U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

94–255 PDF 2015

S. HRG. 108–992 

THE CASE FOR CLIMATE CHANGE ACTION 

HEARING 

BEFORE THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE 

ONE HUNDRED EIGHTH CONGRESS 

FIRST SESSION 

OCTOBER 1, 2003 

Printed for the use of the Committee on Commerce, Science, and Transportation 

( 

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED EIGHTH CONGRESS 

FIRST SESSION 

JOHN MCCAIN, Arizona, Chairman 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

SAM BROWNBACK, Kansas 

GORDON H. SMITH, Oregon 

PETER G. FITZGERALD, Illinois 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

ERNEST F. HOLLINGS, South Carolina, 

Ranking 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

JOHN B. BREAUX, Louisiana 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

JEANNE BUMPUS, Republican Staff Director and General Counsel 

ROBERT W. CHAMBERLIN, Republican Chief Counsel 

KEVIN D. KAYES, Democratic Staff Director and Chief Counsel 

GREGG ELIAS, Democratic General Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on October 1, 2003 ............................................................................ 1 

Statement of Senator McCain ................................................................................. 1 

Statement of Senator Lautenberg .......................................................................... 8 

Statement of Senator Nelson .................................................................................. 45 

WITNESSES

Busalacchi, Jr., Ph.D., Antonio J., Chairman, Climate Research Committee, 

National Academy of Sciences, and Director, Earth System Science Interdisciplinary Center (ESSIC), University of Maryland ...................................... 10 

Prepared statement .......................................................................................... 12 

Delbeke, Jos, Director, Environment DG, European Commission, Brussels ...... 2 

Prepared statement .......................................................................................... 5 

Gorman, Paul, Executive Director, National Religious Partnership for the 

Environment ......................................................................................................... 55 

Prepared statement .......................................................................................... 57 

Podell, Ethan J., President, Orbis Energy Advisors Inc. ..................................... 59 

Article dated October 1, 2003 from the Natural Resources Defense Council entitled ‘‘Analysis of the McCain Lieberman Climate Stewardship 

Act (S. 139)’’ ................................................................................................... 61 

Prepared statement .......................................................................................... 65 

Schneider, Stephen H., Professor, Department of Biological Sciences; Co-Director, Center for Environmental Science and Policy, Stanford University .... 22 

Prepared statement .......................................................................................... 25 

Stephenson, John B., Director, Natural Resources and Environment, United 

States General Accounting Office ....................................................................... 68 

Prepared statement .......................................................................................... 71 

Walker, Christopher T., Managing Director, Greenhouse Gas Risk Solutions 

on behalf of Swiss Re ........................................................................................... 77 

Prepared statement .......................................................................................... 78 

Wigley, Tom M.L., Senior Scientist, National Center for Atmospheric Research .................................................................................................................... 14 

Prepared statement .......................................................................................... 16 

APPENDIX

Kerry, Hon. John F., U.S. Senator from Massachusetts, prepared statement ... 89 

Letter dated October 1, 2003 from U.S. Scientists to Senators Frist and 

Daschle, U.S. Senate .................................................................................... 91 

Response to written questions submitted to Antonio J. Busalacchi, Jr., Ph.D. 

by: 

Hon. Ernest F. Hollings ................................................................................... 123 

Hon. John F. Kerry .......................................................................................... 123 

Hon. John McCain ............................................................................................ 122 

Response to written questions submitted to Dr. Tom M.L. Wigley by: 

Hon. Ernest F. Hollings ................................................................................... 124 

Hon. John F. Kerry .......................................................................................... 126 

Response to written questions submitted by Hon. John F. Kerry to: 

Jos Delbeke ....................................................................................................... 127 

Ethan J. Podell ................................................................................................. 133 

Dr. Stephen H. Schneider ................................................................................ 128 

John B. Stephenson .......................................................................................... 134 

Christopher Walker .......................................................................................... 136 

(1) 

THE CASE FOR CLIMATE CHANGE ACTION 

WEDNESDAY, OCTOBER 1, 2003 

U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. 

The Committee met, pursuant to notice, at 9:30 a.m. in room SR– 

253, Russell Senate Office Building, Hon. John McCain, Chairman 

of the Committee, presiding. 

OPENING STATEMENT OF HON. JOHN MCCAIN, 

U.S. SENATOR FROM ARIZONA 

The CHAIRMAN. Welcome. Today’s hearing will be the third in a 

series of hearings this Committee has held this year on the very 

critical topic of global climate change, an issue of worldwide importance. 

The National Academy of Sciences has reported that ‘‘Greenhouse gases are accumulating in the Earth’s atmosphere as a result of human activities, causing surface air temperatures and subsurface ocean temperatures to rise. Temperatures are, in fact, rising. The changes observed over the last several decades are likely 

mostly due to human activities, but we cannot rule out that some 

significant part of these changes is also a reflection of natural variability.’’ 

While the National Academy of Sciences statement allows that 

factors other than human activity may affect temperatures, there 

is broad scientific consensus that global warming is occurring, that 

human activity is causing it, and that its consequences are extremely serious. While these consequences are alarming to think 

about, and politicians are naturally inclined to postpone tough 

choices, no excuse for inaction on this issue is acceptable. 

While Congress and the Administration continue to expend their 

efforts on justifying our inaction, many countries have already recognized the scientific consensus, some states have joined together 

to address the problems, and domestic businesses are taking their 

own actions to respond to global climate change. 

Earlier this year, Senator Lieberman and I introduced S. 139, 

the Climate Stewardship Act of 2003, which proposes to establish 

a mandatory carbon dioxide reduction program along with an emissions trading system. We believe that a market-based approach, 

combined with mandatory caps and Federal oversight, offers the 

best way for the Nation to respond to a growing global environmental threat. 

We requested the Energy Information Administration and the 

Environmental Protection Agency to conduct analyses of our cliVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\94255.TXT JACKIE
2 

mate change proposal. While EIA responded to our request, EPA 

did not. Based on the EIA’s analysis, as well as an independent 

analysis performed by the Massachusetts Institute of Technology 

and the Tellus Institute, we intend to offer a modified approach 

when the Senate finally debates our climate change legislation, 

which we expect to occur later this month. 

Specifically, Senator Lieberman and I will offer a substitute 

amendment, which will, among other things, eliminate the second 

target date for reductions of greenhouse gases. It also would require the effected sectors to reduce their greenhouse emissions to 

the year 2000 levels by the year 2010, which is approximately 1.5 

percent below today’s levels. The bill, as introduced, would have required additional reductions by the year 2016. 

By modifying the bill, we expect to build additional momentum 

for the measure in the Senate. We’ve insisted on and secured an 

agreement for a vote on the measure, a vote that must take place 

in order for constituents to know where their Senators stand on 

one of the most important environmental issues of our time. 

We have a number of witnesses with us today to help further inform the Committee about the results of leading-edge scientific research, discuss actions being taken by industry in response to this 

growing worldwide concern, and public reaction to recent environmental reports on climate change. We’re also joined today by a representative from the European Union to discuss the EU’s efforts to 

develop a ‘‘cap-and-trade system.’’ 

I welcome our witnesses here today and look forward to their testimony. 

First, I’d like to ask Mr. Jos Delbeke—he’s the Director for Air 

Quality, Climate Change, and Biotechnology, the Delegation of the 

European Commission, the European Union—to come forward. 

Welcome, Mr. Delbeke, and thank you for giving us your perspective and giving your responsibilities on this issue. Thank you. And 

I understand that your testimony will be in the form of a statement 

of position. Just want to make that clear for the record. 

Thank you, sir. Please proceed. 

STATEMENT OF JOS DELBEKE, DIRECTOR, ENVIRONMENT DG, 

EUROPEAN COMMISSION, BRUSSELS 

Mr. DELBEKE. Thank you very much, Mr. Chairman. 

I’m grateful for this opportunity to give input to your meeting 

today. And there is a particular reason for that. The particular reason is that Europe is now embarking on the cap-and-trade regime, 

and will have been largely inspired by your successful experience 

on sulphur allowance trading. So we learned a lot from you, and 

we hope to continue that in the future. 

Mr. Chairman, I also prepared a written statement, and I would 

like to ask you to incorporate it into the record of this hearing. 

The CHAIRMAN. Without objection. 

Mr. DELBEKE. I will deal with two major points, a few words on 

our climate change policy in Europe, in general, and then come to 

the cap-and-trade system and the specificities of that. 

As you know, Europe is fully committed to the multilateral process, to the U.N. Climate Change Convention, and to the Kyoto Protocol. And the EU ratified, together with all the member states alVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\94255.TXT JACKIE
3 

ready, in May 2002, the Kyoto Protocol. We are already implementing the commitments in view of having a good start and everything in place as of the first of January of 2008. 

The target of the EU is minus 98 percent at the 1990 level. 

Today, we are at minus 2.3. A major part of that reduction comes 

thanks to policies and measures in the fields of energy and transport. A minor part of that comes thanks to the restructuring of the 

economy following the German reunification. Recently, however, 

our emissions of greenhouse gases are up again, and so we fully realize that we need reinforcement of our policies we have already in 

place and new ones to be developed. 

For that reason, we developed a European Climate Change Program in which we involved all stakeholders and which gave also a 

new dimension in our environmental policy at large in Europe. And 

the new dimension is that we are very determined to go for lowcost measures, and very determined to develop more market-based 

instruments in our policies. 

While we do that, and while we fully realize how costly climate 

policy can be, when we call for low-cost measures, we have calculated for Europe that we can keep down costs to below .1 percent 

of GDP in 2012. 

What kind of measures have we developed already? We are doing 

a lot in the field of renewable energy. We double our share by 2010. 

We do a lot of biofuels and transport and cogeneration of heat and 

power, on energy efficiency of buildings and passenger cars, on the 

emissions of fluorinated gases, including mobile air conditioning, 

emitting emissions from landfills and so on. 

Important to know is that also in the field of research we are 

fully committed to new breakthroughs that may happen in the field 

of hydrogen and carbon sequestration, and we are happy to cooperate with your country in this respect. 

Let’s turn now to the EU’s allowance trading scheme, the capand-trade system, which is really the pillar of our new climate policy. 

We have finalized our legislation, in July 2003—that means a 

couple of months ago—and important to note is that we had unanimity on that bill. We call it the Directive in Europe in the Council of Ministers. 

As of the first of January of 2005, that bill would allow us to install the largest multi-country cap-and-trade scheme in the world, 

because it will apply to the 15 member states of the EU, 15 member states that we have today, plus the 10 new acceding member 

states, plus probably Norway and Iceland, with which we have cooperation agreements in the field of energy and transport. 

This legislation implements our obligations that we have taken 

on under the Kyoto Protocol. And important is that it goes a step 

further than what we have undertaken in Kyoto, namely that our 

trading obligations are translated up to obligations for each company covered by the scheme. It’s a mandatory scheme for all major 

companies from the power sector and energy-intensive sectors, such 

as steel, oil refineries, cement, lime, glass, pulp and paper, et 

cetera. And we count we have more or less 10,000 companies in the 

scheme. That would cover up to 40 percent of Europe’s greenhouse 

gas emissions, and cover plus/minus half of its GDP. 

4 

The scheme, Mr. Chairman, is mandatory. We have a lot of experience with voluntary schemes, but those schemes did not deliver 

enough results. So we thought we could establish a scheme that is 

mandatory and, if we do it well, make it much simpler to implement. So that’s why we have a strict compliance regime incorporated into the bill that would create automatic financial sanctions for companies not fulfilling their obligations, up to 100 euros 

per ton of CO2 under the period under Kyoto. 

We would start, as I said, in 2005. That means that we would 

have a learning-by-doing phase before the Kyoto period starts, because, as I indicated, this is a very new instrument that we learned 

from you, Mr. Chairman, in the United States, and there is a lot 

to learn for our European companies in that. So we hope to be completely ready to have the implementation scheme compatible with 

Kyoto as of January 1, 2008. 

It starts with CO2 only, and not the five other gases which are 

mentioned in the Kyoto Protocol. But we have foreseen possibilities 

to gradually extend the regime, as you have also been considering 

that, if I understand it well, under the sulphur-allowance scheme. 

The allocation that we are undertaking is free of charge, but 

there is a possibility for member states to auction a percentage of 

the allowances—namely, up to 5 percent. Important to know is that 

the member states are responsible for allocation according to very 

clear criteria incorporated into the directive. Member states will 

then have to submit their allocation plans to the Commission, and 

the Commission will scrutinize them before the system starts. The 

Commission actually, to facilitate that process, is now drafting 

guidelines to be as clear as possible about what the Commission 

has in mind and what kind of precise rules are going to be followed. 

A final word, Mr. Chairman. The EU’s scheme is not a closed 

scheme. I know that some have said the EU is now establishing its 

scheme on its own. That’s true, but it is not closed. It has two important provisions to make bilateral agreements with states who 

have ratified the Kyoto Protocol so as to recognize each other’s 

company-based emissions trading schemes. 

The second possibility is that we have joint implementation and 

clean development mechanism projects under the Kyoto Protocol 

that may bring in credits into Europe’s scheme, and also that is, 

in principle, allowed. We are elaborating, however, the modalities 

of how to do that. 

So we have learned that, in particular, global companies in the 

sectors I mentioned are very much interested into these modalities, 

because they see the European scheme as a start for what they 

would like to see one day as a global trading scheme that is company-based. 

As a conclusion, Mr. Chairman, the EU is going, and is showing, 

I hope, that it is already implementing all provisions of the Kyoto 

Protocol. And I stress ‘‘all,’’ because emissions trading in Kyoto was 

not the favorite subject of the Europeans at that time. So we go 

ahead with that, and, indeed, we are convinced that such marketbased mechanisms are very much capable of keeping down costs to 

companies and to the economy. 

5 

Our legislation is completed, so we are now implementing. And 

the public sector is preparing for the allocation plans, for other modalities that have to be sorted out. The private sector is already 

preparing, because thousands of companies and businesses and 

brokers are now elaborating their business plans in view of January 1, 2005. 

And the European Union, let me repeat that, looks forward to 

open its schemes to other major players in the world. 

Thank you very much, Mr. Chairman. 

[The prepared statement of Mr. Delbeke follows:] 

PREPARED STATEMENT OF JOS DELBEKE, DIRECTOR, ENVIRONMENT DG, 

EUROPEAN COMMISSION, BRUSSELS

Climate Change: How the European Union Implements 

the Kyoto commitment 

Mr. Chairman and members of the Committee, I am grateful for the opportunity 

to provide input to this meeting today. 

I am a Director at the European Commission in Brussels, the executive arm of 

the European Union. 

In July 2003, the Council of Ministers of the European Union adopted with unanimity a Directive (bill) to introduce a CO2 cap-and-trade scheme as of 2005. It constitutes the legal base for the largest multi-country cap-and-trade scheme implemented in the world. Its scope is wide as it will cover close to 40 percent of the EU’s 

greenhouse gas emissions, mainly from power generators and large industries. 

The EU has been inspired by the positive experience in your country the Sulphur 

Allowance Trading scheme based on Title IV of the 1990 Clean Air Act Amendments. It is therefore a special pleasure to be given the opportunity to provide input 

to a process in which the United States Congress may again lend support to a market-based instrument to tackle the issue of global climate change. 

Before turning to the EU allowance trading scheme in more detail let me however 

provide you with the bigger picture of Europe’s Climate Change policy. 

The European Union is fully committed to the multilateral process to combat global climate change. It has ratified the Kyoto Protocol in May 2002 and is now in the 

midst of the implementation process. 

As part of the European Climate Change Program, and in addition to the EU allowance trading scheme, the following initiatives are underway to: 

• increase the share of renewables in the EU’s electricity generation from 14 to 

22 percent in 2010 (emission reduction potential 100 to 125 Mt CO2eq.) 

• promote high quality co-generation of power and heat (65 MtCO2eq.) 

• improve the energy performance of buildings (35–45 Mt CO2eq.) 

• improve energy efficiency and energy demand management 

• reduce the average CO2 emission of a new car by 25 percent in 2008/2009, with 

respect to 1995, (75–SOMt CO2eq.). 

• increase the share of bio-fuels in the road transport sector to 5.75 percent (35– 

40 MtCO2eq.) 

• reduce the emission of fluorinated gases, including a gradual phaseout of certain fluorinated gases in mobile air conditioning systems. (23 MtCO2eq.) 

• reduce methane emissions from landfills (41 Mt CO2eq.) 

Except for the voluntary commitment of the automotive industry, all of these initiatives are being implemented through binding EU legislation. 

The EU also values and participates in initiatives, including the development of 

hydrogen technologies and geological carbon sequestration, to accelerate the introduction of technologies necessary to combat climate change over the next decades. 

The European Union has to meet its 8 percent reduction target under the Kyoto 

Protocol, equivalent to annual cuts of some 336 Mt CO2eq. The latest figures available indicate that the European Union (EU–15) has reduced total greenhouse gas 

emissions by 2.3 percent since 1990. The major part of this reduction is due to policies and measures targeted at reducing greenhouse gas emissions, while a minor 

part was due to a one off reduction resulting from the economic restructuring following German reunification. Recently, emissions have been increasing slightly 

6 

again and this underlines the need to continue our efforts and further reinforce existing policies. 

Since 2000, the European Climate Change Program has been in place to identify, 

analyse and prepare such policies and measures in all major sectors, in particular 

emissions trading, energy, transport, agriculture & forestry, and research. Stakeholder consultation, involving EU Member States, businesses, experts and NGOs, is 

viewed as essential for the success of the European Climate Change Program. The 

backdrop of an internationally agreed and legally binding target has helped considerably to establish the Program as an ambitious force for policy and technological 

innovation. 

The overall conclusion of the European Climate Change Program is that there are 

ample low-cost reduction measures—that is, below 20 £ per tonne of CO2eq—to meet 

our Kyoto commitments. The total estimated cost of Kyoto compliance of less than 

0.1 percent of GDP represents only a small fraction of total economic output in the 

EU. No indications were found that the standard of living of EU citizens would be 

hampered. 

The EU allowance trading scheme is the major cornerstone of our Climate Change 

Program and will play a crucial role in the EU’s implementation strategy for the 

Kyoto Protocol. As the legislation has been adopted, the EU allowance trading 

scheme will be up and running in 25 countries across Europe as of 1 January 2005. 

This will be ‘‘the onset of the EU carbon economy’’, as a leading European Parliamentarian has referred to it. It also marks a major change in EU environmental 

policy in general, showing far greater reliance on market-based instruments because 

of their attractiveness in terms of cost-effectiveness. 

Let me provide you with the overall picture of the EU scheme. It will be implemented in multi-annual phases, with the first phase running from 2005 to 2007 and 

the second (in parallel to the Kyoto Protocol) from 2008 to 2012. It will cover over 

10,000 plants in electricity and energy-intensive industry. Initially the coverage will 

be limited to carbon dioxide emissions. Nevertheless, the scheme will encompass 

more than a third of total EU greenhouse gas emissions and close to half of EU CO2

output. Just as the Congress is considering expanding the SO2 cap-and-trade program in the U.S. to cover other pollutants, we intend to extend the coverage of the 

EU scheme over time. We have, however, not made concrete decisions yet as to 

which sectors and gases will come in at what stage. 

Allowances will mainly be allocated free of charge, although Member States may 

auction a small percentage of allowances if they wish. The number and methods for 

allocating allowances are determined in periodic allocation plans at the Member 

State level. For companies failing to deliver a sufficient number of allowances, financial sanctions of £40 per ton of CO2 (i.e., about £147 per ton of carbon) and £100 

per ton of CO2 (i.e., about £367 per ton of carbon) will apply automatically. The experience of the Sulphur Allowance scheme demonstrates the importance of a robust 

enforcement regime for the environmental and economic success of a program. 

Finally, and very importantly, the EU scheme is not a closed scheme. It has 

inbuilt provisions to create links to the outside world. Firstly, the EU may conclude 

bilateral agreements for mutual recognition of greenhouse gas allowances with countries running similar trading schemes and having ratified the Kyoto Protocol. This 

allows to extend the benefits of trading to other jurisdictions. It is an open invitation to countries around the world to cooperate with Europe in the multilateral effort to combat climate change. Contacts are already developing with several OECD 

countries. 

Secondly, the Commission has initiated an additional legislative process to create 

a link to the Kyoto Protocol’s project-based mechanisms—‘‘Joint Implementation’’ 

and the ‘‘Clean Development Mechanism’’. This initiative aims to allow companies 

to use credits from these mechanisms for compliance. Details of this link will be discussed and decided in the legislative institutions in the months to come. 

The EU allowance trading scheme, with its possibility of linking with schemes in 

other jurisdictions, is the way in which the EU promotes the vision of an international emission trading scheme in greenhouse gases. Such an international 

scheme would prove highly beneficial for globally active multinationals of which 

there are many in Europe as well as the United States. 

The legal foundation having been set, Europe is now preparing for the launch 

date of the scheme on 1 January 2005. Member States are now drafting national 

implementation laws (a necessary step for any EU Directive). Member States will 

very soon elaborate first drafts of their national allocation plans and consult with 

industry, NGOs and civil society. Before the end of the year, the Commission will 

issue guidance on the implementation of the common allocation criteria agreed in 

the Directive. And the Commission will scrutinize the national allocation plans 

which are to be submitted to Brussels by the end of March 2004. Common guideVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00010 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\94255.TXT JACKIE
7 

lines for monitoring and reporting of emissions by companies at European level will 

be agreed this fall. And we work on the legal framework and the development of 

electronic allowance registries. 

In parallel to the preparations being made in the public sector, thousands of businesses have started preparing their compliance strategies in the allowance market 

and are assessing how to benefit from the economic opportunities the program will 

offer. 

In conclusion, Europe is fully committed and works with priority to respect the 

multilateral commitment it has taken on with respect to climate change. In doing 

so, we increasingly rely on market-based instruments such as the implementation 

of the world’s largest multi-country cap-and-trade scheme. The EU looks forward to 

many countries joining us in this journey. 

The CHAIRMAN. Thank you very much, sir. 

You mention in your statement that the estimated cost of Kyoto 

compliance is less than 0.1 percent of GDP. How does that fit in 

with estimates from here in the United States that if the United 

States were involved in a similar program, that it would be a huge 

and devastating impact on our economy? I don’t quite understand 

the contradiction there. 

Mr. DELBEKE. Well, Mr. Chairman, when we embarked on this 

exercise, we were asked to do that exactly for that reason, because 

we were told that the costs could be very high, and, indeed, they 

could be very high. But when we were starting low-cost measures, 

including emissions trading, we were discovering for ourselves how 

vast the possibilities are for companies to improve their energy efficiency. In most cases, we learned through their participation in 

this study—it was a stakeholder involvement, but also businesses, 

experts, member states, et cetera, were present—that they were 

gradually discovering for themselves that if you have squeezed out 

some 5 to 10 percent energy efficiency in many different parts of 

the economy, that that is possible. So the art is to squeeze them 

out where they are available at the lowest cost. 

And, for example, we know that we have subsidy schemes in 

place in Europe for the coal sector and the energy field, in general, 

where we could do a major exercise in scaling them down, what we 

have been doing currently over the last decade. They are still there, 

but far less important than what they were at the beginning of the 

exercise. 

The CHAIRMAN. Could you send us the basis for your estimates 

of the impact on the economy and the rationale for it? It would be 

very helpful when we discuss it here, on proposed impacts. 

This isn’t exactly on the subject, but the heat wave in Europe 

this summer was a prominent topic in the American media, not to 

mention the European media. Can you comment on observation or 

analysis of the European Commission regarding the correlation between that and patterns of global climate change? Or was that just 

a one-shot experience? 

Mr. DELBEKE. Thank you, Mr. Chairman. 

Indeed, we are very much willing to convey all information to 

you about the economics we did, and that is, indeed, available already on the website of the European Commission Climate Change 

Unit. 

The CHAIRMAN. Thank you very much. 

Mr. DELBEKE. But I can confirm to you that the heat wave in Europe and the way water has appeared in the news over the last 

couple of years has become a very dominant theme in the minds 

8 

of the day-to-day people. We have had the flooding in Central Europe and in Eastern Europe, and we have had the heat wave and 

the drought last summer. So people are very, very much aware 

about how the appearance of water is becoming very irregular. And 

people talk about it and make the link with climate change. 

That’s why I think the policies we have been discussing have 

been supported by an overwhelming majority in the Parliament, in 

the Parliaments of the members states, because people feel that 

something is happening. They are aware of the research that has 

been worldwide, including from the IPPC, and they would like to 

contribute their little bit to the solution of the problem, and would 

look very much forward of other parties in the world to do the 

same. 

The CHAIRMAN. Thank you. And, again, your economic estimates 

will be very helpful to us, because the major opposition to the very 

modest proposal that Senator Lieberman and I have is the economic consequences. And so I think it would be very helpful in the 

debate to use your analyses of cap-and-trade, and so I think it 

would be very helpful. And you’ve been very helpful to us today. 

Senator Lautenberg? 

STATEMENT OF HON. FRANK R. LAUTENBERG, 

U.S. SENATOR FROM NEW JERSEY 

Senator LAUTENBERG. Mr. Chairman, thank you very much for 

holding this hearing. I want to commend you and Senator 

Lieberman for initiating some action to deal with the problem. 

I was in Antarctica a couple of years ago, and went to the South 

Pole. I was shocked to learn that so much of the world’s fresh 

water is stored in a single place. In the evening you could almost 

hear the ice groaning as it shifted. When we see the reduction of 

the ice cap there and the magnitude of that reduction, to me it 

says, ‘‘Sound the alarm. Let’s get something going here.’’ 

We all have experienced the potential aberrations from climate 

change. I happen to have been in Europe, Mr. Chairman, for a 

short stay this summer. The temperatures in Italy at that time 

were over 100 degrees, and incredibly uncomfortable. 

Mr. Delbeke, thank you for being here. With the cap-and-trade 

program that we have, what influence might U.S. participation 

have? It certainly would enlarge the marketplace, the negotiating 

place, but what do you think the—how important an impact do you 

think it would have if the U.S. joined in the world marketplace? 

Mr. DELBEKE. Thank you very much. 

On the last question, I think the impact would be tremendous, 

because there are effects related to the environment and effects related to the economy and the competitiveness. I will not hide that 

despite the fact that our overall costs are down—but, of course, and 

below .1 percent of GDP—that the impact in different sectors may 

be, indeed, more important than the .1 percent they may suggest. 

So we have distributed effects. 

And in technology-intensive sectors and in the field of new energy technologies and new technologies that allow to embody energy-efficiency requirements more strictly, we see a lot of positive 

news following our climate agenda. But there are also energy—part 

of the energy sector, part of the energy-intensive industry—taking 

9 

products like steel and aluminum, et cetera, where energy use is 

vast—where our companies are very much worried about their 

competitiveness, knowing that this allowance trading is going to 

start on January 1, knowing that they’ll have to be very competitive in the global markets, and they convey to us constantly to 

make the point to its major players in the world, including you, 

that it would be most helpful if a global environmental problem is 

being sorted out with a global effort that would minimize distortions also in the markets in which they operate. 

So, I think a possible decision by the United States to go for the 

act that you are discussing those days would be tremendously welcome in Europe and, indeed, in the rest of the world, as well. 

May I also indicate that the political environment within which 

we have been discussing the new laws and directives, that not everybody in Europe is 100 percent enthusiastic because of this distributive effect, but that everybody was prepared to get started to 

have the system up and running that will be the architecture for 

future emission reductions over decades. So testing out that architecture and being pragmatic has been a very important element 

that was creating a coalition that was vast, from green NGO’s up 

to companies who feel responsible for what is happening in the 

world. 

So getting started, having this on January 1, 2005, if not perfect, 

at least getting started and optimize and review elements that may 

have to be reviewed because this or that elements was underestimated, has been a strong element around the political—or present 

in the political debate that we have had around this directive. 

Senator LAUTENBERG. This may be a little outside your field, but 

has there been a lot of review with your contacts about the impact 

of nuclear energy generation versus fossil fuel-generated energy? 

Because it’s more popular in Europe than it is here, and I just wonder whether you’ve done an analysis about that. 

Mr. DELBEKE. Thank you very much. 

This has, indeed, been an element; in particular, because several 

member states of the EU have already decided to phase out nuclear 

as part of their energy mix. And that will undoubtedly have an impact in the fuel mix and the greenhouse gas emissions related to 

energy use. 

So nuclear has not been advocated as the way out of the problem, 

but has been incorporated into the debate in saying, well, look, if 

we are going to phaseout the nuclear installations, as we have 

today in Europe, in important countries such as Germany or the 

Netherlands or in Scandinavian countries, et cetera, this will have 

an impact. And an emissions trading regime would help us very 

much to have that impact again incorporated into the economy in 

an as smoothly a way as possible. 

And, of course, I could mention, as well, that in the current emissions trading scheme that is adopted by the council, nuclear installations are not covered, because they do not have emissions of CO2. 

So they have a slight comparative advantage compared to power installations that do have emissions of CO2 and that are covered by 

the cap-and-trade system that we are developing. So, in strict 

terms, they are not part of the equation, but, of course, in overall 

10 

economic terms, they have a slightly beneficial treatment, because 

they do not fall under the scheme. 

Senator LAUTENBERG. Thank you. 

Thanks, Mr. Chairman. 

The CHAIRMAN. I think, Mr. Delbeke, in the laws of unintended 

consequences, that a number of countries, including this one, over 

time, may take a look at advanced technology as it applies to nuclear power. I think there has been a dramatic change, both in generation of nuclear waste and size of—but it’ll be a very interesting 

thing to observe. 

Mr. Delbeke, I thank you for coming today. I appreciate the opportunity of getting your outlook and your plans and proposals for 

the European Union, and we look forward to working with you and 

hope someday we’ll all be working together. 

Thank you very much for being here. 

Mr. DELBEKE. Thank you very much, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Our next panel is Dr. Antonio Busalacchi, who is the Chair of the 

Climate Research Committee Board on Atmospheric Science and 

Climate on the National Research Council; Mr. Tom M.L. Wigley, 

who is a Senior Scientist, Climate and Global Dynamics Division 

and Climate Analysis Section, and Program Director of A Consortium for the Application of Climate Impact Assessments, the National Center for Atmospheric Research; Mr. Stephen H. Schneider, 

who is a Professor, Department of Biological Sciences, and Co-Director, Center for Environmental Science and Policy at Stanford 

University. 

Mr. Schneider, I particularly want to thank you for traveling a 

long way on short notice. And, Mr. Wigley, I would like to congratulate you, you have the longest title of any witness who has 

appeared here. 

[Laughter.] 

The CHAIRMAN. Thank you. 

Mr. Busalacchi, thank you, and we’ll begin with you. 

STATEMENT OF ANTONIO J. BUSALACCHI, JR., PH.D. 

CHAIRMAN, CLIMATE RESEARCH COMMITTEE, 

NATIONAL ACADEMY OF SCIENCES, AND DIRECTOR, 

EARTH SYSTEM SCIENCE INTERDISCIPLINARY CENTER 

(ESSIC), UNIVERSITY OF MARYLAND 

Dr. BUSALACCHI. Good morning, Senator. 

The CHAIRMAN. Did I have the proper pronunciation, sir? 

Dr. BUSALACCHI. Perfect. 

The CHAIRMAN. Thank you. 

Dr. BUSALACCHI. Very good. Thank you. 

Good morning, Senators. 

Senator LAUTENBERG. Good morning. 

Dr. BUSALACCHI. Thank you very much for this opportunity to 

testify. 

I’m Tony Busalacchi, Professor at the University of Maryland, 

and I serve as the Chair of the National Academy’s Climate Research Committee. 

I will use my time this morning to summarize what most scientists agree to be true about the change in the Earth’s climate. 

11 

Understanding climate and whether it is changing and why is 

one of the most crucial questions facing humankind in the 21st century. This question is the subject of much scientific research and, 

of course, policy debate, since the economic and environmental implications could be large. 

The National Academies have produced a number of reports focused on understanding climate in recent years, and my testimony 

draws heavily from two of these, a February 2003 report here, I 

show here, that gives input to the Administration’s draft U.S. Climate Change Science Program’s strategic plan, and a 2001 report 

called ‘‘Climate Change Science’’ that was done at the request of 

the White House. This report answered a series of specific questions designed to identify areas in climate-change science, where 

there are the greatest certainties and uncertainties. If you haven’t 

read this report, there’s an excellent summary, only about 25 pages 

long, written in very straightforward language. 

As explained in that report, ‘‘Climate Change Science,’’ there is 

wide scientific consensus that climate is, indeed, changing. Greenhouse gases are accumulating in the Earth’s atmosphere as a result of human activities, causing surface air temperatures and subsurface ocean temperatures to rise. 

Our confidence in this conclusion is higher today than it was ten 

or even 5 years ago. Yet uncertainties remain, because there is a 

level of natural variability inherent in the climate system. On 

timescales of decades and centuries, that can be difficult to interpret with precision, because we gather this evidence from sparse 

observations, numerical models, and proxy records such as ice cores 

and tree rings. Despite the uncertainties, however, there is widespread agreement that the observed warming is real and particularly strong within the past 20 years. 

A diverse array of evidence supports the view that global air 

temperatures are warming. Instrumental records from land stations and ships indicate global mean surface temperatures have 

warmed by about .7 to 1.5 degrees Fahrenheit during the 20th century. The warming trend is spatially widespread and is inconsistent with the global retreat of mountain glaciers, reductions in 

snow cover extent, the earlier spring melting of ice on rivers and 

lakes, 20th century sea-level rise, to name a few. 

The ocean, which represents the largest reservoir of heat in the 

climate system, has warmed since the 1950s by about a tenth of 

a degree, when averaged from the surface down two miles at depth 

into the ocean. 

The role that human activities have played in causing these climate changes has been the subject of debate and research for more 

than a decade. There is no doubt that humans have modified the 

abundances of the key greenhouse gases in the atmosphere—in 

particular, carbon dioxide, methane, nitrous oxide, and tropospheric ozone. These gases are at their highest recorded levels. In 

fact, ice core records of carbon dioxide and methane show that today’s amounts are significantly large than at any period over the 

last 400,000 years. 

The increase in these greenhouse gases is primarily due to fossil 

fuel combustion, agriculture, and land-use changes. Recent research advances have led to widespread acceptance that the 

12 

human-induced increase in greenhouse gas abundance is responsible for a significant portion of the observed climate. The precise 

size of that portion is difficult to quantify against the backdrop of 

natural variability and climate, forcing uncertainties. 

Because the Earth’s system responds so slowly to changes in 

greenhouse gas levels, and because altering established energy-use 

practices is difficult, changes in impacts attributable to these factors will continue during 21st century and beyond. Current models 

indicate the large potential range for future changes, with global 

mean surface temperature warming by anywhere from two-and-ahalf to ten-and-a-half degrees Fahrenheit by 2100. 

Given increasing evidence of how humans have modified the 

Earth’s climate over the last century, it is imperative for the Nation to continue directing resources for better observing, modeling, 

and understanding the form future changes in climate and climate 

variability may take, the potential positive and negative impacts of 

these changes on humans and ecosystems, and how society can best 

mitigate or adapt to these changes. 

Thank you for this opportunity to talk about climate change. 

This is a problem that affects us all and a problem the scientific 

communities does take seriously. It does not shy away from its responsibility to provide objective scientific assessment in support of 

sound policy decisions. 

I’ll be happy to take any questions at the appropriate time. 

[The prepared statement of Dr. Busalacchi follows:] 

PREPARED STATEMENT OF ANTONIO J. BUSALACCHI, JR., PH.D. CHAIRMAN, CLIMATE

RESEARCH COMMITTEE, NATIONAL ACADEMY OF SCIENCES, AND DIRECTOR, EARTH

SYSTEM SCIENCE INTERDISCIPLINARY CENTER (ESSIC), UNIVERSITY OF MARYLAND

Good morning. Thank you very much for this opportunity to testify. I am Dr. Tony 

Busalacchi, a professor at the University of Maryland and I serve as the Chair of 

The National Academies’ Climate Research Committee. I will use my time this 

morning to summarize what most scientists agree to be true about change in the 

Earth’s climate. 

Understanding climate and whether it is changing, and why, is one of the most 

crucial questions facing humankind in the twenty-first century. This question is the 

subject of much scientific research and, of course, policy debate, since the economic 

and environmental implications could be large. The National Academies have produced a number of reports focused on understanding climate in recent years and my 

testimony draws heavily from two of these: a February 2003 report that gives input 

to the Administration’s draft U.S. Climate Change Science Program Strategic Plan 

(NRC 2003) and a 2001 report called ‘‘Climate Change Science’’ that was done at 

the request of the White House (NRC 2001). The latter report answered a series of 

specific questions designed to identify areas in climate change science where there 

are the greatest certainties and uncertainties. If you haven’t read this report, it is 

an excellent summary (only 25 pages long) written in very accessible language. 

As is explained in ‘‘Climate Change Science,’’ there is wide scientific consensus 

that climate is indeed changing. Greenhouse gases are accumulating in Earth’s atmosphere as a result of human activities, causing surface air temperatures and subsurface ocean temperatures to rise. Our confidence in this conclusion is higher today 

than it was ten, or even five years ago, but uncertainty remains because there is 

a level of natural variability inherent in the climate system on time scales of decades to centuries that can be difficult to interpret with precision because we gather 

this evidence from sparse observations, numerical models, and proxy records such 

as ice cores and tree rings. Despite the uncertainties, however, there is widespread 

agreement that the observed warming is real and particularly strong within the 

past twenty years. 

As the report further explains, human-induced warming and associated sea level 

rises are expected to continue through the 21st century. Computer model simulations and basic physical reasoning show that there will be secondary effects from 

13 

these changes. These include increases in rainfall rates and increased susceptibility 

of semi-arid regions to drought. The impacts of these changes will depend on the 

magnitude of the warming and the rate with which it occurs. 

A diverse array of evidence supports the view that global air temperatures are 

warming. Instrumental records from land stations and ships indicate that global 

mean surface air temperature warmed about 0.4–0.8 degrees C (0.7–1.5 degrees F) 

during the 20th century. The warming trend is spatially widespread and is consistent with the global retreat of mountain glaciers, reductions in snow-cover extent, 

the earlier spring melting of ice on rivers and lakes, the accelerated rate of rise of 

sea level during the 20th century relative to the past few thousands years and the 

increase in upper-air water vapor and rainfall rates over many regions. A lengthening of the growing season also has been documented in many areas, along with 

an earlier plant flowering season and earlier arrival and breeding of migratory 

birds. Some species of plants, insects, birds and fish have shifted toward higher latitudes or higher elevations, often together with associated changes in disease vectors. 

The ocean, which represents the largest reservoir of heat in the climate system, has 

warmed by about 0.05 degrees C (0.09 degrees F) averaged over the layer extending 

from the surface down to 10,000 feet, since the 1950s. 

It has been said that the Arctic will be the ‘‘canary in the coal mine’’ where the 

effects of global warming will be felt first and with the greatest magnitude. Analysis 

of recently declassified data from U.S. and Russian submarines indicates that sea 

ice in the central Arctic has thinned since the 1970s, and satellite data indicate a 

10–15 percent decrease in summer sea ice concentration over the Arctic as a whole. 

Satellite measurements also indicate that the time between the onset of sea-ice 

melting and freeze-up has increased significantly from 1978 through 1996, and the 

number of ice-free days have increased over much of the Arctic Ocean. A decline of 

about 10 percent in spring and summer continental snow cover extent over the past 

few decades also has been observed. Looked at in total, the evidence paints a reasonably coherent picture of change, but the conclusion that the cause is greenhouse 

warning is still open to debate; many of the records are either short, of uncertain 

quality, or provide limited special coverage. 

As you may have seen in the press, a large ice shelf recently broke up along the 

coast of northeast Canada’s Ellesmere Island, followed by the drainage of an icedammed lake that had built up behind it (Disraeli Fiord). The Ward Hunt Ice Shelf 

was the largest remaining piece of an ice shelf that once, a century ago, rimmed 

the entire northern coast of Ellesmere Island. I have not studied this particular incident, nor has the Academy, but researchers working at the site had documented reductions in the freshwater volume of the lake accompanied by a rise in mean annual 

air temperature and have stated that they believe this change can be attributed to 

global warming. Other scientists have been more cautious, noting that many of the 

changes being seen in the Arctic could have more to do with long-term world climate 

patterns than with the release of carbon dioxide and other greenhouse gases. Still, 

atmospheric chemist and National Academy of Sciences member Ralph J. Cicerone 

of the University of California at Irvine was quoted in the Washington Post article 

on the ice-shelf breakup as saying: 

‘‘But even though this ice melt and permafrost thawing [probably happened] too 

fast to be due to global warming, this is [a] prototype of what we should expect 

after the next few decades. . . . This is a good dress rehearsal for the kinds 

of things we could see later.’’ 

Some of the changes being experienced at high latitudes are believed to be reflections of changes in wintertime wind patterns rather than a direct consequence of 

global warming per se. It is important to note that the rate of warming has not been 

uniform over the 20th century. Much of the warming occurred prior to 1940 and 

during the past few decades. The Northern Hemisphere as a whole experienced a 

slight cooling from 1946–1975, and the cooling during that period was quite marked 

over the eastern United States. The cause of this hiatus in the warming is still 

under debate. One possible cause might be the buildup of sulfate aerosols due to 

the widespread burning of high sulfur coal during the middle of the century followed 

by a decline; it is also possible that at least part of the rapid warming of the Northern Hemisphere during the first part of the 20th century and the subsequent cooling 

were of natural origin—a remote response to changes in the oceanic circulation, or 

variations in the frequency of major volcanic emissions or in solar luminosity. 

The role that human activities have played in causing these climate changes has 

been a subject of debate and research for more than a decade. There is no doubt 

that humans have modified the abundances of key greenhouse gases in the atmosphere, in particular carbon dioxide, methane, nitrous oxide, and tropospheric ozone. 

These gases are at their highest recorded levels. In fact, the ice-core records of carVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00017 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\94255.TXT JACKIE
14 

bon dioxide and methane show their twentieth century atmospheric abundances to 

be significantly larger than at any period over the past 400,000 years. The increase 

in these greenhouse gases is primarily due to fossil fuel combustion, agriculture, 

and land-use changes. Recent research advances have led to widespread acceptance 

that the human-induced increase in greenhouse gas abundances is responsible for 

a significant portion of the observed climate changes. The precise size of that portion is difficult to quantify against the backdrop of natural variability and climate 

forcing uncertainties. 

Because the Earth system responds so slowly to changes in greenhouse gas levels, 

and because altering established energy-use practices is difficult, changes and impacts attributable to these factors will continue during the twenty-first century and 

beyond. Current models indicate a large potential range for future climates, with 

global mean surface temperature warming by 1.4 to 5.8 °C (2.5 to 10.4 °F) by 2100 

(IPCC, 2001). 

Given increasing evidence of how humans have modified the Earth’s climate over 

the last century, it is imperative for the Nation to continue directing resources toward better observing, modeling, and understanding of what form future changes 

in climate and climate variability may take, the potential positive and negative impacts of these changes on humans and ecosystems, and how society can best mitigate or adapt to these changes. 

Thank you for this opportunity to talk about climate change. This is a problem 

that affects us all, and a problem the scientific community does not shy away from 

in terms of its responsibility to provide objective scientific assessment in support of 

sound policy decisions. I’d be happy to take any questions. 

References 

IPCC, 2001. Climate Change 2001: The Scientific Basis. Contribution of Working 

Group I to the Third Assessment Report of the Intergovernmental Panel on Climate 

Change, eds. J.T. Hought, Y. Ding, D.J. Griggs, M. Noguer, P.J. van der Linden, 

X. Dai, K. Maskell, and C.A. Johnson. Cambridge, U.K.: Cambridge University 

Press. 

National Research Council, 2003. Planning Climate and Global Change Research: 

A Review of the Draft U.S. Climate Change Science Program Strategic Plan. The 

National Academies Press. 

National Research Council, 2001. Climate Change Science: An Analysis of Some 

Key Questions. The National Academies Press. 

The CHAIRMAN. Thank you very much, Doctor. 

Dr. Wigley? 

STATEMENT OF TOM M.L. WIGLEY, SENIOR SCIENTIST, 

NATIONAL CENTER FOR ATMOSPHERIC RESEARCH 

Dr. WIGLEY. Thank you, Senator McCain, for giving me the opportunity to talk about this issue. 

I’ve produced a written statement that I request be formally included in the record. 

The CHAIRMAN. Without objection. 

Dr. WIGLEY. My name is Tom Wigley. I’m a Senior Scientist at 

the National Center for Atmospheric Research, and I’ve been involved in climate change research for 20 or 30 years. 

This is a brief statement that will flesh out some of the information that Dr. Busalacchi gave, in a quantitative sense. I’m going to 

address three issues. I want to say a little bit about the 20th century warming and our understanding of the causes for that warming. I’m going to say a little bit about the more recent record, over 

the last 25 years, of satellite temperatures of the free atmosphere, 

and then quantify the effects of human influences over the next 

hundred years. 

This diagram shows—— 

The CHAIRMAN. Can you hold a minute, Dr. Wigley? In my declining years, I have trouble seeing, so I will come closer. 

[Laughter.] 

15 

Dr. WIGLEY. Yes, I’m sympathetic to that. I don’t know whether 

‘‘declining’’ is really the right word to use, however. 

OK. This diagram shows—the black, with little dots, is the observed global warming temperature record, and you can see that 

there’s a warming here of roughly seven-tenths of a degree Centigrade over the last hundred years. In terms of Fahrenheit, that’s 

a little over one degree. 

And then there are two sets of curves. The lower two curves 

show model estimates of what the changes would have been if we 

accounted only for natural external forcing factors on the climate 

system. And the upper two curves correspond to the results that 

would attain if we included human influences. And you can see 

that including human influences is essentially the only way that 

we can explain the observed warming. And particularly, the dramatic warming over the last 30 to 50 years is largely the result of 

human factors. Natural variability alone cannot explain the past 

record. 

This little diagram acts as a credibility test for climate models, 

and I’m going to give one other test for these climate models. 

Now, this diagram looks at changes over the last 20 years, where 

we have very precise records from satellite observations using an 

instrument called the microwave sounding unit. And there are four 

results here. And on the lefthand side, labeled UAH, is one of the 

records that is based on satellite data from the University of Alabama at Huntsville. The RSS curve uses the same data, but is a 

different way of analyzing the changes from one satellite to another. And the ERA 40 curve is a composite of a variety of different 

types of evidence. The final curve, on the right-hand side model, 

shows the results that would be expected for tropospheric temperature trends using climate models and using our best estimates of 

what the forcing of the climate system has been over this time period. 

You can see there are a lot of uncertainties. You can see that the 

RSS and ERA 40 curves, or trends, agree very well with the model 

expectation. There’s some uncertainty associated with the satellite 

temperature records, and that’s indicated by the difference between 

the two lefthand RSS and UAH panels there. So this is not a totally resolved issue, but there appears to be no inconsistency between model expectations and observed temperatures. 

Given that credibility test for models, then we can use, with 

some confidence, these models for predicting what might happen in 

the future. And this diagram shows the past warming record, from 

minus-.7 Celsius up to that little triangle there in the year 2000, 

and then future projections. The two—the red and blue curves, 

these are just for one particular emission scenario or projection of 

what emissions of greenhouse gases might be in the future. The red 

and blue curves are an estimate of the uncertainty associated with 

the buildup of carbon dioxide and other gases and with the response of the climate system. You can see that the warming, even 

at the low end, the blue curve, is substantially than what has occurred over the last hundred years. The yellow bar, on the righthand side, accounts for other uncertainties in emissions and other 

factors that affect the climate system, and that’s the result given 

by the Intergovernmental Panel on Climate Change, IPCC. And 

16 

just to summarize that bar, the warming at the low end is about 

double the warming over the last hundred years. At the high end, 

the warming rate is some seven times the warming rate over the 

last hundred years, clearly cause for concern. 

And, in summary, we can’t explain the 20th century warming unless we include human influences. Roughly 75 percent of the warming over the last hundred years appears to be due to these human 

influences. There’s no problem with satellite data as far as the latest measurements go, in terms of their comparison with model results. And in the absence of climate mitigation policies, it seems 

that the future warming might be somewhere between two and 

seven times the rate of warming that occurred over the last century. 

And I’d just like to conclude by thanking Senator McCain and 

other Senators involved for this balanced and responsible approach 

to the climate change problem. 

Thank you. 

[The prepared statement of Dr. Wigley follows:] 

PREPARED STATEMENT OF TOM M.L. WIGLEY, SENIOR SCIENTIST, 

NATIONAL CENTER FOR ATMOSPHERIC RESEARCH

1. Introduction 

Projections of future climate change made using state-of-the-art climate models 

suggest that changes over the coming century will be much larger than experienced 

over the past 100 years. The case for taking action to mitigate these human-induced 

(or ‘anthropogenic’) changes rests on the credibility of these models. There is a vast 

scientific literature on the development and testing of these models, summarized in 

the recent ‘‘Third Assessment Report’’ (henceforth ‘‘TAR’’) produced under the auspices of Working Group 1 of the Intergovernmental Panel on Climate Change (IPCC, 

Houghton et al., 2001). There are two main methods of model testing—comparing 

model simulations of the present state of the climate system (such as the geographical patterns of temperature, rain-and snowfall, sea-level pressure, etc.) 

against observations, and comparing model simulations of past changes in climate 

with observations. 

The most recent climate models are able to simulate present-day climate remarkably well—with errors often less than the uncertainties in observational data sets. 

Here, however, I will not dwell on this aspect of model validation, but concentrate 

on the second method—comparison of observed and model-simulated changes. I will 

show that models simulate temperature changes over the past 100+ years with considerable fidelity provided they are driven (or ‘‘forced’’) by observed changes in both 

natural forcing agents (such as variations in the output of the Sun) and anthropogenic factors (such as changes in greenhouse gas concentrations and aerosol particle 

changes). Natural forcing factors alone cannot explain the past record. 

Using the results from this model/observed data comparison, I will give projections of future changes in global-mean temperature for a central scenario for future 

emissions. These results, which are consistent with projections given in the IPCC 

TAR, imply, for this particular emissions scenario, a future warming rate of three 

to five times the warming that occurred over the 20th century. The uncertainty 

range expands to two to seven times the past warming rate when emissions and 

other uncertainties are accounted for. Even at the low end, these projections are 

cause for concern. 

2. Temperature changes over the 20th century 

The simplest indicator of climate change is the global-mean, near-surface temperature—the average over the Earth’s surface area of temperature observations obtained primarily for the purposes of weather forecasting. After carefully correcting 

these data for instrumental and exposure changes, global-mean temperature shows 

a warming trend of about 0.7 °C over the past 100 years. This warming trend has, 

superimposed on it, substantial variability on monthly, annual and decadal 

timescales associated with natural climate processes such as El Nin ̃ o and other 

interactions between the land, ocean and cryosphere (ice)—see Figure 1. 

17 

To understand the causes of the century timescale warming trend we make use 

of climate models. Such models are an efficient way to synthesize and integrate, in 

an internally-consistent way, the many complexities and interactions of the climate 

system. The basic procedure begins by defining, independently of the model, the 

changes in the external drivers of the climate system. We then use these drivers 

as input forcing factors for the model and run the model to see how well it agrees 

with observed changes. In doing so, we try to quantify any uncertainties in both the 

inputs and the model structure to see what affects these uncertainties might have 

on the model outputs. 

The forcing factors are of two types: natural agents like the effects of large volcanic eruptions and changes in the energy output of the Sun; and a variety of anthropogenic factors. Volcanic eruptions have a strong short-term cooling effect 

(Robock, 1999), and only a minimal effect on decadal or longer timescales. Since the 

goal here is to understand the century timescale warming, I will not consider volcanic effects further in this analysis, beyond noting that climate models are able to 

simulate the short-term coolings well. For changes in solar output, I use the recent 

estimates of Foukal (2002) from 1915 onwards and Hoyt and Schatten (1993) prior 

to 1915. Other estimates of solar output changes yield similar results. I do not consider the hypothesized amplification of solar forcing through the effects of cosmic 

rays, partly because there is no credible physical basis for this amplification. I note, 

however, that any assumed amplification of solar forcing degrades the agreement 

between model and observed results. 

The anthropogenic factors include changes in the concentrations of greenhouse 

gases (carbon dioxide, methane, nitrous oxide, ozone, and various man-made 

halocarbons, of which the CFCs—chlorofluorocarbons—are the most well known), 

and changes in the atmospheric loading of small particles (aerosols) associated primarily with fossil fuel burning. The greenhouse gases, of which carbon dioxide is 

the most important, have a warming effect. Aerosols, depending on type, may have 

either a warming or cooling effect. To date, the cooling effect dominates, but the 

magnitude of this cooling is still uncertain. In the results below I consider a range 

of possible values for the magnitude of aerosol cooling. 

For the climate model I use the model employed by IPCC to produce their globalmean temperature projections (see Wigley and Raper, 2002, and references therein). 

This is a relatively simple model, but it has been rigorously tested against much 

more complex coupled Atmosphere/Ocean General Circulation Models (AOGCMs) 

and is able to simulate the results of these models with high accuracy over a wide 

range of conditions (Raper et al., 2001). 

The simpler model has the advantage that it can be used to examine the effects 

of uncertainties in the parameters that control the response of the climate system 

to external forcing. The primary source of uncertainty is the ‘‘climate sensitivity’’ parameter (designated by ‘‘S’’ below). This is usually characterized by the eventual (or 

‘‘equilibrium’’) global-mean warming that would occur if we doubled the amount of 

carbon dioxide in the atmosphere. It has an uncertainty range of 1.5 °C to 4.5 °C 

with about 90 percent confidence. I will give results for sensitivity values of 2 °C 

and 4 °C to show the importance of this factor. For more information on sources 

of modeling uncertainty, see Wigley and Raper (2001). 

18 

Figure 1: Observed versus model-simulated changes in global-mean, near-surface temperature. 

For observed data, see Jones et al., (1999) and Jones and Moberg (2003). 

Figure 1 compares observed near-surface temperature changes with model predictions. The four model-based curves consider two forcing cases; one in which the 

model is driven solely by the primary natural driving force, changes in the output 

of the Sun (lower two curves), and one where both natural and anthropogenic 

forcings are used to drive the model (upper two curves). The two curves for each 

case reflect the main sources of uncertainty in the modeling exercise, the magnitude 

of aerosol forcing, and the magnitude of the climate sensitivity. 

The upper two curves show that it is possible to obtain a good match between the 

model and observations by using a low aerosol forcing (–0.8W/m2 in 1990) combined 

with low climate sensitivity (S = 2.0 °C), or by using a relatively high aerosol forcing 

(–1.3W/m2 in 1990) combined with low climate sensitivity (S = 4.0 °C). Since these 

values are within their accepted ranges of uncertainty, it is clear that there is no 

inconsistency between models and observations. The observations, however, do not 

narrow the ranges of uncertainty for these two parameters, so, in making projections of future change, we need to account for these uncertainties. 

The lower two curves show the expected global-mean temperature changes in the 

absence of anthropogenic forcing. Up to around the mid 1970s both the natural-forcing-only and the natural-plus-anthropogenic forcing cases fit the observations reasonably well. After this, the natural-only case provides an increasingly bad fit, while 

the natural-plus-anthropogenic case fits the observed warming trend extremely well. 

It is clear from this that anthropogenic forcing effects must be considered in order 

to explain the observations. 

3. Satellite-based temperature changes since 1979 

One of the more puzzling aspects of recent climate change has been the apparent 

inconsistency between the linear trends in tropospheric temperatures (from satellitebased Microwave Sounding Units—MSU data), surface air temperatures, and model 

results (National Academy of Sciences (NAS), 2001). The original MSU data (see 

Christy et al., 2003, and earlier references cited therein—this data set is referred 

to below as the UAH data, since its developers are associated with the University 

of Alabama at Huntsville) showed little or no warming trend since the beginning 

of the satellite record in 1979, while both the surface data and model results for 


1001WIGL1.eps
19 

the surface and for the troposphere (as illustrated in Figure 1) showed a substantial 

warming trend. The NAS (2001) report concluded that there was no reason to suspect serious errors in any of the trends, but this rather down-played what is really 

an important inconsistency. 

More recent work has moved towards resolving this inconsistency. First, an entirely independent analysis of the raw satellite data (the MSU2 data specifically) 

has recently been carried by Mears et al., (2003—these authors are with Remote 

Sensing Systems, Santa Rosa, CA, so their data set is referred to below as the RSS 

data). This new analysis has a warming trend that is both larger than the UAH 

trend and more consistent with both the surface and model data (Santer et al., 

2003a). Second, a new reanalysis product (the ERA–40 data produced by the European Centre for Medium-range Weather Forecasting), when used to construct equivalent MSU2 temperature trends, also shows a larger warming trend than the UAH 

data. (Reanalysis is a technique for synthesizing diverse observational data sets, including both satellite and radiosonde data, to produce an internally-consistent picture of changes in atmospheric meteorological conditions—the ERA exercise is described in Gibson et al., 1997.) Third, analysis of changes in the height of the 

tropopause—the boundary between the lowest layer of the atmosphere, the troposphere, where temperatures decrease with height, and the layer above this, the 

stratosphere, where temperatures either change little or increase with height—show 

that these changes can only be explained if the troposphere is warming (Santer et 

al., 2003b). 

Trends in the three observed data sets, UAH, RSS and ERA–40 are shown in Figure 2, along with model results consistent with those shown in Figure 1. The observed trends have substantial statistical uncertainty because of the ‘‘noise’’ of interannual variations about the underlying trend. The statistical uncertainty ranges 

shown in the Figure are the ‘two-sigma’ ranges, corresponding to 95 percent confidence intervals. For the model results there are additional uncertainties associated 

primarily with radiative forcing and climate sensitivity uncertainties, as explained 

above. 

Figure 2: Trends over 1979–2001 and trend uncertainties for different tropospheric data sets. 

In a statistical sense, Figure 2 shows that there is no significant difference between any of the trends. While it is clear that the UAH results are qualitatively 


1001WIGL2.eps
20 

different from the other results, because of the uncertainties involved it is too soon 

to pass judgment. As noted by Santer et al., (2003a), model results cannot be used 

as a basis for selecting one observed data set over another. The key result of this 

comparison is that it exposes uncertainties that are larger than hitherto suspected. 

If, however, the UAH data are found to have underestimated the warming trend in 

the troposphere, then this will resolve an important climatological ‘problem’ and 

provide a strong endorsement for the validity of current climate models. 

4. Supporting evidence for 20th century climate change 

The temperature results above provide strong evidence for the reality of a strong 

warming trend over the 20th century. The warming is consistent with model expectations and can only be explained if one includes anthropogenic factors as part of 

the cause. From Figure 1, the natural warming trend over the 20th century accounts for only 23–32 percent of the total trend. The observations are also consistent 

with a climate sensitivity in the standard 1.5 °C to 4.5 °C range, and are not consistent with a lower value. 

These results are consistent with many other lines of evidence that there are unusual changes occurring in the climate system. Not only are global-mean temperature changes consistent with models, but the horizontal and vertical patterns of 

change also agree with model predictions (TAR). In addition, a sharp cooling trend 

has been observed in the stratosphere that agrees well with model predictions 

(Santer et al., 2003a). Sea level has been rising steadily (TAR), partly as a result 

of warming in the ocean that agrees with model expectations (Barnett et al., 2001) 

and partly due to the melting of glaciers and small ice sheets (TAR). Sea ice area 

and thickness have also been decreasing in accord with the changes suggested by 

models (Vinnikov et al., 1999). Sea-level pressure patterns have shown significant 

changes and, once again, these changes are similar to those predicted by models 

(Gillett et al., 2003). The frequency of precipitation extremes has also been increasing (Karl and Knight, 1998; Groisman et al., 1999), a result that agrees both with 

simple physical reasoning (Trenberth et al., 2003) and with model predictions (Wilby 

and Wigley, 2002). Finally, based on paleoclimatological evidence, the warmth that 

characterizes the late 20th century is, at least for the Northern Hemisphere, unprecedented in at least 1000 years (Mann and Jones, 2003). 

5. Climate change over the 21st century 

Given the weight of evidence endorsing the credibility of climate models, at least 

at large spatial scales, we can safely use these models to estimate what changes 

might occur over the next 100 years. To do this we must first estimate how the 

emissions of all climatically-active gases will change in the future. As part of the 

IPCC Third Assessment Report process, a large set of future emissions scenarios 

was developed, all under the ‘‘no-climate-policy’’ assumption (referred to as the 

‘‘SRES’’ scenarios for ‘‘Special Report on Emissions Scenarios’’; Nakic ́enovic ́ and 

Swart, 2000). In total there are 35 complete scenarios spanning a range of assumptions about future population growth, economic growth, technological change, and 

so on—and each set of assumptions leads to a different set of emissions. In order 

to predict future climate one must take account of the attendant uncertainties in 

emissions, since it is these that drive changes in the composition of the atmosphere, 

which in turn drive changes in the climate system. At each step, in going from emissions to atmospheric composition changes, and from composition changes to climate, 

there are other uncertainties that must be taken into account. Most of these uncertainties were accounted for in the TAR, where the estimated changes in global-mean 

temperature over 1990 to 2100 were given as 1.4 °C to 5.8 °C. A more formal probabilistic analysis was given by Wigley and Raper (2001). 

Here, to illustrate the procedure, I will use a single emissions scenario, the A1B 

scenario, which is roughly in the middle of the range covered by the SRES set. I 

will then account for uncertainties in aerosol forcing and climate sensitivity as in 

Figure 1 (recognizing that this does not span the full range of uncertainties in these 

parameters). The projected future changes in global-mean temperature, compared 

with past changes, are shown in Figure 3. 

21 

Figure 3: Projected global-mean warming. 

Over 2000 to 2100 the warming range is 2.0 °C to 3.6 °C, which corresponds to 

warming rates of roughly three to five times the rate of warming over the 20th century—and temperatures are still increasing at the end of the century. A wider uncertainty range is obtained when other uncertainties are accounted for, as in the 

TAR analysis (shown by the bar on the right side of the Figure). Even at the low 

end of the range of possibilities, the warming rate over 2000 to 2100 is double the 

20th century warming rate, while at the top end the future rate is seven times the 

past rate. 

Major changes in all aspects of climate will occur in parallel with these unprecedented global-mean temperature increases. Many of these will be beyond our 

present adaptive capabilities (particularly in lesser developed countries), and will 

undoubtedly lead to damages to natural ecosystems and managed systems such as 

agriculture and water resources, and to possibly serious consequences for health and 

the spread of pests and disease. While the changes and their impacts cannot be predicted in detail, and while some of the consequences of future climate and atmospheric change may be positive, it would be prudent to insure against adverse 

changes either through improving our adaptive capabilities and/or, through emissions mitigation, reducing the magnitude of future climate change. In the absence 

of climate policies, as time goes by we will be moving further and further into unknown climate territory and committing ourselves to even larger future changes. Because of the inertia in both socioeconomic systems and the climate system, it is likely that quite aggressive actions may be required to avoid (quoting Article 2 of the 

Framework Convention on Climate Change) ‘‘dangerous interference with the climate system’’, and ensure that we are able to stabilize the composition of the atmosphere and the climate at acceptable levels. 

6. References 

Barnett, T.P., D.W. Pierce, and R. Schnur, 2001: Detection of anthropogenic climate change 

in the world’s ocean. Science, 292, 270–274. 

Christy, J.R., R.W. Spencer, W.B. Norris, and W.D. Braswell, 2003: Error estimates of version 

5.0 of MSU–AMSU bulk atmospheric temperatures. Journal of Atmospheric and Oceanic Technology, 20, 613–629. 


1001WIGL3.eps
22 

Foukal, P., 2002: A comparison of total variable solar and total ultraviolet irradiance outputs 

in the 20th century. Geophysical Research Letters, 29, 10.1029/2002GL015474. 

Gibson, J.K., P. Ka ̊llberg, S. Uppala, A. Hernandez, A. Nomura, and E. Serrano, 1997: 

ECMWF Re-Analysis Project Report Series. 1. ERA Description. 66 pp. 

Gillett, N.P., F.W. Zwiers, A.J. Weaver, and P.A. Stott, 2003: Detection of human influence 

on sea-level pressure. Nature, 422, 292–294. 

Groisman, P.Ya., et al., 1999: Changes in the probability of heavy precipitation: Important indicators of climate change. Climatic Change, 42, 243–283. 

Houghton, J.T., Y. Ding, D.J. Griggs, M. Noguer, P.J. van der Linden, X. Dai, K. Maskell, 

and C.A. Johnson, Eds, 2001: Climate Change 2001: The Scientific Basis. Cambridge University 

Press, 881 pp. 

Hoyt, D.V., and K.H. Schatten, 1993: A discussion of plausible solar irradiance variations, 

1700–1992. J. Geophys. Res., 98, 18895–18906. 

Jones, P.D., and A. Moberg, 2003: Hemispheric and large-scale surface air temperature variations: An extensive revision and an update to 2001. Journal of Climate, 16, 206–223. 

Jones, P.D., M. New, D.E. Parker, S. Martin, and I.G. Rigor, 1999: Surface air temperature 

and its changes over the past 150 years. Reviews of Geophysics, 37, 173–199. 

Karl, T.R., and R.W. Knight, 1998: Secular trends in precipitation amount, frequency, and intensity in the United States. Bull. Amer. Met. Soc., 79, 231–241. 

Mann, M.E., and P.D. Jones, 2003: Global surface temperatures over the past two millennia. 

Geophysical Research Letters, 30, 10.1029/2003GL017814. 

Mears, C.A., M.C. Schabel, and F.W. Wentz, 2003: A reanalysis of the MSU channel 2 tropospheric temperature record. Journal of Climate (in press). 

Nakic ́enovic ́, N., and R. Swart, Eds, 2000: Special Report on Emissions Scenarios. Cambridge 

University Press, 570 pp. 

National Academy of Sciences (NAS), 2001: Climate Change Science. An Analysis of Some Key 

Questions. National Academy Press, Washington, D.C., 29 pp. 

Raper, S.C.B, J.M. Gregory, and T.J. Osborn, 2001: Use of an upwelling-diffusion energy-balance model to simulate and diagnose A/OGCM results. Climate Dynamics, 17, 601–613. 

Robock, A., 2000: Volcanic eruptions and climate. Reviews of Geophysics, 38, 191– 219. 

Santer, B.D., T.M.L. Wigley, G.A. Meehl, M.F. Wehner, C. Mears, M. Schabel, F.J. Wentz, C. 

Ammann, J. Arblaster, T. Bettge, W.M. Washington, K.E. Taylor, J.S. Boyle, W. Bru ̈ ggemann, 

and C. Doutriaux, 2003a: Influence of satellite data uncertainties on the detection of externallyforced climate change. Science, 300, 1280–1284. 

Santer, B.D., M.F. Wehner, T.M.L. Wigley, R. Sausen, G.A. Meehl, K.E. Taylor, C. Ammann, 

J. Arblaster, W.M. Washington, J.S. Boyle, and W. Bru ̈ ggemann, 2003b: Contributions of anthropogenic and natural forcing to recent tropopause height changes. Science, 301, 479–483. 

Trenberth, K.E., A. Dai, R.M. Rasmussen, and D.B. Parsons, 2003: The changing character 

of precipitation. Bull. Amer. Met. Soc., 84, 1205–1212. 

Vinnikov, K.Y., A. Robock, R.J. Stouffer, J.E. Walsh, C.L. Parkinson, D.J. Cavalieri, J.F.B. 

Mitchell, D. Garrett, and V.F. Zakharov, 1999: Global warming and Northern Hemisphere sea 

ice extent. Science, 286, 1934–1937. 

Wilby, R.L., and T.M.L. Wigley, 2002: Future changes in the distribution of daily precipitation 

totals across Nth America. Geophysical Research Letters, 29, 10.1029/2001GL013048. 

Wigley, T.M.L., and S.C.B. Raper, 2001: Interpretation of high projections for global-mean 

warming. Science, 293, 451–454. 

Wigley, T.M.L., and S.C.B. Raper, 2002: Reasons for larger warming projections in the IPCC 

Third Assessment Report. Journal of Climate, 15, 2945–2952. 

The CHAIRMAN. Thank you very much. 

Dr. Schneider? 

STATEMENT OF STEPHEN H. SCHNEIDER, PROFESSOR, 

DEPARTMENT OF BIOLOGICAL SCIENCES; CO-DIRECTOR, 

CENTER FOR ENVIRONMENTAL SCIENCE AND POLICY, 

STANFORD UNIVERSITY 

Dr. SCHNEIDER. Thank you very much, Senator, and I appreciate 

your noticing my jet-lagged eyes. 

[Laughter.] 

Dr. SCHNEIDER. But let me begin with a personal point, which is 

how much I appreciate having testified before committees in which 

you sat since—maybe neither one of us wants to remember back 

to the mid-1980s, and the 1990s in the case of Senator Lieberman. 

And many of us in the outside community deeply appreciate your 

staying with this issue. 

23 

We also appreciate the opportunity to try to clarify very briefly, 

which is all I can do in the few minutes I have now, some of the 

items that may be confusing to people on the outside. 

We hear claims that climate will lead to certain catastrophic outcomes. We hear claims that it’ll be good for you from CO2 fertilization. And I’ll state my prejudice at the outset, sir, which is that 

‘‘the end of the world’’ and ‘‘good for you’’ are the two lowest probability outcomes. 

Almost everything else in between is more likely, and that includes a substantial number of events which could have serious 

consequences; and, therefore, I find that entirely justifiable that 

you and your colleagues are looking to find solutions which are 

both fair, cost effective, and able to handle the reduction in the 

growth rate of the gases that we think will create this problem. 

I was asked, thinking back to a Committee that you were on in 

May 8, 1989, and, in fact, it was this very Committee, there was 

contention about the degree to which uncertainty would allow us 

to say anything. And I was pressed by Senators at the time to say, 

‘‘Well, you don’t know this based on looking at the temperature 

changes of the kind that Dr. Wigley just mentioned.’’ And the point 

that I said—I just looked it up—I said, ‘‘Most of our confidence that 

the future will change is about the heat-trapping properties of 

gases, not so much based on the performance of the planet in this 

century. If we insist on waiting for the planet to catch up with 

what we expect it to do, it is another 10 to 20 years to prove that.’’ 

Well, so I put myself on the line. That was 14 years ago, and I 

would now argue that nature has caught up with theory. And precisely what Tom Wigley said has driven the vast bulk of climate 

scientists to assert that despite remaining uncertainties in many 

aspects of the problem, it’s overwhelmingly clear that something 

unusual is going on in the last few decades. And recent studies are 

suggesting it isn’t just the last few decades relative to the last hundred years, with the graphics we saw, but the last few decades are 

unusual over the timescale of 2,000 years. 

Moreover, there are those who assert, ‘‘Well, maybe this is just 

an accident of nature. Maybe it’s just the sun that did it.’’ And, of 

course, it raises the question among most serious scientists, well, 

if the sun is acting so perverse, why did it choose the last two decades when we also happened to have increased greenhouse gases 

and land-use changes and other things? 

So the best explanation we have for the complex set of issues is, 

as Dr. Wigley has said, and the IPCC, and the National Research 

Council, a combination of natural and human factors. And in the 

recent years, the human factors are probably becoming dominant. 

Now, that’s becoming dominant for the warming of up to the degree or so Fahrenheit we had, and what’s really critical is predicting what might happen in the future. In order to do that, we 

depart with the climate science of arguing about feedbacks and 

oceans and so forth, and now move into the realm of human behavior, because we have to figure out how many people will there be 

in the world, what kind of standards of living will they demand, 

and what kind of technologies and organizations will they use to 

bring those about, because that’s what determines the relative 

amount of emissions, land-use, and so forth. Not only do those beVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00027 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\94255.TXT JACKIE
24 

haviors of us—which, of course, we have a choice over, including 

supporting this bill, which, personally, I strongly do—we also have 

to say as countries evolve and as people develop, it changes our capacity to adapt to the very pressures that we will put on and that 

nature will put on. 

So it all works interactively, and that what we have to do is recognize that our choices made in the next generation or so will then 

play themselves out, not just for the climate, but for our vulnerability to climate changes of all kinds over the century as a whole. 

Therefore, rather than dwell more on climate, let me, instead, 

talk about the ‘‘so what.’’ So what if the climate changes? And 

there’s very good science that’s recently emerged in that. In particular, two studies published this year, both using independent 

methods, showed that plants and animals in the world are not 

longer sitting passively, but actually beginning to respond to the 

six-tenths of a degree, seven-tenths of a degree warming that’s already taken place. 

Now, it shouldn’t come as any surprise to somebody who’s actually opened their eyes outside that if it gets warmer, the trees will 

flower early, or butterflies might move up mountains, or birds 

would lay eggs earlier. That wasn’t the surprise. The surprise was 

that the warming we’ve had so far has been sufficient to lead to 

a clear statistically significant signal that’s discernable in hundreds 

of species of plants and animals. No one has claimed harm from 

that yet, but if we can see the change already, at six-tenths of a 

degree-C, then if we end up with the numbers Dr. Wigley referred 

to, where warming would be, if we’re lucky, another degree or so, 

and, unlucky, five, then we would expect dramatic reorganization 

of ecosystems. Not only would they be forced to move, and move 

rapidly, but they’d have to cross factories, farms, freeways, and 

urban settlements. And those combination of disturbances means 

that nature could very well be the prime reason for concern for 

dealing with the greenhouse effect and its future potential. 

Let me wrap up by saying we have to take a long view. It’s very 

difficult, as we all know—there’s a famous expression that ‘‘politics 

is now, and politics is local’’—and, indeed, there’s a lot of truth in 

that. On the other hand, the tailpipe that I may have is going to 

do exactly the same thing to the climate as one from China or Russia. And as a result of that, we are all in this together. And as each 

nation fashions its own best solution, we have to recognize that 

that can only be partially effective without international agreements to try to coordinate cost-effective and fair actions. 

You mentioned at the outset, for the first testimony, that there 

were critics who suggested that it was unimaginably expensive to 

try to deal with this problem. Last summer, a Swedish colleague, 

Christian Azar, and I had published a paper, in the Journal of Ecological Economics, where we examined that. And we looked and 

said, supposing we did the impossible thing, we had a draconian 

carbon tax of $300 or $400 a ton, something that would be considered politically outrageous today, and that led to a stabilization of 

carbon dioxide in the atmosphere of 300 or 400 parts per million, 

or 500, something well below any of the current IPCC scenarios. 

Well, if we costed those out using conventional economic models, 

the present value is on the order of something like $10 to $20 trilVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00028 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\94255.TXT JACKIE
25 

lion. Well, that seems so outrageously unimaginable among the 

world economies, $30 trillion, that we can understand why people 

were criticizing it. 

But then we took a step back and said, wait a minute, that’s the 

present value of the entire event over a hundred years. All these 

same economic models project about a 2 percent per year growth 

rate in GDP, so the current economy, 30 trillion, would have to be 

multiplied times eight. It would be something like 250 trillion. So 

if you have a 2 percent per year growth rate in 2100, and you have 

a $250 trillion economy, a $20 trillion cost at that time is about 1 

percent of GDP. In other words, we could essentially solve the global warming problem and do it by getting 500 percent richer in personal income, globally averaged, and have to have that wealth 

occur in 2101 instead of 2100. I would assert that’s a very inexpensive insurance policy to deal with a potentially dangerous problem, 

such as climate change. 

I have heard it similarly said about this very bill that we’re discussing, that it could have very high costs. When one looks at numbers in absolute terms, like billions of dollars, that seems high. But 

when one looks at the very, very small percentages of change to 

GDP, you’re literally talking about delaying 25 to 50 percent increases in personal income several months, at most, and that’s with 

pessimistic assumptions. 

So I think we need to have two kinds of perspectives in talking 

about this, and one is the absolute costs, and the other one is the 

relative costs to the growth rate in the economy. And if one looks 

at that, one will find that it is not remotely too expensive, in my 

personal view, to try to slow down the potential of dangerous climate change that the previous speakers have described. 

Thank you, sir. 

[The prepared statement of Dr. Schneider follows:] 

PREPARED STATEMENT OF STEPHEN H. SCHNEIDER, PROFESSOR, DEPARTMENT OF

BIOLOGICAL SCIENCES; CO-DIRECTOR, CENTER FOR ENVIRONMENTAL SCIENCE AND

POLICY, STANFORD UNIVERSITY

Introduction and Personal Perspective. If I may indulge in a personal note 

at the outset: it is a pleasure to appear again in front of both Senators McCain and 

Lieberman on climate change issues, having had that honor on several occasions 

since the mid-1980s with Senator McCain and the mid-1990s with Senator 

Lieberman. As these hearings today are about the ‘‘case for action’’ on climate 

change based on sound science assessment, I will try to emphasize aspects of the 

science of climate change less exhaustively covered by other witnesses, such as Dr. 

Tom Wigley of the National Center for Atmospheric Research, whose testimony on 

climate change science I fully associate myself with. Instead, I will focus more on 

climate change impacts. The problem was well-stated by Senator Lieberman when 

I commented to the Senate Environment and Publics Works Committee, chaired by 

the late Senator Chaffee, in July 1997. At that time, Senator Lieberman said: 

Changes in climate have major implications for human health, water resources, 

food supplies, infectious diseases, forests, fisheries, wildlife populations, urban 

infrastructure, and flood plain and coastal developments in the United States. 

Although uncertainties remain about where, when, and how much climate 

might change as a result of human activities, the changes—when they happen— 

may have severe impacts on many sectors of the U.S. economy and on the environment. These are serious risks that we must start considering (p. 15). 

This statement is equally valid today and can be further supported by substantially more scientific studies pointing out potentially serious climate impacts. I will 

briefly review some of these and put them in the context of climate change costbenefit analyses. But first, a brief statement about the climate change science itself. 

26 

While testifying to this Committee on May 8, 1989—when Senator McCain was 

a member of the Committee—I recall a discussion about the problem of uncertainties surrounding climate change and the question of how long we should wait before 

taking action. Some debaters had asserted that there wasn’t enough direct evidence 

of human-induced climate change for strong policy actions. In response to Senators 

from this committee on that point, I agreed that ‘‘Most of our confidence that the 

future will change is based on literally millions and millions of observations which 

tell us about the heat trapping properties of gases, not based so much on the performance of the planet this century. If we insist on waiting for the planet to catch 

up to what we expect it to do, it is another 10 to 20 years to prove that beyond 

doubt’’ (p. 150). 

Well, it is now 14 years since I said that. I believe the work of the Intergovernmental Panel on Climate Change (IPCC), the U.S. National Academy of Sciences 

(NAS), and others has amply demonstrated that, indeed, nature has ‘‘caught up’’ 

with our expectations of warming and in fact added a few surprises like rapid 

changes in polar regions and devastating heat-wave-induced deaths, even in modern, highly developed countries, with the more than 15,000 mortalities occurring in 

France this summer as a result of the extreme heat serving as a prime example. 

Surface warming trends are solidly grounded in observational science and consistent with human-induced pressures. It is scientifically well established that the 

Earth’s surface air temperature has warmed significantly, by about 0.6 ° Celsius (C) 

since 1860, and that an upward trend can be clearly discerned by plotting historical 

temperatures. Such a graph would show a rapid rise in temperature at the end of 

the twentieth century. This is supported by the fact that all but three of the ten 

warmest years on record occurred during the 1990s. But what has been learned only 

in the past five years is that this unusual warmth in recent years is not just an 

anomaly in temperature records of the last 140 years, but the past 2000, as Figure 

1 displays. 

Figure 1. 2,000-year reconstruction of global temperature changes in 

degrees Celsius 

The blue line represents the temperature reconstruction, with 95 percent confidence band 

shown in yellow and the instrumental record in red. Notice that the last several decades of the 

20th century exceed the range of temperatures over the past 2,000 years. (Source: Mann and 

Jones, 2003.) 

The probability that the radical upward swing in temperature at the tail end of 

the 20th century is just a natural quirk of nature—as some ‘‘contrarians’’ and their 

political supporters contend—is exceedingly low. If, as some assert, ‘‘the sun did it’’, 

then what was the sun doing over the previous 2 millennia? It is rather perverse 

to expect such radical behavior from the sun just now, at the same time that we 

have clear evidence of human-induced pressures coincident with the warming. While 

the possibility (at some low probability) that natural factors are responsible for the 

unusual warmth of the Earth’s surface at the end of the 20th century cannot be 

ruled out completely, a much more likely explanation is that the warming is the result of a mix of natural and human-induced (anthropogenic) factors. While this 

alone is cause for worry, more disquieting still are climate change projections for 

the 21st century, especially if we assume that greenhouse gas emissions follow a 

business-as-usual path. 

It is for these reasons that I express my personal satisfaction for having, over the 

past two decades, had the opportunity to testify to the Senators currently leading 

this effort to establish a meaningful climate change policy for the United States that 

will actually result in emissions reductions. In my personal opinion, it is essential 

that we get on with the job of providing (mandatory) incentives to push the amazing 


1001SCHN1.eps
27 

industrial and intellectual capacity of our country to fashion cost-effective solutions. 

I thank the Senators for having pursued this issue over the long term. 

As mentioned, nature has cooperated with theory in the past few decades, as evidenced by the record warming. In addition, it is well-established that human activities have caused increases in radiative forcing, with radiative forcing defined as a 

change in the balance between the radiation coming into and going out of the surface-atmosphere system. In the past few centuries, atmospheric carbon dioxide has 

increased by more than 30 percent, and virtually all climatologists agree that the 

cause is human activities, and the burning of fossil fuels in particular. 

Despite the many well-established aspects of the science of climate change (e.g., 

anthropogenic forcing of global warming), other aspects (e.g., specific regional 

changes) are still being vigorously debated. In fact, the climate change debate is 

characterized by deep uncertainty, which results from factors such as lack of information, disagreement about what is known or even knowable, linguistic imprecision, 

statistical variation, measurement error, approximation, subjective judgment, and 

disagreement about structural models, among others (see Moss and Schneider, 

2000). These problems are compounded by the global scale of climate change, which 

produces varying impacts at local scales, long time lags between forcing and its corresponding responses, very long-term climate variability that exceeds the length of 

most instrumental records, and the impossibility of before-the-fact experimental controls or empirical observations (i.e., there is no experimental or empirical observation set for the climate of, say, 2050 AD, meaning all our future inferences cannot 

be wholly ‘‘objective,’’ data-based assessments—at least not until 2050 rolls around). 

Moreover, climate change is not just a scientific topic but also a matter of public 

and political debate, and degrees of uncertainty may be played up or down (and further confused, whatever the case) by stakeholders in that debate. 

Can We Define ‘‘Dangerous’’ Climate Change? Article 2 of the UN Framework Convention on Climate Change (UNFCCC) states that: ‘‘The ultimate objective of this 

Convention and any related legal instruments that the Conference of the Parties 

may adopt is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that 

would prevent dangerous anthropogenic interference with the climate system’’. The 

Framework Convention on Climate Change further suggests that: 

‘‘Such a level should be achieved within a time frame sufficient 

• to allow ecosystems to adapt naturally to climate change, 

• to ensure that food production is not threatened and 

• to enable economic development to proceed in a sustainable manner.’’ 

Thus, the term ‘‘dangerous anthropogenic interference’’ may be defined or characterized in terms of the consequences (or impacts) of climate change outcomes, which 

can be related to the levels and rates of change of climate parameters. These parameters will, in turn, be determined by the evolution of emissions and consequent atmospheric greenhouse gas concentrations. Evaluating the consequences of climate 

change outcomes to determine those that may be considered ‘‘dangerous’’ is a complex undertaking, involving substantial uncertainties as well as value judgments. In 

this context, the role of scientists is to assess the literature with a view to providing 

information that is policy-relevant, without being policy prescriptive. 

Climate Sensitivity and Climate Scenarios to 2100 and Beyond. By how much will 

humans and natural changes in the Earth each contribute to future climate disturbance? The IPCC has attempted to tackle this controversial question in its Special 

Report on Emission Scenarios (SRES), which contains a range of possible future climate scenarios based on different assumptions regarding economic growth, technological developments, and population growth, arguably the three most critical determinants of future climate change. Together, the fan of possible climate scenarios 

and the probability distributions of possible climate sensitivities determine what 

policy makers often want to know—by how much will it warm in, say, 2100 (or any 

other time), depending on what policies we choose to change emissions scenarios 

(e.g., Schneider, 2002). 

The SRES scenarios and other climate change projections depend on detailed modeling. The most typical way scientists codify knowledge is by constructing models 

made up of the many subcomponents of the climate system that reflect our best understanding of each subsystem. The most comprehensive models of atmospheric conditions are three-dimensional, time-dependent simulators known as general circulation models (GCMs). Because of the complexity and computational costs of GCMs, 

simpler models are often constructed to explore the sensitivity of outcomes to plausible alternative assumptions (e.g., Wigley’s, testimony to this session). The system 

model as a whole cannot be directly tested before the fact—that is, before the future 

28 

arrives—but it can be verified against historical situations that resemble what we 

believe will be analogous to what will occur in the future (see ‘‘Model Validation’’ 

below). 

While modeling has become both more complex and more accurate as computing 

abilities have advanced and more is understood about the climate problem, scientists still have to deal with an enormous amount of uncertainty, as mentioned 

above. In modeling, a major uncertainty is climate sensitivity, the amount by which 

the global mean surface air temperature will increase for a doubling of CO2 concentrations from pre-industrial levels. Many scientists have done extensive modeling 

and observational research on this subject over the past 20 years, and most agree 

that climate sensitivity probably falls somewhere within the IPCC’s range of 1.5– 

4.5 °C. However, that old consensus is changing, as several recent studies (e.g., 

Andronova and Schlesinger, 2001; Forrest et al., 2001) have estimated that climate 

sensitivity could be an alarming 6 °C or higher. (To give a sense of the magnitude, 

a 5–7 °C drop in temperature is what separates Earth’s present climate from an 

ice age.) 

Model Validation. In the presence of so much uncertainty, how can modelers be 

more confident in their model results? How do they know that they have taken into 

account all economically, ecologically, and/or climatologically significant processes, 

and that they have satisfactorily ‘‘parameterized’’ processes whose size scales are 

below that of their models’ grid cells? The answer lies in a variety of model validation techniques, most of which involve evaluating a model’s ability to reproduce— 

in the case of climate models—known climatic conditions in response to known 

forcings. 

Volcanic eruptions are one good form of model validation. Major volcanic eruptions 

inject so much sulfuric acid haze and other dust into the stratosphere that they 

exert a global cooling influence that lasts several years. Such eruptions occur somewhat randomly, but there is typically one every decade or so, and they constitute 

natural ‘‘experiments’’ that can be used to test climate models. The last major volcanic eruption, of the Philippine volcano Mt. Pinatubo in 1991, was forecast by a 

number of climate modeling groups to cool the planet by several tenths of a degree 

Celsius. That is indeed what happened. 

Figure 2. Predicted and observed changes in global temperature after the 

1991 eruption of Mt. Pinatubo 

Solid curve is derived from measured air temperatures over land and ocean surfaces. Broken 

curves represent climate model runs with slightly different initial conditions. In both cases the 

models included the effect of dust injected into the atmosphere by the volcanic eruptions. 

(Source: Hansen et al., 1996.) 


1001SCHN2.eps
29 

Figure 2 shows a comparison between actual global temperature variations and 

those predicted by a climate model for a period of five years following the Mt. 

Pinatubo eruption. Now, a drop in temperature of a few tenths of a degree Celsius 

is small enough that the observed variation just could be an unusual natural fluctuation. However, earlier eruptions, including El Chicho ́n in 1983 and Mt. Agung 

in 1963, were also followed by a marked global cooling of several tenths of a degree 

Celsius. Studying the climatic effects from a number of volcanic eruptions shows a 

clear and obvious correlation between major eruptions and subsequent global cooling. Furthermore, a very simple calculation shows that the negative forcing produced by volcanic dusts of several watts per square meter is consistent with the 

magnitude of cooling following major volcanic eruptions. Viewed in light of these 

data, the graph above suggests that climate models do a reasonably good job of reproducing the large-scale climatic effects of volcanic eruptions over a time scale of 

a few years. 

Seasonality provides another natural experiment for testing climate models. Winter weather typically averages some fifteen degrees Celsius colder than summer 

weather in the Northern Hemisphere and five degrees Celsius colder in the Southern Hemisphere. (The Southern Hemisphere variation is lower because a much larger portion of that hemisphere is water, whose high heat capacity moderates seasonal 

temperature variations.) Climate models do an excellent job reproducing the timing 

and magnitude of these seasonal temperature variations, although the absolute temperatures they predict may be off by several degrees in some regions of the world. 

However, the models are less good at reproducing other climatic variations, especially those involving precipitation and other aspects of the hydrological cycle. Of 

course, being able to reproduce the seasonal temperature cycle alone—since it comes 

full circle in only one year—does not guarantee that a model will accurately describe 

the climate variations resulting from other driving factors (such as increasing anthropogenic greenhouse gas concentrations) that will likely occur over decades or 

centuries. On the other hand, the fact that models do so well with seasonal variations is an assurance that the models’ climate sensitivity is unlikely to be off by 

a factor of 5–10, as some contrarians assert. 

Joint Probability Estimation. The combined effects of uncertainties in emissions 

and uncertainties in climate sensitivity are also known as a ‘‘joint probability’’ (i.e., 

sensitivity and emissions varied jointly). How do we approach this question of the 

joint probability of temperature rise to 2100 and crossing some ‘‘dangerous’’ warming threshold, to use the language of the UNFCCC—which, by the way, was signed 

by President Bush in 1992 and ratified by the Senate. Instead of using two probability distributions, an analyst could pick a high, medium, and low range for each 

factor and plot the results, as I will demonstrate. For example, a glance at 

Andronova and Schlesinger’s (2001) calculations shows that the 10 percentile value 

for climate sensitivity is 1.1 °C for a doubling of CO2 (i.e., 4 W/m2 of radiative forcing). 1.1 °C is, of course, below the IPCC’s lower limit climate sensitivity value of 

1.5 °C. However, this merely means that there is a 10 percent chance climate sensitivity will be 1.1 °C or less—that is, a 90 percent chance climate sensitivity will be 

1.1 °C or higher. The 50th percentile result—that is, the value that climate sensitivity is as likely to be above as below—is 2.0 °C. The 90th percentile value for climate sensitivity from Andronova and Schlesinger (2001) is 6.8 °C, meaning there 

is a 90 percent chance climate sensitivity is 6.8 °C or less, but there is still a very 

uncomfortable 10 percent chance it is even higher than 6.8 °C—a value well above 

the 4.5 °C figure that marks the top of the IPCC’s range. Using these three values 

to represent a high, medium, and low climate sensitivity, we can produce three alternate projections of temperature over time, once an emissions scenario is decided 

on. 

In Schneider (2003), the three climate sensitivities just explained were combined 

with two SRES storylines: A1FI, the very high emissions, fossil fuel-intensive scenario; and A1T, the high technological innovation scenario, in which development 

and deployment of advanced technologies dramatically reduces the long-term emissions. This comparison pair almost brackets the high and low ends of the 6 SRES 

representative scenarios’ range of cumulative emissions to 2100, and since both are 

for the ‘‘A1 world,’’ the only major difference between them is the technology component. This component should be viewed as a ‘‘policy lever’’ that could be activated 

through the implementation of policies to encourage decarbonization, for example— 

like the bill before this committee. Therefore, studying how different the evolution 

of projected climate is to 2100 for the two different scenarios is a very instructive 

exercise and can help in exploring the different likelihoods of crossing ‘‘dangerous’’ 

warming thresholds. 

30 

Figure 3. Three climate sensitivities and two scenarios (source: Schneider, 

2003) 

As noted in Figure 3 above, the three climate sensitivities—10th, 50th and 90th 

percentiles—designated by Andronova and Schlesinger (2001) are combined with the 

radiative forcings for the A1FI and A1T scenarios laid out in the SRES. The dashed 

horizontal lines in both graphs represent the 3.5 °C cut-off—a very conservative 

number picked by me as the threshold value for ‘‘dangerous’’ climate change—and 

the blue shaded area marks the extent to which each temperature change scenario 

exceeds that 3.5 °C threshold. As shown, these scenarios produce similar projections 

of warming for the first several decades of the 21st century, but diverge considerably—especially in the high-sensitivity 90th percentile case—after mid-century. The 

50th and 90th percentile A1FI cases both exceed the threshold of 3.5 °C warming 

before 2100, and the area shaded in blue is much more dramatic in the fossil-intensive scenario than the technological innovation scenario. In fact, at 2100, when the 

A1T curves are stabilizing, the A1FI curves are still upwardly sloped—implying 

even greater warming in the 22nd century. In order to fully assess ‘‘dangerous’’ climate change potential, simulations that cover well over 100 years will be necessary, 

since it is widely considered that warming above a few degrees Celsius is likely to 

be much more harmful than changes below a few degrees (see Figure 4 below). 

How Long is a ‘‘Long View’’? The most striking features of both scenarios in Figure 3 are the top (red) lines, which rise very steeply above the two lines below them. 

That is because of the peculiar shape of the probability density function for climate 

sensitivity in Andronova and Schlesinger (2001). [For those concerned with the technical details, that is because the probability density function has a long tail on the 

right-hand side, representing the possibility that aerosols have been holding back 

not-yet-realized warming and the rise in temperature could be much higher than 


1001SCHN3.eps
31 

currently expected.] Also striking is that both the 10th and 50th percentile results 

for both the A1FI and A1T scenarios don’t differ much in 2050, but then diverge 

considerably by 2100. This has led some to declare (erroneously, in my view) that 

there is very little difference in climate change across scenarios or even among different climate models with different sensitivities. This is clearly wrong, for although 

both A1FI and A1T have emissions, and thus CO2 concentration, projections that 

are not very different for the first several decades of the 21st century, they diverge 

after 2050, as does the temperature response. For the 90th percentile results, both 

the A1FI and the A1T temperature projections exceed the ‘‘dangerous’’ threshold of 

3.5 °C at roughly the same time (around 2040), but the A1FI warming not only goes 

on to outstrip the A1T warming, but is still steeply sloped at 2100, implying warming beyond 13 °C in the 22nd century, which would undoubtedly leave a dramatic 

legacy of environmental damage for distant posterity and great ecological stress for 

nature. 

Figure 3 shows, via a small number of curves (6 in all), the probability of temperature changes over time for three climate sensitivity probabilities, but it does not 

give probabilities for the emissions scenarios themselves; only two are used to 

‘‘bracket uncertainty,’’ and thus no joint probability can be gleaned from this exercise. This is the next step that needs to be taken by the research community. An 

MIT integrated assessment group (Webster et al., 2003) has already attempted to 

fashion a probability distribution for future climate using a series of different models and expert judgments. Like other assessments, their work also suggests a wide 

range of possibilities, with some representing quite ‘‘dangerous’’ potential outcomes. 

That approach, I predict, will be the wave of the future in such analyses, but given 

the heavy model-dependence of any such results, individual ‘‘answers’’ will remain 

controversial and assumption-bound for a considerable time to come. 

The likelihood of threshold-crossing is quite sensitive to the particular selection 

of scenarios and climate sensitivities used. However, in these bracketing studies, the 

probability of crossing ‘‘dangerous’’ thresholds of climate change is typically around 

ten percent—a risk society will have to weigh against the costs of climate mitigation 

activities. As will be discussed shortly, that is a high risk indeed. 

If conventional economic discounting were applied, some present-day ‘‘rationalists’’ 

might argue that the present value of damages postponed for a century or so is virtually nil. But what if our behavior were to trigger irreversible changes in sea levels 

and ocean currents or the extinction of species (on generational time scales)? Is it 

fair to future generations for us to leave them the simultaneous legacy of more 

wealth and severe ecosystem damage? That is the dilemma thoughtful analysts of 

the climate policy debate have to ponder, since the next few generations’ behaviors 

will precondition to a considerable extent the long-term evolution of the climate and 

the planetary ecosystems. 

Climate Impacts. Let us consider some of the effects that might occur in the next 

century if the SRES emissions do occur. We can use models to calculate the climatic 

consequences of those scenarios unfolding, which then allow us to estimate potential 

impacts of climate changes, and in turn, the benefits of avoiding some of those potential damages through mitigation and/or other measures. 

Table 1 shows the IPCC’s summary of a number of such projected impacts. These 

effects have been consolidated into five major reasons for concern and represented 

graphically, as shown in Figure 4. 

32 

Table 1.—Projected effects of global warming during the 21st Century 

(adapted from IPCC 2001b, table SPM–1) 

Projected Effect Probability estimate Examples of Projected Impacts with high confidence of occurrence 

(67—95 percent probability) in at least some areas 

Higher maximum 

temperatures, more 

hot days and heat 

waves over nearly all 

land areas 

Very likely (90–99%) Increased deaths and serious illness in older age groups 

and urban poor 

Increased heat stress in livestock and wildlife 

Shift in tourist destinations 

Increased risk of damage to a number of crops 

Increased electric cooling demand and reduced energy 

supply reliability 

Higher minimum 

temperatures, fewer 

cold days, frost days 

and cold waves over 

nearly all land areas 

Very likely (90–99%) Decreased cold-related human morbidity and mortality 

Decreased risk of damage to a number of crops, and 

increased risk to others 

Extended range and activity of some pest and disease 

vectors 

Reduced heating energy demand 

More intense 

precipitation events 

Very likely (90–99%) 

over many areas 

Increased flood, landslide, avalanche, and mudslide 

damage 

Increased soil erosion 

Increased flood runoff increasing recharge of some 

floodplain aquifers 

Increased pressure on government and private flood 

insurance systems and disaster relief 

Increased summer 

drying over most midlatitude continental 

interiors and 

associated risk of 

drought 

Likely (67–90%) Decreased crop yields 

Increased damage to building foundations caused by 

ground shrinkage 

Decreased water resource quantity and quality 

Increased risk of forest fire 

Increase in tropical 

cyclone peak wind 

intensities, mean and 

peak precipitation 

intensities 

Likely (67–90%) over 

some areas 

Increased risks to human life, risk of infectious disease 

epidemics and many other risks 

Increased coastal erosion and damage to coastal buildings 

and infrastructure 

Increased damage to coastal ecosystems such as coral reefs 

and mangroves 

Intensified droughts 

and floods associated 

with El Nin ̃ o events 

in many different 

regions 

Likely (67–90%) Decreased agricultural and rangeland productivity in 

drought- and flood-prone regions 

Decreased hydro-power potential in drought-prone regions 

Increased Asian 

summer monsoon 

precipitation 

variability 

Likely (67–90%) Increase in flood and drought magnitude and damages in 

temperate and tropical Asia 

Increased intensity of 

mid-latitude storms 

Uncertain (current 

models disagree) 

Increased risks to human life and health 

Increased property and infrastructure losses 

Increased damage to coastal ecosystems 

33 

Figure 4—Reasons for concern about climate change impacts (source: IPCC 

Working Group 2 Third Assessment Report, figure SPM–2) 

In Figure 4 above, the left part of the figure displays the observed temperature 

increase up to 1990 and the range of projected increases after 1990, as estimated 

by IPCC Working Group I (IPCC, 2001a). The right panel displays conceptualizations of five reasons for concern regarding climate change risks evolving through 

2100. White indicates neutral or small negative or positive impacts or risks, yellow 

indicates negative impacts for some systems, and red means negative impacts or 

risks that are more widespread and/or greater in magnitude. This figure shows that 

the most potentially dangerous impacts (the red colors on the figure) typically occur 

after a few degrees Celsius of warming—thus, my use of 3.5 °C as a tentative 

‘‘threshold’’ for serious climate damages in Figure 3 is very conservative. (The European Union has suggested the ‘‘dangerous’’ threshold is about 2 °C.) The risks of 

adverse impacts from climate change increase with the magnitude of climate 

change. 

Despite uncertainties surrounding emissions scenarios and climate sensitivity, the 

IPCC has projected that, if its latest estimate that the Earth’s atmosphere will 

warm somewhere between 1.4 and 5.8 °C by 2100 is correct, likely effects will include: more frequent heat waves (and less frequent cold spells); more intense storms 

(hurricanes, tropical cyclones, etc.) and a surge in weather-related damage; increased intensity of floods and droughts; warmer surface temperatures, especially at 

higher latitudes; more rapid spread of disease; loss of farming productivity and/or 

movement of farming to other regions, most at higher latitudes; species extinction 

and loss of biodiversity; and rising sea levels, which could inundate coastal areas 

and small island nations (see Table 1). 

The threat of rising sea levels has been studied in great detail. It is thought that 

warmer atmospheric temperatures would lead to warming of ocean water (and corresponding volumetric expansion) until the heat was well-distributed throughout the 

oceans—a mixing time known to be on the order of 1,000 years. Instead of only up 

to a meter of sea level rise over the next century or two from thermal expansion 

of warmed ocean waters—and perhaps a meter or two more over the five or so centuries after that—significant global warming would likely trigger nonlinear events 

like a deglaciation of major ice sheets near the poles. That would cause many additional meters of rising seas for many millennia, and once started, might not be reversible on the time scale of thousands of years. 

It is important that scientists continue to develop stronger models and probe the 

issue of climate sensitivity, as improvements in the science will lead to improveVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00037 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\94255.TXT JACKIE

1001SCHN4.eps
34 

ments in our understanding of the potential impacts of various levels of temperature 

change. 

In What Units Can We Measure Climate Damage? Schneider, Kuntz-Duriseti, and 

Azar (2000) have argued that the best way to estimate the full extent of the climate 

change-induced damages described above is by examining not just monetarily-quantifiable (‘‘market’’) damage, but the ‘‘five numeraires’’: monetary loss (market category), loss of life, quality of life (including coercion to migrate, conflict over resources, cultural diversity, loss of cultural heritage sites, etc.), species and/or biodiversity loss, and distribution/equity. Assessing climate impacts in all these categories should ensure a fairer, more accurate assessment of the actual costs of global warming. 

The last numeraire, the issue of equity in climate change, is, and will likely continue to be, contentious. Climate change inequality will likely come in two forms. 

First, it will produce inequity in effects. Some countries or sectors within countries 

will benefit from a certain degree of warming, whereas others will be harmed by 

it. The developed countries, who are responsible for most of the greenhouse gases 

emitted into the atmosphere thus far may not be affected as much as the developing 

countries for two reasons: first, there is usually higher adaptive capacity in richer, 

cooler countries than in poorer, warmer ones. Second, developing countries that 

have not yet experienced the economic fruits of an industrial revolution and want 

their chance to emit and industrialize fear that policies to restrict emissions will 

deny them their ‘‘fair share’’ of the atmospheric commons to use—quite literally— 

as a waste dump. One strategy to solve this problem is ‘‘technology leapfrogging,’’ 

the transfer or development of cleaner technologies to developing countries on a 

much-accelerated time schedule (relative to the developments that have emerged 

over a century in now-rich countries). 

Moreover, as there are disparities in countries’ abilities to pay for global warmingrelated problems, once again, the developing countries will be affected more yet 

have less of an ability to pay than the rich nations. While I agree it is essential 

to deal with climate policy at home—and thus personally applaud this bill before 

the committee today—we will have to join with other countries to fashion joint solutions in the near future if we are to make progress on the climate change problem. 

Nature Is Already Responding. Another numeraire mentioned above was the loss 

of biodiversity. Very recent studies (e.g., Root et al., 2003; Parmesan and Yohe, 

2003) have shown that nature is already responding to climate trends of the past 

several decades. Figure 5 (below), for example, shows the activities of many plants 

and animals—such as the flowering of trees and the migrating of birds in the 

spring—have been occurring earlier due to observed climate trends. That warmer 

weather would make flowers bloom earlier is hardly surprising, but that ‘‘only’’ 0.6 

°C of warming to date has already caused a statistically significant ‘‘discernible impact’’ on plants and animals is surprising. Moreover, it is sobering to consider what 

major movements—and extinctions—would likely take place in plant and animal 

communities if the climate changes by several degrees or more. 

35 

Figure 5. Frequency of species and groups of species with a temperaturerelated trait changing by number of days in 10 years for data gathered 

primarily since 1960 

The arrow indicates the mean and the ‘‘x’’ indicates no data were tabulated for species showing no clear trait changes. This is a highly statistically significant result demonstrating that 

there has been a discernible impact of recent climate trends on plants and animals. Their vital 

activities that are linked to temperature are occurring earlier, in concert with global warming 

trends. (Source: Root et al., 2003.) 

Another clear climate impact is the retreat of mountain glaciers. This problem 

goes beyond just the disruption of scenic beauty as glaciers in places like Glacier 

National Park continue to disappear; it can be damaging to societies that are flooded during the glacier-melting stage and will later suffer from lack of water as their 

current supplies disappear with the glaciers. Figure 6 shows the dramatic disappearance of Mt. Kilimanjaro’s glaciers, which have decreased in size by 80–90 percent relative to 100 years ago. 

Figure 6. What will happen to the snows of Kilimanjaro? 

The extent of ice cover on Mt. Kilimanjaro decreased by 81 percent between 1912 and 2000. 

Disappearing paleoclimate archives such as this are a priority target of the Global Paleoclimate 

Observing System currently being proposed by the Past Global Changes (PAGES) scientists. 


1001SCHN5.eps 1001SCHN6.eps
36 

Climate Surprises? The IPCC and others have stated that ‘‘dangerous’’ climate 

change, including surprises, is more likely to occur with more than a few degrees 

Celsius of additional warming. Surprises, better defined as ‘‘imaginable abrupt 

events’’, could include deglaciation and/or the alteration of ocean currents, the most 

widely-used example of the latter being a slowdown of the Thermohaline Circulation, or THC, system in the North Atlantic Ocean. Ecosystems, especially those already stressed by land use pressures, are particularly vulnerable to rapid climate 

changes. 

Estimating climate damages that are expected to occur gradually and their effects 

is simple relative to forecasting ‘‘surprise’’ events and their consequences. But rather than being ignored as unlikely, surprises and other irreversibilities like plant and 

animal extinctions should be treated like other climate change consequences by scientists performing risk assessments, where risk is defined as probability x consequence. While the possible consequences of climate change have been discussed 

thoroughly, they are often not accompanied by probabilities. The probability component of the risk equation will entail subjective judgment on the part of scientists, 

but this is far preferable to overlooking the risk equation entirely. 

Policymakers will be better able to determine what is ‘‘dangerous’’ and formulate 

effective legislation to avoid such dangers if probabilities appear alongside scientists’ 

projected consequences. These probabilities and consequences will vary regionally. 

In general, temperature rises are projected to be greatest in the subpolar regions, 

and to affect the polar winter more dramatically than the summer. Hotter, poorer 

nations (i.e., developing nations near the equator) are expected to suffer more dramatic effects from climate change than their developed neighbors in the North. This 

is partly due to the lower expected adaptive capacities of future societies in developing nations (when compared with their developed country counterparts), which depend on their resource bases, infrastructures, and technological capabilities. This 

implies that damages may be asymmetrically felt across the developed/developing 

country divide. The scenario in which climate change brings longer growing seasons 

to the rich northern countries and more intense droughts and floods to the poor 

tropical nations is clearly a situation ripe for increasing international tensions and 

could cause developing nations to feel increasing resentment towards the most-polluting nations in the twenty-first century. That scenario has clear security implications for the United States. 

Regardless of the different levels of vulnerability and adaptive capacity that future societies are expected to have and the need for regional-level assessments that 

that implies, all people, governments, and countries should realize that ‘‘we’re in 

this together.’’ In all regions, people’s actions today will have long-term consequences. Even if humanity completely abandons fossil fuel emissions in the 22nd 

century, elevated CO2 concentrations are projected to remain for a millennium or 

more. The surface climate will continue to warm from this greenhouse gas elevation, 

with a transient response of centuries before an equilibrium warmer climate is established. How large that equilibrium temperature increase is depends on both the 

final stabilization level of the CO2 and the climate sensitivity. 

Implications for Climate Policy Choices. In the face of such uncertainty, potential 

danger, and long-term effects of present actions, how should climate change policy 

be confronted? As discussed previously, climate change, like many other complex 

socio-technical issues, is riddled with ‘‘deep uncertainties’’ in both probabilities and 

consequences. They are not resolved today and may not be resolved to a high degree 

of confidence before we have to make decisions regarding how to deal with their implications. With imperfect, sometimes ambiguous, information on both the full range 

of climate change consequences and their associated probabilities, decision-makers 

must decide whether to adopt a ‘‘wait and see’’ policy approach or follow the ‘‘precautionary principle’’ and hedge against potentially dangerous changes in the global 

climate system. Since policymakers operate on limited budgets, they must determine 

how much to invest in climate protection versus other worthy improvement 

projects—like new nature reserves, clean water infrastructure and other health improvement, and better education. 

Ultimately, the decision on whether or not to take action on climate change entails a value judgment on the part of the policymaker regarding what constitutes 

‘‘dangerous’’ climate change, ideally aided by complete risk assessments provided by 

scientists. Cost-benefit analyses (CBAs) are also useful in deciding the ifs and whats 

of climate change policy, but uncertainties and the need for multiple metrics (e.g., 

the ‘‘five numeraires’’) make this exercise difficult as well, especially when attempting to estimate the costs of surprise and other catastrophic events. 

Any policies that are implemented should encourage, and possibly even go so far 

as to subsidize, technological change. Encouraging technological change through energy policies, in particular, is of critical importance when addressing climate change. 

37 

As Figure 3 shows, alternate energy-technology scenarios could dramatically lower 

the risk of ‘‘dangerous’’ climate change. 

Is It Really Too Expensive To Mitigate Global Warming? Christian Azar and I 

(Azar and Schneider, 2002) developed a simple economy model and estimated the 

present value (discounted to 1990, expressed in 1990 USD, and assuming a discount 

rate of five percent per year) of the costs to stabilize atmospheric CO2 at 350 parts 

per million (ppm), 450 ppm, and 550 ppm to be 18 trillion USD, 5 trillion USD, and 

2 trillion USD, respectively. Obviously, 18 trillion USD is a huge cost; the output 

of the entire global economy in 1990 amounted to about 20 trillion USD. Seen from 

this perspective, these estimates of the costs of abatement tend to create the impression that we would, as critics suggest, have to make draconian cuts in our material 

standards of living in order to reduce emissions and achieve the desired levels of 

CO2 concentration. These same critics view the cost estimates as unaffordable and 

politically impossible. 

However, viewed from another perspective, an entirely different analysis emerges. 

In the absence of emission abatement and without factoring in any damages from 

climate change, GDP is assumed to grow by a factor of ten or so over the next 100 

years, which is a typical convention used in long-run modeling efforts. (The plausibility of these growth expectations is not debated here, but the following analysis 

will show how GDP is expected to grow with and without climate stabilization policies.) If the 350 ppm target were pursued, the costs associated with it would only 

amount to a delay of two to three years in achieving this aforementioned tenfold 

increase in global GDP. Thus, meeting a stringent 350 ppm CO2 stabilization target 

would imply that global incomes would be ten times larger than today by April 2102 

rather than 2100 (the date the tenfold increase would occur for the no-abatementpolicies scenario). This trivial delay in achieving phenomenal GDP growth is replicated even in more pessimistic economic models. These models may be very conservative, given that most do not consider the ancillary environmental benefits of 

emission abatement (see Figure 7 below). 

Figure 7. Global income trajectories under business-as-usual (BAU) and in 

the case of stabilizing the atmosphere at 350 ppm, 450 ppm, and 550 

ppm 

Observe that we have assumed rather pessimistic estimates of the cost of atmospheric sta- bilization (average costs to the economy assumed here are $200/ton Carbon (tC) for 550 ppm 

target, $300/tC for 450 ppm, and $400/tC for 350 ppm) and that the environmental benefits in 

terms of climate change and reduction of local air pollution of meeting various stabilization targets have not been included. (Source: Azar & Schneider, 2002.) 

Representing the costs of stringent climate stabilization as a few short years of 

delay in achieving monumental increases in wealth should have a strong impact on 

how policymakers, industry leaders, and the general public perceive the climate policy debate. Similar results can be presented for the Kyoto Protocol: the drop in GDP 

below ‘‘baseline’’ levels that would occur if the Kyoto Protocol were implemented 

ranges between 0.05 percent and 1 percent, depending on the region considered and 

the model used (see IPCC Working Group III, chapter 8, IPCC 2001c, p. 537–538). 


1001SCHN7.eps
38 

The drops in the growth rates for OECD countries over the next ten years would 

likely fall in the range of 0.005–0.1 percent per year below baseline scenario projections under the Kyoto Protocol. (It should be kept in mind that the uncertainties 

about baseline GDP growth projections are typically much larger than the presented 

cost-related deviations.) Returning to the analysis Azar and I did, assuming a 

growth rate of two percent per year in the absence of carbon abatement policies, implementation of the Kyoto Protocol would imply that the OECD countries would get 

20 percent richer (on an annual basis) by June 2010 rather than January 2010, assuming the high-cost abatement estimate. 

Similar statements could well be made about the costs associated with this bill 

that is before the Committee. Although I have not analyzed it myself, I strongly suspect that the loss of GDP from the costs incurred as a result of implementing this 

measure would be such a small fraction of typically-projected U.S. GDP growth 

rates that only months of delay in growth would occur, nowhere enough to prevent 

large increases in personal income from occurring. Thus, this bill is likely to be an 

inexpensive ‘‘insurance premium’’ to slow down global warming and lower the likelihood of ‘‘dangerous’’ climate impacts. 

Whether the costs mentioned are big or small is, of course, a value judgment, but 

in any case, it is difficult to reconcile the long-term climate benefits of a short-term 

delay in GDP growth with the strident rhetoric of contrarians like Lindsey (2001) 

who states in a speech to a colloquim on Science and Technology Policy (organized 

by the American Association for the Advancement of Science, or AAAS) that ‘‘the 

Kyoto Protocol could damage our collective prosperity and, in so doing, actually put 

our long-term environmental health at risk’’ (p.5). Others have made similar statements about this bill, and they have been refuted by careful economic analyses 

(Pizer and Kopp, 2003; Paltsev et al., 2003). Clearly, such balanced quantitative economic assessments, rather than pessimistic and often politically-motivated exaggerations should guide the evaluations of making bills like this one the laws of the 

land. 

I thank the Committee for asking for my views on this important piece of legislation. 

References 

Andronova, N.G. and M.E. Schlesinger, 2001: ‘‘Objective Estimation of the Probability Density 

Function for Climate Sensitivity’’, Journal of Geophysical Research 106:22605–22612. 

Azar, C. and S.H. Schneider, 2002: ‘‘Are the Economic Costs of Stabilizing the Atmosphere 

Prohibitive?’’ Ecological Economics 42:73–80. 

Forest, C.E., P.H. Stone, A.P. Sokolov, M.R. Allen, and M.D. Webster, 2001: ‘‘Quantifying Uncertainties in Climate System Properties Using Recent Climate Observations’’, Science 

295(5552):113–117. 

Hansen, J. et al., 1996: ‘‘A Pinatubo Climate Modeling Investigation’’, in Fiocco G., D. Fua, 

and G. Visconti (eds.), The Mount Pinatubo Eruption: Effects on the Atmosphere and Climate 

(Heidelberg, Germany: Springer-Verlag), 233–272. NATO ASI Series Vol. I 42. 

IPCC, 2000: Emissions Scenarios—A Special Report of Working Group III of the Intergovernmental Panel on Climate Change [N. Nakicenovic et al. (eds.)] (Cambridge: Cambridge University Press), 599 pp. 

IPCC, 2001a: The Scientific Basis, Summary for Policy Makers—Contribution of Working 

Group I to the Third Assessment Report of the Intergovermental Panel on Climate Change [J.T. 

Houghton, Y. Ding, D.J. Griggs, M. Noguer, P.J. van der Linden, X. Dai, K. Maskell, C.A. Johnson (eds.)] (Cambridge: Cambridge University Press), 881 pp. 

IPCC, 2001b: Impacts, Adaptation, and Vulnerability—Contribution of Working Group II to 

the IPCC Third Assessment Report, [J.J. McCarthy, O.F. Canziani, N.A. Leary, D.J. Dokken, 

K.S. White (eds.)] (Cambridge: Cambridge University Press), 1032 pp. 

IPCC, 2001c: Mitigation—Contribution of Working Group III to the Third Assessment Report 

of the Intergovernmental Panel on Climate Change [B. Metz, O. Davidson, R. Swart, J. Pan 

(eds.)] (Cambridge: Cambridge University Press), 752 pp. 

Lieberman, J.I., 1997: Prepared statement to the Senate Committee on Environment and Public Works (One Hundred Fifth Congress, first session). 10 July 1997. Published in Hearings on 

Reviewing the Effects of Greenhouse Gases on Global Weather Conditions and Assessing International Policy Options to Reduce the Negative Impacts of Climate Change (Washington, D.C.: 

U.S. Government Printing Office), pp. 14–16. Senate Hearing # 105–304. 

Lindsey, L.B., 2001: Speech to a colloquium on Science and Technology Policy organized by 

the American Association for the Advancement of Science (AAAS), May 2001. Available online 

at http://www.ostp.gov/html/010515.html. 

Mann, M.E. and P.D. Jones, 2003: ‘‘Global Surface Temperatures Over the Past two Millennia’’, Geophysical Research Letters 30(15): 1820. 

Moss, R.H. and S.H. Schneider, 2000: ‘‘Uncertainties in the IPCC TAR: Recommendations to 

Lead Authors for More Consistent Assessment and Reporting’’, in Pachauri R., T. Taniguchi, 

and K. Tanaka (eds.), Guidance Papers on the Cross Cutting Issues of the Third Assessment 

Report of the IPCC (Geneva, Switzerland: World Meteorological Organization), 33–51. 

39 

Paltsev, S., J. Reilly, H. Jacoby, A. Ellerman, K.H. Tay, 2003: ‘‘Emissions Trading to Reduce 

Greenhouse Gas Emissions in the United States: The McCain-Lieberman Proposal,’’ MIT Joint 

Program on Science and Policy of Global Change, Report # 97. 

Parmesan, C. & G. Yohe, 2003: ‘‘A Globally Coherent Fingerprint of Climate Change Impacts 

Across Natural Systems’’, Nature 421: 37–42. 

Pizer, W.A. and R.J. Kopp, 2003: ‘‘Summary and Analysis of McCain-Lieberman—‘Climate 

Stewardship Act of 2003’ ’’, Resources for the Future, Washington, D.C. 

Root, T.L., J.T. Price, K.R. Hall, S.H. Schneider, C. Rosenzweig, and J. A. Pounds, 2003: ‘‘’Fingerprints of Global Warming on Animals and Plants’’, Nature 421:57–60. 

Schneider, S.H., 1989: Comments on climate surprises to the Subcommittee on Science, Technology, and Space of the Senate Committee on Commerce, Science, and Transportation (One 

Hundred First Congress, first session). Published in Hearing on Possible Climate Surprises— 

Predicting Greenhouse Warming (Washington, D.C.: U.S. Government Printing Office), pp. 150. 

Senate Hearing #101–128. 

Schneider, S.H., 2002: ‘‘Can We Estimate the Likelihood of Climatic Changes at 2100?’’ Climatic Change 52(4):441–451. 

Schneider, S.H., 2003: ‘‘Abrupt Non-Linear Climate Change, Irreversibility, and Surprise,’’ 

presentation to OECD Workshop on the Benefits of Climate Policy: Improving Information for 

Policy Makers, Paris, France. 12–13 December 2002. Available online at http://www.oecd.org/ 

dataoecd/9/59/2482280.pdf. 

Schneider, S.H., K. Kuntz-Duriseti, and C. Azar, 2000: ‘‘Costing Non-linearities, Surprises and 

Irreversible Events’’, Pacific and Asian Journal of Energy 10(1):81–106. 

Webster, M. et al., 2003: ‘‘Uncertainty Analysis of Climate Change and Policy Response’’, Climatic Change (in press). 

Wigley, T.M.L., 2003: Testimony to the Senate Committee on Environment and Public Works 

(One Hundred Eighth Congress, first session). 1 October 2003. Hearing on The Case for Climate 

Change Action. Senate Hearing #253. Available online at http://commerce.senate.gov/hearings/ 

testimony.cfm?id=949&witlid=2676. 

The CHAIRMAN. Thank you very much, Dr. Schneider. 

Dr. Busalacchi, could I refer back to your statement? I think it’s 

a very strong and compelling one. ‘‘Despite uncertainty, there’s 

widespread agreement that the observed warming is real and particularly strong within the last 20 years.’’ Your statement if full of 

very strong assertions that we have a serious problem, and yet 

your answer is, well, all we need to do is keep monitoring and observing. ‘‘It’s imperative that the Nation continue directing resources toward better observing, modeling, and understanding of 

what form future changes in climate and climate variability may 

take, potential positive and negative impacts of these changes on 

the human ecosystem, and how society can best mitigate’’—— 

Doctor, your recipe belies the problem. Don’t you think we should 

at least take some modest steps toward reducing these impacts 

that you so graphically and dramatically describe, rather than continue monitoring and observing? 

Dr. BUSALACCHI. I’m trying to draw a distinction between myself, 

as a physical scientist—trying to give you the assessment of the 

system. And you ask me now, as a parent, as a citizen, then I give 

you a different answer. All right? So I am trying to—I’m not trying 

to play games. OK? 

The CHAIRMAN. Well, as a parent and as citizen, perhaps we deserve the benefit of your view. 

Dr. BUSALACCHI. I want an environment, I want quality of life 

for my grandchildren to be better than it is for me right now. 

We—— 

The CHAIRMAN. And better than it’s projected to be under the 

present circumstances. 

Dr. BUSALACCHI. That’s correct. And we are not—right now, we, 

collectively, are not on a path to give my grandchildren and your 

grandchildren improved quality of life. 

40 

So now when we’re talking about policy actions, yes, I mean, the 

time has come to take action. The burden of proof there within the 

scientific community is there. Outside this room, quite oftentimes, 

the pulse of the scientific community is oftentimes described as— 

you have a collection of scientists over here that are pro-globalwarming, and a collection of scientists over here that are skeptical. 

That’s not the way the situation is, in reality. It’s actually like— 

the burden of proof is way over on this side that we have a problem, this planet has a fever, and it is time to be taking action. 

The CHAIRMAN. And could I re-emphasize your point, going back 

to what Dr. Schneider was mentioning. If this hearing, 15 years 

ago, in the 1980s, we would have had basically that balance you’re 

talking about. Right? 

Dr. BUSALACCHI. Yes. 

The CHAIRMAN. I’ve been around long enough to know that. And 

the preponderance keeps shifting in the direction of the conclusions 

that you reach in your statement. 

Dr. BUSALACCHI. The evidence is there. The time is now to take 

action. 

The CHAIRMAN. Well, I thank you for that statement. 

Also, thank you for all your good works by the way. Dr. Wigley, 

we’ve had witnesses and writings and other things, ‘‘Look, back 

40,000 years ago, or whatever it was, we had an ice age, and Earth 

almost froze. Look, you guys are not looking at the long-term problem here.’’ Now, that’s one reason why I was very interested in 

your chart, just going back to 1870. But there are many people who 

are opposed to us taking any actions, who will claim that this is 

just one of those accidents of history, using the ice age as an example. 

Dr. WIGLEY. Yes, I don’t deny that there are natural changes, but 

the changes that are projected over the next hundred years are far, 

far greater than anything that’s occurred over the last 10,000 

years, at least. And, as Stephen Schneider pointed out, there’s very 

strong evidence that the present warming of the last 20 to 50 years 

is totally unprecedented in the last 2,000 years. 

So, you know, we’re talking about moving into totally unknown 

territory. Forty-thousand years ago, you know, if you were a mammoth, then maybe you were happy. But I don’t think there were 

any industrialized nations or human beings, you know, coping with 

water resources and agriculture at that time. You know, we’re in 

a different situation nowadays, and these changes really are unprecedented. And they’re in a direction where immediate action of 

some form is absolutely required. 

The CHAIRMAN. You know, this proposal of Senator Lieberman’s 

and mine has been described as the end of Western civilization as 

we know it. 

[Laughter.] 

The CHAIRMAN. Would you perhaps comment, perhaps all three 

of you, very briefly, as to—I’m sorry to say, it’s a very modest 

measure that it, indeed, is. I don’t know if you want to comment, 

Dr. Busalacchi, but perhaps you would. 

Dr. BUSALACCHI. Just following with what I said last time, it’s 

time to be moving forward. Even if it is modest steps, they’re steps 

41 

forward rather than no steps at all. And so we need to be advancing on this issue, plain and simple. 

The CHAIRMAN. Thank you, sir. 

Dr. Wigley? 

Dr. WIGLEY. Yes, or course. I agree. 

The CHAIRMAN. And if you had a magic wand, you would want 

us to do the following. 

Dr. WIGLEY. The proposals you’ve made, I think, are both beneficial to the environment and potentially beneficial to the economy. 

As with the Kyoto Protocol, they are only first steps in what is a 

century timescale problem, but they seem to be very positive first 

steps. And as the European Union is doing, I mean, the only way 

to approach this problem is learning by doing. And, you know, the 

only way to learn by doing is to do first, and then benefit from that 

experience, and then decide what to do on a longer timescale. 

The CHAIRMAN. Thank you. 

Dr. Schneider, would you respond? And also, would you care to 

comment—because you were highlighted by Senator Inhofe as 

being a critic of the Intergovernmental Panel on Climate Change 

Results, maybe you’d like to clarify your comments there. 

Dr. SCHNEIDER. Yes, thank you. 

You began your question to us by noting that rhetorical excess 

is not absent from the climate debate either, and we’re all used to 

it. 

The unfortunate problem is that when you have a complex issue 

of this type, what happens is you get one scientist who says ‘‘good 

for you’’ and one ‘‘the end of the world,’’ and they get equal time 

in the op-ed pages, it’s very easy for people to be confused about 

this complexity. 

But as my colleagues have said earlier, there is very little debate 

among the mainstream scientific community over the substantial 

likelihood that humans are already in the game and will, in fact, 

become increasingly strong over time. 

Looking backward 40,000 years, in fact, is very important. It’s 

the backdrop against which we calibrate our understanding to go 

forward. There are no analogies from the past about what will happen in the future, because there weren’t six billion people tightly 

locked in national boundaries, they didn’t have a billion of them at 

nutritional margins, they didn’t have the land-use pressures 

they’ve put on, nor the dependencies on expected climate to feed 

that many people, for example. So as a result of that, the situation 

is different, and we go backward to try to explain how the thing 

works. Then we look at what humans might do and what policies 

such as those that you’re discussing now might do in reducing the 

pressure we put on. And we ask those questions differentially. And 

I think that’s the appropriate mode to go in. 

And the rhetorical excesses will go on, because those are often 

by people who are—let’s be very blunt—who are special interests 

in protecting certain groups who are afraid that the kinds of actions we do remind us that the atmosphere is not a free sewer, and 

if our tailpipes are going to be reducing what we dump in it, it will 

probably have to have a charge associated with it; otherwise, it 

won’t work. It’s very difficult to expect people to stop at red lights 

or at stop signs if they were voluntary. And as a result of that, one 

42 

has to look toward rules that are fair and effective. And I applaud 

the Committee for doing that. 

You asked one other thing at the end, and I’m not certain I remember. If you could again—my jet lag—I will try and answer 

that, because I was answering the first part of your questions. 

The CHAIRMAN. Senator Inhofe—— 

Dr. SCHNEIDER. Oh, yes. Quoting me as saying that there’s uncertainty is fine. That’s, you know, a correct quote. In fact, for the 

last IPCC, Richard Moss and I were somewhat unaffectionately 

dubbed ‘‘the uncertainty cops,’’ because we wrote the guidance 

paper that was rather aggressive in insisting that for policymakers 

to find statements from scientists useful, they wanted to have probabilities attached so you’d know how to make resource decisions in 

the face of scarcity by knowing the relative likelihood of various 

outcomes. And I clearly believe that uncertainty is necessary. 

I’m also, like any scientist, skeptical of any result, new and old, 

and we’re always continuously refining, which is precisely how the 

community works. On the other hand, the more we try to prove 

something wrong and the less we can do it, the more we begin to 

believe that there’s a substantial likelihood that it’s true, and that’s 

precisely where the mainstream scientific community is sitting on 

this. 

What he quoted, unfortunately, was not accurate. He quoted me 

as saying that the IPCC was not peer-reviewed. In fact, the IPCC 

is mega-peer-reviewed. I edit a peer-reviewed journal, ‘‘Climatic 

Change,’’ and I am very envious of the degree of peer-review IPCC 

or the National Research Council is able to obtain. 

I get two or three scientists to comment on a paper, and then 

usually the comments are sufficiently critical that we have to have 

it rewritten, and then maybe I’ll bring in a fourth person to try to 

give advice on whether it’s a balanced response. And I, like a judge, 

have to make a decision as to what’s enough. 

In the case of the IPCC, it was almost odious for those of us who 

were lead authors, because not only did we have peer-review comments from hundreds and hundreds of people and from many, 

many different nations and from all stakeholder groups, but we 

had to prepare, in our revisions, responses to review editors saying 

how we dealt with each comment. We couldn’t just dismiss it, because, you know, in the coffee klatch around the room, we said, 

‘‘Well, we don’t like this guy, so we don’t trust him. We’re going to 

ignore it.’’ There had to be real reasons written down to justify to 

the review editors any peer comment that was ignored, and we had 

to explain how we dealt them and why and that we didn’t overreact. And this didn’t just happen once, it happened three times. 

So for a pro bono operation, it was absolutely amazing that the 

scientific community responded by putting in so many personal 

hours working on this project with this kind of peer review and the 

requirement that it be justified how you respond. And I’m personally very proud of my colleagues for having done that, and appreciate your noticing the credibility of the IPCC and the National 

Academy. And those people who impune it either don’t know about 

it or have other convenient personal reasons for making charges 

that are, frankly, false. 

The CHAIRMAN. Senator Lautenberg? 

43 

Thank you, Dr. Schneider. 

Senator LAUTENBERG. Thanks, Mr. Chairman. 

Mr. Wigley, you were included in Senator Inhofe’s commentary 

on the floor of the U.S. Senate. He repeatedly quoted from your 

writings, stating that you believe that science in support of climate 

change is unsubstantiated. Is that a correct appraisal of what you 

said? 

Dr. WIGLEY. No, that’s certainly not a correct appraisal at all. I 

believe he implied that some work that I published with a co-author of mine a year or so ago suggested that the science behind climate change was unstable and, therefore, could not be trusted. And 

the reason for making that statement was because they’re projections made by Intergovernmental Panel on Climate Change. In 

their most recent report, it was different fairly substantially from 

the projections made in the previous report of 1995/96. 

In the paper that we published, we tried to break down the reasons for those changes into a number of different factors, and the 

primary reason was not related to our understanding of the climate 

system, not related to the development or lack of development of 

climate models. It was related to our understanding of how people 

globally would respond to the emissions of sulphur dioxide. Now, 

sulphur dioxide produces more particles, called aerosols, in the atmosphere, which have a cooling effect. And in the earlier second assessment report and projections of the emissions of sulphur dioxide, 

the pollution effect of those emissions was not accounted for, and 

so their emissions rose very substantially and caused a substantial 

global cooling, offsetting the warming due to greenhouse gases. 

Senator LAUTENBERG. Dr. Wigley, I assume that your answer 

was no. 

Dr. WIGLEY. Yes, absolutely. 

[Laughter.] 

Senator LAUTENBERG. Thank you very much. 

The science is befuddling to those of us who only think about war 

and peace and budgets and things of that nature. I have so much 

respect for all three of you for the presentation that you’ve made 

and for the work that you’ve done. 

Let me ask you a question. If the United States was to join in 

the Kyoto principles, could you see an impact from that coming in 

fairly short-term, if we were to sign on and join in the pact on 

Kyoto? Anyone? 

Dr. WIGLEY. Well, I’m sure that there would be an impact if we 

were to sign on. I mean, certainly it would allow multilateral trading, particularly with the European Community, and that would be 

a positive benefit, because the trading scheme is a way of making 

the economics much more efficient. 

There is a small avenue for some sort of trading through what’s 

called the ‘‘clean development mechanism,’’ but that’s not really directed toward countries like the United States. 

So there would be an advantage. It would broaden the playing 

field and make the global situation economically more efficient. 

Senator LAUTENBERG. Dr. Schneider? 

Dr. SCHNEIDER. Yes. That’s another area where there has been 

a lot of distortion. People suggest that the only thing we do in the 

next hundred years is Kyoto, that in 2100 the world will only be 

44 

two-tenths of a degree cooler than it otherwise would have been, 

so why have we spent all this money to get the same amount of 

warming 4 years later? 

No one in the scientific community that has been involved in 

these credible assessments, like IPCC or the National Research 

Council, has ever said that Kyoto was the final and only step. In 

fact, it has been clear, again and again and again, in report after 

report after report, science, over the past 25 years, and, in testimony before this Committee and others, that in order to keep the 

atmospheric concentrations of carbon dioxide, for example, below 

doubling above pre-industrial level, that would have to cut something on the order—and Tom has done many calculations on this, 

himself—of about 50 percent by mid-century for typical businesses, 

and we’d have to go down to nearer to zero in the next century. 

The good news is, we have a century to do that. The bad news 

is, the longer and longer we delay the process of beginning to develop the relative carbon-free energy at reasonable prices, the more 

expensive it becomes to do it when you have to do it decades from 

now. 

So the answer I would give you to Kyoto, or, as well, to this bill, 

is while there will be skeptics and critics who will say that its overall impact on global warming reduction is relatively modest, that’s 

true in the short-run. But, you know, all journeys begin with small 

steps. And if one does not begin the process of sending positive incentives to the incredible industrial and technological machinery in 

the United States and other countries, it’ll be that much longer before we invent the low-cost technologies that are necessary to deal 

with the problem over time, when the really big cuts start to occur 

decades from now. 

So getting started in a cost-effective manner, and sending the 

right incentive signals, is very important. And that’s why I personally wish that we would be involved with other nations through the 

Kyoto process. In fact, because of the presence of the United States 

during the negotiations in the 1990s and early 2000s, Kyoto added 

a number of mechanisms, so-called ‘‘flexibility mechanisms,’’ that 

allow us to have much lower-cost trading and other actions than 

otherwise would happen. So I think we’ve already taken long, good 

steps in that direction. 

This bill reflects those very components. 

Senator LAUTENBERG. Mr. Chairman, one other question. 

I mentioned before that I had been to Antarctica and saw this 

incredible reservoir of fresh water with 70 percent of all the fresh 

water in the world stored there. It was being dissipated as the 

cracks and fissures and float-offs, if I can call them that, occurred 

because it just melts into the sea. The consequence down the road 

would be higher water levels and just loss of that precious resource. 

In that visit, I went to Australia also, and there was conversation 

about how children going to the beach had to wear hats and full 

bathing suits and everything else, because Australia has the highest rate of melanoma skin cancers of any country, developed country, in the world. 

More recently, I read something about the hole in the ozone 

layer, and that it was seen to be closing. Is that an observation 

45 

that any of you have heard about? I read it in the paper, and I just 

wanted to know if—well, what might be causing that? Is there 

some improvement that we’re making that would permit that to 

happen? 

Dr. BUSALACCHI. There have been the comments in the press 

about it closing, but I think what it showed is this is—that was another example of natural variability going on in the region, experiencing some extremes, but you can’t point to any, sort of, human 

influence on that. 

Let’s go back to your last question, though. I think we really can 

have an impact in the short-term, especially with respect to shortlived species, be it black carbon, the aerosols, even methane. And 

I think the Montreal Protocol taught us that we can work in the 

international context and have a positive impact on the environment. 

Senator LAUTENBERG. Thank you. 

The CHAIRMAN. Thank you very much, all of you. 

Thanks. 

Senator Nelson? 

STATEMENT OF HON. BILL NELSON, 

U.S. SENATOR FROM FLORIDA 

Senator NELSON. Thank you, Mr. Chairman. And thank you for 

your devotion to this issue and the fact that you won’t let it go. I 

appreciate your leadership. 

I tried to offer some leadership on this issue in the mid-1990s as 

the elected insurance commissioner of Florida. I tried to point out 

that, of all places, that Florida was going to be one of the ones that 

was going to be affected the most by the rising of the sea levels, 

by the increased temperatures, and, therefore, the increased ferociousness of storms, as well as pestilence. And I, particularly in the 

mid-1990s, reached out to the insurance companies to try to get 

them to understand that it was in their interest to start planning, 

and I would hit a solid brick wall. 

I am heartened to see that one of your people testifying is from 

Swiss Re today, and it’s fairly strong testimony. And there was 

some indication, even back in the late 1990s, that some of the European insurance companies were starting to come around, but the 

American insurance companies didn’t want to talk about it. 

I’d like your comments about this. 

Dr. BUSALACCHI. Well, Senator, as a graduate of Florida State, 

I remember your efforts at that time. I think the Southeast is a 

particularly vulnerable part of the country. I can’t say anything 

about the recent passage of Isabel being due to global warming, but 

it’s a very good sort of harbinger or lessons learned of potential 

things to come because of the extreme damage due to storm surge 

and floods as a result that we could expect from global warming. 

Basically, as we pump more energy into the system, the way our 

system, our planet, expresses itself is as a result of the severe 

events, storms, and floods. So we expect an intensification of the 

hydrological cycles. So we have precipitation, more intense precipitation. And where that drier air descends, we expect semi-arid regions to become more arid. 

46 

So, I, again, can’t say that a hurricane, that hurricane, was due 

to global warming, but, sort of, the storm-surge examples, a lot of 

what we went through in this area, is something that may be signs 

of things to come. 

Senator NELSON. Well, do you think the insurance companies are 

waking up to reality? 

Dr. BUSALACCHI. I think we’ll defer to our speaker—but definitely even in—with respect to the hurricanes in Florida, yes, most 

definitely, the insurance industry is very much in tune to how, let’s 

say, climate variability and whether or not we have an El Nin ̃ o 

event affects landfall hurricanes or whether or not they go out to 

sea. So the insurance community is much more in tune to where 

we are with climate science, more than many of us realize. 

Senator NELSON. Most of our development is along the coast. 

And, of course, with the rising of the sea, that then threatens property. And you would think that the insurance companies would be 

first in line, but they didn’t want to talk about it. 

Dr. BUSALACCHI. No, I think things have changed drastically in 

the last—— 

Senator NELSON. And what has caused that change in the CEO’s 

minds of insurance companies? 

Dr. BUSALACCHI. I wouldn’t dare speak for the mind of a CEO. 

[Laughter.] 

Senator NELSON. In your opinion. In your opinion. 

Dr. BUSALACCHI. Some of the very points you mentioned to. They 

are extremely vulnerable, and we now know that the state of the 

climate system is not constant and stationary. It is changing, and 

we actually now have an understanding of how it’s changing, and 

so we can take our knowledge of this change and put it to good use, 

and prevent those losses, both for the people in those houses and 

the monetary losses for the companies. 

Senator NELSON. Would you say that the scientific community is 

virtually 95 percent now in a consensus that global warming is 

real? 

Dr. BUSALACCHI. Yes. Maybe it was before you came in—— 

Senator NELSON. Yes. 

Dr. BUSALACCHI.—I made the remark that the press portrays our 

problem has having the community over here in favor of global 

warming, a community over here as skeptics. 

Senator NELSON. And that’s not the way it is. 

Dr. BUSALACCHI. No, it’s like this. 

Senator NELSON. It’s 95 to 5. 

Dr. BUSALACCHI. Way over here, that global warming is real, and 

it’s time now to take action. 

Senator NELSON. Do the 5 percent really believe it, or are they 

paid to say that? 

Dr. BUSALACCHI. Yes. 

[Laughter.] 

Senator NELSON. That’s a good answer. I ought to learn from 

that one. 

[Laughter.] 

Senator NELSON. Well, I’ll tell you, you know, this is just as simple as anything to me, and maybe it’s because I’ve always lived on 

the coast. But, I’ll tell you, if I were President—and, by the way, 

47 

I’m one of the few Senate Democrats who is not running for President—— 

[Laughter.] 

Senator NELSON.—but, I mean, it’s pretty simple. I’d work the 

international community on this issue like crazy, and what I’d do 

on things like the energy bill is that—I mean, we get beat around 

here just when we try to raise the miles-per-gallon on SUVs. But 

I’d take it further. I mean, I’d put an Apollo kind of project going 

to build a hydrogen engine that was cheap enough so it was economical so that we could wean ourselves from the dependence on 

foreign oil, and so that we could start the process of cleaning up 

the environment. 

Thank you. 

The CHAIRMAN. Well, thank you very much, Senator Nelson. 

Senator NELSON. Maybe that’s my announcement speech. 

[Laughter.] 

The CHAIRMAN. Well, we’re not short of those. 

[Laughter.] 

The CHAIRMAN. I thank you. I do thank you, Senator Nelson, for 

you long advocacy and support on this issue. And I really do believe that states like Florida are in some significant danger here. 

But I think the reality is that about 80—70 percent, something like 

that, of the American people live on both coasts, and there’s a real 

challenge. 

I would like to thank the witnesses for being here. I would like 

to thank them for their candor, and I would like to thank them for 

their honesty and integrity. And one thing I am fairly confident of, 

we will be seeing each other again, because this issue is not going 

away for a long time, and, unfortunately, we are a long way from 

coming up with a coherent international set of priorities and policies to address this issue, in my opinion. 

I thank you very much, thank the witnesses. 

Our third panel is Mr. Paul Gorman, who is the Executive Director of the National Religious Partnership for the Environment; Mr. 

Ethan J. Podell, who is the President of Orbis Energy; Mr. John 

B. Stephenson, the Director of the Natural Resources and Environment at the U.S. General Accounting Office; and Mr. Christopher 

Walker, who is the Managing Director of the Greenhouse Gas Risk 

Solutions, Swiss Re Financial Services Corporation. 

As the witnesses are seating themselves, I received a letter from 

the Executive Office of the President, Control on Environmental 

Quality, and he would like to take this opportunity to share with 

us in the Committee a summary of the actions the Bush Administration has taken thus far to implement the President’s 10-year 

strategy to reduce the greenhouse gas intensity of the American 

economy by 18 percent. As demonstrated by the enclosed summary, 

the Administration is actively addressing the complex long-term 

issue of global climate change and will work toward meeting the 

commitments outlined in the President’s strategy. 

This will be included in the record. Remarkable. 

[Laughter.] 

[The information referred to follows:] 

48 

EXECUTIVE OFFICE OF THE PRESIDENT

COUNCIL ON ENVIRONMENTAL QUALITY

Washington, DC, September 30, 2003 

Hon. JOHN MCCAIN, 

United States Senate, 

Washington, DC. 

Dear Chairman McCain: 

I understand the Senate Commerce Committee is scheduled to conduct a hearing 

Wednesday, October 1, on ‘‘The Case for Climate Change Action.’’ As you explore 

this important issue, I would like to take the opportunity to share with you and the 

Committee a summary of the actions the Bush Administration has taken thus far 

to implement the President’s 10-year strategy to reduce the greenhouse gas intensity of the American economy by 18 percent. As demonstrated by the enclosed summary, the Administration is actively addressing the complex, long-term issue of 

global climate change, and will work toward meeting the commitments outlined in 

the President’s strategy. I respectfully request that this summary be entered into 

the record. 

Sincerely, 

JAMES L. CONNAUGHTON

Enclosure 

cc: Members of the Senate Commerce, Science, and Transportation Committee 

49 


1001CONN1.eps
50 


1001CONN2.eps
51 


1001CONN3.eps
52 


1001CONN4.eps
53 


1001CONN5.eps
54 


1001CONN6.eps
55 

The CHAIRMAN. Mr. Gorman, welcome. 

STATEMENT OF PAUL GORMAN, EXECUTIVE DIRECTOR, 

NATIONAL RELIGIOUS PARTNERSHIP FOR THE 

ENVIRONMENT 

Mr. GORMAN. Thank you, Senator and Members of the Committee. Thank you for your own perseverance on these questions, 

Senator McCain, and your openness today to hearing religious and 

moral and ethical principles related to this issue. 

I represent the National Religious Partnership for the Environment, which is an alliance of faith groups across a very broad spectrum, the U.S. Conference of Catholic Bishops, the National Council of Churches of Christ, a federation of 36 mainline protestant 

and orthodox denominations, the Coalition on the Environment in 

Jewish Life, which represents 29 national Jewish organizations, 

and the Evangelical Environmental Network, which is an alliance 

of evangelical Christian organizations. 

Each has its own distinctive perspectives, but we share precepts 

for God’s creation, for caring for it, albeit with different, often 

imaginative, forms of expression. For example, facilitating renewable and solar energy programs, the Interfaith Power and Light 

Campaign, led by the Episcopal Church, has helped over 300 congregations in California alone conserve energy, preventing four million tons of carbon dioxide form entering the atmosphere. The 

Catholic Bishops of the Pacific Northwest issued a pastoral letter 

on protecting the Columbia River. The Redwood Rabbis, so-called, 

have fought to preserve all-growth forests. In addition to asking, 

‘‘What would Jesus drive,’’ the evangelical Christians have worked 

for extension of the Endangered Species Act. 

So with the bishops in rivers, and rabbis in redwoods, and evangelicals in wetlands, and Episcopalians cleaning the sky, we’re at 

least trying to get out of the house and open our eyes and perhaps 

add a new voice and a source of activity. 

About global climate change, we have fundamental agreements, 

all of which have been stated in formal declarations at the highest 

levels of governance, which we would like to be able to submit for 

the record, Mr. Chairman. 

The CHAIRMAN. Without objection. 

[The information referred to follows:] 

Interfaith Climate & Energy Campaign 

A Call for Power Plant Clean-Up 

As the U.S. Senate begins debate on legislation that addresses the clean-up of 

America’s dirty power plants, religious leaders call on policy makers to adopt legislation that includes carbon dioxide as a regulated pollutant from power plants. Carbon dioxide is a byproduct of burning fossil fuels such as coal and oil. In a balanced 

system, carbon dioxide helps regulate the Earth’s climate. However, too much carbon dioxide causes excess heat to be trapped in the atmosphere, forcing global temperatures upward, the process known as global warming. 

The largest source of carbon dioxide in the U.S. is the electric power industry, accounting for about 40 percent of all U.S. emissions. More than 88 percent of emissions come from older, dirtier coal-fired facilities. In addition, these power plants are 

a source of nitrogen oxide and sulfur dioxides which cause smog, asthma and other 

breathing-related illnesses and mercury exposure which causes birth defects. 

There is broad agreement among scientists and experts that global warming is occurring and that it will likely result in changes that will harm people in the U.S. 

56 

and around the world. As described in the recent climate report of the Bush Administration to the United Nations, climate change is linked to devastating environmental impacts: including an increase in the severity of hurricanes, floods and 

droughts. Though there may be some positive results to climate change, such as increased agricultural productivity in some places, the majority of effects are likely 

to cause harm. These events are likely to exact a terrible toll in terms of both 

human suffering and economic loses. 

Protecting God’s children and God’s creation from harmful air pollution is a fundamental moral obligation. Cleaning up dirty power plants that cause harmful pollution must therefore be a policy priority. The following moral principles ought to 

apply to policies on power plants: 

(1) Justice for all God’s children by addressing the reality that carbon dioxide 

emissions are causing global warming and that we must protect all God’s children from the harmful affects of mercury emissions. 

(2) Justice for future generations who will be adversely affected by the harmful 

air pollution that is produced today. 

(3) Solidarity with people who live in poverty around the world who are more dangerously affected by air pollution and who do not have the resources to adapt 

to the realities of global warming. 

(4) Stewardship of the balance of creation which sustains all life on Earth. 

In response to such global environmental concerns, senior religious leaders from 

America’s leading denominations have said, ‘‘At stake are: the future of God’s creation on earth; the nature and durability of our economy our public health and public lands; the environment and quality of life we bequeath our children and grandchildren. We are being called to consider national purpose not just policy.’’ With respect to the current debate in the U.S. Senate, the Interfaith Climate & Energy 

Campaign calls for: 

• A ‘‘4P’’ Approach—The Dramatic Reduction of Pollutants Which Cause Smog, 

Acid Rain, Respiratory Disease, Mercury Contamination AND Global Warming. 

Legislation should be adopted that dramatically cuts power plant emission of 

the four major power plant pollutants (4P). One such proposal before the Senate 

would dramatically cut power plant emission of the four major power plant pollutants by 2007: nitrogen emissions would be cut by 75 percent from 1997 levels, sulfur emissions would be cut by 75 percent below Phase II Acid Rain levels, mercury emissions would be cut by 90 percent from 1999 levels, and carbon 

dioxide emissions would be cut to 1990 levels. This level of carbon dioxide reduction is contained in the Framework Convention on Climate Change, which 

was signed by former President Bush and unanimously ratified by the U.S. Senate. 

• Close the Grandfather Loophole that Exempts Dirty Old Coal Plants. Legislation 

should require all power plants to meet the most recent pollution control standards for new pollution sources within a reasonable timeframe. 

• Corporate voluntary measures have proven insufficient in addressing carbon dioxide pollution. Since the early 1990s when the Federal Government began calling for voluntary action in reducing carbon emissions, the reality has been that 

greenhouse gas emissions have significantly increased. 

The Interfaith Climate & Energy Campaign is a coalition of religious American 

leaders, institutions and individuals who for nearly two years have been working 

in 21 states to educate congregants about the causes and effects of global climate 

change and to speak out about the religious and moral imperatives to protect God’s 

creation and all of God’s children. Over 1,200 leading religious leaders have joined 

in calling for Federal policies for energy conservation and climate justice. 

Mr. GORMAN. We are not scientists, but we are convinced of the 

problem’s urgency, as documented by eminent scientists worldwide. 

And to amplify this scientific consensus, we would affirm a religious and moral consensus. 

It seems best, in this brief time, to outline four principles in this 

consensus, moral precepts which provide a case, we hope, for guiding policy, and scripture guides us here. 

57 

First, in Genesis, God declares creation as very good and commands us to till and to tend the garden. Humankind is called to 

stewardship. That’s why we’re here. 

Second, we read, in Psalms, the Earth is the Lord’s and the fullness thereof, the gifts of creation are intended for the well-being of 

all. 

Third, we have a paramount obligation to defend the poor and 

the orphan, to do justice to the afflicted, and to care first for the 

least of these. Care for God’s creation requires justice and equity 

for God’s children, and not putting innocent lives at risk. 

And we call upon the Senate, in your forthcoming deliberations, 

to address the impact of global climate change on the poor, vulnerable peoples and nations of the planet. 

Finally, we have an obligation to the future well-being of all life 

on Earth. God’s covenant, which I make between me and you and 

every living creature for perpetual generations, in Genesis. 

Protecting our planet’s climate is a religious duty, because it embraces everything and everyone on Earth. 

Stewardship, covenant, justice, intergenerational equity. These 

perennial principles have never seemed to many of us more meaningful and mandatory. We are all part of God’s creation. Environmental isolationism is neither morally acceptable nor faithful to 

God’s law. 

These are high standards, easy to proclaim in rooms like this, 

but they are in the hearts and consciences of an increasing number 

of people of faith in this country, worldwide. We recognize challenges still before us, the need for further scientific research and 

energy policy which reduces greenhouse gas emissions and steadily 

and forcibly moves us beyond reliance on fossil fuels, assurance of 

economic security, and protection of workers. 

Human habits of materialism and over-consumption, we believe, 

in the faith community, are also root causes of environmental degradation. And while we understand the drive of deeply held convictions—we have some issues here ourselves—partisanship and 

shortsightedness seem to be leading to dead-ends. 

We have to lift our vision. This is an enterprise for the entire 

human species. So we share these convictions not simply as articles 

of our own faith, but toward a universal moral resolve, a conversion of hearts and conscience, without which it would seem very 

difficult to me to challenge at this scale. 

We’re grateful for your invitation to share these beliefs. We look 

forward to discussing them further and will be communicating 

them to individual Senators during the October recess. 

But we are here to say that the religious community is committed to help provide new momentum, as you do here, Mr. Chairman to what must be a universal enterprise for the common good. 

[The prepared statement of Mr. Gorman follows:] 

PREPARED STATEMENT OF PAUL GORMAN, EXECUTIVE DIRECTOR, 

NATIONAL RELIGIOUS PARTNERSHIP FOR THE ENVIRONMENT

Thank you, Mr. Chairman and members of the Committee: 

I represent members of the National Religious Partnership for the Environment, 

an alliance of faith groups across a broad spectrum: the United States Conference 

of Catholic Bishops, the National Council of Churches of Christ (a federation of 36 

58 

mainline Protestant and Orthodox communions), the Coalition on the Environment 

and Jewish Life (representing 29 national bodies), and the Evangelical Environmental Network (an alliance of evangelical Christian organizations). Each has its 

own distinctive perspectives. But we share biblical precepts for care of God’s creation, albeit with different, often imaginative forms of expression. 

For example, supporting renewable and solar energy programs, The Interfaith 

Power and Light campaign, led by the Episcopal Church, has helped over 300 congregations in California alone conserve energy, preventing 40 million pounds of carbon dioxide from entering the atmosphere. The Catholic Bishops of the Pacific 

Northwest issued a pastoral letter on protecting the Columbia River. ‘‘The Redwood 

Rabbis’’ have fought to preserve old growth forests. In addition to asking ‘‘What 

Would Jesus Drive?’’, evangelical Christians have worked for extension of the Endangered Species Act. So with bishops in rivers, rabbis in forests, evangelicals in 

wetlands, and Episcopalians looking to the sun, we’re at least getting out of the 

house and perhaps making a fresh contribution. 

About global climate, change we have fundamental agreements, all of which have. 

been stated in formal declarations at the highest levels of governance, which we 

would like to submit for the record. 

We are convinced of the problem’s urgency as documented by eminent scientists 

worldwide. 

To amplify a scientific consensus, we affirm a religious and moral consensus. 

It seems best, in this brief time—perhaps as an introduction to those outside the 

faith community—to outline four principles of this religious consensus. These are 

moral precepts that should guide policy. 

First, in Genesis, God beholds creation as ‘‘very good’’ (Gen 1:31) and commands 

us to ‘‘till and tend the garden’’ (Gen 2:15). Humankind is called to stewardship. 

Second, we read in Psalms, ‘‘The Earth is the Lord’s and the fulness thereof’ (Ps 

24:1). Creation’s gifts are intended for the well-being of all. Third, we have a paramount obligation to ‘‘defend the poor and the orphan; do justice to the afflicted’’ (Ps 

82:3) and to care first for ‘‘the least of these’’ (Math 25:35). Care for God’s creation 

requires justice for God’s children and not putting innocent lives at risk. And we 

call upon the Senate, in your forthcoming deliberations, to address the impact of 

global climate change on the poor and vulnerable peoples and nations of our planet. 

Finally, we have an obligation to the future well-being of all life on Earth, God’s 

‘‘covenant which I make between me and you and every living creature for perpetual 

generations’’ (Gen 9:12). Protecting our planet’s climate is a religious duty because 

it embraces everything and everyone on Earth. 

Stewardship, covenant, justice, intergenerational equity: these perennial principles have never seemed more meaningful and mandatory. We are all part of God’s 

creation. Environmental isolationism is neither morally acceptable nor faithful to 

God’s Law. 

These are high standards, easier to proclaim than to practice. We recognize challenges still before us all: the need for further scientific research; an energy policy 

which reduces greenhouse gas emissions and steadily moves us beyond reliance on 

fossil fuels; assurance of economic security and protection of workers. Human habits 

of materialism and over-consumption lie deeply at the root of environmental degradation. And while we understand the drive of deeply held convictions—we have 

some issues here ourselves—partisanship and short-sightedness seem to be leading 

to dead ends. 

We have to lift our vision. This is an enterprise for the entire human species. So 

we share these convictions not simply as articles of our own faith but toward a universal moral resolve—a conversion of hearts and habits . . . without which it would 

seem difficult to meet a challenge of this scale. 

We are grateful for your invitation to share these core beliefs. We look forward 

to discussing them further, and will be communicating them to individual Senators 

particularly during the October recess. Perhaps you will pass them on as well. But 

we are here to say this: the religious community is committed to help provide new 

momentum, as you do here, Mr. Chairman, for what must be a universal enterprise 

to reduce global warming for the common good. 

The CHAIRMAN. Thank you very much, Mr. Gorman, for a very 

powerful statement. 

Mr. Podell? 

59 

STATEMENT OF ETHAN J. PODELL, PRESIDENT, 

ORBIS ENERGY ADVISORS INC. 

Mr. PODELL. Mr. Chairman and distinguished Members of the 

Senate, I’m grateful for the invitation to address the Committee 

and to share my perspective, as a businessman who has tried to 

get corporate America to take voluntary action on climate change. 

I’m the President of Orbis Energy Advisors, a financing consulting firm focused on the business of climate change and renewable energy, and I’m also here today as a representative of E2, Environmental Entrepreneurs, a national group of professional 

businesspeople who believe in protecting the environment while 

building economic prosperity. 

E2 has over 400 members in 16 states who have been in financing and founding more than 800 companies, which have created 

over 400,000 jobs. E2 members currently represent more than $20 

billion in private equity capital available for investment into new 

companies. 

After a 20 year career as a media entrepreneur, I’ve spent the 

better part of the past 2 years trying to get corporate America to 

understand and, more importantly, to take some meaningful action 

to address this enormous looming problem before us, global warming. My conclusion from this experience is that it is essential to 

enact mandatory limits on greenhouse gas emissions, as provided 

for in S. 139. 

I have consulted on strategy and business development for 

Canter Fitzgerald’s greenhouse gas trading business in the United 

States. And from March through August of this year, I was the 

Senior Vice President for Sales and Marketing for the Chicago Climate Exchange. As you may know, the Chicago Climate Exchange 

is the first voluntary greenhouse gas cap-and-trade program in the 

United States. My principal role at the Exchange was to recruit 

corporate clients willing to commit to a modest pilot program requiring minimal reductions in their greenhouse gas emissions. 

I’m here to tell you today that there is very little evidence that 

corporate America has any real interest in participating in a voluntary greenhouse gas reduction trading program. 

The Chicago Climate Exchange is a terrific idea and an innovative institution of the first order. Its founder, Richard Sandor, is 

one of the most dynamic and visionary leaders of the business community I’ve ever met. It seeks to prove the concept that a voluntary 

greenhouse gas emissions reduction program, using a cap-andtrade, can be effective within the American business community. 

It’s designed as a 4 year pilot program running from now through 

2006, so the companies which join the program are really making 

a very limited time commitment. And Exchange members are also 

making a very limited commitment to reduce their greenhouse 

emissions, as the targets, the reduction targets, set by the Exchange are really rather modest. Those reductions are 1 percent 

below baseline this year, rising to 4 percent below baseline in 2006. 

The Chicago Climate Exchange was designed over a number of 

years with the active participation of leading companies from many 

sectors of American business. Notwithstanding the modest reduction targets and other incentives embedded in the rules of the Exchange, which are designed to make for a very slow and nonVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00063 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\94255.TXT JACKIE
60 

threatening game of softball, there are, so far, at least, very few 

takers in the corporate world. 

The Chicago Climate Exchange has about 20 members responsible for about 3 or 4 percent of the total United States greenhouse 

gas emissions. If you do the math, and apply the 1 percent per year 

emissions reductions required of members of the Exchange against 

the 4 percent of total U.S. emissions which these companies represent, what we end up with is a very small drop removed from a 

very large bucket. This bucket has 10,000 drops. The current members of the Chicago Climate Exchange will remove four of those 

10,000 drops this year, and 16 in the year 2006. 

As we have seen with the Acid Rain Program, cap-and-trade can 

accomplish real environmental goals at modest cost when coupled 

with a mandatory set of targets. However, without regulation and 

governmentally imposed sanctions, the early evidence, at least, is 

that the American business community is not very interested. 

Over the past 6 months, I have spoken or met with more than 

250 companies, mostly in the Fortune 500, but smaller private 

businesses, as well, about why they should join the Chicago Climate Exchange. I’ve also marketed the Exchange to municipalities, 

universities, and state governments. 

For cap-and-trade to work, you really need only three things: a 

target, or cap, representing some reduced level of emissions when 

measured against the past; two, a group of participants that will 

reduce their emissions below the target and have excess reduction 

credits to sell; and, three, a group who will miss the target and 

need to buy credits to be in compliance with the rules of the game. 

In marketing the Chicago Climate Exchange, we have very few 

companies in this country willing to buy emissions credits to be in 

compliance with the voluntary greenhouse gas reduction program. 

The companies which are willing to participate in a voluntary 

cap-and-trade are those that see carbon trading as a way to make 

some money by selling excess credits, and a way to make a statement, really a gesture, about their environmental awareness. For 

these companies, the ones which will be sellers of emissions reduction credits, participating in a program such as the Chicago Climate Exchange is largely a risk-free, money-making opportunity. 

The companies we really need to join a carbon cap-and-trade program, the large emitters of greenhouse gases, those who will end 

up as buyers of emissions reduction credits—the utilities, the oil, 

gas, and petrochemical companies, the cement-makers, the truckers 

and railroads, those companies are not yet prepared to join a voluntary cap-and-trade. 

The large carbon emitters listen attentively to all the arguments: 

regulation will happen sooner or later, so they should get in early 

and learn ahead of their competitors; Wall Street and other stakeholders are increasingly concerned about the link between the companies’ carbon liabilities and its balance sheets; that the companies’ overseas operations are, as a practical matter, soon going to 

be subject to international greenhouse gas reductions under Kyoto 

or other emerging regulations, whether or not the U.S. Government 

participates along with the international community. Yes, they listen. Some even agree to gather data on their historic levels of emisVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00064 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\94255.TXT JACKIE
61 

sions. But very few companies are prepared to reduce these emissions if it will cost them any money. 

Yes, it’s true, there is nothing from preventing a voluntary system from working here, other than the absence of volunteers. And 

that is precisely what we have, the absence of volunteers. And why, 

after all, should any one American company agree to take the lead 

on voluntary greenhouse gas emissions reductions? Were are their 

competitors on this issue? Why be a pioneer when it will just cost 

them money, threaten their market share? And, worst of all, even 

if they agree to join a voluntary reduction program, where’s the assurance that Washington will recognize their early participation in 

the voluntary program and not eventually pass legislation which 

raises the bar and penalizes the early movers? 

The image here is that pioneers were the ones who ended up 

with arrows in their backs. Long-term thinking about the environment being in short supply in corporate America, our business 

leaders generally ignore or forget the fact that many pioneers 

ended up not with arrows in their backs, but as the owners of very 

valuable real estate. 

In the absence of rules and clear guidelines, the field evidence I 

have is that most American businesses would prefer to sit this one 

out from the sidelines. Washington needs to provide firm rules and 

regulations if you expect corporate America to respond. When it 

comes to climate change, voluntary action from the American business community means hardly any action at all. 

As S. 139 recognizes, a cap-and-trade system is likely be cost-effective in reducing greenhouse gas emissions, provided it’s a mandatory system. 

S. 139, or other mandatory cap-and-trade programs, will cause 

some disruption, some adjustments in everyone’s business-as-usual 

behavior, and it is not, at least not in the short-term, without some 

costs. However, the costs are regularly exaggerated, and the benefits often ignored. 

A recent MIT study of S. 139 showed that its enactment would 

affect household purchasing power by less than one-tenth of 1 percent. The gains in energy efficiency and in technological innovation 

which will follow once we start to constrain carbon emission in this 

country will far outweigh any of the temporary short-term burdens 

which will arise. And over time, the cost of compliance will turn 

into real and large levels of cost savings. 

A recent analysis of S. 139 by the Tellus Institute shows that as 

this legislation is implemented over time, it will ultimately yield 

net cost savings to American consumers of some $50 billion per 

year. 

[The information referred to follows:] 

NATURAL RESOURCES DEFENSE COUNCIL

Washington, DC, October 1, 2003 

ANALYSIS OF THE MCCAIN LIEBERMAN CLIMATE STEWARDSHIP ACT (S. 139) 

The Tellus Institute conducted an analysis for NRDC of the McCain-Lieberman 

Climate Stewardship Act (S.l39) using a modified version of the Energy Information 

Administration’s (EIA) NEMS model. The analysis finds that S. 139 in conjunction 

with targeted complementary policies significantly reduces U.S. emissions of heattrapping gases while saving consumers billions of dollars. 

62 

The bipartisan Climate Stewardship Act is a comprehensive market-based solution to cut heat-trapping emissions from U.S. sources to 2000 levels in 2010 and 

1990 levels in 2016. In late September or early October, the Senate is expected to 

vote on the modified version of S. 139, originally introduced in January 2003. This 

bill would create a comprehensive market-based program to cut heat-trapping pollution from U.S. sources. The modified McCain-Lieberman bill contains only the first 

phase of their original bill limiting emissions to 2000 levels in 2010. The second 

phase (1990 levels in 2016) contained in the original bill is not included in the modified version. The modified bill will be even cheaper to implement than the original 

bill analyzed in this report. An MIT economic analysis finds that meeting the phaseone emission limits will affect household purchasing power by less than one-tenth 

of one percent. 

Key findings of the Tellus study include: 

• Net savings to consumers accrue from 2013, reaching $48 billion annually in 

2020. 

• Household electricity bills decrease because of reduced demand, even though 

electricity prices rise slightly. 

• There is no spike in natural gas prices because demand decreases relative to 

the base case, the result of efficiency policies and the emissions cap. 

• Allowance prices increase from $8/tonne CO2-equivalent in 2010 to $22/tonne in 

2020. 

• Results of the new Tellus study are consistent with a recent study by the Massachusetts Institute of Technology (MIT), with the Tellus study forecasting even 

lower compliance costs. Both analyses predict sharply lower costs than forecast 

by the Energy Information Administration, which does not adequately predict 

energy savings. 

The modeling encompasses a set of complementary policies for cost-effective implementation of the Act, including energy efficiency investments funded by sales of 

pollution allowances, oil savings of 1 million barrels per day by 2013, renewable energy standards, promotion of combined heat and power systems, caps on other 

power plant pollutants, and smart growth measures. A scenario analyzing a more 

aggressive (Advanced) policy to improve vehicle fuel efficiency showed lower allowance prices and higher net economic benefits. These policies are relatively modest 

in comparison to bipartisan proposals already offered in congress, and backed by 

NRDC and others. 

Table 1.—Key Results for the Policy and Advanced Policy Cases 


1001NRDC1.eps
63 

Comparison to Other Studies 

The MIT Joint Program on the Science and Policy of Global Change recently published Emissions Trading to Reduce Greenhouse Gas Emissions in the United States: 

The McCain Lieberman Proposal. Scenario 7 of that analysis resembles the scenario 

analyzed in this analysis, although the MIT analysis does not include complementary policies. The MIT results have allowance prices increasing from $21/tonne CO2

in 2010 to $36/tonne CO2 in 2020 (2001$), higher than the values that we have calculated. Even with the higher 

allowance prices, MIT calculates that welfare costs (the cost to the economy as 

measured by the impact on household purchasing power) would be only 0.09 percent 

to 0.13 percent of the business-as-usual consumption levels. MIT also analyzed a 

Phase 1 only of the above scenario (Scenario12). They find the costs of the Act to 

be significantly lowered. If only Phase 1 reductions are implemented the MIT results have allowance prices increasing from only $9/tonne CO2 in 2010 to $14/tonne 

CO2 in 2020 (2001$), more than half the value found for full implementation of the 

Act. The corresponding welfare costs are also substantially reduced to only 0.02 percent of the business-as-usual consumption levels from 2010 onward. This translates 

to a cost per household of only $15–$19 per year from 2010–2020. 

The MIT results suggest that if the complementary policies adopted in our analysis were included also in the MIT analysis, the effect would be to further reduce 

both MIT’s estimate of allowance prices and welfare costs. As in this study, MIT 

finds that natural gas consumption would be lower under S. 139 than under its 

business-as-usual case. 

The Energy Information Administration analyzed S. 139 at the request of Senator 

Inhofe (and a subsequent request by Senator Lieberman). EIA used its energy forecasting NEMS model to conduct the analysis without the modifications and complementary policies considered in this analysis. In this form the NEMS model is 

well known to respond weakly to policy signals, implying that higher allowance 

prices are needed to achieve the emission limits of S. 139. 

The allowance prices forecast by EIA average more than twice as high as those 

forecast by Tellus and are also significantly above MIT’s prices. Welfare costs projected by EIA are also much higher than those found in the MIT study by a factor 

that greatly exceeds the difference in allowance prices. This translates into cost to 

households that are vastly higher than found in MIT’s study, where the costs are 

quite modest, to the Tellus study were households in the later years actually begin 

to save considerable amounts of money because electricity prices increase only modestly compared to the reference case while energy efficiency measures help reduce 

electricity demand. Another major difference is that EIA projects an increase, rather 

than a decrease, in natural gas consumption under S. 139 relative to its Base case. 

This is due to the very weak demand response in the end-use sectors projected by 

EIA. As a result a much greater proportion of the total emission reductions must 

be achieved by fuel switching from coal to natural gas in the electric sector, driving 

up gas demand and prices. 

64 

Table 2.—Comparison of S. 139 Analyses 

EIA’s energy forecasting model reflects and reinforces the status quo. It, thus, limits the potential impact of new and innovative policies that differ from business as 

usual behavior. Analyses reviewing the historical record of energy-economic model 

results, including NEMS, have shown a strong tendency to over project energy consumption and underestimate the impacts that technological change can have on reducing consumption. This results in a systematic overestimation of both future allowance and energy prices. Furthermore, the NEMS model assumes a reference case 

where all resources are fully employed and efficiently allocated. Therefore, by definition any changes in the mix to protect the environment will automatically lead to 

a less efficient and more costly outcome. Yet, to assume that there must be a tradeoff between environmental and economic benefits has been shown to be false. For 

example, it has been shown over and over again in the economic literature and 

through practical experience that energy efficiency measures can and do result in 

a net benefit to businesses and consumers. 

Our results for the policy cases analyzed demonstrate that the Climate Stewardship Act is a cost-effective approach to managing U.S. emissions of global warming 

pollution, especially when partnered with sound energy policies that help increase 

energy efficiency and clean, renewable, sources of energy. Furthermore, implementation of just Phase 1 of the Act is shown to further decrease costs. 

The executive summary and full report can be found at: 

http://www.tellus.org/energy/publications/McCainLieberman2003.pdf 

If you have any questions or need additional information, please do not hesitate 

to contact the following NRDC Climate Center staff: 

Dan Lashof, Director of Science dlashof@nrdc.org 

Antonia Herzog, Staff Scientist aherzog@nrdc.org 

Mr. PODELL. Real meaningful action on climate change is not an 

academic or theoretical issue anymore. A March 2003 Gallup Poll 

survey found that 75 percent of Americans support mandatory controls on carbon dioxide and other greenhouse gas emissions. 

In a recent University of Oregon poll, some 80 percent of Americans said that climate change is a real problem and one for which 

the business community should take direct responsibility. 

Many in the business community understand the magnitude of 

global warming. Some are waiting for our political leadership to devise the necessary rules and policies, others are hoping that regulaVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00068 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\94255.TXT JACKIE

1001NRDC2.eps
65 

tion will never occur. But in either case, without regulation, the 

business community will stay in its comfort zone and continue to 

wait and delay action on this critical world issue. 

Scientific understanding today of climate change is clear and certain enough to point public policy in one direction, and one direction only. We do not really need more research on the relationship 

between clouds and climate change before we take action. We do 

not need to wait a decade for energy research to magically deliver 

a silver bullet, which will never arrive unless the private sector has 

a clear incentive to invest in innovative solutions. 

No, what we need is to take action now to reduce our greenhouse 

gas emissions. We are kidding ourselves if we think that a plea for 

voluntary action to reduce greenhouse gas emissions in the United 

States will accomplish anything. 

Finally, climate change is, as the World Business Council said 

not too long ago, the single biggest issue facing the world business 

community. The American business community has a special responsibility here to participate fully and actively in finding the 

right solution. We emit 25 percent of the world’s greenhouse gases. 

S. 139 is a path-breaking, innovative step, a bold effort to take 

America in the right direction on a critical issue for the future of 

the world. Only with a mandatory set of greenhouse gas emissions 

targets will we make any meaningful progress in winning this crucial war with carbon. 

Thank you. 

[The prepared statement of Mr. Podell follows:] 

PREPARED STATEMENT OF ETHAN J. PODELL, PRESIDENT, 

ORBIS ENERGY ADVISORS INC. 

Summary 

The evidence so far is that voluntary greenhouse gas (GHG) cap-and-trade programs are not attracting many volunteers from the American business community. 

For instance, the Chicago Climate Exchange (‘‘CCX’’)—the nation’s first attempt 

to create a voluntary, multi-sector greenhouse gas cap-and-trade program—has only 

attracted 20 or so members. It is not because the CCX imposes large GHG reduction 

obligations on its members; the reductions are only 1 percent below baseline in 

2003, rising to 4 percent below baseline in 2006. Furthermore, CCX members are 

only making a limited, 4-year commitment to a pilot program running from now 

through 2006. 

The companies which are so far participating in a voluntary GHG reduction program such as the Chicago Climate Exchange are those that see carbon trading as 

a way to make some money by selling excess reduction credits, and a way to make 

a statement—really a gesture—about their environmental awareness. For these 

companies participating in a program such as the Chicago Climate Exchange is 

largely a risk-free, money-making opportunity. 

The companies we really need to join a GHG cap-and-trade program, the large 

emitters of greenhouse gases, those who will end up as buyers of emission reduction 

credits—the utilities, the oil/gas/petrochemical companies, the cement makers, the 

truckers and railroads—these companies are not prepared to join a voluntary capand-trade program. They view voluntary compliance as a short term expense which 

will create competitive disadvantages. Long term benefits and cost savings are ignored. 

Washington needs to provide firm rules and regulations if you expect corporate 

America to respond. When it comes to climate change, voluntary action from the corporate community means hardly any action at all. As S. 139 recognizes, a cap-andtrade system is likely to be effective in reducing greenhouse gas emissions, provided 

it is mandatory. 

66 

Mr. Chairman and distinguished Members of the Senate, 

I am grateful for the invitation to address the Committee and to share my perspective as a businessman who has tried to get corporate America to take voluntary 

action on climate change. 

My name is Ethan Podell. I’m the President of Orbis Energy Advisors, a finance 

and consulting firm focused on the business of climate change and renewable energy. I am also here today as a representative of E2—Environmental Entrepreneurs—a national group of professionals and business people who believe in protecting the environment while building economic prosperity. E2 has over 400 members in 16 states who have been involved in financing and founding more than 800 

companies, which created over 400,000 jobs. E2 members currently represent more 

than $20 billion in private equity capital available for investment into new companies. 

After a 20 year career as a media entrepreneur, I’ve spent the better part of the 

past two years trying to get corporate America to understand—and more importantly to take some meaningful action to address—this enormous problem looming 

before us . . . global climate change. My conclusion from this experience is that it 

is essential to enact mandatory limits on greenhouse gas emissions as provided for 

by S. 139. 

I consulted on strategy and business development for Cantor Fitzgerald’s greenhouse gas trading unit. From March through August of this year, I was the senior 

vice president for sales and marketing for the Chicago Climate Exchange. As you 

may know, the Chicago Climate Exchange is the first voluntary, greenhouse gas 

cap-and-trade program in the U.S. My principal role at the Exchange was to recruit 

corporate clients willing to commit to a modest, pilot program requiring minimal reductions in their greenhouse gas emissions. 

I’m here to tell you today that there is very little evidence that corporate America 

has any real interest in participating in a voluntary greenhouse gas reduction trading program. 

The Chicago Climate Exchange is a terrific idea and an innovative institution of 

the first order. It seeks to prove the concept that a voluntary, greenhouse gas emissions reduction program using a cap-and-trade system can be effective with the 

American business community. The Exchange is designed as a 4-year pilot program, 

running from now through 2006, so that companies which join the program are 

making a limited time commitment. And Exchange members are also making a very 

limited commitment to reduce their greenhouse gas emissions, as the reduction targets set by the Exchange are extremely modest. Those reductions are 1 percent 

below baseline in 2003, rising to 4 percent below baseline in 2006. 

The Chicago Climate Exchange was designed over a number of years with the active participation of leading companies from many sectors of American business. 

Notwithstanding the modest reduction targets and other incentives embedded in the 

rules of the Exchange, which are designed to make for a very slow and non-threatening game of softball, there are—so far at least—very few takers in the corporate 

world. As of last week, only about 20 companies in the U.S. had agreed to participate in the Chicago Climate Exchange. These companies are responsible for about 

3 or 4 percent of the total U.S. greenhouse gas emissions. If you do the math and 

apply the 1 percent per year emissions reduction required of members of the Chicago Climate Exchange against the 4 percent of total U.S. emissions which these 

companies represent, what we end up with is a very small drop removed from a very 

large bucket. This bucket has 10,000 drops; the current members of the Chicago Climate Exchange will remove 4 of these 10,000 drops this year and 16 in the year 

2006. 

As we have seen with the acid rain program, cap-and-trade can accomplish real 

environmental goals at modest cost when coupled with a mandatory set of targets. 

However, without regulation and governmentally-imposed sanctions, the early evidence, at least, is that the American business community is not very interested in 

a voluntary, greenhouse gas cap and trade program. 

Over the past six months, I’ve spoken or met with more than 250 companies, 

mostly in the Fortune 500, but smaller private businesses as well, about why they 

should join the Chicago Climate Exchange. I’ve also marketed the Exchange to municipalities, universities and state governments. 

For a cap and trade system to work, you really need only three things: (1). a target or cap representing some reduced level of emissions when measured against the 

past; (2). a group of participants that will reduce their emissions below the target 

and have excess reduction credits to sell; and (3). a group who will miss the target 

and need to buy credits to be in compliance with the rules of the game. 

67 

What I’ve seen in marketing the Chicago Climate Exchange is that there are very 

few companies in this country willing to commit to buy emission credits to be in 

compliance with a voluntary greenhouse gas reduction program. 

The companies which are willing to participate in a voluntary can-and-trade program are those that see carbon trading as a way to make some money by selling 

excess credits, and a way to make a statement—really a gesture—about their environmental awareness. For these companies, the ones which will be sellers of emission reduction credits, participating in a program such as the Chicago Climate Exchange is largely a risk-free, money-making opportunity. 

The companies we really need to join a carbon cap-and-trade program, the large 

emitters of greenhouse gases, those who will end up as buyers of emission reduction 

credits—the utilities, the oil/gas/petrochemical companies, the cement makers, the 

truckers and railroads—these companies are not yet prepared to join a voluntary 

cap-and-trade program. 

The large carbon emitters listen attentively to all the arguments: that regulation 

will happen sooner or later so they should get in early and learn ahead of their competitors; that Wall Street and other stakeholders are increasingly concerned about 

the link between the company’s carbon liabilities and its balance sheet; that the 

company’s overseas operations are as a practical matter subject to greenhouse gas 

reductions under the Kyoto Protocol or other emerging international regulations 

whether or not the U.S. Government participates along with the international community. . . . Yes, they listen, some even agree to gather data on their historic levels 

of emission, but very few companies are prepared to reduce these emissions if it will 

cost them any money. 

Yes, it’s true that there is nothing to prevent a voluntary system from working 

here . . . other than the absence of volunteers. And that is precisely what we 

have—the absence of volunteers. 

And, why after all, should any one American company agree to take the lead on 

voluntary greenhouse gas reductions? Where are their competitors on this issue? 

Why be a pioneer when it will just cost them money, threaten their market share, 

and worst of all, even if they agree to join a voluntary reduction program, where’s 

the assurance that Washington will recognize their early participation in a voluntary program, and not later create legislation which raises the bar and penalizes 

the early movers? The image here is that pioneers were the ones who ended up with 

arrows in their backs. Long-term thinking about the environment being in short 

supply in corporate America, our business leaders generally ignore, or forget, the 

fact that many pioneers ended up, not with arrows in their backs, but as the owners 

of very valuable real estate. 

In the absence of rules and clear guidelines, the field evidence I have is that most 

American businesses would prefer to sit this one out from the sidelines. Washington 

needs to provide firm rules and regulations if you expect corporate America to respond. When it comes to climate change, voluntary action in the real world means 

hardly any action at all. As S. 139 recognizes, a cap-and-trade system is likely to 

be cost-effective in reducing greenhouse gas emissions, provided it is a mandatory 

system. 

A mandatory carbon cap-and-trade program, such as S. 139, will cause some disruption, some adjustments in everyone’s business-as-usual behavior, and it is not— 

at least not in the short term—without some costs. However, the costs are regularly 

exaggerated, and the benefits often ignored by the business community. A recent 

MIT study on S. 139 showed that its enactment would affect household purchasing 

power by less than 1/10th of 1 percent. The gains in energy efficiency and in technological innovation which will follow once we start to constrain carbon emissions in 

this country will far outweigh any of the short term burdens which will be imposed 

upon the business community. And over time, the cost of compliance will turn into 

real and large levels of cost savings. A recent analysis of S. 139 by the Tellus Institute shows that as this legislation is implemented over time, it will ultimately yield 

net cost savings to American consumers of some $50 billion per year. 

Real, meaningful action on climate change is not an academic or theoretical issue 

anymore. A March, 2003 Gallup Poll found that 75 percent of Americans support 

‘‘mandatory controls on carbon dioxide and other greenhouse gas emissions.’’ In a 

recent University of Oregon poll, some 80 percent of Americans said that climate 

change is a real problem and one for which the business community should take 

direct responsibility. 

Many in the business community understand the magnitude of global warming. 

They are waiting for our political leadership to devise the necessary rules and policies. Without regulation, the business community will stay in its comfort zone, and 

continue to wait and delay action on this critical world issue. 

68 

Scientific understanding today of climate change is clear and certain enough to 

point public policy in one direction and one direction only. We do not really need 

more research on the relationship between clouds and climate change before we take 

action. We do not need to wait a decade for energy research to magically deliver 

a silver bullet, which will never arrive unless the private sector has a clear incentive to invest in innovative solutions. No, what we need is to take action now to 

reduce our greenhouse gas emissions. We are kidding ourselves if we think that a 

plea for voluntary action to reduce greenhouse gas emissions in the U.S. will accomplish anything. 

Climate change is, as the World Business Council said not too long ago, the single 

biggest issue facing the world business community. The American business community has a special responsibility here to participate fully and actively in finding the 

right solution. We emit 25 percent of the world’s greenhouse gases. S. 139 is a pathbreaking, innovative step, a bold effort to take America in the right direction on a 

critical issue for the future of our world. Only with a mandatory set of greenhouse 

gas emission targets will we make any meaningful progress in winning this crucial 

war with carbon. 

Thank you. 

ETHAN J. PODELL

Trained as a lawyer, Ethan Podell spent over twenty years as an entrepreneur 

in television programming and distribution. He co-founded and built two private 

media enterprises, active in both the U.S. and European markets. Both companies— 

Orbis Communications and Orbis Entertainment—were eventually sold to publiclytraded entertainment companies. Podell has served as chief financial officer (Orbis 

Communications Inc.) and chief executive officer of Orbis Entertainment Company 

(later All American Orbis), where he was responsible for client relationships, program creation and sales. Podell began his career in 1978 as a lawyer for O’Melveny 

& Myers in Los Angeles, and then worked in legal and business affairs for CBS and 

HBO, before starting his first company. 

Several years ago Ethan Podell began an entirely new career focused on environmental issues, in particular business opportunities connected with climate change 

and greenhouse gas trading. As a consultant, Podell developed a marketing strategy 

for greenhouse gas trading in the U.S. (for a unit of Cantor Fitzgerald), and recruited clients for the first voluntary greenhouse gas trading program in the U.S. 

(Chicago Climate Exchange), where he was senior vice president for sales and marketing. Podell recently founded Orbis Energy Advisors Inc., a finance and consulting 

company focused on the business of climate change and renewable energy. 

Podell is active in E2, a national community of professionals and business people 

promoting environmental protection while building economic prosperity. He has also 

done pro bono work as a lawyer and business adviser for the Rainforest Alliance 

and The Nature Conservancy. 

Ethan Podell earned his undergraduate degree at Brown University (B.A. 1974) 

where he was elected to Phi Beta Kappa. He holds a Masters from the University 

of Chicago (Committee on Social Thought, 1975) and a law degree from Northwestern University (1978), where he was on the editorial board of the Law Review. 

Podell is a member of the State Bar of California, and currently resides in New 

York. 

ETHAN J. PODELL, 

President, 

Orbis Energy Advisors Inc. 

The CHAIRMAN. Thank you, sir. 

Mr. Stephenson, welcome back. 

STATEMENT OF JOHN B. STEPHENSON, DIRECTOR, 

NATURAL RESOURCES AND ENVIRONMENT, 

UNITED STATES GENERAL ACCOUNTING OFFICE 

Mr. STEPHENSON. Thank you. 

Mr. Chairman, Senator Lautenberg, and Senator Nelson, my 

only purpose in being here today is to make some preliminary and, 

I might add, independent observation about the Administration’s 

69 

Global Climate Change Initiative that it announced back in February 2002. 

This initiative included, among other things, a goal concerning 

domestic emissions of carbon dioxide and other greenhouse gases. 

Specifically, the initiative established the goal of reducing U.S. 

emissions intensity by 18 percent by 2012. This is 4 percentage 

points more than the—or, I should say, less than the 14 percent 

reduction that would otherwise have been expected to occur without the initiative. It’s important to note that the Administration’s 

goal is based on emission intensity, not total emissions. 

I had a graphic to show, that hopefully was handed out. 

The CHAIRMAN. We have it. 

Mr. STEPHENSON. Good. 

Now, emissions intensity is the ratio between that top line, the 

green line, and the bottom two lines. So, for example, in 1990, 

which you don’t have on your chart, U.S. emissions totaled about 

1,909 million metric tons of carbon equivalents, and the economic 

output at that time was about $9.2 trillion. Dividing these two 

numbers yields the emission intensity ratio of 200 million metric 

tons. If emissions and economic output increase by the same proportion, the ratio doesn’t change. 

[The chart referred to follows:] 

What the Administration is saying is that emissions will increase 

more slowly than output increases, and, therefore, the emission intensity ratio will decrease by 18 percent. 

So it’s important to note that we’re playing with the slope of the 

line. The blue line on your chart is the business-as-usual case 


1001GAOO1.eps
70 

that’s projected through 2012. The red line represents the Administration’s slowed growth rate. And, therefore, the ratio of those, between that top line, which is the gross domestic product, would decline. So it’s a little bit misleading when you talk about, you know, 

a declining intensity ratio. It’s really still increasing the emissions, 

just at a slower rate. 

My testimony is based on ongoing work for this Committee to, in 

part, determine, one, the basis for the Administration’s 18 percent 

emissions intensity reduction goal; two, the extent to which the 30 

projects comprising the initiative contribute to the goal; and, three, 

the extent to which the Administration plans to track progress in 

meeting its goal. 

First, in analyzing the 18 percent goal, let me reiterate that it’s 

four additional percentage points beyond the 14 percent otherwise 

expected, so it’s very, very modest. We could not, however, find a 

specific rationale for the reduction, as opposed to any other level 

that they might have proposed. The 4 percent represents about 100 

million metric tons less than otherwise occur in 2012 if you did 

nothing in that 1 year. For the overall 11-year period, it’s only 2 

percent, or 500 million metric tons, less than would otherwise 

occur. 

Second, the Administration’s climate change initiative identifies 

30 projects, albeit notional projects, it expects to help reduce greenhouse gas emissions and achieve the 18 percent goal. However, we 

found no current or comprehensive source of information about all 

of the projects or specifically how the contributions of these individuals projects will add up to the 500 million metric tons that it estimates the initiative will save over the 11-year period. 

Our analysis show that no emission estimates were provided for 

19 of those 30 projects. Of the 11 projects that did contain emission 

estimates, eight were based upon past reduction levels or related 

to measures that were already underway before the initiative was 

announced. That leaves only three of the 30 projects representing 

future emission estimates specifically attributable to the initiative. 

And, finally, the Administration states that it plans to determine, in 2012, whether the goal of reduced emission intensity was 

met. This means that it will not be in a position to determine, until 

a decade after announcing the initiative, whether its efforts are on 

track or whether additional efforts may be warranted. 

We believe that the Congress and the public would be better 

served if the Administration would, one, make regularly available 

more current and complete information regarding the basis for establishing its goal; two, better describe the specific projects and 

their expected contribution to the goal; and, three, develop a plan 

for monitoring interim progress. Providing such information would 

constitute a small, but important, step toward addressing broader 

issues in the policy debate now before the Congress about challenges posed by global climate change. 

Mr. Chairman, that concludes my statement. I’ll be happy to answer questions. 

[The prepared statement of Mr. Stephenson follows:] 

71 

1To allow for comparisons among greenhouse gases, which differ in terms of their effects on 

the atmosphere and their expected lifetimes, emissions are sometimes measured in million metric tons of carbon equivalent (which we refer to as million metric tons). The economic output 

number is expressed in 1996 dollars. 2Federal Climate Change Expenditures: Report to Congress, Aug. 2003. 

PREPARED STATEMENT OF JOHN B. STEPHENSON, DIRECTOR, NATURAL RESOURCES

AND ENVIRONMENT, UNITED STATES GENERAL ACCOUNTING OFFICE

Preliminary Observations on the Administration’s February 2002 Climate 

Initiative 

Mr. Chairman and Members of the Committee: 

We are pleased to be here today to discuss our preliminary observations on certain aspects of the Administration’s February 2002 Global Climate Change Initiative. This Initiative included, among other things, a goal related to domestic emissions of carbon dioxide and other greenhouse gases. 

Specifically, the Initiative established the goal of reducing U.S. emissions intensity 18-percent by 2012, which is 4 percentage points more than the 14-percent reduction that was otherwise expected to occur. In 2012, this4-percent reduction in 

emissions intensity is expected to translate into a 100 million ton reduction in carbon emissions below levels that would be expected in the absence of the Initiative. 

The Initiative is comprised of 30 elements, including partnerships with industry and 

tax credits, designed to achieve the reduction in emissions intensity. 

It is important to note that the Administration’s goal is to reduce emissions intensity, not total emissions. Emissions intensity measures the amount of greenhouse 

gases emitted per unit of economic output. For example, in 1990, U.S. emissions totaled 1,909 million metric tons of carbon equivalent and economic output (or Gross 

Domestic Product) totaled $9,216 billion.1 Dividing these numbers yields an emission intensity ratio of 207 tons of emissions per million dollars of economic output. 

Emissions intensity changes in response to variations in either emissions or economic output. For example, if emissions increase more slowly than economic output 

increases, the ratio decreases. If emissions increase more quickly than economic output increases, the ratio increases. If emissions and economic output increase by the 

same proportion, emissions intensity does not change. 

Our testimony, which is based on ongoing work, discusses the extent to which the 

Administration’s public documents (1) explain the basis for its general goal of reducing emissions and its specific goal of reducing emissions intensity 18 percent by 

2012, (2) explain how the elements included in the Administration’s Initiative are 

expected to reduce emissions and contribute to the goal of reducing emissions intensity 18 percent, and (3) discuss the Administration’s plans to track progress toward 

meeting the goal. We expect to issue a final report on the results of our work later 

this year. 

Our testimony is based on our analysis of the Administration’s February 2002 

Global Climate Change Policy Book and subsequent White House fact sheets, as 

well as congressional testimony by administration officials, an August 2003 report 

on Federal climate change spending,2 and related documents. Because of time constraints, we limited our work to reviewing these documents. 

We performed our work between July and September 2003 in accordance with 

generally accepted government auditing standards. 

Summary 

In summary, in our review of the Administration’s documents, we found that the 

Administration provided a general basis for its climate goal, but did not provide a 

detailed rationale for the emissions intensity target that it established. That is, we 

did not find a specific justification for the additional 4-percentage-point reduction— 

as opposed to any other target that could have been established—or what achieving 

a 4-percent reduction is specifically intended to accomplish. 

The Administration’s documents identified 30 elements that it expects to help reduce greenhouse gas emissions, but did not consistently provide information on how 

each element would contribute to the approximately 100 million metric tons that it 

estimates the Initiative will save in 2012. In 11 cases, the Administration provided 

an estimate of the element’s contributions, but in 19 other cases it did not provide 

such an estimate. Moreover, while 3 of the 11 estimates represented future savings 

levels related to activities that occurred after the Initiative was announced, the 

other 8 estimates were based upon past or current savings levels or were related 

to elements that were underway before the Initiative was announced. Furthermore, 

we found no current and comprehensive source for information about all 30 of the 

72 

Initiative’s elements and their expected contributions toward achieving the goal of 

the Initiative. 

Finally, the Administration states that it plans to determine, in 2012, whether the 

goal of reducing emissions intensity was met. However, the documents we reviewed 

did not indicate whether it plans to assess its progress in the interim. Unless the 

Administration conducts one or more interim assessments, it will not be in a position to determine, until a decade after announcing the Initiative, whether its efforts 

to meet the goal are having the intended effect or whether additional efforts may 

be warranted. 

To help the Congress credibly assess the likelihood that the Initiative will achieve 

its stated goal, we believe that it would be helpful if the Administration would make 

readily available more current and complete information regarding the basis for establishing its emissions intensity goal, the elements intended to help achieve it as 

well as their expected contributions, and plans for monitoring interim progress toward the goal. Providing such information would constitute a small, but important 

step toward addressing broader issues in the policy debate now before the Congress 

about the challenges posed by global climate change. 

Background 

Carbon dioxide and certain other gases trap some of the sun’s heat in the earth’s 

atmosphere and prevent it from returning to space. The trapped energy warms the 

earth’s climate, much as glass in a greenhouse. Hence, the gases that cause this effect are often referred to as greenhouse gases. In the United States, the most prevalent greenhouse gas is carbon dioxide, which results from the combustion of coal and 

other fossil fuels in power plants, the burning of gasoline in vehicles, and other 

sources. The other gases are methane, nitrous oxide, and three synthetic gases. In 

recent decades, concentrations of these gases have built up in the atmosphere, raising concerns that continuing increases might interfere with the earth’s climate, for 

example, by increasing temperatures or changing precipitation patterns. 

In 1997, the United States participated in drafting the Kyoto Protocol, an international agreement to limit greenhouse gas emissions, and in 1998 it signed the 

Protocol. However, the previous administration did not submit it to the Senate for 

advice and consent, which are required for ratification. In March 2001, President 

Bush announced that he opposed the Protocol. 

In addition to the emissions intensity goal and domestic elements intended to help 

achieve it, the President’s February 2002 climate initiative includes: (1) new and expanded international policies, such as increasing funding for tropical forests, which 

sequester carbon dioxide, (2) enhanced science and technology, such as developing 

and deploying advanced energy and sequestration technologies, and (3) an improved 

registry of reductions in greenhouse gas emissions. According to testimony by the 

Chairman of the White House Council on Environmental Quality, the President’s 

climate change strategy was produced by a combined working group of the Domestic 

Policy Council, National Economic Council, and National Security Council. 

While U.S. greenhouse gas emissions have increased significantly, the Energy Information Administration reports that U.S. emissions intensity has generally been 

falling steadily for 50 years. This decline occurred, in part, because the U.S. energy 

supply became less carbon-intensive in the last half-century, as nuclear, hydropower, and natural gas were increasingly substituted for more carbon-intensive coal 

and oil to generate electricity. 

Administration’s Public Documents Provide a Context But Not a Specific 

Basis for the 18-percent Goal 

The Administration explained that the Initiative’s general goal is to slow the 

growth of U.S. greenhouse gas emissions, but it did not explain the basis for its specific goal of reducing emissions intensity 18 percent by 2012 or what a 4-percent 

reduction is specifically designed to accomplish. Reducing emissions growth by 4 

percentage points more than is currently expected would achieve the general goal, 

but—on the basis of our review of the fact sheets and other documents—we found 

no specific basis for establishing a 4-percentage-point change, as opposed to a 2- or 

6-percentage-point change, for example, relative to the already anticipated reductions. 

According to the Administration’s analysis, emissions under its Initiative will increase between 2002 and 2012, but at a slower rate than otherwise expected. Specifically, according to Energy Information Administration (EIA) projections cited by 

the Administration, without the Initiative emissions will increase from 1,917 million 

metric tons in 2002 to 2,279 million metric tons in 2012. Under the Initiative, emissions will increase to 2,173 million metric tons in 2012, which is 106 million metric 

tons less than otherwise expected. We calculated that under the Initiative, emisVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00076 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\94255.TXT JACKIE
73 

3Federal Motor Vehicle Safety Standards; Tire Pressure Monitoring Systems; Controls and 

Displays, 67 Fed. Reg. 38704 (2002)(to be codified at 49 C.F.R. pts. 571 and 596). 4Light Truck Average Fuel Economy Standards, Model Years 2005–2007, Final Rule, 68 Fed. 

Reg. 16868 (2003)(to be codified at 49 C.F.R. pt. 533). 

sions would be reduced from 23,162 million metric tons to 22,662 million metric tons 

cumulatively for the period 2002–12. This difference of 500 million metric tons represents a 2-percent decrease for the 11-year period. 

Because economic output will increase faster than emissions between 2002 and 

2012, according to EIA’s projections, emissions intensity is estimated to decline from 

183 tons per million dollars of output in 2002 to 158 tons per million dollars in 2012 

(a 14-percent decline) without the Initiative, and to 150 tons per million dollars 

under the Initiative (an 18-percent decline). 

Administration’s Public Documents Estimated Contributions for Some, but 

Not All, of the Initiative’s Elements 

The Administration identified 30 elements (26 in February 2002 and another 4 

later) that it expected would help reduce U.S. emissions by 2012 and, thus, contribute to meeting its 18-percent goal. These 30 elements include regulations, research and development, tax incentives, and other activities. (The elements are listed in Appendix I.) The Administration groups them into four broad categories, as 

described below. 

Providing incentives and programs for renewable energy and certain industrial 

power systems. Six tax credits and seven other elements are expected to increase the use of wind and other renewable resources, combined heat-and-power 

systems, and other activities. The tax credits cover electricity from wind and 

new hybrid or fuel-cell vehicles, among other things. Other elements would provide funding for geothermal energy, primarily in the western United States, and 

advancing the use of hydropower, wind, and other resources on public lands. 

Still other elements involve research and development on fusion energy and 

other sources. 

Improving fuel economy. Three efforts relating to automotive technology and 

two other elements are expected to improve fuel economy. The technology efforts include advances in hydrogen-based fuel cells and low-cost fuel cells. Two 

of the five elements are mandatory. First, a regulation requiring the installation 

of tire pressure monitoring systems in cars and certain other vehicles was finalized in June 2002 and will be phased in between 2003 and 2006.3 Properly inflated tires improve fuel efficiency. Second, a regulation requiring an increase 

in the fuel economy of light trucks, from the current 20.7 miles per gallon to 

22.2 miles per gallon in 2007, was finalized in April 2003.4

Promoting domestic carbon sequestration. Four U.S. Department of Agriculture 

programs were identified as promoting carbon sequestration on farms, forests, 

and wetlands. Among other things, these programs are intended to accelerate 

tree planting and converting cropland to grassland or forests. 

Challenging business to reduce emissions. Voluntary initiatives to reduce greenhouse gases were proposed for U.S. businesses. For major companies that 

agreed to establish individual goals for reducing their emissions, the Environmental Protection Agency (EPA) launched a new Climate Leaders Program. In 

addition, certain companies in the aluminum, natural gas, semiconductor, and 

underground coal mining sectors have joined voluntary partnerships with EPA 

to reduce their emissions. Finally, certain agricultural companies have joined 

two voluntary partnerships with EPA and the Department of Agriculture to reduce their emissions. 

The Administration provided some information for all 30 of the Initiative’s elements, including, in some cases, estimates of previous or anticipated emission reductions. However, inconsistencies in the nature of this information make it difficult 

to determine how contributions from the individual elements would achieve the total 

reduction of about 100 million metric tons in 2012. First, estimates were not provided for 19 the Initiative’s elements. Second, for the 11 elements for which estimates were provided, we found that 8 were not clearly attributable to the Initiative 

because the reductions (1) were related to an activity already included in ongoing 

programs or (2) were not above previous or current levels. We did find, however, 

that the estimated reductions for the remaining 3 elements appear attributable to 

the Initiative. 

We have concerns about some of the 19 emission reduction elements for which the 

Administration did not provide savings estimates. At least two of these elements 

74 

seem unlikely to yield emissions savings by 2012. For example, the April 2003 fact 

sheet listed hydrogen energy as an additional measure, even though it also stated 

a goal of commercializing hydrogen vehicles by 2020, beyond the scope of the Initiative. Similarly, the same fact sheet listed a coal-fired, zero-emissions power plant 

as an additional measure, but described the project as a 10-year demonstration; this 

means that the power plant would not finish its demonstration phase until the last 

year of the Initiative, much less be commercialized by then. 

Of the 11 elements for which estimates were provided, we found that the estimated reductions for 8 were not clearly attributable to the Initiative. In five cases, 

an estimate is provided for a current or recent savings level, but no information is 

provided about the expected additional savings to be achieved by 2012. For example, 

the Administration states that aluminum producers reduced their emissions by 1.8 

million metric tons to meet a goal in 2000, but it does not identify future savings, 

if any. Similarly, it states that Agriculture’s Environmental Quality Incentives Program, which provides assistance to farmers for planning and implementing soil and 

water conservation practices, reduced emissions by 12 million metric tons in 2002. 

However, while the Administration sought more funding for the program in Fiscal 

Year 2003, it did not project any additional emissions reductions from the program. 

In two cases, it is not clear how much of the claimed savings will occur by the 

end of the Initiative in 2012. The requirement that cars and certain other vehicles 

have tire pressure monitoring systems is expected to yield savings of between 0.3 

and 1.3 million metric tons a year when applied to the entire vehicle fleet. However, 

it will take years for such systems to be incorporated in the entire fleet and it is 

not clear how much of these savings will be achieved by 2012. Similarly, the required increase in light truck fuel economy is expected to result in savings of 9.4 

million metric tons over the lifetime of the vehicles covered. Again, because these 

vehicles have an estimated lifetime of 25 years, it is not clear how much savings 

will be achieved by 2012. 

In one case, savings are counted for an activity that does not appear to be directly 

attributable to the Initiative. Specifically, in March 2001 (nearly a year before the 

Initiative was announced), EPA and the Semiconductor Industry Association signed 

a voluntary agreement to reduce emissions by an estimated 13.7 million metric tons 

by 2010. Because this agreement was signed before the Initiative was announced, 

it is not clear that the estimated reductions should be considered as additions to 

the already anticipated amount. 

Estimates for the remaining 3 of the 11 elements appear to be attributable to the 

Initiative in that they represent reductions beyond previous or current levels and 

are associated with expanded program activities. These are: 

• Agriculture’s Conservation Reserve Program was credited with additional savings of 4 million metric tons a year. This program assists farm owners and operators to conserve and improve soil, water, air, and wildlife resources and results 

in carbon sequestration. 

• Agriculture’s Wetland Reserve Program was credited with additional savings of 

2 million metric tons a year. This program helps convert cropland on wetland 

soils to grassland or forest and also sequesters carbon emissions. 

• The Environmental Protection Agency’s Natural Gas STAR Program was credited with additional savings of 2 million metric tons a year. This program works 

with companies in the natural gas industry to reduce losses of methane during 

production, transmission, distribution, and processing. 

More current information about certain of these elements and their expected contributions has been made public, but has not been consolidated with earlier information about the Initiative. For example, the Department of Agriculture’s website includes a June 2003 fact sheet on that agency’s programs that contribute to carbon 

sequestration. Among other things, the fact sheet estimated that the Environmental 

Quality Incentives Program, cited above, will reduce emissions 7.1 million metric 

tons in 2012. However, we did not find that such information had been consolidated 

with the earlier information, and there appears to be no comprehensive source for 

information about all of the elements intended to help achieve the Initiative’s goal 

and their expected contributions. The lack of consistent and comprehensive information makes it difficult for relevant stakeholders and members of the general public 

to assess the merits of the Initiative. 

Administration’s Public Documents Do Not Discuss Plans for Monitoring 

Interim Progress 

According to the February 2002 fact sheet, progress in meeting the 18-percent 

goal will be assessed in 2012, the final year of the Initiative. At that point, the fact 

sheet states that if progress is not sufficient and if science justifies additional acVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00078 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\94255.TXT JACKIE
75 

tion, the United States will respond with further policies; these policies may include 

additional incentives and voluntary programs. The fact sheets did not indicate 

whether the Administration plans to check its progress before 2012. Such an interim 

assessment, for example, after 5 years, would help the Administration determine 

whether it is on course to meet the goal in 2012 and, if not, whether it should consider additional elements to help meet the goal. 

Mr. Chairman, this concludes our prepared statement. We would be happy to respond to any questions that you or Members of the Committee may have. 

Contacts and Acknowledgments 

For further information about this testimony, please contact me. John Delicath, 

Anne K. Johnson, Karen Keegan, David Marwick, and Kevin Tarmann made key 

contributions to this statement. 

76 

APPENDIX I 

Table 1.—Summary of Initiative’s Elements Expected to Reduce Greenhouse Gas Emissions 

Number Measure 

Providing tax incentives and programs for renewable energy and certain industrial power systems 

1 Tax credit for combined heat and power systems 

2 EPA Combined Heat and Power Partnership 

3 Department of Energy challenge to heat and power industry 

4 Tax credit for residential solar energy systems 

5 Tax credit for electricity from wind and certain biomass sources 

6 Tax credit for electricity from additional biomass sources 

7 Tax credit for new methane landfill projects 

8 Tax credit for new hybrid or fuel-cell vehicles a

9 Funding for geothermal energy 

10 Renewable energy on public lands 

11 Hydrogen energy 

12 Coal-fired, zero-emissions electricity generation 

13 Fusion energy 

Improving fuel economy 

14 Advancing hydrogen-based fuel cells 

15 Department of Energy public-private projects for low-cost fuel cell technology 

16 Fuel economy standards for light trucks 

17 Tire pressure monitoring systems 

18 High-efficiency automobile technology 

Promoting domestic carbon sequestration 

19 Conservation Reserve Program 

20 Environmental Quality Incentives Program 

21 Wetland Reserve Program 

22 Forest Stewardship Program 

Challenging business to decrease emissions 

23 EPA Climate Leaders Program 

24 Semiconductor industry 

25 Aluminum producers 

26 EPA Natural Gas STAR Program 

27 EPA Coal Bed Methane Outreach Program 

28 AgSTAR Program 

29 Ruminant Livestock Efficiency Program 

30 Climate VISION Partnership 

Source: Data from Global Climate Change Policy Book, Feb. 2002; White House Fact Sheets, July 2002 and April 2003; analysis 

by GAO. a Also listed in improving fuel economy category. 

77 

The CHAIRMAN. Thank you very much, Mr. Stephenson. 

Mr. Walker, welcome. 

STATEMENT OF CHRISTOPHER T. WALKER, 

MANAGING DIRECTOR, GREENHOUSE GAS RISK SOLUTIONS, 

ON BEHALF OF SWISS RE 

Mr. WALKER. Good morning. 

Good morning, Mr. Chairman and Members of the Committee. 

We have submitted a written statement for the record. 

My name is Chris Walker. I am the Managing Director of the 

Greenhouse Gas Risk Solutions Team for Swiss Re in North America. Thank you for giving me this opportunity to discuss greenhouse gas emissions and its effect on climate change. 

Founded in 1963, Swiss Re is North America’s largest reinsurer, 

and the world’s second-largest reinsurer, and largest life and 

health reinsurer. The company is global, operating in 70 offices in 

30 countries. We have 2,300 employees in the U.S., and 9,000 

worldwide. 

Natural catastrophes have always been a critical concern to the 

reinsurance industry. Swiss Re has paid claims on every major 

U.S. catastrophe since the 1906 California earthquake. No other 

single factor affects the bottom line of our industry or livelihood of 

our clients more than natural catastrophes. We believe that climate 

change has the potential to affect the number and severity of these 

natural catastrophes and have a significant impact on our business. 

Swiss Re supports strategies that protect the global climate system. The need to contain potential consequences of climate change 

calls for a precautionary global climate protection policy. 

Swiss Re congratulates Chairman McCain and his entire Committee for dedicating a significant portion of your busy agenda to 

this critical issue. In particular, we also thank Senator Nelson for 

his leadership in the past capacity as Florida insurance commissioner on this issue. 

Climate change natural disasters are forecasted to cost the 

world’s financial centers as much 150 billion per year within the 

next 10 years, according to the U.N. Environmental Program’s Finance Initiative Report of last year. Our analysis indicates that climate change will impact various insurance lines, such as property 

and casualty, due to potential increases in severity and frequency 

of storms, floods, droughts, et cetera. Also, though, on the life and 

health side, we may experience changes in mortality rates and disease factors. 

To enhance our understanding of this potential problem, Swiss 

Re is funding a study of the health impacts of climate change with 

Harvard Medical School’s Center for Health and Global Environment, and the U.N.—United Nations Development Program. 

Swiss Re also supports measures to reduce greenhouse gas emissions by offering financial solutions to facilitate the market mechanisms that would be employed. 

At present, we see business at a crossroads for how to conduct 

operations in a carbon-constrained future. Responsible businesses 

are taking action, but do so blindly without governmental leadership on this issue. 

78 

As a global reinsurer, we work to understand global trends. Because we operate throughout the world, we are in a unique position 

to witness what may not be seen, the consequences of change in climate on property, life, and health in the developing world. 

As an industry, we can raise awareness and change attitudes. 

We saw this firsthand last year when we participated in the carbon 

disclosure project with 35 other financial institutions constituting 

4 trillion in investments. The project wrote to the world’s 500 largest companies by market capitalization, asked them for the disclosure of investment-related information concerning their greenhouse 

gas emissions. The CDP study found that 80 percent of respondents 

acknowledged the importance of climate change as a financial risk, 

but only 35 to 40 percent were actually taking action to address the 

risks and opportunities. To us, this is not acceptable as management. 

Swiss Re has focused on risk from GHG emissions reductions to 

our own current customers. For example, we are focusing on the 

exposure potentially for directors and officers coverage. D&O insurance is professional liability insurance for directors and officers and 

members of senior management. Companies that are not complying 

with climate-change-related regulations could create personal liabilities for directors and officers. Noncompliance with these GHG 

reduction requirements potentially represents a significant risk. 

We consider GHG-related shareholder actions to be a distinct possibility in creating this risk; and, therefore, it is of concern to us. 

Worldwide policy measures to stimulate reductions in GHG emission are inevitable. From the emerging GHG regulations in the EU, 

Japan, and Canada, to the multitude of proposed U.S. Federal and 

state policies, as well as global NGO initiatives, the public and 

other stakeholders are exerting increasing pressure for concrete action. Some companies have taken up the challenge and are voluntarily reducing their emissions footprint, but a long and demanding 

learning curve awaits many companies who have not made the 

GHG reductions a part of their daily business practice. 

The issue of climate change is real, and we believe a domestic 

regulatory response is both necessary and inevitable. With this perspective in mind, we believe that we are better off as a company 

and industry if we develop an implement an effective moderate response now. If we wait five to 10 years, we may discover the need 

for a much more drastic and difficult response. 

Thank you for the opportunity to testify before the Committee. 

I am happy to answer any questions. 

[The prepared statement of Mr. Walker follows:] 

PREPARED STATEMENT OF CHRISTOPHER T. WALKER, MANAGING DIRECTOR, GREENHOUSE GAS RISK SOLUTIONS ON BEHALF OF SWISS RE

Introduction 

Good morning. My name is Chris Walker and I am the Managing Director of the 

Greenhouse Gas Risk Solutions team for Swiss Re in North America. Thank you for 

giving us this opportunity to discuss greenhouse gas emissions (GHG) and its effect 

on climate change. 

Founded in 1863, Swiss Re is North America’s leading reinsurer and the world’s 

second largest reinsurer and largest life and health reinsurer. The company is global, operating from 70 offices in 30 countries. Swiss Re has three business groups: 

Property & Casualty reinsurance, Life & Health reinsurance and Financial Services. 

We have 2,300 employees in the U.S. and 9,000 worldwide. 

79 

1The Harvard Health Futures Project 

Natural catastrophes have always been of critical concern to the reinsurance industry. Swiss Re has paid claims on every major U.S. catastrophe since the 1906 

California earthquake. No other single factor affects the bottom line of our industry 

or the livelihood of our clients more than natural catastrophes. We believe that climate change has the potential to affect the number and severity of these natural 

catastrophes and result in very significant impact on our business. 

In 1994, Swiss Re published its first publication on climate change, ‘‘Global 

Warming, Element of Risk’’. At the time, there was still uncertainly as to whether 

global climate change could be influenced by human intervention. Today, we recognize that global warming is a fact. The climate has changed, visibly, tangibly and 

measurably. One only has to look at the extreme summer heat in Europe or severe 

draughts in the Western United States to understand that something has changed. 

The question is no longer whether the climate is changing, but how the occurring 

climate change will affect our existence, what conclusions can be drawn from it and 

what can be done to mitigate the impact. 

Swiss Re supports strategies that serve to protect the global climate system. The 

need to contain potential consequences of climate change calls for a precautionary 

global climate protection policy. Swiss Re congratulates Chairman McCain and his 

entire committee for dedicating a significant portion of your busy agenda to this critical issue. 

Assessing the risks 

Climate change-driven natural disasters are forecasted to cost the world’s financial centers as much as $150 billion per year within the next 10 years, according 

the UN Environment Program’s (UNEP) finance initiative report. 

Our analysis indicates that climate change will impact various insurance lines of 

such as: 

• Property and casualty insurance due to potential increases in severity and frequency of storms, floods, droughts, etc., and 

• Life and health insurance may experience changes in mortality rates and disease vectors. To enhance our understanding of this potential problem, Swiss Re 

is funding a study of the health impact of climate change, undertaken by the 

Harvard Medical School’s Center for Health and the Global Environment 1 and 

the United Nations Development Program. 

Offering financial solutions 

Swiss Re supports measures to reduce GHG emissions. At present, we see business at a crossroads for how to conduct operations in a carbon-constrained future. 

Responsible businesses are taking action, but do so blindly without government 

leadership on this issue. 

As a global reinsurer, we work to understand global trends. This may give us an 

advantage in considering the impact of long-term issues such as climate change and 

sustainability. Because we operate throughout the world, we are in a unique position to witness what many may not see—the consequences of changing climate on 

property, life and health in the developing world. 

The financial services industry, of which Swiss Re is a leading player, has an opportunity and an obligation to assist in solving this problem through its investment 

and business expertise. After all, dealing with climate change and commensurate 

emissions reductions are ultimately financial issues. 

Reinsurance can play a crucial role in grappling with broad societal issues. As an 

industry, we can raise awareness and change attitudes. We saw this first hand last 

year when we participated in the Carbon Disclosure Project with 35 financial institutions representing over $4 trillion in investments. The project wrote to the world’s 

500 largest companies by market capitalisation asking for the disclosure of investment-relevant information concerning their greenhouse gas emissions. The CDP 

study found that while 80 percent of respondents acknowledge the importance of climate change as a financial risk, only 35–40 percent were actually taking action to 

address the risks and opportunities. This is not acceptable risk mitigation. 

Reinsurers make a living in part by understanding and anticipating risks. As an 

example, Swiss Re has climatologists and atmospheric physicists on staff and last 

year published ‘‘Opportunities and Risks of Climate Change.’’ Once we understand 

the risks, we educate our clients and the public in an effort to mitigate these risks. 

GHG issues are just the latest example of an insurer addressing a risk that grows 

more prominent with every passing year. 

80 

2Please see: www.swissre.com/emissions for more detail 

Swiss Re’s Greenhouse Gas Risk Solutions 

Swiss Re is an industry pioneer in identifying and incorporating risk and capital 

management to assist clients in dealing with emissions constraints in the most effective and cost efficient manner. We have endeavored to raise awareness of GHG 

risks and opportunities by hosting well-received and broadly-cosponsored conferences in 2001, 2002 and 2003 at our Center for Global Dialogue in Ruschlikon, 

Switzerland and in 2002 in New York City. We are considering hosting an event 

in Washington, D.C. in 2004. 

In 2001,we created Greenhouse Gas Risk Solutions.2 This unit works to determine 

where, when and how Swiss Re can play a role in facilitating emissions reductions. 

For example, my unit focuses on several relevant activities: 

• Providing clearing and pooling insurance geared to removing the counter-party 

and delivery risks that have hampered much of early stage emissions trading 

potential. 

• Raising the credit rating of renewable/alternate energy projects through the insuring of construction, technical and operational risks in projects. This insurance has the effect of decreasing the cost of capital for greenhouse-gas-reduction 

projects. 

• Assisting GHG emission reductions with investment asset management. For example, we are developing a project financing mechanism for energy efficiency 

projects in Eastern Europe. 

• In conjunction with the Commonwealth Bank of Australia, we are developing 

a program for voluntary emissions reductions activities for U.S. and European 

corporations. 

Swiss Re also focuses on risks from GHG emissions reductions to our current customers. For example, we concluded that an exposure potentially exists for Directors 

and Officers covers (D&O—Professional Liability insurance for senior management). 

Companies that are not complying with climate-change related regulations could 

create personal liabilities for directors and officers. Non-compliance with these GHG 

reduction requirements potentially represents a significant risk. We are educating 

companies and requiring them to address this issue to prevent losses. These actions 

are similar to those taken in the mid-1990s before the Y2K crisis was commonly acknowledged. As we know, non-compliance of IT systems would have caused untold 

losses to companies and shareholders. We consider GHG-related shareholder actions 

to be a distinct possibility. 

Swiss Re has prepared a Directors and Officers questionnaire to be completed 

during policy renewals for corporate clients. The companies are asked questions concerning emissions, emissions reductions plans and their climate change strategy. 

The information provided serves as a factor for our risk and underwriting assessment. 

Emissions reductions efforts 

Worldwide, policy measures to stimulate reductions in GHG emissions are inevitable. From the emerging GHG regulation in the EU, Japan and Canada to the multitude of proposed U.S. Federal and state policies, as well as global Non Governmental Organizations initiatives, the public and other stakeholders are exerting increasing pressure for concrete action. Some companies have taken up the challenge 

and are voluntarily reducing their emissions footprint. But a long and demanding 

learning curve awaits many companies who have not made GHG reductions a part 

of their daily business practice. Unfortunately, for U.S. companies operating overseas they face certainty in being regulated for their emissions overseas but potentially a patchwork quilt of non-fungible future legislation and litigation at home. 

At Swiss Re we believe that environmental performance is one indicator of overall 

business performance. Experience has taught us that proactive steps to improve environmental performance leads to better bottom line results. In our view, environment and economics are inseparable, and, as with many things, the secret to success 

is finding the right balance. 

From Swiss Re’s perspective, U.S. regulation of emissions has many benefits including better public health and environmental improvements. We believe the best 

way to lessen potential loss is through sound public policy utilizing market mechanisms which strike the right balance between environmental precaution and societal 

policy objectives. 

81 

Conclusion 

The issue of climate change is real, and we believe a domestic regulatory response 

is both necessary and inevitable. With this perspective in mind, we believe that we 

are better off as a company, and industry, if we develop and implement an effective 

moderate response now. If we wait 5–10 years, we may discover the need for a much 

more drastic and difficult response. 

Thank you for the opportunity to testify before this committee. I am happy to answer any questions you may have. 

The CHAIRMAN. Thank you very much, Mr. Walker. 

Mr. Stephenson, let me get this straight, from your statement. 

The Administration states that it plans to determine, in 2012, 

whether the goal of reducing emissions intensity was met? Is that 

a correct statement? 

Mr. STEPHENSON. Yes, and their goal is an 18 percent reduction 

in intensity. 

The CHAIRMAN. So I calculate that to be the end of President 

Cheney’s first term. 

[Laughter.] 

The CHAIRMAN. 2012, the Administration will determine whether 

the intensity—not the amount, but whether the intensity of greenhouse gas emissions has been reduced. 

Mr. STEPHENSON. Right. And as you can see on the chart, they’re 

simply slowing the growth of greenhouse gases, there’s no reduction of greenhouse gas emissions. 

The CHAIRMAN. Well, I don’t think we have to spend anymore 

time on the Administration’s proposal. 

Mr. Podell, you paint a rather pessimistic picture about the prospects of this very important free-market initiative unless there is 

some kind of government-set regulation and goals. Is that fundamentally what you’re saying here? 

Mr. PODELL. Yes, Senator. I believe it’s absolutely essential to 

get enough participants in the market so you’ve got a reasonable 

balance between buyers and sellers of emissions reduction credits. 

The CHAIRMAN. Have you seen what they’re doing in the EU? 

Mr. PODELL. Yes, I’m generally familiar with what they’re doing 

in the EU. 

The CHAIRMAN. They seem to have a pretty thriving system 

going on there. 

Mr. PODELL. They do. And it’s largely because there is a regulatory thrust behind those activities. 

The CHAIRMAN. Because goals need to be met. 

Mr. PODELL. Absolutely. There’s a real regulatory stick that is involved in getting corporations and other participants to deal with 

the issue. Whether that’s in England or whether that’s in the 

emerging EU situation, there is a push from the regulators to get 

participation. 

The CHAIRMAN. Mr. Gorman, isn’t it a little unusual for religious 

organizations to get involved in what is clearly a policy dispute 

here? 

Mr. GORMAN. Well, I think, for us, it is primarily a religious and 

moral question, and that the details of legislation are really for you 

to work out. As I said, we are convinced that there is a clear scientific consensus. We’re convinced there are fundamental values; 

intergenerational equity, stewardship, our sense of commitment to 

82 

the future. This conversation cannot simply be a technical one, particularly inasmuch as it affects all of humankind. 

It is unusual for us to move forward across such a breadth of 

support, from Catholic bishops, the Jewish community, and evangelical Christians, but it’s some measure of what we think is really 

the deepest, most fundamental issues that are being addressed 

here. And we’re here to urge you to continue to address this dimension of the challenge. 

The CHAIRMAN. Mr. Walker, in your testimony—and I think it’s 

an important point here—I quote, ‘‘the analysis indicates that climate change will impact various insurance lines, such as property 

and casualty insurance, and life and health insurance.’’ Go over 

again, one, what is that effect, and how is significant is it? 

Mr. WALKER. We believe it’s actually quite significant, or potentially quite significant. What’s interesting is that it crosses the 

lines of business. Generally, in insurance, when you do calculations 

on exposures, you calculate what basically the exposure would be, 

say, for a storm hitting a certain region, for property values. What 

the climate change actually potentially presents is the opportunity 

or the problem of crossing lines into life and health issues, also, 

which, as the largest reinsurer on the life and health side in the 

world, we had not actually correlated with our other parts of the 

business, at least in our calculations, or potentially are not correlated. And so the concern is that you have potential loss of both 

the property and casualty—storms, floods, droughts—as well as life 

and health issues—disease factors, mortality rates, et cetera. 

The CHAIRMAN. The reason why it’s an important point, Mr. 

Walker, is that we’re always discussing, and appropriately, the cost 

of any regulations or mandatory reductions in greenhouse gases 

and other pollutants, but we very rarely discuss the impact of 

doing nothing. And I think that that’s an important factor, not just 

the cataclysmic floods, et cetera, but the cost of insurance, the cost 

of rebuilding homes, the cost of moving. Senator Stevens, of Alaska, 

mentioned that some of the Indian tribes have had to move from 

where they were, inland. 

So I think that perhaps what’s missing from this debate, to some 

degree, is not only the cost of doing something, but the costs that 

are associated with doing nothing. And that’s why I thank you for 

your testimony here today. 

Senator Lautenberg? 

Senator LAUTENBERG. Thanks, Mr. Chairman. 

I wanted to ask Mr. Walker a question, also. Has Swiss Re—if 

you can tell us this—looked to offload the areas of coverage that 

it’s presently taking care of on a reinsurance basis? Is it suggested 

within the company that you’d rather apply your opportunities in 

other places? Are there any other nations, besides America, that 

run less risk than we do from the results of the global warming, 

let’s say, over the next decade? 

Mr. WALKER. I would say we have not, at this point, looked to, 

say, make a region uninsurable at this point in time. It certainly 

could be a consideration down the line. I think there is some historic record, not from Swiss Re’s point of view, but what the Outer 

Banks of North Carolina, for instance, in the Dune Road section of 

83 

the Hamptons, for instance, being uninsurable, as far as commercially insurable, due to just frequency of storms. 

Senator LAUTENBERG. Well, then, how about lines of business? 

Has that been—well, obviously, if you’re saying areas are uninsurable, that’s an option the company has, in terms of providing its 

backup insurance, the reinsurance, that is required. So you take 

those risks. 

Mr. WALKER. Well, certainly, I mean, that would be an option in 

the future. I mean, to echo what Senator McCain said, I think the 

ability or the availability of insurance in certain regions may get 

affected in the future. 

Senator LAUTENBERG. Yes. 

Mr. WALKER. And I think that is going to be a big, very significant factor for the economy at some point in time. 

The CHAIRMAN. Senator Lautenberg, could I interrupt? I have to 

go to the floor on the Iraqi issue. And could you conclude and shut 

it down? 

And my thanks to the witnesses for their valuable input. I thank 

you for being here today. I think this has been a very good hearing. 

Senator LAUTENBERG. And I’ll take not more than 10 minutes, I 

promise. 

The CHAIRMAN. Thank you. 

Senator LAUTENBERG [presiding]. I happen to be familiar with 

one of the places that you mentioned in your testimony, and there 

is some very expensive real estate there. That area has been subjected to flooding in the past, as you know, because it sits between 

two bodies of water, the ocean and bay. I would imagine that you’d 

have to examine the kinds of coverage that you’re going to give in 

these vulnerable areas. 

Mr. Podell, the Chicago Climate Exchange—interesting idea—but 

this one of the places where you’ve built it and they still haven’t 

come, realistically. And that challenges an adage that we hear, 

once you get it going. 

From your experience, can you think of any scenario in which the 

Administration’s voluntary reductions policy would help accomplish 

the goals of the Exchange? 

Mr. PODELL. Well, as a practical matter, how long are you prepared to wait? Timing is rather critical here. I supposed it’s conceivable that five, six, 10 years from now, if we just sort of limp 

along and do nothing, well, you know, clearly there may well be an 

increase in membership to a voluntary trading platform like the 

Climate Exchange. I think that’s possible. 

But what I think is missing now is that, sort of, critical push or 

impetus to get corporate America, in meaningful numbers, to participate in the Exchange. One makes all the arguments, as I outlined in my testimony, and many of which are persuasive and empirically true; but without there being a requirement on corporations to really cap and reduce their emissions, you’re not going to 

get meaningful participation. 

Senator LAUTENBERG. I agree. I came out of the corporate world 

before I came to the Senate, and I know something about that. I 

was at the 1992 conference in Brazil and saw the complaints registered by other countries. When the American representatives 

complained, about the forest-burning for farming and habitation, 

84 

that kind of thing, the response was, ‘‘One of your workers in a 

chemical factory does more to damage the environment than one of 

our farmers taking an acre of forestland and burning it.’’ And, ‘‘If 

you want to keep them from making a living,’’ was the response of 

an interior minister at one of the countries, ‘‘then you should, by 

all means, provide the funds and perhaps we can let the forests go 

as they are.’’ Stark reality. And I’m one of those very disappointed 

in the response that we, as a country, have taken to what I consider emergency needs that face us. 

I’ve got nine grandchildren, another one on the way, and they’re 

all very young. The one thing that I can leave them as a legacy 

that has durability, is to make sure that the air is clean, that they 

can fish and play in the water, that they can play on all kinds of 

ground that our wonderful industrial revolution left so toxic that 

we can’t go near it. So this has been a large concern of mine. 

I want to ask you, Mr. Gorman—the impact of the problems of 

the results of neglect of this problem probably affect different economic classes of the world’s population. Could you, in a few words, 

describe what happens to perhaps the poorest of the poor? 

Mr. GORMAN. Thank you for asking that, Senator. 

You mentioned your grandchildren. I don’t have to go any further 

than today’s Washington Post, which compiles reports from the Associated Press and Reuters, and I’ll just read two paragraphs, 

‘‘ ‘About 160,000 people die every year from the side effects of global 

warming, which range from malaria to malnutrition, and the numbers could almost double by 2020,’ a group of scientists said yesterday. The study by scientists at the World Health Organization and 

the London School of Hygiene and Tropical Medicine said, ‘Children in developing nations seem most vulnerable.’ ’’ 

Senator LAUTENBERG. That is as a result of sticking your head 

in the sand and letting events go by. 

Mr. Stephenson, thank you for your presentation. I’ve got a couple of charts here. Any one of them reflects what the greenhouse— 

the gray line, the greenhouse intensity percent under the White 

House proposal, kind of, to paraphrase, ‘‘live and let die.’’ 

[Laughter.] 

Senator LAUTENBERG. I just invented that. 

[Laughter.] 

Senator LAUTENBERG. The red line is the increase in emissions 

and the projected real GDP percentage change under White House 

Fiscal Year 2003 budget. Look at the contrast here, how much attention we pay to it and the reality of the growth and the projected 

effects of the present policy. And this is the defining, the more 

markedly identified, of the intensity factor, just headed down at it 

looks like in a rapidly accelerating rate, if you just look out years. 

And the increase of emissions in—the GDP percents, thank you. 

It’s, again, a kind of a fantasy that persists around here that 

somehow or other things will get better if we do nothing. This is 

like having a very high fever or persistent coughing or some other 

physical symptom that sometimes send a person to the doctor, 

sometimes to the hospital, and sometimes, it’s too late. We’re practicing the same thing on a larger scale. I’m hoping that there is 

some way—and I commend Senator McCain for his interest, and 

85 

Senator Lieberman. And I guess the conclusion that we have to 

draw is that we’d better do something soon. 

One of the things, when we had the scientists sitting there, I 

wanted to ask was, If we talk about changes in the ecosystem or 

changes that are not visible immediately, what might the shortterm—look out 10 years from now—what can be the immediate effects? Higher water levels? Discomfort from the increasing temperatures? What else might we say that could take effect in your 

studies or your own view? 

Mr. Stephenson? Anybody. Mr. Walker? 

Mr. WALKER. Well, actually, the comment I would add is, for instance, changing disease factors. Paul Epstein, up at Harvard, Dr. 

Paul Epstein, has done a lot of work on changes in disease factors, 

such as West Nile virus, for instance, which had never appeared 

in the U.S. prior to the late 1990s. And those type of changes, 

you’re seeing the effects. For instance, they had an outbreak of malaria in Toronto last year. Those type of changes, which they are 

unprecedented. And, in one sense, it’s the easiest way, I would say, 

that you can explain climate change to someone, because it’s very 

personal. They see these changes. They see these things that have 

not—that are out of the norm, that have not been a part of human 

experience, in a sense, in our lifetimes of experiences. 

Senator LAUTENBERG. Anybody else want to—— 

Mr. GORMAN. Crop failure. 

Senator LAUTENBERG. Huh? 

Mr. GORMAN. Crop failure. 

Senator LAUTENBERG. Crop failures could happen significantly 

within the next decade. We’ve seen it happen. 

Mr. Stephenson, any comment from you? 

Mr. STEPHENSON. I can’t answer that question. I think you need 

the science panel back. But, in general, changes in climate, you 

know, in certain areas—— 

Senator LAUTENBERG. Dr. Schneider is back there. He smiling. 

But I can’t do that. 

Mr. STEPHENSON. I know. Certain areas that might have been 

farmable may no longer be, in the future. There is very real 

change, let alone to the wildlife, but to the health of the humans. 

Senator LAUTENBERG. I will take my leave as interim Chairman 

and turn it over to my colleague, Bill Nelson, and say thank you 

very much, each one of you, for the contributions you’re making by 

being here. 

Senator NELSON (PRESIDING). You know, Senator, I’ve been looking forward to being Chairman of the Commerce Committee. 

[Laughter.] 

Senator LAUTENBERG. Would the Florida turnpike be getting 

wider? 

[Laughter.] 

Senator NELSON. Are we ready to mark up the bill? 

[Laughter.] 

Senator NELSON. I’d like to ask Mr. Walker some of the questions 

that I posed to the earlier panel about mid-1990s insurance companies weren’t interested. Your company obviously has surveyed the 

rest of the companies for me. 

86 

Mr. WALKER. Well, it’s actually a very good point that you made. 

I’m asked this question very often, and I guess I would explain two 

things. For instance, why Swiss Re, and where others are. I think 

part of why Swiss Re is involved is, as a reinsurer, we generally 

think a few years ahead of the curve. It’s just the nature of our 

business. We have long-term relationships, generally, with our insurance companies, so we have to think three to 5 years out of the 

box. So, generally, reinsurers are a little further ahead. And Munich Re, for instance, as the largest reinsurer in the world, is very 

similar to us in their thinking on climate change. 

But there’s also a difference between European and U.S. insurance companies, and the Europeans have gotten this a lot quicker. 

They believe it’s happening. The European insurance industry, 

while not as active as they could be, is starting to get there. If you 

just had to look at the financial initiatives, it’s all European insurance companies and I think one or two U.S. 

For the U.S. companies, it’s very interesting, certainly from the 

business unit that I run, which looks at—looking at the greenhouse 

gas emissions issue, there his no counterpart of mine at all in the 

U.S. to speak with. The U.S. insurance industry has not even 

looked at the emissions reduction issue, let alone acknowledge climate change, per se. It’s still a long way off, and I’m not sure why 

the reticence is. I believe if you ask them, on an underwriting 

basis, they are factoring in climate trends into their underwriting, 

but they’re very reluctant to speak publicly about it. 

Senator NELSON. What’s it going to take to get American insurance companies to recognize this is a threat to their bottom line? 

Mr. WALKER. Very good question. I’m not sure. Certainly, from 

an emissions issue, if there was legislation of some kind, there is 

a lot of business opportunities, as well as risks, for insurance companies. And the insurance industry will be fast, I think, to come 

into it, believing that there’s a role for insurance to facilitate market mechanisms, trading, offset projects, et cetera. 

On climate change, itself, I do believe they’re factoring it in, and 

it’s just a matter of, I guess, some leadership in some of the major 

insurance companies to actually come out publicly and state that 

this is something they’re already doing so they’d believe it’s happening. But so far we haven’t seen it, to be real frank. 

Senator NELSON. Well, that’s what I certainly found out. 

Mr. Gorman, to quote the ancient scriptures, ‘‘The Earth is the 

Lord’s, and everything in it.’’ Why do you think that so many people in the faith community do not have that recognition, that understanding, which you had quoted to us in several different passages in your testimony? 

Mr. GORMAN. Well, Senator, thank you for that question, and I’ll 

be leaving now. 

[Laughter.] 

Mr. GORMAN. I think the most relevant categories for this issue 

are fear, and—fear that there really isn’t enough to go around, and 

faith, you know, that if we are prepared to move forward steadily 

in the direction of generosity and collaboration and solidarity, that 

it can move to the benefit of all. And I think, finally, it’s really an 

issue of leadership, which you all address here. I don’t think people 

in the faith community are any more or any less generous or selfVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00090 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\94255.TXT JACKIE
87 

ish than anyone else. I think we are most moved by examples of 

love and compassion and caring for one another. And I think the 

unique contribution of the environmental challenge to religious life 

is that it holds up the totality of creation as something that we 

have some responsibility for future generations. People love what 

they most know, and people love their—the forests nearby and the 

farms and crops that might be lost and the children, whose wellbeing might be sacrificed. 

We really see this issue as an issue that invites people to expand 

their vision and move from their hearts, out of their love for all of 

creation. And then we move forward. You know? 

Senator NELSON. I would merely reflect, in conclusion, as we conclude this hearing, the image that is seared in my mind’s eye of 

the view out the window of our spacecraft back at Planet Earth on 

the 24th flight of the space shuttle, when I was privileged to fly, 

of the Earth looking so beautiful and yet so fragile, so colorful, so 

creative, so much of a creation in the midst of nothing. Space being 

nothing. Space, an airless vacuum that goes on and on for billions 

of light years. And there’s home. And home is the planet. 

And with the naked eye, you can see how we are doing some of 

the destruction. For example, coming across South America, I could 

see—because of the color contrast, I could see where the rainforest 

was being destroyed, and then I could look to the East, to the 

mouth of the Amazon, and I could see the result of that, for the 

waters of the Atlantic were discolored for hundreds of miles from 

the silt that was coming down. Going over Madagascar, every outlet of every stream or river into the ocean was nothing but a discolored mass of silt as a result of the destruction of the vegetation on 

that island. 

And I’ll tell you what it did for me. It made me want to be a better steward of our planet, having seen it from that perspective. 

Naturally, it’s very difficult to have an experience like that and 

not have some spiritual dimension to it, as well. And that’s why I 

was so struck by your comments, your testimony, that I think that 

there really is something to that, that people of faith ought to realize that we have a responsibility to be good stewards. That’s why 

I want to see us go to Mars with a human mission, because I want 

to see if there are dry river beds and if there was water. And if 

water was there, was there life? And if life was there, was it developed? And if it were, was it civilized? And if it was, what happened? And how can we learn to be better stewards of what we 

have by finding out some other experience in the cosmos? 

So, with those lofty thoughts, thank you all for participating. 

The hearing is adjourned. 

[Whereupon, at 11:45 a.m., the hearing was adjourned.] 

(89) 

A P P E N D I X 

PREPARED STATEMENT OF HON. JOHN F. KERRY, U.S. SENATOR FROM MASSACHUSETTS

First, I want to thank Chairman McCain and Ranking Member Hollings for their 

continued interest in this subject and their support for holding this hearing. 

Today we will hear from a distinguished group of individuals representing a wide 

variety of interests and sectors, including the European Union, eminent scientists, 

the General Accounting Office, the religious community, and the business and insurance sectors. Yet despite this wide variety of interests and perspectives, these witnesses appear to agree on one thing: that climate change poses a very real—and 

not an imaginary—threat to our environment, to our livelihoods, and to our wellbeing, and that concrete action must be taken now if we are to ever address the 

problem. 

This Committee has held hearings on climate change now for many years, spanning multiple Congresses. And the one thing that has become clear is that there 

should be no dispute that human activities are a significant cause of global warming. 

The United States has a global responsibility to be a leader in finding effective 

solutions to this problem, as we are responsible for 25 percent of all the greenhouse 

gases produced worldwide. Yet the policies of the Bush Administration appear to 

have taken several steps backwards, away from real solutions. 

First, as is well known, soon after taking office, President Bush’s Administration 

backed away from U.S. international commitments to support the Kyoto protocol on 

climate change that establishes measures for reducing greenhouse gases. At that 

time, the Administration still seemed to recognize that climate change was a real 

problem, and that human activities were connected to this phenomenon. In 2001, 

at the first hearing we held during the new Bush Administration, Dr. David Evans, 

a respected scientist and head of NOAA Research, presented compelling evidence 

that reaffirmed the steady growth in atmospheric CO2—‘‘increasing by more than 

30 percent over the industrial era compared with the preceding 750 years’’. Dr. 

Evans summarized his assessment of the science in this way, ‘‘[E]missions of greenhouse gases and aerosols due to human activities continue to alter the atmosphere 

in ways that are expected to affect the climate.’’ He also said ‘‘stabilizing concentrations means that we must ultimately end up with much lower net emissions.’’ 

Since Dr. Evans testimony before this Committee two years ago, the scientific evidence of increasing global temperatures associated with increasing atmospheric levels of CO2, and the associated threats to our people and our environment, has continued to grow. Although the Administration tried to raise questions about the 

credibility of the most recent global science report of the IPCC, its own report, U.S. 

Climate Action Report—2002, only adds to the volume of evidence. 

In response to recent attacks on the validity of science linking human activities 

to climate change, over 800 U.S. scientists declared their support for the latest findings of the IPCC and the National Research Council (NRC) with respect to climate 

change in an open letter to Senate majority and minority leaders Frist and Daschle 

(July 29, 2003). These findings include the conclusion that anthropogenic climate 

change, driven by emissions of greenhouse gases, is likely responsible for most of 

the observed warming over the last 50 years and that the Earth is expected to warm 

an additional 2.5 to 10.5 °F in the next century. 

The Administration promised leadership in promoting an international alternative 

to the Kyoto protocol. However, such a proposal simply never materialized. Instead, 

in early 2002, the U.S. unveiled its own domestic strategy to address climate 

change: reducing ‘‘greenhouse gas intensity’’. The strategy calls for reductions to be 

achieved entirely through voluntary measures. As part of the strategy, the President 

has called for a review of progress in 2012 to determine if additional steps may be 

needed to achieve further reductions in out national greenhouse gas emission intensity, but has not set forth any proposal requiring mandatory steps to lower greenhouse gas emissions through 2012. 

90 

At a hearing held by this Committee last year, James Connaughton, Chair of the 

White House Council on Environmental Quality, testified that this ‘‘greenhouse gas 

intensity’’ approach would lead to increasing emissions. This should not come as a 

great surprise, given that the approach simply reduces the ratio of emissions to 

gross national product. The testimony today from the General Accounting Office 

confirms that not only will this approach continue to increase total emissions, but 

the entire ‘‘plan’’ is a sham—there are few concrete steps being taken, and no mechanisms in place to monitor any progress. Incredibly, apart from announcing this voluntary approach, the next step we can expect from the President’s team is that they 

will be ‘‘checking back with us’’ in the year 2012! Truth in advertising would require 

this to be called the Bush ‘‘business as usual’’ plan. 

Let me say, that there are many of us in the Congress—Democrats, Republicans, 

and Independents—who were very disappointed that the President turned his back 

on his campaign commitment to address the problem of CO2 emissions when he took 

office. The United States is the largest producer of CO2 in the world—utilities and 

transportation account for two-thirds of our emissions. Yet, this Administration 

fails, repeatedly, to acknowledge the threat of increasing CO2 emissions or to 

present to the Congress any real policies, programs, or strategies to deal with this 

threat. To their credit, states have leapt into the void—Massachusetts adopted the 

first CO2 cap and trade program, and now California has passed a law to reduce 

greenhouse gas emissions from automobiles. 

There will always be some ‘‘uncertainty’’ in science—but it is not an excuse for 

no action in the face of risk. We cannot delay. 

But it’s worse than delay—we are slipping backward. The Administration’s Energy Policy seeks to promote national energy security by simply increasing the development of oil, gas, coal, and other fossil fuels for energy production. The Administration has officially opposed any provisions in the energy bill that would address 

climate change, has pressed back on provisions that promote renewable sources of 

energy, and other measures that are aimed at responsibly fixing this problem. By 

contrast, states and other nations are moving forward with concrete plans. I am particularly pleased that a representative from the European Commission has come to 

inform the Committee of its plans to institute greenhouse gas emissions reductions 

and begin its cap and trading program as soon as 2005. 

In sum, this is an issue that cannot be ignored, and action is being taken on many 

levels. Yet this Administration is not only putting its head in the sand, but its policies—by its own admission—will lead to an increase in emissions of greenhouse 

gases by the United States. I commend the witnesses today for appearing before the 

Committee to inform us what is going on in the real world—of science, policy, and 

business—on the question of what action is needed to address climate change. 

91 

ATTACHMENT


1001SCSO1.eps
92 


1001SCSO2.eps
93 


1001SCSO3.eps
94 


1001SCSO4.eps
95 


1001SCSO5.eps
96 


1001SCSO6.eps
97 


1001SCSO7.eps
98 


1001SCSO8.eps
99 


1001SCSO9.eps
100 


1001SCSO10.eps
101 


1001SCSO11.eps
102 


1001SCSO12.eps
103 


1001SCSO13.eps
104 


1001SCSO14.eps
105 


1001SCSO15.eps
106 


1001SCSO16.eps
107 


1001SCSO17.eps
108 


1001SCSO18.eps
109 


1001SCSO19.eps
110 


1001SCSO20.eps
111 


1001SCSO21.eps
112 


1001SCSO22.eps
113 


1001SCSO23.eps
114 


1001SCSO24.eps
115 


1001SCSO25.eps
116 


1001SCSO26.eps
117 


1001SCSO27.eps
118 


1001SCSO28.eps
119 


1001SCSO29.eps
120 


1001SCSO30.eps
121 


1001SCSO31.eps
122 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN MCCAIN TO

ANTONIO J. BUSALACCHI, JR., PH.D. 

Question 1. As you mentioned in your testimony, National Academy of Sciences 

member Ralph J. Cicerone of the University of California at Irvine was quoted in 

the Washington Post article on the ice-shelf breakup as saying: 

‘‘But even though this ice melt and permafrost thawing [probably happened] too 

fast to be due to global warming, this is [a] prototype of what we should expect 

after the next few decades. . . . This is a good dress rehearsal for the kinds 

of things we could see later.’’ 

Do you agree with this statement and can you elaborate? 

Answer. Yes, I do agree with this statement. There is general consensus among 

climate scientists that the magnitude of climate change will be greatest in the Arctic, potentially resulting in significant changes to the Arctic sea ice cover. This general agreement is derived in part from numerous general circulation model projections that indicate that the Arctic climate is particularly sensitive to global warming. In addition, we have some observations showing that changes may already be 

taking place in the Arctic. Analysis of recently declassified data from U.S. and Russian submarines indicates that sea ice in the central Arctic has thinned since the 

1970s, and satellite data indicate a 10–15 percent decrease in summer sea ice concentration over the Arctic as a whole. Satellite measurements also indicate that the 

time between the onset of sea-ice melting and freeze-up has increased significantly 

from 1978 through 1996, and the number of ice-free days have increased over much 

of the Arctic Ocean. A decline of about 10 percent in spring and summer continental 

snow cover extent over the past few decades also has been observed. Looked at in 

total, the evidence paints a reasonably coherent picture of change, but the conclusion that the cause is greenhouse warning is still open to debate; many of the 

records are either short, of uncertain quality, or provide limited special coverage. 

Question 2. You mentioned in you statement that greenhouse gases are accumulating in Earth’s atmosphere as a result of human activities, causing surface air 

temperatures and subsurface ocean temperatures to rise. 

(a) What type of environmental impacts can we expect from rising surface air temperatures and subsurface ocean temperatures? 

Answer. A number of secondary effects are expected to accompany changes in 

global mean temperature. These include increases in rainfall rates and increased 

susceptibility of semi-arid regions to drought. For example, warmer temperatures 

would increase evaporation rates and thereby accelerate drying of soils following 

rain events. This effect will likely be most important in semiarid regions such as 

the Great Plains. The impacts of these changes will depend on the magnitude of the 

warming and the rate with which it occurs. 

(b) Are these impacts consistent with the other type of events such as Ward Hunt 

Ice Shelf breakage and the shifting of certain species of plants, insects, birds and 

fish to higher latitudes which you described in your testimony? 

Answer. Yes. 

Question 3. Can you elaborate on why the Arctic region in considered the ‘‘canary 

in the coal mine?’’ 

Answer. As mentioned in the response to the first question, there is general agreement that the magnitude of climate change will be greatest in the Arctic, potentially 

resulting in significant changes to the Arctic sea ice cover. Thus, we might expect 

to see significant impacts of climate change first in the Arctic. 

Question 4. In July 2002, Dr. John Marburger, the Director of the Office of 

Science and Technology Policy, testified before this Committee about the 2001 National Academy Report that ‘‘Even a cursory reading of the report indicates that the 

uncertainties are real and they are significant.’’ In your statement, you state that 

‘‘Despite the uncertainties, however, there is widespread agreement that the observed warming is real and particularly strong within the past twenty years.’’ What 

factors have led to the ‘‘widespread’’ conclusion that the Earth’s climate is really 

warming? 

Answer. As is explained in the 2001 National Academy Report Climate Change 

Science, there is wide scientific consensus that climate is indeed changing. Greenhouse gases are accumulating in Earth’s atmosphere as a result of human activities, 

causing surface air temperatures and subsurface ocean temperatures to rise. This 

conclusion is based on the instrumental record of surface air temperatures and subsurface ocean temperatures for the recent past. Instrumental records from land stations and ships indicate that global mean surface air temperature warmed about 

0.4–0.8 degrees C (0.7–1.5 degrees F) during the 20th century. The ocean, which 

123 

represents the largest reservoir of heat in the climate system, has warmed by about 

0.05 degrees C (0.09 degrees F) averaged over the layer extending from the surface 

down to 10,000 feet, since the 1950s. In addition to these direct measurements, 

proxy records—which can be derived from ice cores, tree rings, and corals—indicate 

that today’s global mean temperatures and levels of carbon dioxide (CO2), a key 

greenhouse gas, are at their highest levels of the last 450,000 years. The observed 

change in temperature is consistent with our understanding of how Earth responds 

to greenhouse gases present in the atmosphere. 

A diverse array of evidence supports the view that global air temperatures are 

warming. The warming trend is spatially widespread and is consistent with the 

global retreat of mountain glaciers, reductions in snow-cover extent, the earlier 

spring melting of ice on rivers and lakes, the accelerated rate of rise of sea level 

during the 20th century relative to the past few thousands years and the increase 

in upper-air water vapor and rainfall rates over many regions. A lengthening of the 

growing season also has been documented in many areas, along with an earlier 

plant flowering season and earlier arrival and breeding of migratory birds. Some 

species of plants, insects, birds and fish have shifted toward higher latitudes or 

higher elevations, often together with associated changes in disease vectors. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. ERNEST F. HOLLINGS TO

ANTONIO J. BUSALACCHI, JR., PH.D. 

The Need for Science and Technical Advice in Congress 

From 1972 to 1995, Congress had its own bipartisan, scientific and technical analysis organization called the Office of Technology Assessment (OTA). The office was 

shut down for economic reasons. The OTA’s function was to do analysis for committees and to provide consultations for congressional staff and members, providing a 

needed level of expertise on complex science and technology issues. 

Question 1. If such an advisory office still existed, do you think it would benefit 

Congressional understanding of climate change science (i.e., is it the nature of the 

science causing debate or is it the people interpreting the science)? 

Answer. The leadership of the National Academy of Sciences supported the original creation of OTA and was on the record for the preservation of the OTA at the 

time of its cancellation. If OTA were in existence today, it would certainly be able 

to play a positive role in providing Congress with additional understanding of the 

scientific aspects of climate change science. 

Question 2. Do you see a need for increased scientific advice at the congressional 

level? 

Answer. The National Academy of Sciences has long supported the need for multiple means for providing scientific advice to Congress, the Executive Branch, and 

the American public. 

Question 3. Do you think the National Academy of Sciences, universities, and 

other institutions successfully fill the gap left by the removal of the OTA, with respect to climate change? 

Answer. The National Academy of Sciences and other institutions have served a 

valuable and successful effort to inform the Congress since the demise of OTA. However, the absence of OTA has been a real loss for Congress because OTA was an 

important and useful source of in-house scientific and technical advice for committees and members. OTA reports were produced by a different process from that of 

reports from the National Academies. The National Academies found OTA reports 

to be informative and useful for our own work. 

Question 4. Do you think the lack of scientific and technical expertise at the congressional level puts us at a disadvantage? How about at the international level? 

Answer. In a complex and important issue such as climate change, it could be said 

that there is no such thing as too much objective and high quality scientific information and advice. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN F. KERRY TO

ANTONIO J. BUSALACCHI, JR., PH.D. 

Delay of Action and Costs to Society 

Despite the President’s declaration to cut U.S. greenhouse gas intensity by 18 percent in the next ten years, we have heard in previous testimony from Mr. James 

Connaughton, head of CEQ, that his proposal will result in steadily increasing GHG 

emissions. 

124 

Question 1. Speaking as a scientist, doesn’t each decade that we delay in reducing 

greenhouse gas emissions commit us to enduring greater warming in the future and 

make it exceedingly difficult to stabilize atmospheric GHG concentrations? 

Answer. The course of future climate change will depend on the nature of the climate forcing (e.g., the rate and magnitude of changes in greenhouse gases, aerosols) 

and the sensitivity of the climate system. Each decade that we continue to emit 

greenhouse gases commits the Earth to some amount of warming. Indeed, because 

of inertia in the climate system, we are already committed to some warming due 

to emissions during the last century. Model projections have been conducted that 

compare the impacts of continued increases in greenhouse gas emissions to those 

of stabilizing greenhouse gas emissions at levels below the business-as-usual case. 

The models in which emissions continue to increase show more significant impacts 

than those where emissions are stabilized. 

Question 1a. Doesn’t this mean that either mitigation or adaptation will come at 

a much greater cost to society in the future? 

Answer. I am not an expert in the economic impacts of different climate change 

response options and the National Academies have not yet conducted any studies 

on this topic. Economic analysis of response options is the type of research that 

should be supported at the interface of the U.S. Climate Change Science Program 

and the U.S. Climate Change Technology Program 

Voluntary Approach and UNFCC 

As you know, the U.S. signed and ratified the UN Framework Convention on Climate Change in 1992, which set as its goal ‘‘stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.’’ 

The UNFCC further stated that ‘‘such a level should be achieved within a time 

frame sufficient to allow ecosystems to adapt naturally to climate change. . . ’’ . But 

according to testimony before this Committee in July of last year and the U.S. Climate Action Report, U.S. greenhouse gas emissions will increase under the Bush 

plan by 43 percent between 2000–2020, despite improvements in greenhouse gas intensity. 

Question 2. Is the ‘‘emissions intensity’’ voluntary approach to greenhouse gas 

emission reductions currently advocated by the Administration is sufficient to put 

us on track to achieve greenhouse gas stabilization in a timely manner? 

Answer. Present increases in greenhouse gas emissions are incompatible with 

greenhouse gas stabilization. 

Question 2a. If we continue on the current path—with emissions rising annually— 

when would we achieve this goal? Ever? 

Answer. It is difficult to answer this question because scientists are still trying 

to determine what level of greenhouse gases in the atmosphere would ‘‘prevent dangerous anthropogenic interference with the climate system.’’ At this time, the goal 

is only qualitative and therefore doesn’t lend itself well to a quantitative response. 

In fact, no single threshold level of greenhouse gas concentrations in the atmosphere 

exists at which the beginning of dangerous anthropogenic interference with the climate system can be defined. Some impacts have already occurred, and for increasing concentrations there will be increasing impacts. The unprecedented increases in 

greenhouse gas concentrations and those anticipated in the future, constitute a real 

basis for concern. 

Question 2b. Can actual emissions reductions on such scale and time-frame be 

achieved solely through any type of voluntary action? 

Answer. The utility of voluntary emissions control programs is a matter of socioeconomic research, outside my expertise in climate science. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. ERNEST F. HOLLINGS TO

DR. TOM M.L. WIGLEY

The Need for Science and Technical Advice in Congress 

From 1972 to 1995, Congress had its own bipartisan, scientific and technical analysis organization called the Office of Technology Assessment (OTA). The office was 

shut down for economic reasons. The OTA’s function was to do analysis for committees and to provide consultations for congressional staff and members, providing a 

needed level of expertise on complex science and technology issues. 

Question 1. If such an advisory office still existed, do you think it would benefit 

Congressional understanding of climate change science (i.e., is it the nature of the 

science causing debate or is it the people interpreting the science)? 

125 

Answer. I was one of those very saddened, Senator Hollings, when the OTA was 

eliminated. having worked with many of its staff on climate and energy issues over 

the years. They checked facts, reviewed the literature broadly and produced credible 

assessments—not always liked by those who preferred spin to balanced assessment. 

Fortunately, in the climate arena at least, there are many other assessment bodies 

of high credibility you can turn to, even in the absence of a good in-house body like 

OTA was. These include the Intergovernmental Panel on Climate Change (IPCC) 

internationally (but with major U.S. scientific and administrative input), and the 

U.S. National Research Council, whose many reports say virtually the same things 

about the science and impacts of climate as the IPCC. That is, both reflect the 

strong consensus of mainstream climate scientists on the likelihood of human interference in the natural climate and its potential for some problematic outcomes if we 

do not attempt to slow down this threat—via policies, like the McCain Lieberman 

bill. Of course, the assessments do not take positions on particular policies, except 

to evaluate the differential climatic implications of various options. 

Question 2. Do you see a need for increased scientific advice at the congressional 

level? 

Answer. I think the greatest need is to have a reasonable debate of parties who 

put the nature of the science above special interests. Unfortunately, the latter have 

dominated both the media and congressional hearing rooms for 15 years with a cacophonous ‘‘end of the world’’ versus ‘‘good for you’’ debate over climate change, 

though the vast bulk of the knowledgeable scientific community would rate the two 

polar extremes as the lowest probability outcomes. My personal wish is you could 

hear nothing but opinions of those dedicated to honest and balanced assessment of 

the literature rather than the selective special-interest spin all too prevalent in debates on climate change over the past 15 years. I appreciate your questions, and 

admit a great personal frustration being constantly forced to respond to non-scientific polemics from those dabbling in climate science with an agenda and spouting 

seemingly technically competent arguments that would not pass muster at any decent per reviewed journal. Fortunately, the IPCC and NRC are mega peer reviewed, 

and are clearly the most credible sources for Congress right now on climate and 

other related technical issues. 

Question 3. Do you think the National Academy of Sciences, universities, and 

other institutions successfully fill the gap left by the removal of the OTA, with respect to climate change? 

Answer. Please see remarks above in answer to part 1 of your question. Basically 

yes, I argued. 

Question 4. Do you think the lack of scientific and technical expertise at the congressional level puts us at a disadvantage? How about at the international level? 

Answer. Yes, Senator Hollings, I worry about this, as a veteran of testimony before congress since 1976. I find many staffers dedicated and honest, but too easily 

persuaded by less-than objective but credible-sounding unsound scientific arguments 

of special interest PhDs. This is a very difficult job to do—be highly literate in the 

subtleties of complex issues like climate change—but if our leaders are to make decisions commensurate with their values—those of the public that elected them— 

then it is imperative that those in the process of decisionmaking know enough about 

what the potential consequences and probabilities are of various policies, so they can 

make the trade-offs between investing present resources as a hedge against potential future risks or not. So a greater number of staff that can be more discerning 

about who is credible and who is spinning would be helpful. At a minimum, some 

staff should be fully able to understand technical assessment reports of the National 

Research Council and IPCC to help members fathom these complex issues. So yes, 

I think a few more specialists in understanding complex system scientific issues in 

the Congress would aid the process of putting decision making on a firmer scientific 

foundation. 

As to international disadvantages, I don’t see more knowledgeable government 

scientists or policy analysts in European or Australian institutions than here, but 

perhaps there is better communication between parliamentarians and the technically competent governmental and academic worlds in Europe than in the U.S., 

where so much of the Congressional debate is highly polarized. and frankly, as I 

said above. not very reflective of the debates the scientist have—the public debate 

being captured by extreme special interest views in the U.S. to a degree far exceeding what I observe in Europe. 

126 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN F. KERRY TO

DR. TOM M.L. WIGLEY

Level of Scientific Justification for Action 

The Climate Action Report states: ‘‘Greenhouse gases are accumulating in Earth’s 

atmosphere as a result of human activities, causing global mean surface air temperature and subsurface ocean temperature to rise’’. It also states: ‘‘the best scientific information indicates that if greenhouse gas concentration continue to increase, changes are likely to occur’’. 

We also are already seeing the effects of climate change, according to recent studies shrinking ice sheets, shifts in species ranges, and loss of snow covet on Mt. Kilimanjaro -to name only a few of many examples of the frightening consequences of 

climate change. 

Question 1. Do we not have sufficient conclusions and studies to justify some level 

of mandatory reductions in greenhouse gases? 

Question 1a. If not, why not? 

Question 1b. What additional evidence—short of flooding of the National Mall— 

must we gain to have sufficient justification for mandatory reductions in greenhouse 

gas emissions? 

Answer. We need to separate out two aspects of this question. First, science can 

provide the ‘‘what ifs’’—what if we do not have enforceable incentives to cut greenhouse gas emissions. by how much will concentrations rise and what might that 

imply for impacts on environment and society. In other words, science assesses the 

risks of alternative policies. Second. is the value laden political exercise of deciding 

how much risk should we take before trying to hedge against potentially ham1ful 

or irreversible prospects. Science can—and has—told us that climate change beyond 

a few degrees further warming will have a much greater likelihood of dangerous 

outcomes than keeping it below a few degrees. The latter is much less likely to happen without climate policies like the McCain-Lieberman bill than with climate policies. Thus, the value choice is whether to hedge—i.e., adopt a precautionary principle to hedge against dangerous possibilities, whose severity increases with delay 

in dealing with the problem. That is the risk-management gamble 1we take if we 

ignore the problem and hope it will turn out on the low side of the current uncertainty range. Of course, if our luck—in truth, the luck of our children and grandchildren and nature—is bad, we will have much greater damages by doing nothing 

than by hedging. 

However, sensible policies also solve more than one problem at once. So cutting 

greenhouse emissions via more efficient or renewable systems reduces health-damaging air pollution in cities, and can reduce dangerous dependence on foreign supplies of oil. Such ‘‘win-win’’ strategies are usually the cheapest and most politically 

acceptable hedging strategies, and in my personal opinion we knew enough 

science—a better than even chance for serious climate damages from business-asusual—that we should have Implemented climate policies 15 years ago (as I said 

to this committee in testimony in 1989 and again this month—see my written testimony on Oct. 1, 2003, for references). 

In terms of how much shock it will take to wake us up, the 1988 heat waves were 

the first such shock, and moved this problem from a largely academic setting to congressional hearing rooms and media programs. Since then a contentions and too 

often special interest driven polemical debate has arisen, pitting ‘‘end of the world’’ 

pessimism versus ‘‘CO2 is good for the environment’’ optimism—the former from 

‘‘deep ecology’’ groups and the latter from the fossil fuel industry and their ideological supporters. This debate has confused many, as it is technical and shrill. But 

the vast bulk of the knowledgeable scientific community that specializes in climatology has agreed over the past 10 years that effects of human activities are already 

discernible in the observational record, that plants and animal are already responding and will be greatly disturbed if the trends continue for decades more, and that 

cost effective solutions need not cost more than a year’s delay in achieving phenomenal income growth—hundreds of percent improvement—and can eliminate the 

global warming risk (see the discussion in my testimony to this committee on Oct. 

1, 2003). Thus, in my personal view we have had many clear signs of potential trouble and to risk more and greater threats seems foolish in view of the available costeffective steps that can be taken now to lower the threat and provide co-benefits 

such as greater energy independence and reduced air pollution. 

127 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN F. KERRY TO

JOS DELBEKE

State Carbon Cap Programs & Federal Coordination 

As you may know, the state of Massachusetts was the first state to initiate a 

mandatory cap on CO2 emissions from its six highest-emitting power plants, and 

plans to reduce their emissions further. In addition, Oregon has placed CO2 limits 

on new power plants. 

Question 1. Given the potential for a patchwork of state carbon cap and trade programs, what role could the Federal Government play? 

Answer. This question reminds me very much of the situation we have been faced 

with in Europe a few years ago. We have witnessed two out of 15 Member States 

establishing national greenhouse gas trading programs—Denmark in 2001 and the 

United Kingdom in 2002. It was striking to see how different these national 

schemes turned out to be designed. In order to prevent such a patchwork of national 

trading schemes developing against the backdrop of the EU common market the 

Commission has taken the initiative and proposed a Directive in order to coordinate 

or harmonise the most crucial choices at European level while leaving other choices 

to the discretion of Member States. I see therefore the role of the Federal Government in ensuring that crucial program design variables are coordinated or harmonized. 

Question 2. What roles are particularly appropriate for the states? 

Answer. In the EU scheme the Member States’ roles are quite far-reaching when 

it comes to implementation and administration of the scheme. Member States decide 

on initial allocation of allowances (both the total quantity of allowances to allocate 

and the distribution between covered installations), build and maintain the electronic allowance registries, check for compliance and levy financial penalties for 

non-compliance. It could imagine that a similar sharing of tasks could be appropriate in the U.S. context. 

Answer 3. What would be useful to see in such a system—consistent national criteria, standards, information coordination? 

Answer. I believe all the elements mentioned in the question would be useful. The 

approach we are taking in Europe contains all these elements together with the approach to periodically review what the best arrangements are to run the scheme. 

The experience collected in implementation may well make us decide to adapt the 

mix of these elements over time. 

Question 4. What is a good model for such a coordinated state-national system? 

Answer. The most appropriate model of state and national action depends on the 

institutional circumstances. The European Union is a unique construct and the 

sharing of tasks in our scheme are very much a reflection of the institutional structure. One of the major differences I see between EU and the U.S. in this context 

is the absence of greenhouse gas emission targets in the 50 U.S. states. In view of 

this an appropriate model for the U.S. would probably differ in foreseeing more of 

a Federal role with regards to initial allocation. As far as the maintenance of allowance registries is concerned, it may be preferable to consider this as a Federal function in the US. 

Cost to Business of Emissions Reductions 

One of the rationales given by the Bush Administration for rejecting any measures to require actual reductions in greenhouse gas emissions is that these will result in enormous costs to the U.S. economy, to the point that no mandatory requirements are acceptable. CEQ Chairman James Connaughton’s testimony in a previous 

hearing stated that compliance with Kyoto would cost the United States $400 billion 

and 4.9 million jobs. 

Question 5. Do you agree with this assessment? 

Answer. Many economic assessments of implementing the Kyoto targets have 

been carried out over the year’s since the adoption of the Kyoto Protocol. If the estimate is on an annual basis I have strong doubts about the figure, as this would 

imply that the cost would be about 5 percent of annual economic output of the U.S. 

economy. The most authoritative overview of economic studies is the review undertaken by the IPCC for the Third Assessment Report which concluded that most cost 

estimates are in the range of 0.1 to 1.1 percent of GDP, assuming the use of the 

flexible mechanisms and 0.2 to 2 percent of GDP without their use. 

Question 6. Are you aware of any examples where requirements to address pollution either had little negative impact on the economy, or even provided areas for 

economic growth? 

128 

Answer. I think there are many examples of environmental measures which have 

improved society’s well-being. Both European and U.S. societies are characterized 

by quite a high level of environmental protection—when it comes to issues as air 

and water quality, waste management etc.—as well as by a high standard of living. 

If environmental policy would be to the detriment of economic development we 

should have become poorer after three decades of strong societal interest and advances in environmental policy. 

Question 7. Won’t U.S. industries be at a disadvantage if other countries develop 

more environmentally efficient technologies? 

Answer. One of the pillars of European climate policy is the premise that the challenge represented by climate change will necessitate a movement to an increasingly 

carbon-constrained global economy over the coming decades. In such an economic 

environment efficient carbon management and the development and deployment of 

low-carbon technologies will be among the key sources of competitive advantage. 

The earlier policy sets the right incentives for industries to start the transition to 

the low-carbon economy the smoother the transition process will turn out to be. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN F. KERRY TO

DR. STEPHEN H. SCHNEIDER

Question 1. You were also highlighted by Senator Inhofe as being a critic of the 

Intergovernmental Panel on Climate Change (IPCC) results. Would you care to clarify your comments concerning the IPCC range of expected temperature increases 

over the next 100 years? 

Answer. A general comment first on Senator Inhofe’s overall approach to discussing the climate issue, then I will specifically respond to the temperature increase issue you raise. 

It is indeed correct as the Senator suggests that I have criticized a few aspects 

of IPCC assessments, but then so too have nearly all scientists or policy analysts 

who honestly observe the complex issues involved. In fact, IPCC Lead Authors 

themselves are among the most vigorous critics of their own evolving assessment 

reports—as they should be. That is why IPCC assessments undergo several rounds 

of rigorous internal and external peer review—to maximize the likelihood of balanced assessment. 

However, criticizing pieces of a whole hardly constitutes disagreeing with the 

principal conclusions and the overarching credibility of most of the IPCC analyses. 

It is misrepresenting my views to characterize them as even implying that IPCC 

has exaggerated or failed to describe the state of the science fairly at the time the 

assessment reports were completed in 2000. In fact, work of my own (see Testimony 

of Stephen H. Schneider to Senate Commerce committee on Oct. 1, 2003) or by the 

MIT group Senator Inhofe mentions, shows we all believe that IPCC may have underestimated the potential for large climate change by restricting itself to existing 

climate models available in 2000, and that several more recent papers (e.g., 

Andronova and Schlesinger, 2001 or Forest et al., 2001) show that climate may indeed be both more or less sensitive to greenhouse gas increases than IPCC could 

have known in 2000 when the Third Assessment was prepared. Thus, if anything, 

since the 2000 assessment—which may in fact be conservative in its conclusions— 

new research could as well increase the likelihood of higher warming as lower 

warming in 2100. Such is the nature of complex problems in which humans dump 

their wastes into the atmosphere at a faster rate than science can understand the 

consequences. 

In addition, to criticize the international scientific community for not providing ‘‘a 

definitive scientific answer’’ to the question of what constitutes ‘‘dangerous’’ global 

warming is to misunderstand the nature of sound science—in which it is rare to 

have ‘‘definitive’’ knowledge of any complex system (and to so claim would be dishonest, which IPCC did not do). For example, in his July 28, 2003 floor speech, Senator Inhofe says: 

According to the U.N.’s Intergovernmental Panel on Climate Change, Kyoto will 

achieve ‘‘stabilization of greenhouse gas concentrations in the atmosphere at a 

level that would prevent dangerous anthropogenic interference with the climate 

system.’’ 

What does this statement mean? The IPCC offers no elaboration and doesn’t 

provide any scientific explanation about what that level would be. Why? The answer is simple: thus far no one has found a definitive scientific answer. (Inhofe, 

2003) 

129 

This statement is erroneous in several aspects, and calls into question the credibility of the research apparatus Senator Inhofe relies upon to determine what is 

sound science. First of all, it was the UN Framework Convention on Climate 

Change (UNFCCC—see: http://unfccc.int/), signed by President Bush (Sr.) and 

ratified by the U.S. Senate about 10 years ago, which stated the object of the Convention was to stabilize greenhouse gas concentrations so as ‘‘to prevent dangerous 

anthropogenic interference . . .’’ IPCC has steadfastly insisted that what is ‘‘dangerous’’ is a value judgment, not a scientific conclusion, so the Senator’s quote that 

‘‘thus far no one has found a definitive scientific answer’’ about what is ‘‘dangerous’’ 

is a contradiction in terms since it is not science, but policymakers, that must decide 

what constitutes a ‘‘dangerous’’ threat. The job of scientists—such as in IPCC or 

U.S. National Research Council assessments—is to discuss what consequences 

might occur at various greenhouse emissions levels and what is the likelihood and 

impacts of such potential consequences. That is responsible scientific assessment. 

The above quote is both incorrect in its assertion about what IPCC said about Kyoto 

and is not about science, let alone ‘‘definitive’’ science, an impossibility in principle 

about a complex problem assessing future possibilities. 

Specific response on warming to 2100 

Senator Inhofe refers to my Commentary in Nature (Schneider, 2001), correctly 

noting that: 

In his article, Schneider asks, ‘‘How likely is it that the world will get 6 degrees 

C hotter by 2100?’’ That, he said, ‘‘depends on the likelihood of the assumptions 

underlying the projections.’’ (Inhofe, 2003) 

The Senator continues: 

But as Schneider wrote, the group drafting the IPCC report decided to express 

‘‘no preference’’ for each temperature scenario. 

In effect, this created the assumption that the higher bound of 5.8 degrees Celsius appeared to be just as likely as the lower of 1.4 degrees Celsius. ‘‘But this 

inference would be incorrect,’’ said Schneider, ‘‘because uncertainties compound 

through a series of modeling steps.’’ 

Keep in mind here that Schneider is on the side of the alarmists. (Inhofe, 2003) 

This is an unfortunate mischaracterization of the context of my commentary, since 

it implies that IPCC has overestimated the likelihood of future temperature rises, 

when in fact they made no probability estimates—and I expressed a wish that they 

had tried, as difficult as that exercise would be. First of all, I praised the IPCC for 

have a wide range of possible emission scenarios—to honestly represent the divergence of possible futures that are reflected in the scientific and policy literature. 

Second, I also approved of the IPCC using several climate models to estimate the 

warming from each emission scenario, as using only one model would be misleading. 

However, the ‘‘incorrect inference’’ that Senator Inhofe quotes me saying was my 

concern about the assumption some analysts outside of the IPCC might make: namely, that if there was a uniform probability distribution implied over both emissions 

scenarios and climate sensitivity estimates, that some might misinterpret that as 

implying a uniform probability distribution of 2100 temperature warming estimates. 

What I actually said was: 

The most typical assumption is a uniform probability distribution across 

storylines (scenarios). This might seem to imply a uniform probability distribution in an outcome that really matters to policymakers: the likelihood of a given 

temperature rise in 2100. But this inference would be incorrect, because uncertainties compound through a series of modeling steps. Uncertainties in emissions scenarios feed into uncertainties in carbon-cycle modeling, which feed into 

uncertainties in climate modeling, which drive an even larger range of uncertain climate impacts. This ‘‘cascade of uncertainties’’ (7) is compounded by the 

very wide range of emissions offered by the SRES authors. (Schneider, 2001) 

In other words, I did not assert that IPCC overestimated anything, just that they 

put the burden on outsiders to estimate probabilities, and in my view the excellent 

expertise IPCC assembled should undertake the exercise in the next assessment. 

Moreover, I showed that under two differing sets of assumptions, there would be 

about a 20 percent or 40 percent probability of 2,100 temperatures exceeding a large 

warming threshold (I used 3.5 °C to be conservative, though IPCC (2001) noted 

warming over 1.5 °C raises serious potential threats for some systems and regions). 

I said that such different probabilities imposed a burden for decision makers to interpret. I also said quite emphatically and explicitly that the probability distributions I showed in my Figure 1 in that paper were simply illustrations of the potenVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00133 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\94255.TXT JACKIE
130 

tial for misinterpretations—I even put quotation marks around the word ‘‘frequency’’ 

to be sure nobody misinterpreted the graph as being based on subjective probabilistic analysis, rather than being what is was: a demonstration of how it is too 

easy for there to be misinterpretations. This is what I actually said about that: 

The sensitivity of the likelihood of threshold crossing occurrences is thus quite 

sensitive to the particular selection of scenarios and climate sensitivities used. 

Arbitrary selection of scenarios or sensitivities will produce distributions that 

could easily be misinterpreted as containing subjective probabilistic analysis 

when in fact they do not—until judgments are formally made about the likelihood of each scenario or sensitivity. For this reason the word ‘‘frequency’’ appears with quotation marks on Figure 1, as it is not a justifiable probability distribution given that the subcomponents are arbitrarily chosen without a ‘‘traceable account’’ (Moss and Schneider, 2000) of the logic of the selection process. 

(Schneider, 2001) 

I concluded my commentary in Nature by expressing my concern: 

The special report leadership was not wrong, of course, about how difficult it 

would be to attempt to assign subjective probabilities to radically different visions of the future. However, in the probability vacuum that followed its assertion that all scenarios were ‘‘equally sound’’, we are facing the even more worrying prospect of dozens of users selecting arbitrary scenarios and climatemodel sensitivities to construct frequency charts that purport to enlighten policymakers on the likelihood of ‘‘dangerous’’ warming. In the risk-management 

dilemma that constitutes climate change policymaking, I would definitely put 

more trust in the admittedly subjective probability estimates of the SRES team 

than the myriad special interests that have been encouraged to make their own 

selection. Meanwhile, while we wait for IPCC to decide whether to reassemble 

the team for this controversial labor, climate policymakers and advisers will 

have to be vigilant, asking all advisors to justify the threshold they choose for 

predicting ‘‘dangerous’’ climate change, as well as to provide a ‘‘traceable’’ account (Moss and Schneider, 2000) of the basis of their selection of emissions scenarios and climate-model sensitivities, as these jointly determine the probability 

of future risks. (Schneider, 2001) 

Thus, Senator Inhofe’s interpretation that ‘‘Schneider’s own calculations, which 

cast serious doubt on the IPCC’s extreme prediction’’, is not a proper characterization of my intent or analysis. In fact, I specifically argue in a number of places 

(summarized in my Oct. 1, 2003 Testimony to the Senate Commerce Committee) 

that the sword of uncertainty cuts two ways: IPCC is as likely to have underestimated the likelihood of climate change crossing dangerous thresholds as having 

overestimated it, and that a better characterization of probabilities would be a useful exercise for the next IPCC assessment. 

Finally, I fail to see how my very conservative approach to characterizing openly 

the uncertainties of climate projections—and my advice on how to improve the situation published in highly visible journals (like Nature)—could possible be characterized fairly by anyone as ‘‘Schneider is on the side of the alarmists’’ or is ‘‘an outspoken believer in catastrophic global warming’’, the ad hominem assertions of Senator Inhofe. I am indeed an ‘‘outspoken believer’’ that both mild or catastrophic global warming outcomes remain plausible. That is why I advocate the use of more probabilistic formulations of the potential risks (e.g., Schneider, 2001) and consideration 

by the policy communities of possible hedging strategies against the more serious 

possibilities—just like most business, medical or military assessment groups would 

do when they face deep uncertainties and an uncomfortable chance of potentially 

risky outcomes. 

Question 2. You mentioned in your statement the next area of research is climate 

sensitivity probabilities. You also mentioned that MIT has started work in this area. 

Can you explain the importance of this area of research? Today, we get the weather 

forecast in terms of probabilities. Is this an attempt to get climate data in the same 

format? 

Answer. As noted in my answer to question 1 above, one important question policy makers ask of climate scientists is by how much might it warm up at some future time given various levels of greenhouse gas concentrations—precisely the question posed in the UNFCCC ‘‘dangerous interference’’ quote. At least two factors contribute greatly to uncertainties over the amount of warming projected: scenarios of 

greenhouse gas emissions and the climate sensitivity (i.e., by how much the temperature will rise given a fixed—usually doubling—increase in the concentration of 

CO2). Up to about 2000, most assessments tried to bracket uncertainties in these 

factors by providing scenarios of emissions and ranges of climate sensitivity. That 

131 

is what led IPCC to give its well-cited 1.4–5.8 °C temperature increase range for 

2100. Several authors/groups have argued that more than ranges are needed for 

helping policy makers, since the likelihood of any particular warming is also necessary to make informed risk-management decisions. Thus, a probabilistic analysis 

is desirable, if possible, to produce credible risk assessments. Several early attempts 

have been made since the IPCC Third Assessment in 2000. These include: Wigley 

and Raper, 2001, Schneider, 2001 and recently Webster et al., 2003. 

An important part of the attempt to provide probabilistic assessments is estimation of climate sensitivity as a probability distribution. Recently, several groups 

have attempted to derive such distributions, by matching the range of emissions of 

greenhouse gasses and aerosols and comparing them to the actual temperature rises 

over the past 50 years. Such attempts to scale climate sensitivity by actual observed 

temperature changes has resulted in a substantial expansion in the range of climate 

sensitivity from most previous assessments. Up to 2000, it was typically believed the 

most likely range for climate sensitivity was 1.5 to 4.5 °C warming for a doubling 

of CO2. Now, two studies, for example, Andronova and Schlesinger, 2001 (from the 

University of Illinois at Champagne-Urbana) and Forest et al., 2001 (from MIT) derive climate sensitivities well above and below the heretofore ‘‘canonical’’ range of 

1.5–4.5 °C. That is why I said in my formal testimony to the Commerce Committee 

on Oct. 1, 2003 (and in answering question 1 above), that recent analyses have actually expanded uncertainty, not reduced it, for the climate sensitivity assessment. Of 

course, eventually more research will narrow uncertainties, but at the moment we 

face an even larger range of potential warming outcomes and thus the probability 

of exceeding thresholds that some might consider ‘‘dangerous’’ has actually gone up, 

not down since the Third Assessment Report. 

The Webster et al. 2003 work (from MIT) has tried to incorporate several major 

uncertainties via probability distributions and produced, like Schneider, 2001 and 

Wigley and Raper, 2001, a probability distribution for warming in 2100, that essentially encompasses the IPCC range, but shows the possibility of both greater than 

5.8 °C or less than 1.4 °C warming. I believe that this new approach—expressing 

the important elements of projected climate change in probabilistic terms—will become the method of choice for the research community over the next decade. Early 

results still show a very wide distribution, but hopefully over the next two decades 

uncertainties can be substantially narrowed. Of course, whether the now-expanded 

possibility for warming over several degrees should motivate policy actions—what 

I personally believe constitutes a sound hedging strategy—is the value judgment 

policy makers will be facing in the decades ahead. Hopefully, the new probabilistic 

presentations will put risk management judgments on a firmer scientific basis. 

References 

Andronova, N.G. and M.E. Schlesinger, 2001: ‘‘Objective Estimation of the Probability Density 

Function for Climate Sensitivity’’, Journal of Geophysical Research 106:22605–22612. 

Forest, C.E., P.H. Stone, A.P. Sokolov, M.R. Allen, and M.D. Webster, 2001: ‘‘Quantifying Uncertainties in Climate System Properties Using Recent Climate Observations’’, Science 

295(5552):113–117. 

Inhofe, J.M. (2003). THE SCIENCE OF CLIMATE CHANGE Senate Floor Statement by U.S. 

Sen. James M. Inhofe (R–Okla) CHAIRMAN, COMMITTEE ON ENVIRONMENT AND PUBLIC 

WORKS July 28, 2003. 

IPCC, 2001: Impacts, Adaptation, and Vulnerability—Contribution of Working Group II to the 

IPCC Third Assessment Report, [J.J. McCarthy, O.F. Canziani, N.A. Leary, D.J. Dokken, K.S. 

White (eds.)] (Cambridge: Cambridge University Press), 1032 pp. 

Moss, R.H. and S.H. Schneider, 2000: ‘‘Uncertainties in the IPCC TAR: Recommendations to 

Lead Authors for More Consistent Assessment and Reporting’’, in Pachauri R., T. Taniguchi, 

and K. Tanaka (eds.), Guidance Papers on the Cross Cutting Issues of the Third Assessment 

Report of the IPCC (Geneva, Switzerland: World Meteorological Organization), 33–51. 

Schneider, S.H., 2001: What is ‘‘Dangerous’’ Climate Change? Nature, 411, 17–19. 

Schneider, S.H., 2003: U.S. Senate Committee on Commerce, Science, and Transportation 

Hearing on ‘‘The Case for Climate Change Action’’ October 1, 2003. 

Webster, M., et al.: ‘‘Uncertainty Analysis of Climate Change and Policy Response’’, Climatic 

Change, in press. 

Wigley, T.M.L. and S.C.B. Raper, 2001: ‘‘Interpretation of High Projections for Global-mean 

Warming, Science, 293:451–454. 

Voluntary Approach and UNFCC 

As you know, the U.S. signed and ratified the UN Framework Convention on Climate Change in 1992, which set as its goal ‘‘stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic 

interference with the climate system.‘‘ 

132 

The UNFCC further stated that ‘‘such a level should be achieved within a time 

frame sufficient to allow ecosystems to adapt naturally to climate change . . .’’. 

But according to testimony before this Committee in July of last year and the U.S. 

Climate Action Report, U.S. greenhouse gas emissions will increase under the Bush 

plan by 43 percent between 2000-2020, despite improvements in greenhouse gas intensity. 

Question 3. Is the ‘‘emissions intensity’’ voluntary approach to greenhouse gas 

emission reductions currently advocated by the Administration is sufficient to put 

us on track to achieve greenhouse gas stabilization in a timely manner? 

Question 3a. If we continue on the current path—with emissions rising annually 

when would we achieve this goal? Ever? 

Question 3b. Can actual emissions reductions on such scale and time-frame be 

achieved solely through any type of voluntary action? 

Answer. In short, Senator Kerry, the answers to all three questions above are 

‘‘No’’. But I will explain briefly why in each case. 

First, to emissions intensity, a measure of the emissions of greenhouse gasses per 

unit economic product (GDP). There are three factors that can reduce (i.e., improve) 

intensity: 1—more efficient energy supply and end uses; 2—a transformation of the 

economy away from materials and energy intensive activities to more service/information based activities (e.g., moving logs around in diesel trucks is much more energy intensive per unit economic product produced than moving electrons around in 

the microchips of computers); 3—a switch from high carbon emitting energy sources 

like coal burning to less emitting sources like natural gas burning, or even less 

emitting energy systems like renewables or deep earth sequestration of CO2. (produced by a closed cycle fossil fuel plant that produced hydrogen as the energy carrier and buried the CO2 underground). The latter will take financial incentives to 

produce the necessary RD investments, and this bill will certainly provide such incentives. 

The problem with the President’s plan is that he promised to accomplish what 

will happen anyway without his intervention—that is, for the transformation of the 

economy to a more efficient, more infom1ation based entity. In fact. the emissions 

intensity improvement he proposes as his climate ‘‘plan’’ are about what historic levels of emissions intensity have been from the natural evolution of the economy— 

in other words, little value added to the emissions profile we would get with no 

plan. 

More importantly, emissions intensity is only a part of emissions. Emissions are 

the product of population size, times affluence (GDP/capita) times emissions intensity. Since the GDP and population sizes are projected to go up dramatically in the 

next few decades by the Administration’s own figures, then the total emissions will 

go up too, even with a decrease in emissions intensity offsetting some of the increase, but by no means all. In other words, the Administration ’’plan’’ is an emissions increase plan, whereas the McCain-Lieberman bill is a true emissions reduction plan, and its passage would send signals to the very able technologists in the 

U.S. to work harder on development of lower priced. low-carbon-emitting energy systems and accelerated emissions intensity improvements well beyond those that 

would be achieved by passive—i.e., no action-policies like that the U.S. is now advocating. 

Greenhouse gas stabilization. Stabilization of greenhouse gasses requires not only 

reductions of emission, but also eventual reductions to near zero. How long we take 

to get there and how much we emit in the interim detem1ines the ultimate stabilization levels. Most scenarios of emissions project a doubling of CO2 over pre-industrial levels sometime in the mid-21st century if we follow a ’’business-as-usual’’ 

policy of no required reductions, and a possible tripling or more of CO2 concentrations by the end of the century—threatening climatic impacts that are truly catastrophic in their potential. In order to ‘‘merely’’ double CO2, we need to cut emission 

by about half below typical business-as-usual projections in the next five decades 

and to near zero by century’s end. Anything less is likely to produce more than a 

doubling of CO2 by the time it stabilizes. Doing nothing just ups the final stabilization levels once society finally decides to prevent further warming. 

Can voluntary action work? I must admit I am very skeptical about voluntary actions that have no private and immediate gains. It is the same to ask a company 

to cut its bottom line for the good of the planet without fair rules to require it in 

general as it is to ask motorists to obey speed limits and traffic lights on a voluntary 

basis without police enforcement. It simply is unrealistic to expect compliance or enhancement of R&D on efficient and lower cost decarbonized energy systems without 

incentives. and the pleading of politicians is a very unlikely incentive for most costconscious businesses. It is necessary in my personal opinion, to charge for the dumpVerDate Nov 24 2008 11:34 Apr 22, 2015 Jkt 075679 PO 00000 Frm 00136 Fmt 6601 Sfmt 6621 S:\GPO\DOCS\94255.TXT JACKIE
133 

ing of wastes into the atmosphere, just as it is a well-accepted principle to charge 

for dumping of solid wastes in municipal landfills. The ‘‘free sewer’’ that the air has 

become cannot be cleaned up without rules—just like it took rules to clean some 

of the criteria air pollutants from many of our cities and some of the acid rain from 

many of our industries. The McCain-Lieberman bill does this for greenhouse gases, 

and thus is a step in the right direction. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN F. KERRY TO

ETHAN J. PODELL

Voluntary Approach and UNFCC 

As you know, the U.S. signed and ratified the UN Framework Convention on Climate Change in 1992, which set as its goal ‘‘stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.’’ 

The UNFCC further stated that ‘‘such a level should be achieved within a time 

frame sufficient to allow ecosystems to adapt naturally to climate change. . . .’’ 

But according to testimony before this Committee in July of last year and the U.S. 

Climate Action Report, U.S. greenhouse gas emissions will increase under the Bush 

plan by 43 percent between 2000–2020, despite improvements in greenhouse gas intensity. 

Question 1. Is the ‘‘emissions intensity’’ voluntary approach to greenhouse gas 

emission reductions currently advocated by the Administration is sufficient to put 

us on track to achieve greenhouse gas stabilization in a timely manner? 

Answer. An ‘‘emissions intensity’’ approach will not reduce the total level of GHG 

emissions, which is the key problem to address. If a person is trying to lose weight, 

what counts is the number indicated on the scale, not the ratio of fat content to each 

gram of food consumed. 

Question 1a. If we continue on the current path—with emissions rising annually— 

when would we achieve this goal? Ever? 

Answer. I do not believe there is any way that an intensity-standard will ever be 

useful in reducing what is now already a dangerous level of GHG concentrations in 

the atmosphere. 

Question 1b. Can actual emissions reductions on such scale and time-frame be 

achieved solely through any type of voluntary action? 

Answer. The evidence we have so far from the marketplace is that a voluntary 

system can not achieve any meaningful reductions in GHG emissions in the U.S. 

State Carbon Cap Programs & Federal Coordination 

Question 2. As you may know, the state of Massachusetts was the first state to 

initiate a mandatory cap on CO2 emissions from its six highest-emitting power 

plants, and plans to reduce their emissions further. In addition, Oregon has placed 

CO2 limits on new power plants. Given the potential for a patchwork of state carbon 

cap and trade programs, what role could the Federal government play? 

Answer. A proliferation of state GHG reduction programs has the very real potential for increasing costs and adding confusion. The most efficient approach is to create a Federal standard along the lines of the SO2 trading program established by 

the 1990 amendments to the Clean Air Act. 

Question 3. What roles are particularly appropriate for the states? 

Answer. Climate change is truly a global problem. At the very least it is a national problem requiring a Federal policy. Congress should adopt a mandatory GHG 

cap-and-trade system. We complicate and Balkanize the task by allowing the states 

to design multiple systems. The states have taken the lead on climate change, given 

the absence of leadership from Washington on this issue. I would hope that what 

state action leads to here eventually is a Federal cap and trade program for GHG. 

The states can be helpful to catalyze this process but I don’t think a plethora of 

state GHG reduction plans by themselves are going to prove very effective. 

Question 4. What would be useful to see in such a system—consistent national 

criteria, standards, information coordination? 

Question 5. What is a good model for such a coordinated state-national system? 

Cost to Business of Emissions Reductions 

Question 6. One of the rationales given by the Bush Administration for rejecting 

any measures to require actual reductions in greenhouse gas emissions is that these 

will result in enormous costs to the U.S. economy, to the point that no mandatory 

requirements are acceptable. CEQ Chairman James Connaughton’s testimony in a 

134 

previous hearing stated that compliance with Kyoto would cost the United States 

$400 billion and 4.9 million jobs. Do you agree with this assessment? 

Answer. There will in the short run be some costs to the economy to reduce GHG 

emissions, but there will also be short run cost savings from energy efficiency and 

conservation. Over a somewhat longer time frame (5 years from implementation), 

there is reason to believe that a mandatory GHG cap-and-trade program will lead 

to reduced energy costs across the economy. 

Question 7. Are you aware of any examples where requirements to address pollution either had little negative impact on the economy, or even provided areas for 

economic growth? 

Answer. There are any number of examples here. First, look carefully at the ramifications of the SO2 trading program over the past 8 years. Second, look at the 

growth in sales in the U.S. of the Toyota Prius, a hybrid gas/electric vehicle. Sales 

have gone from 1,500 vehicles per year to nearly 50,000 vehicles per year in a matter of a few years. In a larger sense, reducing GHG emisssions is another way of 

accomplishing greater energy efficiencies. Energy efficiency is a real business and 

a growth business. By enacting legislation such as S. 139 not only will Congress engage the United States in climate change mitigation, but we will lend support to 

many businesses and emerging technologies focused on energy efficiency solutions. 

Question 8. Won’t U.S. industries be at a disadvantage if other countries develop 

more environmentally efficient technologies? 

Answer. We absolutely will be at such a disadvantage. There is a very compelling 

case to be made for how energy efficient technologies are likely to be one of the real 

worldwide growth businesses of the next decade. As a policy objective, the U.S. Government should take an active role in promoting those American businesses which 

are engaged in this sector. Europe and Japan are already ahead of us in many respects in developing businesses and technologies which address energy efficiency opportunities. Washington needs to engage on this issue, and do it quickly. 

Economic Effects of Greenhouse Gas Limits 

Question 9. If U.S. companies take steps to reduce greenhouse gas emissions, will 

it help them compete in the international marketplace? 

Question 10. Given our experience in the SO2 cap and trade program, and the 

growing interest in international trading, what is the likely effect on the U.S. economy of capping and trading greenhouse gas emissions? 

Question 11. From your knowledge of international efforts, how have other countries benefited from carrying out greenhouse gas reduction strategies similar to the 

ones you have outlined here? 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN F. KERRY TO

JOHN B. STEPHENSON

State Carbon Cap Programs and Federal Coordination 

Question 1. As you may know, the state of Massachusetts was the first state to 

initiate a mandatory cap on CO2 emissions from its six highest-emitting power 

plants, and plans to reduce their emissions further. In addition, Oregon has placed 

CO2 limits on new power plants. 

• Given the potential for a patchwork of state carbon cap and trade programs, 

what role could the Federal Government play? 

• What roles are particularly appropriate for the states? 

• What would be useful to see in such a system—consistent national criteria, 

standards, information coordination? 

• What is a good model for such a coordinated state-national system? 

Answer. There are advantages and disadvantages to state-focused and federal-focused efforts to reduce greenhouse gas emissions. Four arguments in favor of a uniform national regulatory standard for dealing with an environmental or other problem with widely dispersed effects may be cited. (1) The broader the scope of a capand-trade program (in terms of the number of firms, the geographic scope, and so 

forth), the more cost-effective that program is expected to be. (2) Inconsistent state 

regulations can raise the costs of firms that conduct business in more than one state 

because they would need to comply with different states’ standards. (3) The existence of inconsistent state regulations may somewhat affect states’ attractiveness to 

business, possibly leading firms to relocate from a state with more stringent regulations to a state with less stringent regulations or, at a minimum, to expand more 

135 

in a state with less stringent regulations than in a state with more stringent regulations. (Note that the state vs. Federal issues may also apply at the national vs. 

international level.) (4) Large-scale greenhouse gas emissions reductions will be necessary to have an impact on the atmosphere. If a significant share of U.S. sources 

were not involved in making reductions, the environmental impact would be weakened. 

On the other hand, there are also arguments in favor of state-focused regulation. 

(1) Different states may have different perceptions of an environmental threat and 

may have different inclinations to deal with the threat. A state that views climate 

change as a serious threat can take action by itself without having to wait for the 

sort of consensus needed for Federal regulation. (2) Even among states with a consistent assessment of a threat, different states may have different traditions about 

how to deal with a threat, for example, how much regulation is appropriate, which 

regulatory tools are most appropriate, and whether regulations should operate at 

the county or state level. (3) Some states may view carbon dioxide control as also 

having local health benefits that would differ by location. That is, controls on carbon 

dioxide could lead to lower emissions of other byproducts of burning fossil fuels, 

such as nitrogen oxides, sulfur dioxide, and particulate matter, which can harm 

human health. (4) Commitments by states may influence future actions by producers or other states. For example, if a particular state adopts a regulation to control greenhouse gas emissions, this action may induce other states to follow suit, because manufacturers would find that it is less expensive to build one type of energyconsuming device than to configure different models for sale in different states. 

The Federal Government is primarily responsible for efforts to deal with any 

transboundary effects of pollutants. We are not aware of any international environmental issue that involves a significant state role. 

Voluntary Approaches and the U.N. Framework Convention on Climate 

Change 

Question 2. As you know, the United States signed and ratified the United Nations Framework Convention on Climate Change, which set as its goal ‘‘stabilization 

of greenhouse gas concentrations in the atmosphere at a level that would prevent 

dangerous anthropogenic interference with the climate system.’’ The Framework 

Convention further stated that, ‘‘such a level should be achieved within a time 

frame sufficient to allow ecosystems to adapt naturally to climate change. . . .’’ 

But, according to testimony before this Committee in July of last year and the 

U.S. Climate Action Report, U.S. greenhouse gas emissions will increase under the 

Bush plan by 43 percent between 2000–2020, despite improvements in greenhouse 

gas intensity. 

• Is the ‘‘emissions intensity’’ voluntary approach to greenhouse gas emission reductions currently advocated by the Administration sufficient to put us on track 

to achieve greenhouse gas stabilization in a timely manner? 

• If we continue on the current path—with emissions rising annually—when 

would we achieve this goal? Ever? 

• Can actual emissions reductions on such scale and time-frame be achieved solely through any type of voluntary action? 

Answer. While the United States is the world’s largest emitter of greenhouse 

gases, stabilizing atmospheric concentrations depends on more than U.S. emissions 

trends. It may be useful to consider U.S. emissions trends and concentrations separately. 

U.S. emissions are projected to increase 43 percent, and intensity is projected to 

decrease 30 percent through 2025, according to the Energy Information Administration’s (EIA) baseline projections. (Under the President’s February 2002 climate initiative, which runs through 2012, intensity would decrease more and emissions 

would increase less than in these baseline projections.) As a general matter, stabilizing U.S. emissions would require that the average annual increase in GDP and 

the average annual decrease in intensity be roughly equal. Because EIA projects 

that GDP will increase 3 percent a year through 2025, a similar rate of decrease 

in intensity would be required to counterbalance it. However, such a rate would be 

substantially higher than in the recent past (2.1 percent a year between 1980 and 

2000) and in the baseline forecast for the next two decades (1.5 percent a year between 2001 and 2025). 

Stabilizing atmospheric concentrations of greenhouse gases would involve both the 

United States, currently the world’s biggest emitter, and the other nations of the 

world. In 2001, the United States accounted for about 24 percent of the world’s carbon dioxide emissions, according to EIA, and it is expected to account for about 22 

percent in 2025; the U.S. share is declining because emissions in the rest of the 

136 

world are increasing faster than U.S. emissions. Thus, stabilizing U.S. emissions 

would not be sufficient to stabilize atmospheric concentrations. That would require 

stabilizing worldwide emissions, a less likely prospect. Moreover, because greenhouse gases have long lifetimes, atmospheric concentrations would not stabilize 

until decades after worldwide emissions are stabilized. 

According to Dr. John Reilly, Associate Director for Research in the Joint Program 

on the Science and Policy of Global Change at MIT, the 18-percent reduction in U.S. 

emissions intensity envisioned by the President’s climate initiative would not have 

a measurable effect on atmospheric concentrations in 2012, owing to the short timeframe. (This 18-percent includes the 14-percent reduction expected to occur anyway, 

plus the additional 4-percent reduction under the President’s climate initiative.) 

However, he said that—under certain conditions—this approach could have an effect. The conditions are that (1) the initiative be extended over many years and (2) 

other major emitting countries attain similar goals. 

The effectiveness of voluntary programs in stabilizing greenhouse gas emissions 

in the relatively near-term would depend on various factors. These would include: 

(1) the extent to which emitters, including private individuals and firms, believe 

that climate change—or the threat of potential regulation—is urgent and that they 

can help address that threat by reducing their emissions and (2) the costs they 

would bear for reducing their emissions. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN F. KERRY TO

CHRISTOPHER WALKER

Delay of Action and Costs to Society 

Despite the President’s declaration to cut U.S. green house gas intensity by 18 

percent in the next ten years, we have heard in previous testimony from Mr. James 

Connaughton, head of CEQ, that his proposal will result in steadily increasing GHG 

emissions. 

Question 1. Speaking as a scientist, doesn’t each decade that we delay in reducing 

greenhouse gas emissions commit us to enduring greater warming in the future and 

make it exceedingly difficult to stabilize atmospheric GHG concentrations? 

Question 1a. Doesn’t this mean that either mitigation or adaptation will come at 

a much greater cost to society in the future? 

Answer. The answer to both questions is ‘‘yes’’, and I elaborated on them in answering the above questions, so will not repeat that here. But let me make one distinction here I did not make above. We must distinguish between policies that cause 

immediate abatement and policies that invest in the means to make abatement 

cheaper in the future. While I believe there are opportunities to implement immediate abatement actions at low costs—plugging inefficiencies and reducing air pollution at the same time is already a good economic policy—the bulk of the abatement 

of CO2 relative to most business-as-usual projections will be in the decades ahead 

as new discoveries and learning-by-doing lowers the price of substituting current 

polluting systems with cleaner less emitting alternatives. But, and here is the point, 

such low-carbon-emitting systems will not invent themselves, will not create a better 

learning curve if we do not immediately invest in research, development and early 

deployment to learn how to do it better and cheaper at a massive scale later on. 

Doing nothing is the worst policy, but we should not expect to have a major cut in 

emissions instantly, as that will take some time and effort to bring about in the 

most cost effective manner. But, incentives to foster that investment in discovery 

and efficiency should have been in place two decades ago—we’d have the fruits of 

it now had we been more farsighted—but to delay and do little will only increase 

costs over time and increase risks of large and potentially dangerous climate 

changes in the decades ahead. 

Æ