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35–774 2007

ENERGY AND TAX POLICY 

HEARING 

BEFORE THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

FEBRUARY 28, 2007 

Serial No. 110–9 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

CHARLES B. RANGEL, New York, Chairman 

FORTNEY PETE STARK, California 

SANDER M. LEVIN, Michigan 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

MICHAEL R. MCNULTY, New York 

JOHN S. TANNER, Tennessee 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

EARL POMEROY, North Dakota 

STEPHANIE TUBBS JONES, Ohio 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

RAHM EMANUEL, Illinois 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL JR., New Jersey 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

CHRIS VAN HOLLEN, Maryland 

KENDRICK MEEK, Florida 

ALLYSON Y. SCHWARTZ, Pennsylvania 

ARTUR DAVIS, Alabama 

JIM MCCRERY, Louisiana 

WALLY HERGER, California 

DAVE CAMP, Michigan 

JIM RAMSTAD, Minnesota 

SAM JOHNSON, Texas 

PHIL ENGLISH, Pennsylvania 

JERRY WELLER, Illinois 

KENNY C. HULSHOF, Missouri 

RON LEWIS, Kentucky 

KEVIN BRADY, Texas 

THOMAS M. REYNOLDS, New York 

PAUL RYAN, Wisconsin 

ERIC CANTOR, Virginia 

JOHN LINDER, Georgia 

DEVIN NUNES, California 

PAT TIBERI, Ohio 

JON PORTER, Nevada 

JANICE MAYS, Chief Counsel and Staff Director 

BRETT LOPER, Minority Staff Director 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Ways and Means are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 


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C O N T E N T S 

Page 

Advisory of February 21, announcing the hearing ............................................... 2 

WITNESSES 

Ronald G. Prinn, Sc.D., Professor, Department of Earth, Atmospheric, and 

Planetary Sciences, Massachusetts Institute of Technology, Cambridge, 

Massachusetts ...................................................................................................... 6 

Stephen Schneider, Ph.D., Professor, Department of Biological Sciences, Stanford University, Stanford, California .................................................................. 14 

The Honorable Eileen Claussen, President, Pew Center on Global Climate 

Change, Arlington, Virginia ................................................................................ 23 

W. David Montgomery, Ph.D., Vice President, Environmental Practice, CRA 

International ......................................................................................................... 27 

SUBMISSIONS FOR THE RECORD 

Fees, John A., Babcock and Wilcox Companies, statement ................................. 72 

NGVAmerica, statement ......................................................................................... 77 

Nuclear Energy Institute, statement ..................................................................... 82 

Willers, Mark, Minwind Energy, Rock, MN, statement ....................................... 84 

Williamson, Donald, Conyers, GA, letter ............................................................... 85 


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ENERGY AND TAX POLICY 

WEDNESDAY, FEBRUARY 28, 2007 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:20 a.m., in room 

1100, Longworth House Office Building, Hon. Charles B. Rangel 

(Chairman of the Committee) presiding. 

[The advisory announcing the hearing follows:] 


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ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–1721 

February 21, 2007 

FC–10 

Chairman Rangel Announces Hearing on 

Energy and Tax Policy 

House Ways and Means Committee Chairman Charles B. Rangel (D–NY) today 

announced the Committee on Ways and Means will hold a series of hearings on energy and tax policy. The first hearing will focus on climate change and take place 

on Wednesday, February 28, 2007, in the main Committee hearing room, 1100 

Longworth House Office Building, beginning at 10:30 a.m. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from invited witnesses only. However, any individual or organization 

not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. A 

list of invited witnesses will follow. 

BACKGROUND: 

For the past decade, there has been significant debate regarding the topic of global warming. Recent scientific evidence indicates that our dependence on fossil fuels 

as a source of energy is having an adverse impact on the environment. In his State 

of the Union address, President Bush asked Congress to work with him to reduce 

American dependence on gasoline and to increase the supply of alternative fuels. 

Numerous bills have already been introduced this Congress by Members of both 

parties that would create new tax incentives or extend existing tax incentives for 

the development of renewable resources and increased energy efficiency. 

In announcing the hearing, Chairman Rangel said, ‘‘Climate change and global 

warming will have a tremendous impact on the quality of life here in America and 

around the world. The Federal Government needs a better understanding of what 

contributes to global warming so that we may play a significant role in preventing 

further damage.’’ 

FOCUS OF THE HEARING: 

This hearing will focus on a scientific discussion of the factors contributing to 

global warming and the effects of such changes on climate changes. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select ‘‘110th Congress’’ from the menu entitled, 

‘‘Committee Hearings’’ (http://waysandmeans.house.gov/Hearings.asp?congress=18). 

Select the hearing for which you would like to submit, and click on the link entitled, 

‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, completing all informational forms and clicking ‘‘submit’’ on the 

final page, an email will be sent to the address which you supply confirming your 

interest in providing a submission for the record. You MUST REPLY to the email 

and ATTACH your submission as a Word or WordPerfect document, in compliance 

with the formatting requirements listed below, by close of business Wednesday, 

March 14, 2007. Finally, please note that due to the change in House mail policy, 

the U.S. Capitol Police will refuse sealed-package deliveries to all House Office 

Buildings. For questions, or if you encounter technical problems, please call (202) 

225–1721. 


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FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response 

to a request for written comments must conform to the guidelines listed below. Any submission 

or supplementary item not in compliance with these guidelines will not be printed, but will be 

maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word or WordPerfect 

format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons, and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone and fax numbers of each witness. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://waysandmeans.house.gov. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

f 

Chairman RANGEL. Now the Committee will come to order. 

Let me welcome these outstanding witnesses that we have today 

as this Committee embarks on a concern that has attracted late 

but international attention. 

This debate has come a long way since our former Member of 

this Committee, Tom Downing, and his buddy Al Gore, many, 

many years ago, attempted to bring this issue before the Committee and the Congress. 

The curiosity and the debate is over. Global warming is a fact, 

and human energy consumption is driving some of the detrimental 

effects of climate change. 

The Federal Government can and must play a role in changing 

this behavior. Carbon-based fuel consumption is one of the contributing factors to global warming problems, and the Federal Government can and must use the Tax Code to encourage the development of alternative sources of energy, reducing Americans’ reliance 

on oil and other traditional carbon fuels as a priority on her agenda. 

Since we last met, the Committee has developed legislation to 

that effect. 

The goal of this hearing is to offer members a full scientific understanding of climate change and global warming so that with the 

understanding the Committee is able to move forward with tax 

policies that will move forward with the responsibility of solving 

the problem. 


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We intend to frame the Committee’s future work in crafting a 

package of tax incentives that will accelerate the development of 

clean, renewable energy and promote greater energy efficiency. 

I would like to welcome our panel of witnesses and thank them 

for taking the time to join with us and to share their views with us. 

Dr. Ronald Prinn, professor, Department of Earth, Atmospheric, 

and Planetary Sciences, Massachusetts Institute of Technology; Dr. 

Stephen Schneider, professor, Department of Biological Sciences, 

Stanford; Ms. Eileen Claussen, president, Pew Center on Global 

Climate Change; and W. David Montgomery, vice president of environmental practice, CRA International. 

The panel of witnesses includes some of the leading academic 

perspectives on climate change. These witnesses will be able to 

quantify the effects of our nation’s reliance on carbon-based fuels, 

on climate change, and summarize the effects of scientific and business communities to address global warming. 

These witnesses can also provide some big picture overview of 

how the tax system can be utilized to complement regulatory efforts and to encourage the development of clean and renewable energy alternatives. 

I am happy to yield to the Ranking Member, James McCrery, for 

his comments. 

Mr. MCCRERY. Thank you, Mr. Chairman. 

Today’s hearing marks the start of what is likely to be a series 

by this Committee to explore issues dealing with two important 

goals, one of which is to improve America’s energy independence; 

the other is to address issues relating to global climate change. 

As we begin to explore the issue of climate change, I do note the 

lack of disagreement—another way of saying the agreement— 

among the panelists on the fact that the Earth is experiencing a 

period of warming. 

A related issue, which I am sure the panelists will discuss, is the 

degree to which human activity is responsible for these changes. 

We need not attempt to settle that debate here. Rather, we 

should focus on whether the tools at this Committee’s disposal can 

be appropriately deployed to address the issue of climate change. 

In making such an evaluation, I would like to suggest three 

questions that we should apply to this discussion. I hope they will 

be useful to all of us as we debate whether to ask our constituents 

to make difficult sacrifices today that might only marginally reduce 

largely unknown risks in the future. 

First, what are the dangers of global climate change and when 

do they manifest themselves? 

Any inquiry into the issue of global climate change must examine 

the impact of changes in the Earth’s temperature and when those 

changes are going to be felt. 

Second, can the United States, acting on its own, reverse or even 

slow global warming? 

As this issue begins to take shape, I’m sure that each of us will 

be urged by various interest groups to support a variety of solutions to global warming, which could include an array of tax-based 

carrots and sticks to encourage the development of greenhouse gasreducing technologies as well as punishments on those who are 

deemed to be contributing to the problem. 


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Before we rush to enact legislation, let’s be sure we understand 

whether placing new burdens on our economy in the name of fighting global warming—an economy I should point out which is already significantly more greenhouse gas-efficient than many other 

nations—is going to make a measurable dent in the pace of climate 

change. 

Third, what are the direct and indirect costs on our economy for 

what improvement in the global climate? 

This is, in many ways, the single most important issue for this 

Committee, as the true costs of our actions must be considered in 

a broader context. 

What level of damage are we willing to do to our economy in exchange for what level of reduction in the rage of global climate 

change? 

Is it worth sacrificing one percentage point of growth in our GDP 

for 1 degree less in the planet’s average temperature in 2107? 

How many lost jobs does that translate into for American workers? 

What exactly are the negative effects of that 1 degree of average 

higher temperature? 

These are tough questions, but they are questions we must ask 

if we are to reach the right conclusions. 

Similarly, if countries like China, India, and Russia do not implement similar restrictions, or even make a commitment to reduce 

their greenhouse gas emission to levels of most of the developed 

world, we need to ensure that we are not making the problem 

worse. 

After all, if the sticks that we apply to our economy drive up the 

cost of producing goods in the United States, the inevitable result 

will be to chase good jobs overseas, where manufacturing is often 

done with far less regard to its impact on the environment and the 

global climate. 

Surely, that is a result that each of us would find unsettling. 

Mr. Chairman, I hope that this Committee will consider these 

three major questions as we go through this discussion. 

I yield back the balance of my time. 

Chairman RANGEL. Thank you, Mr. McCrery. 

[The opening statement of Ms. Tubbs Jones follows:] 

Opening Statement of The Honorable Stephanie Tubbs Jones, a 

Representative in Congress from the State of Ohio 

Today we are facing what some have termed an energy ‘‘crisis.’’ Others are calling 

it an energy ‘‘crunch.’’ I would call it an opportunity for Cleveland, Ohio and the 

United States to lead the world in alternative energy technology. 

Cleveland has suffered from a shift away from heavy manufacturing in recent decades, allowing a well-educated workforce to atrophy and our heavy industry to decline. However, if we act soon to invest in the research and manufacture of wind 

turbines and other equipment for alternative fuel technologies, we can use this industry as a stimulus to bring Cleveland, Northeast Ohio, and other communities 

hurting in the same way back to the vanguard of high technology industry. It has 

been estimated that 11,000 sustainable jobs could be created by the growth of wind 

turbine manufacture in Ohio. We cannot afford to ignore this opportunity of our 

children’s economic and environmental future. 

Despite the current Administration’s unwillingness to confront this global challenge, I am confident this Congress can create greater opportunities for Ohio and 

American business. With the right mix of federal policy and development of new 

technology, we can find a way forward. 


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I appreciate the testimony by the distinguished panel, and I look forward to discussing these issues with you both today and in the future. 

f 

Chairman RANGEL. Dr. Prinn, thank you so much for making 

yourself available to the Committee, and therefore to Congress and 

our great Nation. 

It took a long time for us to catch up to where you’ve been for 

so long, so I ask your indulgence and your patience with us, but 

together, you can be assured that probably what has been a longlived dream is about to become a reality, not just for us but for humankind. 

So, we thank you for being here, and I say to the entire panel, 

don’t be surprised that we’ll be calling you back. 

Dr. Prinn. 

STATEMENT OF RONALD G. PRINN, Sc.D., PROFESSOR, DEPARTMENT OF EARTH, ATMOSPHERIC, AND PLANETARY 

SCIENCES, MASSACHUSETTS INSTITUTE OF TECHNOLOGY, 

CAMBRIDGE, MASSACHUSETTS 

Dr. PRINN. Honorable Chairman and Members, I want to thank 

you all for the opportunity to present some key issues regarding climate. 

First, is climate changing? 

Global warming or cooling can be driven by any imbalance between the energy the Earth receives through the sun and the energy it radiates back to space, as invisible infrared radiation. It is 

that simple. 

The concentrations of carbon dioxide and many other long-lived 

greenhouse gases have increased substantially over the past two 

centuries, due in large part to human activity. 

These greenhouse gas increases temporarily lower the flow of infrared energy back to space and increase the flow of this infrared 

energy down toward the surface. 

These straightforward facts lead to the rising of temperatures at 

the surface and in the lower atmosphere. 

Recently, the Intergovernmental Panel on Climate Change, in its 

fourth assessment, concluded that warming of the climate system 

is unequivocal. 

As one example, the last 12 years include the two warmest and 

11 of the 12 warmest years since the year 1850. 

There is no doubt in my mind that climate is already changing 

in very significant ways. 

This begs the obvious question, how much of this is due to 

human activity? 

Ten years ago, I gave testimony during the House Countdown to 

Kyoto hearings, in which I stated that I was not convinced at that 

time that the human signal had arisen from the noise of natural 

variability. 

I am now convinced that the human influence is proven with significant probability. 

The observations of continued rapid warming and the recent improvements in climate theory and models are among the reasons 

for the change in my conclusion. 


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Now, human influence on climate is indicated if the observed 

global patterns of climate change over, say, the past 50 to 100 

years, are shown to be consistent with those predicted by climate 

models which include the human influences but not consistent with 

the patterns predicted when the human influences are neglected. 

The observed 1906 to 2005 temperatures at the global and continental scales are compared by the IPCC to the range of temperatures from multi-model simulations with and without human forcing. 

The separation of these two model temperature ranges during recent decades, and the fact that the observations follow the forced 

model range much more closely, argues that the signal of human 

influence has indeed arisen from the noise, and I agree. 

The IPCC fourth assessment has specifically concluded that 

there is greater than 90 percent chance that most of the observed 

increase in globally average temperatures since the mid-20th century is due to the observed increase in anthropogenic greenhouse 

gas levels. 

The conclusions about human influence by the IPCC provide a 

substantial impetus for lowering future greenhouse gas emissions. 

Now, concern about climate change is driven, also and especially, 

by forecasts of significant warming over the next century, but how 

good are these forecasts? 

At MIT, we have developed an integrated global system model 

which consists of coupled models of economic development and its 

associated emissions, natural bio-geochemical cycles, climate processes, and ecosystems. 

We’ve used several hundred runs of this model with different assumptions to estimate the probability of changes in surface temperature between 1990 and the year 2100 for two hypothetical 

cases, no explicit climate policy, and a stringent policy. 

The stringent policy keeps atmospheric carbon dioxide in the 

year 2100 to be below twice its pre-industrial level. That’s chosen 

somewhat arbitrarily. 

For clarity, the probabilities of the various amounts of warming 

from the MIT study are projected onto two wheels, as shown in this 

illustration. 

The no-policy wheel that you see in front of you shows about one 

chance in four of greater than 3 degrees Centigrade warming by 

the year 2100. 

That’s one quarter of the circle. 

Such a warming is regarded by most climate scientists as very 

dangerous. 

The policy wheel indicates that the odds of exceeding 3 degrees 

Centigrade warming drop dramatically when the carbon dioxide 

level is capped in the way I mentioned. 

Imagine now that you are playing a game called the greenhouse 

gamble, and you have $100,000 in winnings. 

To end the game and collect your money, you must finally spin 

one of these two wheels. 

If you land on any part of the wheel corresponding to warming 

exceeding 3 Degrees Centigrade, you lose, say, $10,000 of your 

winnings. 


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You can spin the no-policy wheel, on the left-hand side, for free, 

but you must pay to spin the policy wheel, with its much lower 

odds of losing your money. How much of your $100,000 would you be willing to give up in 

order to spin the policy wheel? 

The world is currently spinning the no-policy wheel. We are not 

spinning the one on the right-hand side. 

To help you make the decision on how much money you want to 

spend to spin the policy wheel, we should ask, what are the risks 

of climate change? 

I advise you not to look too much on the spinning wheels. It can 

be quite disturbing. 

The projected warming of the polar regions in the no-policy case 

is about twice the value shown on the wheel, twice. 

Also, the no-policy case projects sea level rises of about 8 to 31 

inches due to the warming oceans and melting of mountain glaciers. 

These conclusions point to the great vulnerability of coastal and 

polar regions to global warming. 

The Greenland and west Antarctic ice sheets together contain the 

equivalent of 39 feet of sea level rise. 

It’s therefore very significant that the IPCC fourth assessment 

concludes that the last time the polar regions were significantly 

warmer than present for an extended period of time, the reductions 

in polar ice volume led to four to six meters of sea level rise, which 

is 13 to 191⁄2 feet of sea level rise. 

Also, recent research has suggested a significant connection between increasing sea surface temperatures and the duration and 

wind speeds in typhoons and hurricanes. 

If further research confirms this, the increased storm damages, 

which typically rise as the cube of the wind speed, could be very 

costly. 

Regarding the needed emission reductions, it’s important to know 

that it matters very little where the long-lived greenhouse gases 

are emitted, and that substantial reductions of the type in the policy wheel that I show there, require ultimate participation by all 

nations, not just the currently rich nations. 

To better calibrate the policy response, we also need to improve 

the accuracy of estimates of the impacts of climate change on natural and human systems. 

Natural ecosystems may not be able to adapt. Some of these effects can be potentially mitigated by adaptation, particularly in the 

human systems. 

Finally, I emphasize that we cannot wait for perfection in either 

the climate forecasts or the impact assessments before taking action. 

The long-lived greenhouse gases emitted today will last for decades to centuries in the atmosphere. 

Added to this is the multi-decade period needed to change the 

global infrastructure for energy and agricultural production and 

utilization without serious economic impacts, and we certainly do 

not want serious economic impacts. 

Thank you. 

[The prepared statement of Dr. Prinn follows:] 


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Statement of Ronald G. Prinn, Sc.D., Professor, Department of Earth, Atmospheric, and Planetary Sciences, Massachusetts Institute of Technology, Cambridge, Massachusetts 

Honorable Chairman and Members of the House Committee on Ways and Means, 

I respectfully submit the following testimony in response to your invitation of February 14, 2007. 

I have been a member of the faculty of the Massachusetts Institute of Technology 

since 1971. I specialize in atmospheric science, and in my capacity as Director of 

the MIT Center for Global Change Science and Co-Director of the MIT Joint Program on the Science and Policy of Global Change, I have also gained appreciation 

of the various other disciplines in the natural and social sciences involved in the 

climate debate. 

I will address here some key issues that in sum provide a significant scientific 

impetus for lowering greenhouse gas emissions. First, I will briefly say something 

about the current evidence for climate change. Second, I will discuss detection of the 

human influence on climate that is so important to policy. Third, I will address the 

uncertainty in current forecasts. Fourth, I will review the risks to humans and natural ecosystems that arise from allowing very significant future global warming to 

occur. Finally, I will comment on the unresolved issues in climate science that need 

future resolution. 

IS CLIMATE CHANGING? 

Climate is usefully defined as the average of the weather we experience over a 

ten- or twenty-year time period. Long-term temperature, rainfall and sea level 

changes are typical measures of climate change, and these changes can be expressed 

at the local, regional, country, or global scale. When the global average temperature 

changes we call that global warming or cooling. 

Global warming or cooling can be driven by any imbalance between the energy 

the Earth receives, largely as visible light, from the sun, and the energy it radiates 

back to space as invisible infrared radiation. The greenhouse effect is a warming 

influence caused by the presence in the air of gases and clouds which are very efficient absorbers and radiators of this infrared radiation. The greenhouse effect is opposed by substances at the surface (such as snow and desert sand) and in the atmosphere (such as clouds and colorless aerosols) which efficiently reflect sunlight 

back into space and are thus a cooling influence. Easily the most important greenhouse gas is water vapor but this gas typically remains for only a week or so in 

the atmosphere. Water vapor and clouds are handled internally in climate models. 

Concerns about global warming revolve around less important but much longer-lived 

greenhouse gases, especially carbon dioxide. The concentrations of carbon dioxide 

and many other long-lived greenhouse gases (methane, nitrous oxide, chlorofluorocarbons, lower atmospheric ozone) have increased substantially over the past two 

centuries due totally or in large part to human activity. When the concentration of 

a greenhouse gas increases (with no other changes occurring) it temporarily lowers 

the flow of infrared energy to space and increases the flow of infrared energy down 

toward the surface which raises temperatures at the surface and in the lower atmosphere. The rate of surface temperature rise is slowed significantly by the uptake 

of heat by the world’s oceans that then causes sea level to rise. This delaying action 

of the oceans means we are already committed to future warming due simply to the 

greenhouse gases already in the atmosphere. 

The Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment, 

whose summary for policy makers was released earlier this month, summarizes the 

direct observations of recent climate.1 They conclude that ‘‘warming of the climate 

system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising 

global average sea level.’’ They also conclude that ‘‘at continental, regional, and 

ocean basin scales, numerous long-term changes in climate have been observed. 

These include changes in Arctic temperatures and ice, widespread changes in precipitation amounts, ocean salinity, wind patterns and aspects of extreme weather including droughts, heavy precipitation, heat waves and the intensity of tropical cyclones.’’ There is no doubt in my mind that climate is already changing in very significant ways. This begs the obvious question; how much of this is due to human 

activity? 

CAN WE DETECT HUMAN INFLUENCE? 

Human influence on climate is indicated if the observed global patterns of climate 

change over say the past 50–100 years are shown to be consistent with those predicted by climate models which include the human influences, but not consistent 

with the patterns predicted when the human influences are neglected. The preVerDate Aug 31 2005 04:12 Jul 07, 2007 Jkt 035774 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 E:\HR\OC\35774.XXX 35774

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dictions which neglect human influence are taken as a measure of the natural variability of climate and are thus used to represent the ‘‘noise’’ out of which the humancaused ‘‘signal’’ must arise for a definitive detection. The imperfections of current 

climate models make them less than ideal tools for defining natural variability and 

uncertain predictors of the climate response to human forcing. There are other difficulties associated with the inadequacies in climate observations and poor knowledge of past levels of aerosols and their quantitative effects on sunlight reflection. 

Ten years ago, I gave testimony during the House ‘‘Countdown to Kyoto’’ hearings 

in which I stated that I was not convinced at that time that the human signal had 

arisen from the noise of natural variability. I am now convinced that the human 

influence is proven with significant probability. The observations of continued rapid 

warming over the last 12 years, which include the 2 warmest years, and 11 of the 

12 warmest years since 1850,1 and the recent improvements in climate theory and 

number and quality of models, are among the reasons for the change in my conclusion. 

The IPCC Fourth Assessment has concluded that there is greater than 90% 

chance that most of the observed increase in globally averaged temperatures since 

the mid-20th century is due to the observed increase in anthropogenic greenhouse 

gas levels.1 Some of the arguments for this strong conclusion are visibly captured 

in Figure 1 reproduced here from the IPCC report. 

Figure 1. Comparison of observed continental- and global-scale changes in surface 

temperature with results simulated by climate models using natural and anthropogenic forcings from the IPCC Fourth Assessment.1 Decadal averages of observations 

are shown for the period 1906–2005 (black line) plotted against the centre of the 

decade and relative to the corresponding average for 1901–1950. Lines are dashed 

where spatial coverage of observations is less than 50%. Dark gray shaded bands 

show the 5–95% range for 19 simulations from 5 climate models using only the natural forcings due to solar activity and volcanoes. Light gray shaded bands show the 

5–95% range for 58 simulations from 14 climate models using both natural and anthropogenic forcings. 

The observed 1906–2005 temperatures are shown at the global and continental 

scales and are compared to two bands; one band shows the range of multi-model 


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simulations without anthropogenic forcings (i.e. the ‘‘noise’’) while the other shows 

the range with these forcings (i.e. the ‘‘signal’’). The separation of these two bands 

during recent decades, and the fact that the observations follow the ‘‘forced’’ band 

much more closely, argue that the ‘‘signal’’ of human influence has arisen from the 

‘‘noise.’’ Even if the probability is not quite 90%, the conclusions about human influence by the IPCC Fourth Assessment provide a substantial impetus for lowering future greenhouse gas emissions. 

HOW GOOD ARE THE FORECASTS? 

Concern about climate change is driven especially by forecasts of significant 

warming over the next century. The computer models used to make these forecasts 

attempt to simulate with some, but not complete success, the behavior of clouds, 

water vapor, long-lived greenhouse gases, atmospheric and oceanic circulation, and 

many other essential climate processes on the regional and global scale. These models are remarkable in their complexity and, despite their limitations, are invaluable 

tools for scientific research. 

Integrating and understanding the diverse human and natural components of the 

problem is a must when informing policy development and implementation. As a result, climate research should focus on predictions of key variables such as rainfall, 

ecosystem productivity, and sea level that can be linked to estimates of economic, 

social, and environmental effects of possible climate change. Projections of emissions 

of greenhouse gases and atmospheric aerosol precursors should be related to the economic, technological, and political forces at play. In addition, such assessments of 

possible societal and ecosystem impacts, and analyses of mitigation strategies, 

should be based on realistic representations of the uncertainties of climate science. 

At MIT, we have developed an Integrated Global System Model (IGSM) to address 

some of these issues and to help inform the policy process. The IGSM consists of 

a set of coupled sub-models of economic development and associated emissions, natural biogeochemical cycles, climate, air pollution, and natural ecosystems. It is specifically designed to address key questions in the natural and social sciences that 

are amenable to quantitative analysis and are relevant to climate change policy.2

The IGSM is arguably unique in its combination of scientific and economic detail, 

climate-atmospheric chemistry-ecosystem feedbacks, and computational efficiency. It 

does make some important simplifications to enable computational efficiency, but 

the effects of these are likely to become important, at least for global average climate forecasts, only after 2100. 

To help decision-makers evaluate how policies might reduce the risk of climate 

impacts, quantitative assessments of uncertainty in climate projections are very useful. We have used several hundreds of runs of the IGSM together with quantitative 

uncertainty techniques to achieve this assessment.3 The IGSM physical climate 

model is flexible, which enables it to reproduce quite well the global behavior of 

more complex climate models. This flexibility allows for analysis of the effect of 

some of the structural uncertainties present in existing models. The MIT study includes uncertainties in anthropogenic emissions of all climatically important gases 

and aerosols, and in critical climate processes involving clouds, aerosols and deep 

ocean overturning. The MIT estimates of key climate model uncertainties are constrained by observations of the climate system. Also, uncertainty in emissions includes expert judgment about variables that influence key economic projections. 

The probability of changes in the mean global surface temperature and sea level 

between 1990 and 2100 were calculated for two hypothetical cases: no explicit climate policy, and a stringent policy. The stringent policy keeps atmospheric CO2 levels in the year 2100 in the median case to be just below 550 parts per million (which 

is about twice the preindustrial CO2 level). Absent mitigation policies, the median 

projection in this study shows a global average surface temperature rise from 1990 

to 2100 of 2.4°C, with a 95% confidence interval of 1.0°C to 4.9°C. For comparison, 

the recent Fourth Assessment Report of the IPCC reports a range for the global 

mean surface temperature rise by 2100 of 1.1 to 6.4°C for 6 assumed emission scenarios. 

Communicating the results of an uncertainty study like this to the public and policy makers needs to be achieved with clarity. The average person on the street is 

in fact very familiar with the problems of dealing with uncertainty—they just do 

not describe it with probabilities. Anyone who plays cards, bets on horses, or plays 

roulette is gambling with significant knowledge about the odds of various outcomes. 

Similarly, people have become comfortable with these issues when it refers to their 

health—you have high bad cholesterol levels and your doctor informs you that your 

chances of a heart attack are significantly greater than average unless you take 

steps to lower these levels. With this in mind, I share with you one way that I (and 

my MIT colleagues) have found quite effective in communicating the value of cliVerDate Aug 31 2005 04:12 Jul 07, 2007 Jkt 035774 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 E:\HR\OC\35774.XXX 35774

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mate policy despite the uncertainties.4 We call it the ‘‘greenhouse gamble’’ which is 

a variant on the ‘‘wheel of fortune.’’ The probabilities of various amounts of warming 

from the above MIT study are projected onto two wheels, as shown in Figure 2. 

Figure 2. The probabilities for various amounts of global average warming between 

1990 and 2100 calculated from two multi-hundred sets of model forecasts are projected onto two wheels.3 The left-hand wheel is for ‘‘no policy’’ and the right-hand 

wheel is for ‘‘policy’’ (see text). 

The ‘‘no policy’’ wheel shows about 1 chance in 4 of greater than 3 degrees centigrade warming between now and 2100 if there are no significant efforts to curb 

greenhouse gas emissions. Such a warming is regarded by most climate scientists 

as very dangerous. The ‘‘policy’’ wheel, that keeps greenhouse gas levels below twice 

their preindustrial levels, indicates that the odds of exceeding 3 degrees centigrade 

warming drop dramatically. Imagine that you are playing ‘‘the greenhouse gamble’’ 

and have $100,000 in winnings. To end the game and collect your money you must 

finally spin one of these two wheels. If you land on any of the sectors of the wheel 

corresponding to warming exceeding 3 degrees centigrade you lose say $10,000 of 

your winnings. You can spin the ‘‘no policy’’ wheel for free but must pay to spin the 

‘‘policy’’ wheel with its much lower odds of losing your money. In this game the 

$10,000 represents an (arbitrary) penalty for the damages caused by dangerous climate change and the money you are willing to give up represents the cost of mitigating policy. How much of your $100,000 would you be willing to give up in order 

to spin the ‘‘policy’’ wheel? 

I emphasize that the uncertainty represented by the ‘‘no policy’’ wheel is not a 

sound argument for inaction. The fact that there is some probability for small 

amounts of warming is countered by comparable probabilities for dangerous 

amounts of warming. I emphasize that the exact odds of various amounts of warming depicted in the two wheels are not as important as the qualitative differences 

between them. Indeed, more recent research at MIT,5 and other work reported in 

the IPCC Fourth Assessment,1 implies that the probabilities of large amounts of 

warming may be underestimated in these wheels. 

WHAT ARE THE RISKS? 

The projected warming of the Arctic and Antarctic regions in the MIT ‘‘no-policy’’ 

case are about 2.5 and 1.8 times greater respectively than the quoted global average 

warming (this uneven warming is evident from past observations and is seen in essentially all other climate model simulations). Also, the warming in the ‘‘no-policy’’ 

case is accompanied by projected sea-level rises of 0.2 to 0.84 meters due to warming (and hence expanding) oceans and melting of mountain glaciers. The IPCC 

Fourth Assessment reviews forecasts from a large number of other more comprehensive climate models revealing qualitatively similar asymmetry in warming, and sea 

level rises of 0.18 to 0.59 meters (1990 to 2095) depending on the emission scenario 

used. These sea level estimates are conservative since they do not include the possibility of significant melting of the Greenland and Antarctic ice sheets. 

These conclusions and many others in the literature point to the great vulnerability of coastal and polar regions to global warming. The Greenland and West Antarctic ice sheets together contain the equivalent of 12 meters of sea level rise. It 


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is therefore significant that the IPCC Fourth Assessment 1 concludes that ‘‘the last 

time the polar regions were significantly warmer than present for an extended period (about 125,000 years ago), reductions in polar ice volume led to 4 to 6 meters 

of sea level rise.’’ Also vulnerable are Arctic tundra and frozen soils which contain 

the equivalent of about 80 years of current fossil fuel carbon emissions,6 and Arctic 

summer sea ice cover (a cooling influence) that is already decreasing.1

Other expected consequences of global warming include increases in heat waves 

and high latitude precipitation. There are also expected to be some benefits of 

warming, for example increases in the length of the growing season in cold regions, 

that also need to be considered. Recent research has suggested a significant connection between increasing sea surface temperatures and the duration and wind speeds 

in typhoons and hurricanes.7 If further research confirms this, the increased storm 

damages, which typically rise as the cube of the windspeed, could be very costly. 

There are other thresholds and vulnerabilities in the climate system that, added to 

those discussed above, make it prudent to attempt to limit the amount of future 

global warming by lowering greenhouse gas emissions.8

CONCLUDING REMARKS 

Regarding the needed emission reductions, it is important to note that it matters 

very little where the long-lived greenhouse gases are emitted and that, according 

to our emissions projections,3 very substantial reductions will require ultimate participation by all nations, not just the currently rich countries. Another important 

point is that the predicted warming in 2100 is sensitive to the total emissions up 

to that time but relatively insensitive to the temporal pattern of the emissions. 

Hence higher emissions in the near term can potentially be offset by lower emissions later on. 

To better calibrate the policy response, we need to improve the accuracy of estimates of the impacts of climate change on natural and human systems. Here the 

research is less mature, but we need to better understand and quantify these effects. Some of these effects, specifically impacts on human health, agriculture, forestry, water supply and quality, and flood-prone coastal and riverine settlements, 

can be potentially mitigated or avoided by adaptation. Natural terrestrial, coastal, 

and oceanic ecosystems may not be able to adapt. We also need to address the environmental impacts of future potential renewable energy sources operating at the 

multi-trillion watt scales needed for them to make a significant contribution to future total energy demand (e.g. billions of acres of land for biofuels, many millions 

of wind turbines). It goes without saying that quantitative studies of all of these 

issues will require significant improvement in the accuracy of climate predictions at 

the country and regional level. The challenges here are great, but accurate quantification of impacts is essential to define the appropriate balance between the costs 

of policies to lower greenhouse gas emissions and the impacts avoided by these policies. 

Finally, I emphasize that we should not wait for perfection in either climate forecasts or impact assessments before taking action. The long-lived greenhouse gases 

emitted today will last for decades to centuries in the atmosphere and the severity 

of the risk is obvious from the fact that scientists cannot presently rule out the 

rapid warming forecasts. Added to this is the multi-decade period needed to change 

the global infrastructure for energy and agricultural production and utilization without serious economic impacts. 

REFERENCES 

(1) Intergovernmental Panel on Climate Change, Climate Change 2007: The physical science basis, Summary for Policy makers (2007), http://www.ipcc.ch/ 

(2) Prinn, R.G., Complexities in the Climate System and Uncertainties in Forecasts, in The State of the Planet: Frontiers and Challenges in Geophysics, eds. 

S. Sparks and C. Hawksworth, Geophysical Monographs, 150, American Geophysical Union, pgs. 297–305, 2004. 

(3) Webster, M., C. Forest, J. Reilly, M. Babiker, D. Kicklighter, M. Mayer, 

R.G. Prinn, M. Sarofim, A. Sokolov, P. Stone and C. Wang, Uncertainty Analysis 

of Climate Change and Policy Response, Climatic Change, 61, 295–320, 2003. 

(4) MIT Joint Program on the Science and Policy of Global Change, http:// 

web.mit.edu/globalchange/ 

(5) Forest, C.E., P. Stone and A.P. Sokolov, Estimated PDFs of climate system 

properties including natural and anthropogenic forcings, Geophysical Research Letters, 33, L01705, doi:10.1029/2005GL023977, 2006. 

(6) Sabine, S.L., M. Heiman, P. Artaxo, D. Bakker, C.A. Chen, C. Field, N. Gruber, C. LeQuere, R.G. Prinn, J.E. Richey, P. Lankao, J. Sathaye and R. Valentini, 

Current Status and Past Trends of the Global Carbon Cycle, in The Global Carbon 


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Cycle, ed. C. Field and M. Raupach, Island Press, Washington D.C., pgs. 17–44, 

2004. 

(7) Emanuel, K.A., Increasing destructiveness of tropical cyclones over the past 30 

years. Nature, 436, 686–688, 2005. 

(8) Rial, J., R. Pielke, M. Beniston, M. Claussen, J. Canadell, P. Cox, H. Held, 

N. de Noblet-Ducoudre, R.G. Prinn, J. Reynolds and J. Salas, Nonlinearities, 

Feedbacks and Critical Thresholds within the Earths’ Climate System, Climatic 

Change, 65, 11–38, 2004. 

f 

Chairman RANGEL. Thank you, doctor. 

Dr. Schneider is a professor at the Department of Biological 

Sciences. He has served over half-a-dozen presidents and certainly 

brings to us an international reputation. 

We are honored to have you present among us, and we are anxious to listen to your testimony. 

STATEMENT OF STEPHEN SCHNEIDER, Ph.D., PROFESSOR, DEPARTMENT OF BIOLOGICAL SCIENCES, STANFORD UNIVERSITY, STANFORD, CALIFORNIA 

Dr. SCHNEIDER. Thank you very much, Mr. Chairman. 

As a point of personal preference, I can remember back in the 

mid-1970s, as a 31-year-old, when I first testified in the House and 

also in the Senate, and I recall your sitting up there, too, when we 

were discussing this problem cordially, as an interesting curiosity 

in science. 

In fact, in the mid-1970s, we were just beginning at that point 

in the research community to recognize the greater likelihood of 

warming versus cooling from human activities, and some people 

were beginning to talk about long-term concerns for policy. 

If I had to summarize, as I’m sometimes forced to do in a 20-second sound bite in a TV program, so what have you all learned in 

the last 30 years since you’ve all been discussing this in Congress 

and elsewhere, I guess my single fastest quip would be that ‘‘nature has cooperated with theory,’’ that most of what we predicted, 

not precisely, but warming, increased heat waves, decreased cold 

waves, increasing intensity of tropical cyclones, hurricanes, those 

kinds of events would occur, and indeed they have. 

Now, it’s often said that the science is settled, and indeed, with 

regard to warming of the last century, an incredibly unusual word 

for scientists was used by the Intergovernmental Panel on Climate 

Change when they said it was unequivocal. 

However, what fraction of that global warming was due to nature, what fraction was due to us is not completely unequivocal, 

but I believe the words they used, also very strong language for scientists, was ‘‘very likely’’ that at least the last several decades 

could not be explained without the buildup of greenhouse gases in 

the atmosphere; and I personally concur with that. 

The first slide suggests that, despite the fact that our confidence 

in the observed trends, both occurring as a reality and at the same 

time having a deep underlying cause that’s both natural and 

human-driven, scientists can’t explain it all without either one. 

Moreover, we still have substantial work left to do in figuring out 

precisely how much we’ll be warming in the future. 

There are, in fact, two fans of uncertainty. 


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One is human behavior. If you look at this figure—and this is 

one of those unfortunate figures we scientists love so much. 

I tell my students that a figure is supposed to save 1,000 words, 

not take 1,000 words. I fear this one may be in the latter category. 

Fortunately, it’s in my written testimony. 

The main point that it conveys is there’s a large fan of uncertainty in the colored bars. Those are primarily related to assumptions of how many people there will be in the world, what standards of living we’ll have, and what technologies we’re going to use 

to get there—highly polluting or lower polluting. It makes a big difference. 

Then there are bars on the right-hand side of the figure. That 

represents a second fan of uncertainty, which is the uncertainty in 

the internal dynamics of the bio-geophysical system. 

All together, it gives you a very daunting range of projections for 

warming by the end of this century, somewhere between 1.1 Celsius and 6.4—1.1 is larger than we now have, which is around 0.7, 

when we’ve already experienced increased intensity of hurricanes 

and fires and heat waves and ice shrinkage, and therefore, you 

could argue that we’d rather not warm up 1.1 degress more. 

On the other hand, 6.4 degrees Celsius would be, as Ron Prinn 

said, a warming that I don’t know any serious scientist who has 

studied the problem would advise that we risk. It’s the temperature 

difference between an ice age and an inter-glacial cycle occurring 

not in five to ten thousand years, but in one to two centuries, 

would probably represent a massive extinction crisis and many, 

many difficult outcomes. 

So, what is it that we have to be concerned about? It’s risk management. 

I do not believe the scientific community will anytime in the near 

future be resolving precisely that range of uncertainty, and just 

like anyone who buys insurance, invests in deterrence, or makes 

any strategic hedge, you have to consider the balance between the 

price of the premium and the benefit of the policy, and that’s precisely what we will be doing here, because I do not think that you 

can rule out substantially dangerous change, nor can we precisely 

pin it down in the foreseeable future. 

The next picture, which I promise you we won’t go over here, but 

it’s in the written testimony, basically says that it isn’t just happening to our thermometers, it’s happening to nature. 

What those three panels show you, in a few phrases, is that 

plants are blooming earlier in the spring by a week or two, that 

birds come back earlier on migration, and the problem is, they 

don’t all do it together, so you tear apart the fabric of ecological 

communities, and that’s occurred at something like six tenths of a 

degree Celsius warming in the past 50 years, and we shudder to 

imagine what would happen if we were unfortunate and came out 

at the 6 degree warming end with ten times more change than in 

the past 50 years. 

Finally, I want to stress an aspect that’s very significant. 

There are two issues. 

One is, it’s perceived in the world now that climate policy is on 

the track and is no longer just an issue for conversation. 


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Therefore, there will be elements who will try to sneak in under 

the wire and build in—what the economists call ‘‘lock in’’—the largest emitting plants they can get away with before they’re controlled. 

What I would suggest to the Committee is to consider whether 

the rules that you set up would prevent anybody from having a 

perverse incentive to do the wrong thing. 

If the baseline data against which they have to compare their 

emissions were in the past and not in the future, there would be 

little opportunity for chicanery to sneak in under the wire, and 

those again are the kinds of issues I think that you’ll have to carefully address as you look at the policy. 

Finally, let me conclude with this figure, which is complicated, 

but I can summarize it simply. 

A former friend of mine was the astronomer, Carl Sagan, and he 

used to always get made fun of from his accent when he talked 

about billions and trillions of stars and galaxies. 

We have a bit of a billions and trillions problem in dealing with 

climate change, as well. 

There are all sorts of groups that will tell you how many billions 

or trillions it might cost to have one mitigation option or the other, 

and even if they were accurate—and trust me, I’ve read a lot of 

this literature; there’s a wide range of uncertainty in that literature, as well. 

Even if they are accurate, it’s not adequate to say that we will 

lose 1 percent of GDP in the future when the economy will be eight 

times larger, and therefore that’s trillions of dollars, and then take 

that trillions of dollars lost in 2100 and compare it to the present 

economy, where it looks like a Great Depression, because almost all 

models project something like a 2 percent per year growth rate in 

the economy. 

What that means is, if there were a loss of 1 or 2 percent in GDP 

associated with mitigation policy, as many models suggest, what 

would it mean in terms of a delay to be a given percentage richer? 

Well, this is work explained in the text, and it’s just one set of 

examples. Please do not take these numbers literally. The framework is what it was designed to look at. 

I’ll conclude by saying, almost every study shows that even a loss 

of a few percent in GDP, which can translate into staggering numbers of trillions of dollars, is only a year or two delay in being, say, 

500 percent richer by 2100. 

So, what we learn is that the growth rate in the economy, which 

nearly everybody projects, makes up for the extra cost of mitigation 

in somewhere between 6 months and a few years, and I just submit 

to you whether it’s a good insurance policy to avoid the more dangerous aspects of climate change to stay under the 3 degrees that 

my colleague, Ron Prinn, has said is a dividing point for dangerous 

effects by being 500 percent richer in 2101 with mitigation per capita, rather than 2100 without it, and avoid most of that climate 

risk. 

Thank you very much. 

[The prepared statement of Dr. Schneider follows:] 


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Statement of Stephen Schneider, Ph.D., Professor, Department of Biological 

Sciences, Stanford University, Stanford, California 

Honorable Chairman and Members of the House Committee on Ways and Means, 

I respectfully submit the following testimony in response to your invitation of February 14, 2007. 

Introductory Remarks 

In 1976 I had the honor as a 31-year-old of appearing before the Congress for the 

first time, testifying in support of the establishment of a U.S. National Climate Program Office to coordinate activities in the government dealing with the then fledgling discussions of climate change. At that point the research community was just 

recognizing the greater likelihood of warming versus cooling from human activities, 

and the various agencies responsible for climate related research and management 

needed to coordinate their many independent activities. That Office was established 

and climate change work became a major feature of the efforts of several agencies 

and the Congress. Since that time, I have personally participated in some two dozen 

hearings in the House and Senate (as well as many Parliamentary hearings in several countries) on climate variability and change, dealing with both climate science 

and related policy implications (please refer to my website for more information on 

my work and views on the vast range of climate issues I can only touch on today: 

climatechange.net). 

If I had to summarize in a phrase the major advance since that early interest in 

climate in the Congress three decades ago, it would simply be that since the mid 

1970s, ‘‘Nature has cooperated with theory.’’ The warming typically projected then 

was primarily based on the theory that additional heat trapping associated with the 

known increases of human-produced greenhouse gasses in the atmosphere would 

drive warming. In fact, recent studies have shown that most of the mainstream projections since the mid-1970s in the peer reviewed literature and in National Research Council reports that projected up to one degree Celsius warming by 2000 

were accurate to about a factor of two. Impacts such as increased heat waves, decreased cold snaps and increased hurricane intensities were all projected in the 

1980s, and such expectations have been largely supported by subsequent data. The 

many uncertainties in climate science—in particular how clouds might affect the 

sensitivity of the climate to heating produced by increasing greenhouse gasses— 

were always openly acknowledged, leading to roughly a threefold uncertainty in estimates of how much warming there would be from a doubling of CO2 in the atmosphere above a pre-industrial benchmark concentration of 280 parts per million: 

roughly 1.5 to 4.5°C warming over a few centuries if CO2 were to double. I wish 

I could report to the Committee that advances in climate science have substantially 

narrowed that range. But despite the dramatically increased scientific confidence we 

now express in the observed warming of the past 30 years, and the high likelihood 

that much, if not most, of it is a result of human activities, we are still not able 

to produce a substantially narrowed range of potential warming over the next hundred years. As Figure 1 shows, the likely range of warming for 2090 projected in 

the mainstream literature and summarized by the recently released Intergovernmental Panel on Climate Change (IPCC) Working Group 1 Report, covers a very 

large range: 1.1 to 6.4 degrees Celsius. About half that uncertainty is due to geophysical issues like how clouds will govern climate sensitivity, and the other half 

results from uncertainties in human behavior: how many people will be in the 

world, what standards of living they will demand and to what extent development 

goals will be achieved through greenhouse gas-emitting energy systems and land 

clearing activities. Such choices can, as the figure shows, make a major difference 

in climate change risk. 

So What if the Climate Changes? 

The bottom end of that 1.1 to 6.4°C range on Figure 1 would still be problematic 

for many regions and sectors, but the top end estimate is virtually certain to be very 

highly impacting for nearly all sectors and regions, and particularly devastating to 

nature. Note in Figure 2, that already—with about 0.6°C observed warming—that 

plants and animals are showing a discernible response to warming from human activities (see the lower two panels of the Figure). If that amount of warming increases by a factor of ten to the 6.4°C upper limit suggested by IPCC as possible 

by 2090, then most ecological estimates suggest a major extinction crisis for species—with some 50% of all existing biodiversity either going extinct or becoming endangered. These species would have to move substantial distances to find suitable 

new climate space, and in the process be forced to confront highly disturbed landscapes fragmented by factories, farms, freeways and urban settlements. 


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Over the past two decades, research has intensified on the impacts of projected 

warming on coastlines, agriculture, ecosystems, human health and cultures near 

coastlines and in high mountains—where warming can significantly contribute to 

sea level rise and the melting of ice systems. Again, if forced to summarize this 

work in a sentence: some systems might benefit in aggregate dollar terms from up 

to a few degrees of warming (in particular agricultural productivity in higher latitudes), but even small amounts of warming can have detrimental effects to agriculture in warmer regions, can increase the intensity of hurricanes or wildfires, and 

can alter ecological balances. Scientific assessments based on the literature have 

shown that even small amounts of warming would negatively affect more people and 

systems than would be benefited. Warming beyond a few degrees is generally found 

in the scientific literature to have a vast preponderance of significant negative effects on food production, forests, species, coasts, human health, wildfires and the delivery of such services as water supplies and flood protection. Figure 1 suggests that 

this level of warming is considered likely unless major mitigation activities are undertaken. 

In short, a continuation of ‘‘business as usual’’ raises a serious concern from the 

risk-management point of view, given that the likelihood of warming beyond a few 

degrees before the end of this century (and its associated impacts) is a better than 

even bet. Few security agencies, businesses or health establishments would accept 

such high odds of potentially dangerous outcomes without implementing hedging 

strategies to protect themselves, societies and nature from the risks—of climate 

change in our case. This is just a planetary scale extension of the risk-averse principles that lead to investments in insurance, deterrence, precautionary health services and business strategies to minimize downside risks of uncertainty. 

Portfolio of Options: Efficiency, Learning, Adaptation and Mitigation 

Fortunately, many studies over the past decade and a half have shown that there 

is a portfolio of options to deal with the risks of climate change. First of all, since 

we are already committed to some level of further climate change regardless of our 

actions to mitigate emissions, it makes sense to invest in adaptation strategies to 

reduce the negative effects. This could involve research and/or extension activities 

such as the development of more climatically tolerant crops, coastal protection measures, and creating interconnections and improved migration pathways for species 

forced to relocate in response to warming. In particular, as the world’s largest economy—and CO2 emitter—we in the U.S. will be increasingly called upon to be a partner in helping less developed countries to improve their adaptive capacity via targeted development activities. Given that hotter and poorer regions and groups are 

less well able to marshal resources for adaptation, increasing global attention will 

be paid to those vulnerable regions as the globe sees accelerating warming (now projected with high confidence by nearly all mainstream climate scientists and reported 

in many National Research Council reports and by the IPCC). And not only poor 

countries will be vulnerable to extreme climatic events that ride on top of warming 

trends, demonstrated all too well by the aftermath of the 2003 European heat wave 

that took an estimated 50,000 lives prematurely and the still dire straits for most 

of the victims of Hurricane Katrina. 

But adaptation is most effective for less than a few degrees of warming, and is 

virtually ineffective against harm to natural systems like ice sheets, ecosystems or 

those social systems with little resource base to adapt. For warming beyond a few 

degrees, the scientific literature suggests that adaptation becomes a very questionable prospect and the safer strategy is to avoid the risk of warming beyond a few 

degrees. This requires mitigation policies that reduce the emissions that cause the 

warming in the first place, and here is another area where a portfolio of strategies 

have been proposed. The sequencing of such strategies will be a major occupation 

of the governance of climate change risks. I often suggest that the first element in 

this sequence should be actions already prevalent in many counties, states and at 

the federal level: mandatory performance standards for energy efficiency of buildings, automobiles, air conditioners, refrigerators, energy supply systems and other 

technologies. Other strategies could involve capturing greenhouse gasses from 

smokestacks and sequestering them underground, a potentially promising entry in 

the portfolio of options, but one whose cost and efficacy at the gigantic scale needed 

(some trillion tons of carbon to be sustainably and safely buried for centuries or 

more) is not yet assured at all. Therefore, what is called for, in my view, is another 

step in the sequencing of actions: public/private partnerships to foster learning-bydoing projects to make renewable energy systems cheaper and more available and 

to explore other options from both cost and safety aspects. It is not just R&D, but 

R, D & D—the second D being ‘‘demonstration’’—as deployment of prototype systems to compete for future market share based on their improved performance 


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gained from the demonstration investments is the key to learning-by-doing. And 

there can be little learning-by-doing without the ‘‘doing.’’ Similarly, there can be little return on investment until there is investment, and the policy debate thus will 

need to focus on incentives to promote such investments. 

Ultimately, reduction of greenhouse gas emissions by some 60–80% by mid century and to near zero by century’s end (what is needed to have a fighting chance 

to stay below a few degrees more warming globally) is increasingly called for (by 

California, Illinois, South Australia and the UK among others). To achieve such admirable sustainability goals for climate protection, most studies suggest that we 

need both ‘‘carrots and sticks,’’ and that carrots alone (like public support of private 

ventures in cleaner technologies) will not suffice—and that a penalty must be implemented for dumping our tailpipe and smokestack wastes into the atmosphere as if 

it were a free sewer. With no clear disincentives, this dumping is likely to only continue to increase. Such a ‘‘dumping fee’’ is essential over time as an incentive both 

to reduce emissions and to stimulate private investment in greener alternatives. 

Avoiding High Emissions ‘‘Lock-in’’ 

The recent attempts of some power producers to try to rush into service—and thus 

‘‘lock in’’ high emitting power plants for 50 years—seems a clear attempt to ‘‘sneak 

in under the wire’’ of climate policy, and to pre-empt the likelihood of coming controls on emissions. Emissions baselines against which reductions will be scaled need 

to be set in the past, not the future. This strategy may send a signal to investment 

bankers that the sneak-in-under-the-wire game carries the high investment risk of 

a substantial future carbon liability, and may thus blunt this ‘‘lock-in’’ concern. 

Despite some claims to the contrary, a fee for emissions is not an interference in 

the free market, but in fact the opposite: having a price for a commodity that does 

not reflect all the costs (like coastal damages from sea level rise and stronger 

storms) is a violation of market principles: what economists call a ‘‘market failure’’ 

or ‘‘externality.’’ The solution is for governments to act to protect our shared atmospheric commons via policies that impose a fee on polluters covering the full cost of 

emissions. For such a ‘‘shadow price on carbon’’ to be effective as a motivator to reduce pollution and to invest in cleaner technologies, it must be perceived by both 

consumers and producers as inexorable, unavoidable by hunkering down and waiting for a few years or sneaking in under the wire. However, some sectors might be 

especially burdened by a shadow price on carbon, and although I do not personally 

believe we should hold the sustainability of our life support system hostage to any 

special interest, at the same time we could sequence these emission fees over time— 

decades perhaps—and ramp them up at a rate that gives the particularly affected 

sectors some time to adjust—but not to escape or be grandfathered, as that would 

likely increase substantially the risks of warming beyond a few more degrees. 

The Numbers Game 

Finally, it is common for some opposed to climate policies to cite frightening absolute numbers: trillions of dollars of annual costs for climate mitigation policies; or 

a few percent of GDP lost. But let me report that there is a wide variance across 

economic models on how much mitigation might cost—and some estimates suggest 

that it could actually improve the economy at first by promoting the implementation 

of cost-effective efficiency actions sooner. But even if one accepts some of the seemingly staggering estimates like trillions of dollars of costs, let me add some perspective. Figure 3 shows the results that Christian Azar from Sweden and I (Azar and 

Schneider, 2002) produced based on conventional economic models that estimate the 

costs of climate policy. We found that a typical shadow price on carbon (a carbon 

fee or tax, for example) to prevent the concentrations of CO2 from more than doubling was around $200 per ton carbon emitted. A fee twice that high could eventually keep concentrations near present values (though an overshoot of concentrations 

above present in the next half century seems unavoidable—see Schneider and 

Mastrandrea, 2005). Azar and I used typical economic models estimates of the costs 

of such policies, although we believe them personally to be too pessimistic. These 

models estimate between a half a percent and several percent GDP lost annually 

by century’s end. 

Let us reframe this for perspective. If the annual costs in the future were indeed 

a few trillion dollars lost from climate policies, and one compared that to today’s 

level of GDP, it would indeed seem astronomically high—equivalent to a depression—some tens of percent loss of economic production. But that comparison would 

be totally misleading, if not pernicious. We can’t legitimately compare potential future costs of climate mitigation policies to the present size of the economy. Nearly 

all mainstream economic analyses typically project GDP growth rates of some 2% 


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per year—barring pandemics, world wars or other unforeseeable catastrophes we all 

work so hard to prevent. A few numbers to illustrate this follow. 

If the current economy of the world now were about $40 trillion and it grew at 

2% per year, then in 100 years it would be about eight times bigger—about $320 

trillion annually. So indeed, a 2% loss in 2100 from a century of shadow prices on 

carbon that reduced most of the climate change risks would be a seemingly very 

daunting figure: about $6.4 trillion—a major fraction of the economy today. But in 

2100, that loss would be made up in only one year by economic growth! In other 

words, if our economy continues to grow as typically projected, that growth will 

swamp the costs of mitigation. In this simple demonstration, we would be about 

500% per capita richer on average in 2101 with major climate policies to reduce 

risks versus being 500% per capita richer in 2100 having taken no climate policy 

action and thus faced with full risks of dangerous climate change. In the language 

of risk-management, such an investment in mitigation is a cheap insurance policy 

or hedging strategy to avoid significant threat to our planetary life support system. 

It is unacceptable to compare future costs to the present scale of the economy. 

Framing costs in terms of the delay time to be x% richer is much more understandable than frightening, but largely out of perspective, absolute dollar costs. 

But just because overall costs of climate mitigation may not be a large number 

relative to projected growth in the economy, there will still be, as mentioned earlier, 

individuals and groups with more than average difficulties. Thus, the critical challenge to governance is to both protect the planetary commons for our posterity and 

the conservation of nature, while at the same time fashioning solutions to deal fairly 

with those particularly hard hit by both the impacts of climate change (via adaptation programs) or from climate policies (perhaps via job retraining, incentives for relocation of industries, side payments, etc.). 

I am often asked if I am optimistic or pessimistic about addressing climate 

change. In a sentence: I am optimistic that we can affordably and effectively sequence a series of policy steps to deal with climate change via efficiency, learning, 

adaptation and mitigation, but I am also pessimistic that we will fail to prevent a 

considerable climate change risk while we debate and delay the implementation of 

such policies. When I testified on many occasions to this honorable body over the 

decades, I always was asked and offered the personal opinion that steps to anticipate and reduce risks via climate policies were already called for, as the sooner one 

starts, the lower the eventual risks and costs. Given that the scientific evidence now 

is overwhelming that global warming is a reality, that humans are responsible for 

a considerable chunk of it, and that in the decades ahead we will become the dominant factor in climate change and related impacts, a clear and effective portfolio of 

policies is now more urgently needed than ever. 

I deeply appreciate the opportunity to address this Committee and look forward 

to seeing the outcome of your efforts in the form of fair and effective actions to reduce the risks of climate change that will certainly grow considerably in the decades 

ahead if we continue to increase, rather than reverse, our emissions of greenhouse 

gasses. Thank you very much. 

References 

Azar, C. and S.H. Schneider, 2002: Are the Economic Costs of Stabilising the Atmosphere Prohibitive? Ecological Economics, 42, 73–80. 

Root, Terry L., Dena MacMynowski, Michael D. Mastrandrea, and Stephen H. 

Schneider, 2005: ‘‘Human-modified temperatures induce species changes: Joint attribution.’’ Proceedings of the National Academy of Sciences, 102(21), 7465–7469. 

Stephen H. Schneider, Michael D. Mastrandrea, 2005: ‘‘Probabilistic assessment 

of ‘dangerous’ climate change and emissions pathways.’’ Proceedings of the National 

Academy of Sciences, 102(44), 15728–15735. 


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Figure 1. The figure shows clearly how dependent long term warming is on typically 

assumed emissions scenarios and that there is still a very broad range of projected 

risks from these standard scenarios—the lowest of which (B1) is still a doubling of 

atmospheric concentrations of CO2 above pre-industrial levels and the highest 

(A1FI) is a tripling of CO2 by 2100. Only via aggressive mitigation policies can emissions be brought to much lower levels than a doubling. The full range is 1.1 to 6.4°C 

warming. (Source: Intergovernmental Panel on Climate Change, Working Group 1, 

Fourth Assessment Report, in press.) 


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Figure 2. The study of causal connection by separation of natural and anthropogenic 

forcing factors compares observed temporal changes in animals and plants with 

changes over the same time periods in observed temperatures (dark blue bars) as 

well as modeled temperatures using (i) only natural climate forcing; (ii) only anthropogenic climate forcing and (iii) both forcings combined. The locations for the modeled temperatures were individual grid boxes corresponding with given animal and 

plant study sites and time periods. The agreement (in overlap and shape) between, 

the observed and modeled plots is weakest with natural forcings, stronger with anthropogenic forcings and strongest with combined forcings. Thus, observed changes 

in animals and plants are likely responding to both natural and anthropogenic climate forcings, providing a direct cause and effect linkage (‘‘joint attribution’’) between observed species movements and modeled natural and anthropogenic forcing 

factors. (Source: Root et al 2005). 


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Figure 3. Global income trajectories under business as usual (top curve) and for the 

case of stabilizing the atmosphere at 350 (bottom curve), 450 and 550 ppm. Note 

that we have assumed rather pessimistic estimates of the cost of atmospheric stabilization (average costs to the economy assumed here are $200/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 avoidance and reduction of local air pollution) of 

meeting various stabilization targets have not been included. (Source: Azar and 

Schneider, 2002). 

f 

Chairman RANGEL. Thank you, doctor. 

We will hear next from The Honorable Eileen Claussen, president, Pew Center on Global Climate Change and Strategies for the 

Global Environment. 

She spends her lifetime studying climate change, and we are 

honored to have you present with us this morning. 

STATEMENT OF THE HONORABLE EILEEN CLAUSSEN, PEW 

CENTER ON GLOBAL CLIMATE CHANGE, ARLINGTON, VIRGINIA 

Ms. CLAUSSEN. Thank you, Mr. Chairman and Members of the 

Committee, for the opportunity to speak about the important issue 

of global climate change. 

As you have heard from Doctors Schneider and Prinn, it is now 

well-established that climate change is occurring and that humans 

are primarily responsible. 

The recently released summary of the IPCC’s Fourth Assessment 

Report calls the evidence of climate change unequivocal, and expresses over 90 percent confidence that most observed warming is 

due to human influence. 

Left unabated, climate change will have tremendous consequences for our country and the world. 

The greenhouse gases emissions that contribute to climate 

change come from a wide variety of sources and sectors throughout 

the economy. 

These include transportation, electric power generation, use of 

energy in our homes and offices, and manufacturing. 


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Just as there is no single sector or emissions source that is responsible for greenhouse gases emissions, there is also no single 

technology or policy that will solve global warming. We need a 

portfolio of policies and technologies to meet this challenge. 

The Pew Center believes that there are three things we in the 

United States must do to reduce the real and growing risks posed 

by global climate change. 

First, we must enact and implement a comprehensive national 

mandatory market-based program to progressively and significantly reduce U.S. greenhouse gases emissions in a manner that 

contributes to sustained economic growth. 

Second, while taking the necessary first step of placing limits on 

our own emissions, the United States must also work with other 

countries to establish an international framework that engages all 

the major greenhouse gas-emitting nations in a fair and effective 

long-term effort to protect our global climate. 

Third, we must strengthen our efforts to develop and deploy climate-friendly technologies and to diffuse those technologies on a 

global scale. 

Only in this way will we achieve our environmental objectives 

and keep costs to a minimum. 

Recently, the Pew Center joined with three other NGOs and ten 

companies, including BP, Caterpillar, Duke Energy, DuPont, and 

General Electric in announcing the U.S. Climate Action Partnership, or USCAP. 

Together, we are calling for a combination of mandatory approaches, technological incentives, and support for demonstration 

projects. 

The USCAP went into detail as to how we think these goals 

should be achieved. 

Given this Committee’s interest and jurisdiction, let me highlight 

only the recommendations focused on Federal technology research, 

development, demonstration, and deployment. 

Let me reiterate that any solution to this problem will require 

a portfolio of technologies. 

The United States will continue to burn coal and natural gas. We 

will continue to use nuclear energy. We will need to ramp up our 

use of renewable energy resources. 

Transportation will be a key part of our future, but given our interests in both energy security and climate change, we will need to 

see far greater use of bio-fuels, advanced diesels, and hybrids in 

the short term, as well as continuing innovation in fuels and technologies over the longer term, including use of electric of hydrogenpowered vehicles. 

The USCAP recommends the following key characteristics of a 

technology program: 

First. A mix of deployment policies to create incentives to use 

low-greenhouse-gas-emitting technologies and address regulatory of 

financial barriers. 

Such policies could include loan guarantees, investment tax credits, and procurement standards. 

For example, tax incentives currently available to a limited number of hybrid electric cars and trucks could be extended to a larger 

number of qualifying vehicles. 


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Second. Stable, long-term financing, for example, in the form of 

a dedicated revenue stream or other means not reliant upon annual congressional appropriations. 

Third. Joint public/private cost sector cost sharing and oversight. 

The Department of Energy’s FutureGen project is an example of 

a joint public/private initiative, with costs shared between the Government and the companies in the projects’s Alliance. 

The USCAP believes, however, that we need more demonstration 

projects to demonstrate the potential for long-term sequestration in 

a variety of geologic structures. 

Fourth. Establishment of performance criteria and a technology 

roadmap to guide RD&D and deployment program investment decisions. 

Finally. Establishment of a public/private institution to govern 

the administration of the RD&D and deployment program fund. 

From our own work on technology policy, the Pew Center has 

found that Government has not always been good at picking technology winners, so it is best to have programs and incentives that 

serve to promote a variety of technologies and approaches. 

The Committee could also consider incentives for energy efficiency measures in businesses, homes, and vehicles; for capture 

and sequestration of carbon that would otherwise be emitted from 

coal-burning power plants; for energy efficient transmission and 

distribution systems; and for transportation planning measures 

that reduce miles driven. 

I thank the Committee for considering steps to address global climate change and look forward to your questions. 

Thank you. 

[The prepared statement of Ms. Claussen follows:] 

Statement of The Honorable Eileen Claussen, President, Pew Center on 

Global Climate Change, Arlington, Virginia 

Mr. Chairman and Members of the Committee, thank you for the opportunity to 

speak to the Committee about the important issue of global climate change. My 

name is Eileen Claussen and I am the President of the Pew Center on Global Climate Change. 

The Pew Center on Global Climate Change is a non-profit, non-partisan and independent organization dedicated to providing credible information, straight answers 

and innovative solutions in the effort to address global climate change. Forty-two 

major companies participate in the Pew Center’s Business Environmental Leadership Council (BELC), making the BELC the largest U.S.-based association of corporations focused on addressing the challenges of climate change. Many different 

sectors are represented, from high technology to diversified manufacturing; from oil 

and gas to transportation; from utilities to chemicals. These companies represent 

$2.5 trillion in market capitalization, employ over 3.3 million people, and work with 

the Center to educate the public and policy-makers on the risks, challenges and solutions to climate change. 

As you have heard from Drs. Schneider and Prinn, it is now well established that 

climate change is occurring and that humans are primarily responsible. The recently released summary of the IPCC’s 4th assessment report calls the evidence of 

climate warming ‘‘unequivocal’’ and expresses over 90% confidence that most observed warming is due to human influence. Left unabated, climate change will have 

tremendous consequences on our country and the world. 

The greenhouse gas (GHG) emissions that contribute to climate change come from 

a wide variety of sources and sectors throughout the economy. These include transportation, electric power generation, use of energy in our homes and offices, manufacturing, and many others. Just as there is no single sector or emissions source 

that is responsible for greenhouse gas emissions, there is also no single technology 

or policy that will solve global warming. We need a portfolio of policies and technologies to meet this challenge. 


bajohnson on PROD1PC69 with HEARING
26 

The Pew Center believes there are three things we in the United States must do 

to reduce the real and growing risks posed by global climate change: First, we must 

enact and implement a comprehensive national mandatory market-based program 

to progressively and significantly reduce U.S. greenhouse gas emissions in a manner 

that contributes to sustained economic growth. Second, while taking the necessary 

first step of placing limits on our own emissions, the United States must also work 

with other countries to establish an international framework that engages all the 

major greenhouse gas-emitting nations in a fair and effective long-term effort to protect our global climate. Third, we must strengthen our efforts to develop and deploy 

climate-friendly technologies and to diffuse those technologies on a global scale. 

Only in this way will we achieve our environmental objectives and keep costs to a 

minimum. 

Recently, the Pew Center joined with 3 other NGOs and 10 companies, including 

BP, Caterpillar, Duke Energy, DuPont, and GE in announcing the U.S. Climate Action Partnership (USCAP). Together, we are calling for a combination of mandatory 

approaches, technological incentives and support for demonstration projects. 

We chose emission reduction targets with technology in mind: to allow for capital 

stock turnover and for the development and deployment of new technologies. In five 

years, emissions should be between 100 and 105% of today’s levels, in other words, 

no more than 5% above current levels. In ten years, emissions should be 90–100% 

of today’s levels. By 2050, we would like to see emissions cut 60 to 80% from current 

levels. It is the considered judgment of the U.S. Climate Action Partnership that 

these cuts are both technologically achievable and economically sound. 

The USCAP went into detail as to how we think these goals should be achieved. 

Given this Committee’s interests and jurisdiction, I will highlight only the recommendations focused on federal technology research, development, demonstration, 

and deployment. But let me reiterate that we will need a portfolio of technologies. 

The U.S. will continue to burn coal and natural gas; we will continue to use nuclear 

energy; and we will need to ramp up our use of renewable energy sources. Transportation will also be a key part of our future, but given our interests in both energy 

security and climate change, we will need to see far greater use of biofuels, advanced diesels and hybrids in the short term, as well as continuing innovation in 

fuels and technologies over the longer term—including use of electric—or hydrogenpowered vehicles. 

The USCAP recommends the following key characteristics of a technology program: 

• A mix of deployment policies to create incentives to use low-GHG technologies 

and address regulatory or financial barriers. Such policies could include loan 

guarantees, investment tax credits and procurement standards. For example, 

production tax credits currently available to some categories of renewables 

could be extended to other zero-GHG electricity sources. Likewise, tax incentives currently available to a limited number of hybrid-electric cars and trucks 

could be extended to a larger number of qualifying vehicles. 

• Stable, long-term financing (for example, in the form of a dedicated revenue 

stream or other means not reliant upon annual congressional appropriations). 

• Joint public/private sector cost-sharing and oversight. The Department of Energy’s FutureGen project is an example of a joint public/private initiative, with 

costs shared between the government and the companies in the project’s Alliance. The USCAP believes, however, that we need more demonstration projects 

to demonstrate the potential for long-term sequestration in a variety of geologic 

structures. 

• Establishment of performance criteria and a technology roadmap to guide 

RD&D and deployment program investment decisions; and 

• Establishment of a public/private institution to govern the administration of the 

RD&D and deployment program fund. 

It is important that incentives be consistent enough to provide the certainty needed for large-scale investment decisions. For example, the short-term nature of the 

production tax credit for wind power has resulted in a boom and bust cycle in which 

investments have been strong while the credit is in effect but drop quickly as it expires, hampering consistent growth in this sector. 

From our own work on technology policy, the Pew Center has found that government has not always been good at picking technology winners, so it is best to have 

programs and incentives that serve to promote a variety of technologies and approaches. Projects could be selected via a reverse auction, allowing proposals for reduction projects to compete on a level playing field for funding. An auction could 

specify technology categories as well as offer a broad competition to elicit new, asyet-unknown technologies. 


bajohnson on PROD1PC69 with HEARING
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The Committee could also consider incentives for energy efficiency measures in 

businesses, homes, and vehicles; for capture and sequestration of carbon that would 

otherwise be emitted from coal burning power plants; for energy efficient transmission and distribution systems; and for transportation planning measures that reduce miles driven. 

Many of the companies we work with have set voluntary targets and reduced 

their GHG emissions significantly. The majority have done so by finding efficiency 

opportunities in their operations and most have had no net cost to implement those 

reductions. This is not to say that all reductions will be free, or that a regulatory 

scheme alone would be a sufficient response to climate change. But it does suggest 

that moving forward with both a push (through technology incentives) and a pull 

(through a price signal) could allow us to meet a series of emission reduction objectives such as those recommended in the USCAP proposal. 

Here are some examples of what companies have been able to achieve. 

DuPont used seven percent less total energy in 2004 than it did in 1990, and has 

lowered its GHG emissions by 70% during that time despite an almost 30 percent 

increase in production. Compared to a linear increase in energy with production, 

this achievement has resulted in $2 billion in cumulative energy savings. 

From 1990 to 2002, IBM’s energy conservation measures resulted in a savings of 

12.8 billion kWh of electricity—avoiding approximately 7.8 million tons of CO2 and 

saving the company $729 million in reduced energy costs. 

The pharmaceutical company Baxter reduced its process-related GHG emissions 

by 99 percent between 1996 and 2002 by phasing out the use of certain solvents. 

These process changes resulted in reductions equivalent to over 3 million metric 

tons of carbon dioxide. Alcoa’s aluminum smelters reduced generation of PFC’s 

(powerful greenhouse gases) by 75% from 1990 to 2002. 

These leading firms are curbing their contributions to climate change, but their 

voluntary efforts are not enough to achieve the comprehensive reductions in greenhouse gases needed across the economy. To achieve that goal, we need to enact the 

measures discussed above. 

I thank the Committee for considering steps to address global climate change and 

look forward to your questions. 

f 

Chairman RANGEL. Our next witness will be Dr. David Montgomery, who is the vice president of Environmental Practice. 

We are thankful that you’ve taken time to share your views with 

us. You may proceed. 

STATEMENT OF W. DAVID MONTGOMERY, Ph.D., VICE PRESIDENT, ENVIRONMENTAL PRACTICE, CRA INTERNATIONAL 

Dr. MONTGOMERY. Thank you, Mr. Chairman. 

I’m honored by your invitation and the opportunity to be here. 

Since the starting point of this discussion is climate science, I 

thought I should outline briefly a bit of my understanding of that 

subject. 

I’m an economist, but anyone who works on climate economics 

and policy has to have some understanding of the science, and just 

a few words on mine. 

There is clear evidence that the Earth is warming. The amount 

of warming that’s been caused by human activity is open to debate, 

but there is no question that the human race can play a role in 

slowing or stopping that trend. Clearly, something should be done. 

The questions are, what will the alternatives cost, what will be 

effective, and where to start. 

Two points that were mentioned by Professor Prinn in his written testimony I think shed a great deal of light on these questions. 

He stated, and this is my paraphrase, that it does not matter 

where greenhouse gases originate, they’re all mixed in the atmosphere and contribute equally to warming everywhere. 


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This observation implies that the costs of meeting any climate 

goal can be reduced by ensuring that emission reductions occur in 

the countries where they’re least costly. 

Professor Prinn also mentioned that it’s pretty much irrelevant 

when emission reductions occur. 

This observation implies the decision about how much to abate 

now and how much to abate several decades in the future can be 

based pretty much exclusively on the relative costs, because either 

way, we can achieve the same reduction in long-term temperatures. 

So, let me return to the three questions of cost, effectiveness, and 

where to start. 

First, cost: 

Limits on greenhouse gas emissions will impose a cost on the 

U.S. economy, and the cost will be larger for tighter targets. 

In previous studies of proposals for U.S. emission limits, my colleagues and I have estimated annual losses that range from about 

three-tenths of a percent of GDP to about 1.9 percent of GDP in 

2020, for proposals actively under consideration. 

In every case, exactly the same mechanisms are at work: 

The need to adopt more costly methods of electricity generation, 

to invest in producing more expensive low-carbon fuels and to undertake investments to increase energy conservation, divert resources that would otherwise be available to produce the goods and 

services that make up GDP. 

Higher energy costs raise the cost of U.S. manufacturing relative 

to competitors in countries that do not adopt limits on greenhouse 

gases emissions and they lead to a flow of jobs and investment out 

of the United States toward those countries. 

Emissions reductions achieved at these costs in the United 

States or even other industrial countries are also unlikely to make 

much difference in global temperatures over the next century. 

There are two fundamental reasons. 

First, virtually all projections agree that the vast majority of 

emissions over the next century will come from developing countries, in particular China and India. 

Second, with today’s technology, it’s simply not economically feasible to achieve emission reductions on the scale required to stabilize global temperatures. 

These two points suggest to me that the highest priorities for climate policy have to be developing countries and R&D. Both require 

immediate action and are immense challenges. 

Without involvement of developing countries and a dramatic new 

commitment to R&D, it strikes me that it will be nearly impossible 

to reduce emissions sufficiently to manage climate risks effectively. 

Halting the growth of emissions from developing countries will 

not be an easy task. 

These countries have consistently opposed any attempts to initiate discussion of limits on their emissions in international negotiations. They fear that such limits would condemn them to continued poverty. 

They also gain competitive advantages from having industrial 

countries go first and take the lead in reducing emissions, but this 

creates additional resistance on their part to limits on emissions. 


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Finally, developing countries generally have such poor legal and 

market institutions that it’s pretty clear they couldn’t implement 

efficient policies to reduce emissions, even if they desired to do so 

right now, without much more deep economic reforms. 

Nevertheless, some solution must be found. If developing countries continue on their current course, it would not be possible to 

stabilize temperatures. 

I think it is possible to reconcile their desire for improved living 

standards with lower emissions, but what it takes at the start is 

much more rapid and deeper economic reforms to release the market forces that lead to energy efficiency and that set the stage for 

the kind of market-based policies that can reduce emissions effectively and efficiently. 

I think the Asia-Pacific Partnership is a start in this direction. 

R&D is also an absolute necessity. Stabilization of greenhouse 

gas concentrations requires that, at some point, our net emissions 

fall to zero on a global basis. That is, the rate at which we put 

emissions into the atmosphere has to be balanced by the rate at 

which they are removed. 

R&D to create new technological options is a necessity if that 

stabilization goal is to be economically feasible. 

One study estimates that to get on a path toward stabilization, 

within the next 50 years, the world will require twice as much energy from carbon-free sources as the total amount of energy we 

produce today. 

I don’t think that could be done at affordable cost with today’s 

technology or with incremental improvements. A massive program 

of R&D focused on breakthrough discoveries leading to new approaches and technologies is required. 

Even mandatory limits on emissions over the next decade or two, 

I do not believe will provide sufficient or credible incentives for 

that kind of R&D. 

Development and transfer of new technology is also critical to the 

role of developing countries. If we can reduce the cost of reducing 

their emissions, transfer technologies that help their economic 

growth as well as reducing their emissions, we can reduce their resistance to doing something. 

What does all this imply for near-term emission limits? 

The choice of how much to do today and how much to plan on 

doing tomorrow to reduce emissions involves balancing the high 

costs of immediate reductions against the potentially much lower 

costs of achieving reductions of exactly the same magnitude in the 

future with new technologies that we can produce through a commitment to R&D today. 

One way of striking this balance between what to do today and 

what to do once new technologies are available is by considering 

modest financial incentives for reducing greenhouse gases in the 

near term that are designed to rise at a rate that would be sufficient to provide an incentive for the adoption of new cost-effective 

technologies once they become available. 

Thank you, Mr. Chairman, for your invitation. 

[The prepared statement of Dr. Montgomery follows:] 


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Statement of W. David Montgomery, Ph.D., Vice President, Environmental 

Practice, CRA International 

Mr. Chairman and Members of the Committee: 

I am honored by your invitation to appear today, as the Committee addresses 

issues of climate science and its implications for climate policy. I am Vice President 

of CRA International, and an economist by profession and training. Much of my 

work for close to 20 years has dealt with the economics and policy of climate change. 

It is impossible to do climate economics and policy without some understanding of 

the state of climate science, and I am particularly honored to sit here because I have 

known Professor Prinn for most of the time that I have worked on climate policy 

and I have relied on his writing and presentations as the clearest and most objective 

account of the state of climate science. Having said that, I should also add that any 

errors are my own and should not be blamed on him. 

Since the starting point of this discussion is climate science, it might be helpful 

if I begin by stating my understanding of some key aspects of that subject. There 

is clear evidence that the Earth is warming. The extent to which human activity 

has had a role in that warming is open to debate, but there is no question that we 

can play a role in slowing or stopping the trend. But we must do so with a clear 

understanding of the benefits as well as the costs of various approaches, and what 

difference specific actions can make in the consequences of climate change. 

Key Points 

My testimony contains five key points. 

• Mandatory U.S. greenhouse gas controls and any version of the Kyoto Protocol 

will impose a significant cost on the U.S. economy and will lead to a shift of 

investment away from the U.S. and toward countries like China and India that 

are not willing to undertake similar efforts. 

• By creating these competitive advantages, unilateral policies adopted by industrial countries will actually strengthen the incentives for countries like China 

and India to resist controls. 

• Since China, India and other developing countries will be responsible for the 

majority of global emissions over the next century, any prospect for halting 

global warming depends crucially on inducing these countries to cut their emissions. 

• Even if all industrial countries met the emission targets set in the Kyoto Protocol, the emission reductions bought at these costs would not be sufficient to 

prevent most of the temperature increases now projected for the next century. 

• Effective R&D is a necessity, in order to develop new technologies that will 

make it possible to reduce greenhouse gas emissions sufficiently to stop climate 

change at costs that do not exceed public willingness to pay, here and abroad. 

• Minimizing the costs of achieving climate goals requires making sure that the 

timing of emission reductions matches with the availability of these new technologies. 

Summary 

Limits on greenhouse gas emissions will impose a cost on the U.S. economy, and 

the cost will be larger for tighter targets. In previous studies that have looked at 

a range of proposals for U.S. emission caps set at varying levels, my colleagues and 

I have estimated annual losses that range from 0.3% to about 1.9% of GDP in 2020. 

In every case, we see exactly the same mechanisms at work. The need to adopt more 

costly methods of electricity generation, to invest in producing more expensive, lowcarbon fuels and to undertake more intensive energy conservation measures diverts 

resources that would otherwise be available to produce the goods and services that 

make up GDP. Higher energy costs raise the costs of U.S. manufacturing relative 

to competitors in countries that do not adopt limits on greenhouse gas emissions. 

Due to these higher energy costs, there will be an even greater shifting of investment from the United States (and other industrial countries) into countries like 

China and India. Emissions in the United States will fall, especially as our share 

of energy intensive industries shrinks, but they will grow even faster in China as 

factories rise there that would otherwise have been built here. Moreover, given the 

much lower level of energy efficiency in countries like China, the leakage of emissions will be much greater than the leakage of investment. 

The relative share of the United States and other industrial countries in global 

emissions is rapidly shrinking, and over the next century the vast majority of greenhouse gas emissions will come from developing countries. China’s emissions are expected to exceed the U.S. in the next year or two and then to move far ahead. 


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1M.I. Hoffert, et al. ‘‘Advanced Technology Paths to Global Climate Stability: Energy for a 

Greenhouse Planet’’ Science, Vol. 298, November 1, 2002, p. 981–7. 2W.D. Montgomery and A. Smith, Price, Quantity and Technology Strategies for Climate 

Change Policy,’’ Chapter 27 in M. Schlesinger, H. Kheshgi, et. al, eds. Human-Induced Climate 

Change: An Interdisciplinary Assessment, Cambridge University Press, forthcoming 2007. 

Mandatory limits on emissions in the United States, or even in conjunction with 

other industrial countries, will not be sufficient to achieve stabilization of greenhouse gas emissions at any reasonable level. Emissions from developing countries 

are growing too rapidly. Moreover, due to their relative technological backwardness, 

investments in reducing emissions from developing countries could have a much bigger ‘‘bang for the buck’’ than in the United States. 

Adopting mandatory limits will not automatically lead developing countries to follow our lead. Instead, limits on emissions from industrial countries will cause a shift 

in investment toward those developing countries, so that our emission reductions 

will be offset by greater increases in emissions outside the United States. Once they 

build industries based on energy cost advantages, developing countries will be even 

more unwilling to adopt policies that would threaten those industries. 

The implication of these observations is not that the United States should do 

nothing. It is that gaining the participation of developing countries is probably the 

highest priority for climate policy, because without that participation it is impossible 

to prevent large temperature increases. 

Immediate funding for R&D is also required. Stabilization of greenhouse gas concentrations requires that at some point we achieve zero net emissions on a global 

basis—that is, the rate at which emissions are put into the atmosphere must equal 

the rate at which they are removed. R&D to create new technological options is a 

necessity if that stabilization goal is to be economically feasible. One study estimates that in order to get on a path toward zero net emissions, within the next 50 

years the world will require twice as much energy from carbon free sources as the 

total amount of energy produced today.1 That cannot be done at affordable cost with 

today’s technology or with incremental improvements in that technology. A massive 

program of R&D focused on breakthrough discoveries leading to new approaches 

and technologies is required. Even mandatory limits on emissions over the next decade or two will not provide a sufficient, credible incentive for that R&D.2

Again, the correct implication to draw from this analysis is not that we should 

do nothing until new technologies somehow become available. An immense effort 

will be required to develop those technologies, and it must start now. Congress 

should give high priority to the design and funding of an effective R&D program 

that relies heavily on the private sector that will have to adopt and use the technologies. 

Since climate change is driven by the sum total of emissions over long periods of 

time, it is possible to greatly reduce the costs of climate policies and achieve greater 

benefits by adjusting the timing of emission reductions to match with the availability of new technologies that provide emission reductions at lower cost. Thus, incentives for the deployment of cost-effective greenhouse gas-reducing technologies 

could be provided through a modest financial penalty on emissions that balanced 

the costs and benefits achieved. 

Climate science and climate policy 

There are two conclusions from climate science that I think are broadly accepted 

and that are critical to the comparison of costs and benefits. The first is that warming is caused by concentrations of greenhouse gases in the atmosphere, and that 

those concentrations build up slowly as greenhouse gases are added to the atmosphere. The time scales involved in this accumulation are long, since net annual 

emissions are only a small fraction of the total stock of carbon dioxide in the atmosphere. 

The second conclusion is that it does not matter where a greenhouse gas is released, it will make the same contribution to concentrations in the atmosphere—and 

all other climate effects—whether it originates in California, Virginia, Germany or 

China. This leads to the notion of where flexibility, that costs of achieving any climate goal can be substantially reduced by policies that ensure emissions are reduced in the geographic regions where it is least costly to do so. 

Another implication that I draw from these robust conclusions is that to a first 

approximation it is also pretty much irrelevant when emissions enter the atmosphere, since concentrations grow so gradually over time. There is some disagreement on how irrelevant the timing of emissions is to temperature increases, but I 

think all would agree with some notion of when flexibility, that the costs of achievVerDate Aug 31 2005 04:12 Jul 07, 2007 Jkt 035774 PO 00000 Frm 00035 Fmt 6633 Sfmt 6621 E:\HR\OC\35774.XXX 35774

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3 J. Reilly et. al., ‘‘Multi-Gas Assessment of the Kyoto Protocol,’’ Nature 401: 549–555 (1999). 

4D. Malakoff, Science 278, 2048 (1997). 

5T.M.L. Wigley, Geophys. Res. Lett. 25, 2285–2288 (1998). 

6Prepared statement of Dr. Anne E. Smith before the Committee on Energy and Natural Resources, United States Senate, Washington, DC September 20, 2005. 

ing any climate goal can be substantially reduced by choosing the best timing for 

emission reductions. 

The nature of climate processes also implies that the more immediate and irreversible an impact is found to be, the less relevant it is to the decision about what 

to do. The limited ability of the industrial countries to influence emissions from developing countries, and the slow effect of changes in emissions on greenhouse gas 

concentrations suggests that changes that can be observed today are likely to be unavoidable. The benefits of action to reduce greenhouse gas emissions take the form 

of avoided damages. If certain damages cannot be avoided, then they do not play 

a role in the balancing of the costs and benefits of action. In the language of decision 

analysis, we call a bad outcome that cannot be avoided a ‘‘worry’’—something we 

fret about but cannot change—as opposed to a ‘‘risk’’ that can be managed and reduced through actions still available to us. 

With this as background, I would like to discuss the question of what various 

kinds of policy approaches can achieve in reducing the risks and consequences of 

climate change, and what they will cost. 

What can emission limits on industrial countries accomplish? 

The Kyoto Protocol is frequently cited as a standard for effective action on climate 

change. Unfortunately, even if all the countries that originally signed the Protocol 

were to meet those targets, the result would fall far short of what is required to 

stabilize global temperatures. MIT researchers have estimated that the Kyoto Protocol, if all its signatories were to continue forever to keep emission at or below its 

targets, would produce a reduction of 0.5°C in global average temperatures by 2100 

(about a 14% reduction from uncontrolled temperatures).3 Other mainstream climate scientists have estimated that it would take 30 Kyotos to achieve what they 

consider acceptable concentrations of greenhouse gases in the atmosphere,4 and that 

the targets for the 2008–2012 period would produce a reduction in global average 

temperatures in 2050 of just 0.07°C.5

All these estimates assume that all parties to the Protocol actually meet their targets. It is not just the United States that will have emissions in excess of the Kyoto 

Protocol target. At this point, Australia, Japan, Canada, and the European Union 

itself appear likely to fail to reduce emissions sufficiently to meet their targets. The 

European Union may be able to comply with its obligation, but only if it purchases 

large quantities of ‘‘hot air’’ from Russia, an action with leads to no net decrease 

in global emissions. 

It is not the lack of U.S. participation that makes the Kyoto Protocol fall short 

of achieving sufficient reductions in emissions to achieve climate goals. The reason 

for the ineffectiveness of the Kyoto Protocol—and this would still be the case if the 

U.S. were to undertake unilaterally a standard equal to or tighter than Kyoto—is 

that developing countries are not only outside of the agreement but are benefiting 

from the competitive distortions that it creates. 

Any industrial country that sets a mandatory cap on carbon dioxide emissions will 

have to incur higher energy costs to meet that cap. The tighter the cap, the greater 

that cost will be. In previous studies that have looked at a range of proposals for 

U.S. emission caps set at varying levels, we have estimated annual losses that range 

from 0.3% to about 1.9% of GDP in 2020.6 For proposals that apply a constant or 

declining cap, or provide for a rising carbon tax, these costs would increase over 

time. In every case, we see exactly the same mechanisms at work. The need to adopt 

more costly methods of electricity generation, to invest in producing more expensive, 

low-carbon fuels and to undertake more intensive energy conservation measures diverts resources that would otherwise be available to produce the goods and services 

that make up GDP. Higher energy costs raise the costs of U.S. manufacturing relative to competitors in countries that do not adopt limits on greenhouse gas emissions. 

This is the key to the problem of the Kyoto Protocol and any other form of unilateral action by industrial countries to limit their emissions. Due to these higher energy costs, there will be an even greater shifting of investment from the United 

States (and other industrial countries) into countries like China and India. Emissions in the United States will fall, especially as our share of energy intensive industries shrinks, but they will grow even faster in China as factories rise there that 

would otherwise have been built here. Moreover, given the much lower level of enVerDate Aug 31 2005 04:12 Jul 07, 2007 Jkt 035774 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 E:\HR\OC\35774.XXX 35774

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7 H.D. Jacoby, R. Prinn et. al., Kyoto’s Unfinished Business, Foreign Affairs Vol. 7, No. 4. 

8P. Bernstein, W.D. Montgomery and S. Tuladhar, ‘‘Potential for Reducing Carbon Emissions 

from Non-Annex B Countries through Changes in Technology,’’ Energy Economics, 2006. 9W.D. Montgomery and S.D. Tuladhar, ‘‘The Asia Pacific Partnership: Its Role in Promoting 

a Positive Climate for Investment, Economic Growth and Greenhouse Gas Reductions.’’ International Council for Capital Formation, June 2006. 

ergy efficiency in countries like China, the leakage of emissions will be much greater than the leakage of investment. 

Finally, the competitive advantage that China and India would gain from unilateral emission limits in the United States makes those countries even less likely to 

agree to future limits on emissions. Once they build industries that depend on a difference in energy cost to succeed, developing countries will be even more unwilling 

to undertake policies that threaten those activities.7 Thus far from providing a 

moral example that will bring countries like China into an international agreement, 

naı ̈ve unilateral action will create economic disincentives for those countries to limit 

their emissions. 

This is particularly important because developing countries will replace the industrial world as the largest source of greenhouse gas emissions over the next century. 

These countries are expected to continue rapid population and economic growth 

which, combined with essentially wasteful energy use, leads ultimately to emission 

far surpassing our own. China is a good example. Its rate of economic growth has 

exceeded 8% per year for the past decade, and every added dollar’s worth of output 

in China increases greenhouse gas emissions by double the amount associated with 

a dollar’s worth of output in the United States. Energy-related technology used in 

most of China still lags far behind the United States.8 Thus China’s greenhouse gas 

emissions are expected to exceed ours within the next year or two, and to keep on 

increasing from there. India is a similar story, though at this time a smaller economy. 

Promoting cost-effective emission reductions in developing countries 

The remedies are not easy to find, but it is clear they are not being provided by 

the Kyoto Protocol or its Clean Development Mechanism. China, again, is claiming 

most of the money going into the CDM, by building factories that produce exotic 

greenhouse gases and then earning CDM credits for destroying those same gases. 

All of the major developing countries have expressed their opposition to any form 

of mandatory cap on their carbon dioxide emissions, because of valid concerns that 

in their current state of institutional development such caps would interfere with 

their industrial growth. 

Paradoxically, there are in fact immense opportunities for reducing emission in 

these countries in ways that would improve their prospects for economic growth— 

if the governments of China and India can muster the political strength and will 

to end market distorting policies even though these policies may have the support 

of important constituencies.9 If they are able to meet this challenge, a dollar spent 

in developing countries could be expected to create much larger emission reductions 

than the same dollar spent in the United States or any industrial country. These 

opportunities exist because of the outmoded technology used in China and other developing countries, and the lack of market institutions to create effective incentives 

for efficient energy use. Thus large emission reductions can be achieved in developing countries through introduction of technologies that are now the standard in 

industrial countries, and at the same time improve their productivity and prospects 

for economic growth. The situation is exactly the opposite in the United States, 

where our generally efficient markets and advanced technology means that we must 

incur substantial additional costs to reduce emissions. 

Finding approaches to engaging these developing countries is therefore critical to 

managing climate risks, and these approaches must directly address technology 

transfer and institutional reform. Although the Kyoto Protocol offers little hope of 

doing so, the Asia Pacific Partnership has had a promising beginning along these 

lines but it requires more adequate funding and greater emphasis on institutional 

reform if it is to achieve its potential. 

R&D to make reduction of climate risks feasible 

One of the clear implications of climate science is that stabilization of atmospheric 

concentrations of greenhouse gases will require the world (not just the U.S.) to reduce greenhouse gas emissions intensity to near-zero levels. Halting climate change 

is possible only if large-scale greenhouse gas emission reductions can be implemented at costs that are both politically and economically acceptable. The magnitude of possible reductions in the next decade or two achievable with today’s techVerDate Aug 31 2005 04:12 Jul 07, 2007 Jkt 035774 PO 00000 Frm 00037 Fmt 6633 Sfmt 6621 E:\HR\OC\35774.XXX 35774

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10M.I. Hoffert et al., p. 981. 

nology is dwarfed by the magnitude of reductions that are required and that successful innovation would supply. 

Hoffert et al.10 identify an entire portfolio of technologies requiring intensive 

R&D, suggesting that the solution will lie in achieving advances in many categories 

of research. They conclude that developing a sufficient supply of technologies to enable near-zero carbon intensity on a global scale will require basic science and fundamental breakthroughs in multiple disciplines. This kind of R&D effort appears to 

be the only way to hope to achieve meaningful reduction of climate change risks. 

Emission limits that do not simultaneously incorporate specific provisions that directly support a substantially enhanced focus on energy technology R&D will not effectively reduce climate risks. 

Development and transfer of new technology is also critical to preventing increases in emissions from developing countries. Although there are large present opportunities to reduce emissions in China and India through application of technologies that do not require either R&D or emission limits to be economic in industrial countries, preventing future growth in their emissions requires new, low cost 

technologies suited to their use. 

Designing such an R&D program is a huge challenge for Congress, because it 

takes not a single vote but a sustained commitment over many Congresses to provide stable, growing funding for R&D aimed at breakthrough technologies for zero 

carbon energy. That requires a consistent commitment to funding, design of effective 

incentives to motivate private sector investment in R&D, tolerance of the failures 

that inevitably come with serious research, and most of all, avoiding the temptation 

to fritter the money away on large scale demonstrations of current technology that 

may provide jobs for a members’ districts but contribute little or nothing to providing the radically different technologies that will be required to stabilize global 

temperatures. 

The notion of when flexibility is closely connected to R&D policy. It suggests that 

it is possible to reduce the costs of climate policies and achieve greater benefits by 

adjusting the timing of emission reductions to match with the availability of new 

technologies that provide emission reductions at lower cost. The choice of how much 

to do today and how much to plan on doing tomorrow to reduce emissions involves 

balancing high costs of reducing emissions with today’s technology against the potentially much lower costs of achieving reductions of the same magnitude in the future. One way of striking this balance is to consider modest financial incentives for 

reducing greenhouse gas emissions in the near term, designed to rise over time at 

a rate that would be sufficient to provide an incentive for the adoption of new, costeffective technologies as they become available. 

f 

Chairman RANGEL. Let me thank this entire panel. 

You have not made experts out of us, but you’ve certainly made 

us aware that we have to join in with our colleagues in Government and the private sector to arrest this climate change that is 

so dangerous to humankind. 

I assume in your studies, when you refer to tax incentives, that 

that has not really been a part of your studies, that you just know 

that we would have to somehow provide ways for people to use alternative fuels. 

Have any of you come across any readings that you might suggest to us, since our primary responsibility will not be to determine 

the alternative, but to provide the tax assistance to encourage people to use it? Have you done any studies or had discussions in that 

area? 

Dr. Prinn. 

Dr. PRINN. I’m a climate scientist, primarily, but I do co-direct 

a program at MIT that includes a significant economics component. 

There is a lot of debate among economists about the relative 

roles of a simple tax to send a price signal through the system to 


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lower emissions, to providing tax incentives for the development of 

alternative energies, all the way to cap and trade ideas where you 

put a limit on the emissions and have permits that would be traded. 

From my view, just as somebody watching from the side, that debate continues among the relevant community of academics, at 

least, as to which of these ways, or what combination of them, will 

work best. 

So, I personally can’t give you some very highly focused advice, 

particularly on the value of tax incentives relative to these other 

possibilities. 

Chairman RANGEL. Thank you. 

Dr. SCHNEIDER. Yes. Thank you, Mr. Chairman. 

I, too, am a climate scientist, but have for the last 15 years been 

working very closely with economists and we’ve written a number 

of joint papers on just exactly these questions. 

I guess I could characterize the bulk of the comments I hear from 

my economics colleagues as they generally tend to have preferences 

for carbon taxes to other factors on the grounds of simplicity and 

reduced transaction costs, but those are still debated within the 

community. 

Nearly all of them would agree with David Montgomery’s statement that you have to look both across time and in other places 

for the lowest-cost option. 

In my own personal work, one of the things that we did is we 

tried to take a look at how using, in the context of a very simple 

economic model, how a range of carbon taxes imposed in this model 

would affect emissions and then how that affects the probability of 

dangerous climate outcomes. Well, you have to define that according to how many degrees of warming there is. 

There is absolutely no question that if we don’t have some price 

on carbon, that you end up with a much higher probability of being 

in the upper range of risk and if you do have controls on carbon, 

then you substantially lower that likelihood. 

It’s just like Ron Prinn’s wheel. Without some form of policy incentive, whether it’s cap and trade or taxes, that’s important. 

One final remark that I have heard in these debates, and not 

just from economists, more likely from political scientists or sociologists or people in the political world, is that whatever the policies 

that we implement, they will have impacts differentially on different groups. 

We know that it was not the richest people who were harmed in 

Katrina in the aftermath of the floods, just as we know it was not 

the younger people, but the elderly, that were hurt in Europe in 

the heat wave of 2003, and we also know that there’s a differential 

impact on people according to each policy. 

So, not only do we have to look to reducing the overall magnitude 

of our footprint on the Earth through a variety of possible policies 

that you will examine, but we also have to take a look at the distribution of either the impacts of climate or the impacts of policy 

on special groups and see what side payments we may need to do 

to get them to participate more willingly. 

Chairman RANGEL. Thank you. 

Ms. Claussen. 


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Ms. CLAUSSEN. Let me try to explain a little bit about the Pew 

Center. 

We work very closely with 42 major corporations, and they cover 

a wide range of sectors. 

We have utilities that are primarily gas-fired. We have utilities 

that are primarily coal-burning. We have forest products, chemicals, a lot of energy-intensive industries. 

As a group, both based on the analytical work we’ve done and 

from their own analyses, I think there is a clear preference for a 

cap and trade system rather than a tax, carbon tax. 

There are a number of reasons for that, the most important 

being that in the cap and trade system, it is the market that sets 

the price, whereas in a tax system, it is the Government that sets 

the price, and it is not clear exactly what the right price should be 

to draw new technologies into the market. 

So, as a group, they much prefer a cap and trade. 

The second reason they prefer a cap and trade system is because 

there are cap and trade systems in Europe, and they extend into 

parts of the developing world, and the larger the market, the 

cheaper it is to find inexpensive reductions. 

So, were we to go one route and the rest of the world to go another route, I think we would not realize the kinds of cost savings 

that we might if we all did the same kind of thing. 

So, there is clear preference for a cap and trade. 

That said, we also agree as a group that you not only need rules 

that set limits, and you can be modest in how you start and become 

more stringent as time goes on, but that you also need tax incentives and carrots to help get the technology developed and into the 

marketplace. 

Neither one of these by themselves will do what we need to get 

done, but the combination is probably where we need to go. 

Chairman RANGEL. Thank you. 

Dr. Montgomery. 

Dr. MONTGOMERY. Thank you. 

There are, I think, three points I’d like to make on this. 

The first one is on the use of prices, like carbon taxes, versus 

quantity caps. Prices and taxes are market based instruments just 

like cap and trade, but a carbon tax for example has much lower 

cost risks than a mandatory cap. 

Although Ms. Claussen and I work with many of the same businesses, I find that there are some very strong economic arguments 

for considering the price approach rather than the mandatory cap 

approach. 

We have done some studies, where we have looked at various uncertainties that would affect the price of carbon and the cost of 

meeting an emission cap. 

We can never be sure what’s going to happen, for example, to 

electricity demand over the next few years. It’s driven by all sorts 

of things we don’t know—economic growth, temperatures. Therefore, we don’t know what the cost of meeting mandatory caps will 

be. 

What we find is that, with a rigid cap on emissions, you can have 

very large volatility in the price of emission allowances, which then 

reflects itself in potentially destabilizing influences on the economy. 


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That can be avoided by a price approach or by hybrid policies, 

such as a safety valve which limits how high the price of an allowance can go under a cap and trade system, all of which can be very 

important to reducing overall costs. 

The second point, in which I agree with Ms. Claussen, is that the 

analysis that we’ve done in looking at the effect of long-term emission caps or announcements of future carbon prices suggests that 

they will not provide an effective or a credible incentive for R&D 

today. 

Therefore, we really need to think about how to put in place current incentives and programs to provide encouragement for the 

kinds of long-term R&D that are necessary to give us new technology. We’re not going to see that without active money put into 

it today. 

Chairman RANGEL. Thank you so much. 

Mr. McCrery. 

Mr. MCCRERY. Thank you, Mr. Chairman. 

I want to thank the panel. You’ve provided some excellent testimony today, not all of which is in the jurisdiction of this Committee, but certainly you contribute to our broader understanding 

of the problem and how we might fit into the solution. 

Dr. Montgomery in his testimony brings up some very important 

questions, and I think his testimony is most relevant, frankly, to 

the operations of this Committee. 

I think most of us are convinced that the scientific evidence presented by the three scientists on the panel, or the two scientists 

and the Pew Foundation, which I’m sure has scientists on board, 

is accurate, and we don’t quarrel with that. 

The question, though, for this Committee is, how do we use tax 

policy to help with the human effort to allay this, or delay or overcome potentially this dangerous increase in the Earth’s temperatures? 

Dr. Montgomery talks about how, if we impose some solutions, 

either from a tax standpoint or from a general cost standpoint, we 

shift competitive advantages from the United States to other nations, and this is something that another of your Boston colleagues, 

Michael Porter, has written about the advantages of nations and 

how those create jobs or opportunities for job creation, economic 

growth. 

We certainly don’t want to do anything, I think, that unduly 

shifts those competitive advantages to other nations that would 

have an impact, a negative impact on our economic growth and job 

creation here in this country. 

So, the question, I guess, that we have to ask ourselves is, how 

far can we go in terms of implementing policies here in this country without some kind of comfort level that other nations are going 

to participate in this effort to bring down global warming? 

It’s kind of a chicken-and-egg thing, I guess. How to get to agreement unless we agree? 

Certainly, I’m concerned about the United States moving forward 

with punitive measures such as that suggested by the U.N. yesterday, which calls for a carbon tax here in the United States of something in excess of $50 per ton, and I question whether we should 

go unilaterally in that direction. 


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Dr. Montgomery also offers, I think, some direction for us, supported by Ms. Claussen, in terms of encouraging the development 

of new technologies that could help us deal with the problems associated with the increasing use of carbon fuels in our society and 

around the world. 

In fact, I’m optimistic that if we appropriately develop those technologies, that could actually become an economic bonus for us, but 

we’ve got to figure out how we do that without micromanaging that 

development here from the Federal Government, because we don’t 

have a very good track record of industrial policy from here in 

Washington. 

So, I’m encouraged by the testimony that you’ve given us today. 

I hope you will help us sort through these questions and develop 

with us some approaches that provide the greatest opportunity for 

both addressing the global climate change challenge and not diminishing and perhaps even increasing economic growth here at home. 

That’s the challenge they we face. 

So, thank you all very much, and we look forward to working 

with you as we move forward in this. 

Thank you, Mr. Chairman. 

Chairman RANGEL. Thank you. 

Mr. Levin, you may inquire. 

Mr. LEVIN. Thank you, Mr. Chairman. 

Welcome to the panel. 

Let me ask you a question that I think a lot of us have been pondering for some time. 

Mr. McCrery mentions that there is increasing consensus that 

there is climate change, global warming. 

I want to ask you this, because it relates to the issue of urgency 

which relates to what we do. 

Why do you think there’s been such disagreement? What has 

caused it? 

In the work with other people, all of you have done so broadly, 

in addition to perhaps views of science, there seems to be something at work. 

Why has there been such a process of denial for so long? What’s 

been at work here, do you think? 

Dr. SCHNEIDER. Well, I’ll be happy to try a stab at that. 

Mr. LEVIN. Be as blunt as you can. 

Dr. SCHNEIDER. That’s not usually a problem for me. 

Back in the 1970s, as I referred to in the oral remarks, it was 

very easy to have debate. 

We were just sorting out the cooling effect of dust and smoke 

from the warming effect of greenhouse gases, and it took a lot of 

studying. 

By the mid to late 1970s, the warming became the clear winner. 

We were uncertain about the effects of clouds. If you increase 

heating, you evaporate more water, you make more clouds. That 

could cool the Earth back down. It’s what we call a stabilizing feedback. 

On the other hand, if you make the clouds taller, they trap more 

heat, they make it worse. 

That’s part of the reason why we’ve had that uncertainty. 


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So, there’s been a lot of those kinds of arguments, and naturally, 

scientists enjoy looking at the cutting edge, trying to make their 

reputations by finding a new way to see it. 

However, over the last 30 years, the preponderance of evidence 

has become virtually overwhelming that the warming is real, that 

at least the last several decades of it are preponderantly due to us, 

and that there will be substantial change in the future, though as 

I showed you it still has a wide range of uncertainty built in. 

Mr. LEVIN. Let me ask you, the one issue, though. 

Why has there been the lineup there has been as to whether 

there is or there isn’t? What’s been motivating, what have been motivating forces beyond? 

Dr. SCHNEIDER. Clearly there are interests in the world, and 

those interests or ideologies have very different perspectives on 

their personal worldviews about whether it’s more important to 

protect the planetary commons, to deal in long-term risks, or to 

protect nature, or whether it’s more important to maintain market 

share for selected clients or protect entrepreneurial rights. 

So, what’s happened is that the climate problem has also partly 

gotten mixed up with ideological politics to where somebody from 

the deep ecology groups grabs out of context the worst case, the 

end of the world case, and somebody from an enterprise institute 

grabs out of context, oh, it’s good for you, so you get end of the 

world and good for you extremes, the two lowest probability outcomes, getting big play, and the media then proceeds with that, 

when in fact the vast bulk of the knowledgeable community believes them to be low probability and everything else in the middle 

is of more concern. 

I guess that’s not a foreign concept in this town, as well, that we 

have that tendency to polarize. 

Scientists find it very distasteful, frankly, getting engaged in 

that. 

We like to fight with each other over the nuance of the details 

of the theory or the data rather than link it to ideology, but unfortunately, when you’re in a science which has a lot of public involvement and has stakeholders with very opposite views, it’s never surprising that you get some conflict and some selective inattention to 

inconvenient information—— 

Mr. LEVIN. Okay. Anybody else? 

Yes, Dr. Prinn. The yellow light is on. 

Dr. PRINN. I think the root of the debate, if you like, or at least 

the legitimate debate, is the obvious uncertainty in simulating and 

forecasting climate. 

You can look at that wheel that I showed and you can look at 

a little sliver there that shows almost no warming with no policy, 

and you’d say, if you’re comfortable with that, then you can argue 

from that little sliver that it’s not an issue. 

You can argue from the other side of the wheel, where it says 

that there’s some probability of even much greater than 5 or 6 or 

7 degrees Centigrade or almost double that in Fahrenheit, and you 

can make a case that we are facing the greatest threat to 

human—— 


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Mr. LEVIN. Why do some people say one thing and some people 

say another? Why do people line up on the two camps or the two 

attitudes? 

Dr. PRINN. I think there’s been a difficulty for some scientists 

to decide to look at this as an issue of just working out the odds. 

It happens to be that Steve Schneider and I agree very strongly 

in the need to embrace the uncertainty and to see this as a decision-making process, if you like, under that uncertainty. 

The uncertainty is such that it’s a double-edged sword. You can 

look at it and say, on one side, the possibility that there may be 

very little warming, arguing for inaction, then on the other side, 

lots of warming, arguing for action. 

I think the truth lies largely in the middle, and that’s the point 

that I tried to make in my presentation here, and I think also Dr. 

Schneider is making the same point. 

I personally have evolved in my own views. 

I mentioned that 10 years ago I was not convinced that the 

human signal had arisen out of the noise with the observations 

available to that point, and the techniques available. Now my conclusion has changed. 

Scientists do change. We change our minds based on more evidence. 

I think that process is going on, it looks like a glacial pace to 

some, but slowly but surely, the opposition to the notion that humans are making a very significant impact on climate, and particularly in the future are likely to make a very dangerous impact unless we do something, is now a debate that many think, or consider 

to be, largely complete. 

Mr. LEVIN. Thank you. The red light is on. 

Chairman RANGEL. Mr. Herger. 

Mr. HERGER. Thank you very much. 

I can understand why people would be concerned, and that people might change. 

Dr. Prinn, you just mentioned that your opinion changed in the 

last 10 years. 

Archaeologists tell us we went from a, over a long period of time, 

over millions of years, from a dinosaur stage where it was very 

warm, to an ice age, back to where we are now, and I remember 

just 30 years ago scientists, some of you, were telling us it was 

cooling. Remember? We weren’t going through a warming, it would 

cool. This is just in 30 years. 

I think if you look, as I, in at what limited information I have, 

you look over a period of hundreds of years, you actually have several hundred year periods where it will be colder, then it will be 

warmer, and really, to really understand what’s going on, you really need to take several thousand years to really look at it. 

That’s not really the focus of my question. 

Ms. Claussen, I would like to ask you, if I could, you suggest that 

the United States must take the lead in addressing climate change 

by unilaterally imposing a mandatory emission reduction program 

in the United States after taking this initial step, you suggested we 

should then work with other countries in encouraging them to reduce their emissions. 


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This view is contrary to Mr. Montgomery’s testimony where he 

argued that unilateral action by the United States actually increases the incentives for China and India to resist controls. 

In addition, the Financial Times reported just yesterday that, 

quote: ‘‘China’s surge of investment in heavy industry and power 

capacity since 2000 has seen energy efficiency levels retreat and 

pollution measurements soar. China added power capacity last year 

equal to the entire grids of the U.K. and Thailand combined, 90 

percent of it coal-fired. 

To feed its growing stack of steel, aluminum, and cement plants 

and the like, China is home to 16 of the world’s 20 most polluted 

cities.’’ Close quote. 

Ms. Claussen, based on this recent history, what is the basis for 

your belief that if the United States acts unilaterally, countries 

such as China and India will follow? 

Ms. CLAUSSEN. Let me try to answer that by putting it in a 

little bit of context. 

There are 20 countries who account for about 85 percent of the 

world’s greenhouse gas emissions, and if we’re going to find a real 

solution to deal with this problem, at least those 20 have to be engaged. That’s point number one. 

The second point is that there are other countries who have actually taken steps to reduce their emissions. Most of them are in Europe, and they do not include the large developing countries, as you 

point out. 

We have been absent from the global table to try to talk about 

what the framework should be over the past eight or more years, 

and I think that’s a problem. 

I do not think that we have sufficient credibility to design a 

framework that would include those 20 major emitters unless we 

at least take some steps on our own. 

Don’t forget, we are still the world’s largest emitter. We are still 

responsible for most of the concentrations of greenhouse gases that 

are in the atmosphere. 

Mr. HERGER. That’s changing, is that not, and just within a few 

years, China would grow to be number one? 

Ms. CLAUSSEN. Well, they’ll be number one in current emissions, but looking historically at it—— 

Mr. HERGER. Even a few years after that, at the rate they’re 

going, they will become number one. 

Ms. CLAUSSEN. I’m not arguing with you that China’s emissions aren’t really important here. I’m just saying that I think we 

have a responsibility to take some actions. 

Now, I do not agree with the assumption that—— 

Mr. HERGER. Should it be unilateral, as you pointed out—— 

Ms. CLAUSSEN. I do not agree with the assumption that if we 

take some action, we are necessarily going to cause great economic 

harm to the United States, and I would like to just suggest that 

the Committee take a look at some of the actions that major companies have taken to reduce their emissions. 

There are 20 or 30 big corporations that have set targets for 

themselves, on a voluntary basis, and that have reduced significant 

amounts of emissions, much more than the kinds of levels that are 

being talked about either in the House or in the Senate at the 


bajohnson on PROD1PC69 with HEARING
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present time, and not one of them has found that to result in a 

cost. 

Most of those reductions have taken place because of efficiency 

improvements. Most of those have actually been beneficial to the 

bottom line. 

So, taking some steps here, I believe, will give us the credibility 

to work with the big emitters in the developing world, because you 

need them, you can’t solve it without them, and to try to design a 

framework that moves everyone in the right direction. 

I think without some leadership from us, it won’t happen, and 

without some action in the United States, we will not have the 

ability to lead. 

Mr. HERGER. Well, I agree with what you’ve just—your last 

comment, but I think it comes down to common sense, it comes 

down to not bankrupting our economy by unilaterally going out, 

when we look at what the rest of the world is doing, and doing 

things that do make sense, and when we do that, I think it’s a winwin, but not if we do it the other way. 

Thank you, Mr. Chairman. 

Chairman RANGEL. Mr. McDermott. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. 

It’s always amazing, when we have a panel that all agree that 

something needs to be done. 

What we’re really talking about here is the rate at which we’re 

going to move. 

Mr. Herger just used the word ‘‘bankrupt’’ which I think is not 

helpful in the discussion when we get out on those ends. 

The question that I want to ask, and I’d like to reframe what Mr. 

McCrery said. He talked about the problems if we led and all this, 

and what it would do to our economy. 

I would like to talk to you or hear from you about what happens 

if we do not lead in this world change. Let me give you the example. 

It’s a tiny one. It’s really a minor one, but it’s instructive, I 

think. 

We had wind incentives here in this Congress which were allowed to expire, and now if you go and look at wind generators 

across the face of the Earth, almost all of them are made in Denmark, a country of six or eight or nine, ten million, I’m not sure 

exactly, population. 

They took the lead and ran with it, and left us in the dust. 

My feeling is that there is a cost to not taking hold of this. Since 

we all agree across the panel that something must be done, really, 

there is going to be a cost. 

I’d like to hear you talk about the other areas in which we are 

behind the rest of the world in terms of our moving, whether it’s 

solar paneling in Germany or whether it’s the—well, there are 

many places that some of us are aware of. 

I’d like to hear you talk about it in terms of the places where we, 

our industry is losing jobs and losing opportunities because we 

have not taken the incentive and used the Government. 

I happen to think that the answer to Mr. Levin’s question about 

why change was never made was because people were afraid, and 

our industrial concerns that if we admitted there was a need for 


bajohnson on PROD1PC69 with HEARING
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reaction to climate change, the Government would get involved, 

and they didn’t want to disrupt the laissez faire system. Clearly, 

we’re beyond that. 

I’d like to hear you talk about what directions we ought to be 

going in, and who is ahead of us now. 

Any one of the three of you. 

Or Mr. Montgomery, Dr. Montgomery. 

Dr. MONTGOMERY. Thank you. 

Let me start with a thought, which is that what I am really concerned about the United States being behind is something the rest 

of the world is equally far behind, which is the scale of investment 

that’s required in R&D at a fundamental stage to create the kind 

of breakthroughs that are needed to give us, 20 or 30 years from 

now, technologies that we can’t conceive of today, but which are absolutely necessary if we’re going to get on a path to really managing the dangers of global warming. 

Providing subsidies for wind power in the near term—— 

Mr. MCDERMOTT. Don’t get hung up on wind power, because 

that’s really a minor issue. There are much larger issues than that. 

I only used it as an illustrative indicator of what we’ve done before. 

Dr. MONTGOMERY. No, no. I understand, and I agree with you. 

I think that there’s a difference between providing subsidies for 

low-carbon technologies available now, which is really just buying 

current emission reductions, versus providing incentives for R&D 

which set the stage for much larger emission reductions in the future, which can take off on their own. 

That’s where I think we’re far behind. I don’t think we’re losing 

much if we do not subsidize current technologies. Putting a price 

on carbon can bring current technologies into the market and bring 

about reductions in emissions, but the real investment for the future is in the R&D side. 

Mr. MCDERMOTT. The rest of the panel? 

Ms. CLAUSSEN. Let me try to make a couple of points. 

If we look at where the greenhouse gases emissions come from, 

they come from electricity and transportation. That together is 

about 70 percent of the problem. 

Mr. MCDERMOTT. Right. 

Ms. CLAUSSEN. We aren’t going to find a technological solution 

unless we tackle those two big things, because when you look at 

something like manufacturing, and if there is a price on carbon, 

you’re going to get efficiency improvements and process changes, 

and I think those industries are going to go ahead and do that. 

So, the big issues we really have to deal with are electricity and 

transportation. 

On electricity, I do not think there is a single solution. I think 

we are going to use nuclear, I think we are going to go into more 

renewables, I think we are going to burn coal. 

Actually, coal is the thing that concerns me the most, and because we have vast reserves of coal, China and India have vast reserves of coal, they are industrializing, they are all going to burn 

coal. 

So, the real question is, how do you find a way to burn coal that 

doesn’t harm the climate, and what does it take to get you there? 


bajohnson on PROD1PC69 with HEARING
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There are some technologies being developed that are going to 

make it easier to capture the carbon stream. We have done very, 

very little work on exactly how to do it from the range of technologies, and even less on how you might sequester that carbon 

stream and keep it in deep geologic formations for a long, long period of time. 

So, I would say if we were going to concentrate on anything, it 

would be both demonstrating those technologies in a major scale, 

not just one demonstration here that will give you some results in 

15 years, but a lot of demonstrations that could both prove that it 

works, assuming we can make it happen, and bring down the cost, 

because the cost now is actually very, very high, and then dealing 

with transportation. 

Again, I think there are lots of things to do there. I wouldn’t put 

all my money on one particular technology there. 

It may be that hydrogen fuel cells will be the answer to this, but 

I’m not convinced. 

I think we need to make sure that there’s some competition and 

that money goes into a variety of these technologies so you can actually get the beset one to deal with the problem. 

Now, when you look at other countries, a lot of them are starting 

to move along those same lines. I think if we were to do this in 

a vigorous way, put in a certain amount of money, create the incentives, get a price on carbon, we could really do the job that needs 

to be done here and get our industries to be the most successful 

at it. 

If we just wait, others will find the space out there, and they’ll 

do it before we do it. 

Chairman RANGEL. Mr. Camp. 

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

I appreciated just the remarks you made, because I do think we 

need to go beyond just implementing Kyoto, which is often what we 

get to when we talk about global warming or climate change, now, 

I guess to take into account that we had a hearing canceled because of the ice storm, on global warming, in Congress. 

I think that there is an economic cost to Kyoto, and the geophysical research letters published about 10 years ago estimated 

that if every nation on Earth lived up to the U.N.’s protocol on 

global warming, it would prevent no more than a 10th of a degree 

of warming, Fahrenheit, every 50 years. 

So, if we really want to alter the warming trend significantly, 

would we have to cut emissions by larger amounts than called for 

by Kyoto, and if so, do we have the technology to be able to do that, 

to reduce greenhouse gas emissions? 

I guess Dr. Prinn, do we have the technology to go beyond that? 

Dr. PRINN. Well, I’m optimistic that we do. 

The issue of coal in the United States was brought up by Eileen 

Claussen, and I think there is a major challenge for the Nation regarding coal-fired power plant. Going into the future, the way in 

which those can work and also keep emissions down to essentially 

being non-existent, is to look very carefully at carbon capture and 

sequestration to be accompanied by the burning of the coal. 

I personally think that one way or another, significant effort has 

to be put in to see if this is economically feasible? 


bajohnson on PROD1PC69 with HEARING
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I think it’s technologically feasible, but is it geologically feasible 

with the capacity of these reservoirs, to go down about seven, eight 

miles deep in some places. Can they take all of this carbon dioxide, 

and keep it there? A small leakage is all right, but if the answer 

to that is yes, and if the economics works out, and the technology, 

as I say, I think is largely there, then coal can continue to be an 

important source of electrical energy for the Nation. 

The utilities right now are faced with a dilemma. They need to 

perhaps build a few more power plants. What are they going to do? 

Are they going to continue to build conventional coal-fired power 

plants that may be, with great difficulty and cost, converted to carbon capture, or not at all, or do they look at nuclear power, do they 

begin to think that renewables, bio-fuels will power utilities into 

the future? 

They, I think, have got great difficulties in front of them, and the 

more that there’s some leadership on this issue for the Nation, to 

say this is where we’re going, we’re going to reduce emissions, it 

will help utilities make those very, very expensive decisions—— 

Mr. CAMP. Well, and there has been a lot done, particularly in 

the auto industry. 

The automakers have, a majority of them have already committed to achieving at least a 10 percent reduction in greenhouse 

gases by 2012, and that’s from a baseline of 2002. 

We had some testimony about the 1970s, and I will just say that 

vehicles today are 99 percent cleaner than they were in the 1970s, 

and that’s just one particular industry. 

Looking at another industry, in the refrigeration industry, for example, home appliances, they’re much more efficient than they 

were just a few short years ago. 

However, I do think the economic cost of Kyoto is something we 

should look at. The estimates show it could cost 2.4 million U.S. 

jobs, double the cost of electricity, raise the cost of gasoline by an 

additional 65 cents a gallon, reduce the U.S. output by 300 billion, 

which is greater than the total expenditure in primary and secondary education. 

So, I do think we have to look at the costs and tradeoffs, and my 

question would be, is the cap and trade program a viable program 

to reduce emissions? 

I guess I would just ask each of you quickly to answer. I know 

I don’t have much time left. 

Dr. PRINN. Potentially, yes. I realize the debate I think is going 

to be between taxes versus cap and trade. 

Dr. SCHNEIDER. The short answer is yes, but like anything 

that complicated, the devil is in the details and how it’s structured, 

from the point of view of incentives, or fairness, it will matter both 

politically and from the efficiency point of view. 

Mr. CAMP. All right. 

Ms. Claussen. 

Ms. CLAUSSEN. Yes, widely supported by those in the industry 

who would like to see us take on some kind of requirement here. 

Mr. CAMP. Dr. Montgomery? 

Dr. MONTGOMERY. No, if the purpose is developing the new 

technologies and bringing down radically the costs of technologies 

like carbon capture and sequestration. 


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A cap and trade system can get the technologies we have available off the table and into use, but it can’t get the new technologies 

onto the table that we’re going to need in the future. 

Mr. CAMP. All right. I do agree with my colleague that we need 

to take a longer view of the warming issue. 

I want to thank the Chairman for his time. Thank you. 

Chairman RANGEL. Mr. Neal? 

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

In my former life, I was much involved, as you know, with issues 

that are pretty mundane, in the level of local Government, like taking the pressure off the landfill, so we constructed at the time, in 

Springfield, Massachusetts, the largest regional recycling facility in 

America—103 communities participated. As part of an integrated 

approach, we did waste to energy. It shortly worked. 

Now we’re sitting back, and we’re looking at what’s next and 

what’s new. 

For you, Dr. Prinn, I’d like to ask, it’s difficult, even based upon 

the hearing that we’ve had this morning, as we look at alternative 

energy, it’s hard to gauge what the next great breakthrough is 

going to be in terms of innovation. Isn’t that true? 

Dr. PRINN. I certainly agree. 

I think that most of us believe that we’re going to have to have 

about 10 or 20 solutions, that there’s not going to be a single one. 

Depending on the part of the country or, indeed, the Nation, the 

various nations around the world, they will choose among these 10 

or 20 options, so there isn’t a single one. 

Ones where I think some breakthroughs would be very nice to 

see is on the renewable side, on the issue of bio-fuels, an efficient 

way in which you can take cellulose and convert it into the chemicals necessary to produce alcohol for fuel. 

In principle, it can be done, but breakthroughs are needed to 

produce alcohol as a bio-fuel. 

There are limits to bio-fuels, because it is going to take land that 

we presently use for growing food, and there will be a competition. 

So, it has to be looked at, and said, will it work at the very large 

scale? 

Certainly for bio-fuels, cellulosic alcohol, as it’s called, it’s something where we would like to see a breakthrough. 

I would also say for solar energy, that increasing the efficiency 

of the solar panels will make a very, very big difference, and lowering, of course, their cost. 

Mr. NEAL. With the exception of the Clinton health care plan, 

the most strident debate that I’ve participated in during this Committee’s—my time on this Committee was the debate between ethanol and oil. 

I don’t have to tell you, it brought out the worst in some of the 

Members of the Committee. 

We have moved beyond that, haven’t we? I guess the specific 

question, Dr. Prinn, that I’d like to raise with you is, how would 

you suggest that we proceed with tax policy based upon, as you’ve 

indicated, the next round of innovations? 

Dr. PRINN. I would certainly see this as an area where tax incentives could work, because initially, companies, private entities 

that would want to do the necessary research to make these breakVerDate Aug 31 2005 04:12 Jul 07, 2007 Jkt 035774 PO 00000 Frm 00050 Fmt 6633 Sfmt 6602 E:\HR\OC\35774.XXX 35774

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throughs are putting up large capital, and with perhaps some 

chance that they’ll make nothing, because they don’t make the discoveries. 

So, tax incentives I think would help certainly for the development of new inventions, if I can call them that. 

Getting those new inventions, once they are there, from off the 

lab bench as it were, and then beyond that, is an issue, that involves seriously looking at economics and so on, that would be 

there—I’m not sure what tax incentives do, and I think there are 

others on the panel that could comment much more intelligently on 

that. 

Mr. NEAL. I’m going to ask Ms. Claussen that right now. 

The nature of the tax policy here at the Committee level has 

been really to do temporary tax incentives. 

Do you think that’s the way that we ought to proceed, or do you 

think that we ought to be doing something that’s much more consistent with the future? 

Ms. CLAUSSEN. Yes, I do, because I actually think things that 

go into effect and then are gone in a year or gone in 2 years are 

very disruptive. 

They do not get you to the longer-term investments that you actually need to make the difference. 

So, if there is some way to do these things over a long period of 

time in a consistent way, I think we’re going to see a much different picture coming out of companies and the private sector in 

the kinds of technologies that we need for the future. 

Mr. NEAL. Dr. Schneider and Dr. Montgomery, feel free to comment as well. 

Dr. SCHNEIDER. Yes. I think if we look back at history, the degree to which people believe something is inexorable is really very 

important to whether they take a long-term reaction or hunker 

down and wait it out. 

When the OPEC oil embargoes took place in the 1970s, most people believed that was real, and that’s when the United States 

turned to a combination of efficiency standards in automobiles, air 

conditioners, refrigerators, which has given us indelible benefits 

ever since. You can calculate in the many billions the dollars we 

saved from those. 

When we have short-term fluctuations, people wait it out, and 

they just go for business as usual. 

So, a signal from the Congress that they were serious and that 

even if the start was slow, it was going to ramp up inexorably, I 

think would lead to substantial performance change. 

Mr. NEAL. Dr. Montgomery? 

Dr. MONTGOMERY. Yes. I think that permanent tax incentives, 

especially for R&D, are critically important. 

The difficult part is they really need to be very broadly defined 

rather than targeted to specific activities, and I think there may 

actually be general agreement on that, that we don’t want even the 

Committee on Ways and Means picking exactly which technologies 

should be developed and how. 

Of course, the problem with that, as you know, is it makes the 

tax incentives very expensive, because it makes it easier to qualify. 


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You may end up giving some money to something that would have 

happened anyway. 

That’s the risk, I think, of getting the kind of broad try everything out and see if it works R&D that’s necessary. 

Mr. NEAL. Thank you, Mr. Chairman. 

Chairman RANGEL. Mr. Weller. 

Mr. WELLER. Thank you, Mr. Chairman, and I commend you 

and Mr. McCrery for convening this hearing this morning. 

I believe that climate change is real. I also believe it’s caused by 

human activity. 

If you look at the maps of the 15th century used by the European 

explorers when they came to our own hemisphere, you see 

Bahaman Cays that are no longer above water. 

So, clearly, so-called global warming has been occurring for a 

long time. 

However, if you look at the data, it’s occurring much faster today. 

So, I, for one, believe human activity is clearly having an impact 

on the climate, and causing climate change. 

I also believe, Mr. Chairman, that the solution requires a global 

solution. We can’t go alone in addressing the issue of climate 

change. 

As my friend, Mr. Herger, noted, China will soon eclipse the 

United States in emissions, so clearly, they need to be involved, as 

well. 

I also want to commend my colleagues who noted there is an economic impact to this, as we look at what policies we may want to 

adopt. 

Manufacturing is important in my district, and some policies advocated by some would drive the jobs, manufacturing jobs currently 

in my district to China and Asia, because they’ll move to places 

where these policies don’t exist as a place to do business. So, we 

need to take that into account. 

I also hope, Mr. Chairman, as we move forward, that we consider 

energy independence as part of our strategy to complement our 

goal of addressing the issue of climate change, and I hope we’ll 

build on what I believe are the successful policies that were included in the 2005 Energy Policy Act, what many of us call the energy bill. 

I’ve seen in my own district the tax incentives for promoting alternative sources of energy, such as wind and bio-fuels, the impact 

they’ve had, and clearly, rural Illinois and rural America were the 

winners of that energy bill, because we’ve had hundreds of millions 

of dollars in new investment in wind energy in the district I represent. 

There’s five new ethanol and bio-diesel plants in the works, moving forward with construction, and there’s over $1 billion in additional wind energy investment alone in the district that I represent 

planned and moving forward over the next couple years. 

So, clearly, the energy bill of 2005 has made a difference in promoting renewable and alternative sources of energy, and I hope as 

we move forward that we do look at making permanent the renewable production tax credit and look for tax incentives that reward 

investment in new technology, such as marrying the hybrid and 


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flexible fuel technology vehicles that soon will be coming on the 

market, and encouraging consumers to buy those. 

I guess my first question is for Dr. Montgomery. 

Dr. Montgomery, you talked about the need for R&D being a key 

part of our effort to address CO2 gas emissions. 

Ways and Means of course has jurisdiction over tax. A lot of discussion today has been fairly broad, well beyond the Ways and 

Means jurisdiction. 

As we look at energy independence initiatives, climate change 

initiatives, and I hope we can do both, that a lot of us advocate renewable and alternative sources of energy as part of that solution, 

how would you structure tax policy when it comes to that area, as 

attracting greater investment that will be part of our effort on climate change? 

Dr. MONTGOMERY. I tend to think about this question in terms 

of the continuum of activities from basic laboratory research, development, demonstration, and commercialization. 

I actually see the role for the Committee on Ways and Means 

and tax incentives of the kind you’re talking about mostly at the 

front end, where we’re talking about basic research and R&D. 

I think that after making the scientific breakthroughs, creating 

the technological options, at some point in that process—and the 

really hard part of designing anything is figuring out where that 

point is—I think it becomes the private sector’s responsibility, that 

the technology is never going to be developed or deployed effectively if it continues to be owned and pushed by the Government. 

So, there we need to be thinking about market-oriented incentives for giving an incentive to deploy the technology. 

Mr. WELLER. Doctor, is nuclear power part of the solution? 

Dr. MONTGOMERY. Absolutely. 

Mr. WELLER. Do others in the panel agree that nuclear power 

is part of the solution? 

Dr. PRINN. Yes, I certainly do. We need to look at it and regard 

it as a possible significant solution, particularly for utilities. 

Mr. WELLER. The other two on the panel, do you support nuclear power as part of the solution? 

Ms. CLAUSSEN. Nuclear power is now about 20 percent of our 

electricity source. I don’t see any way that we can address climate 

change without it. 

Dr. SCHNEIDER. I guess I’ll give a comparable answer to what 

I said before. It all depends on how you do it. Questions of cost and 

safety are there. 

I certainly am not an idealogue who has ever said ‘‘No nukes.’’ 

I just want to compete it against all the other alternatives, and 

that also has to include costs for how you’re going to deal with 

wastes, particularly wastes that might go to countries that we may 

not be so anxious to have access to those wastes, and that’s part 

of the cost cycle. 

The other question is, there are legal, federally mandated limitations to liabilities on their insurance risk, which is a subsidy, and 

I’m not arguing the subsidy is wrong, but I’m arguing it’s all part 

of the cost factor. 


bajohnson on PROD1PC69 with HEARING
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So, I think if we competed it with all the other things, including 

the R&D, we’ll see what emerges. However, I would certainly not 

rule it off the table. 

Chairman RANGEL. Mr. Doggett. 

Mr. DOGGETT. Thank you, Mr. Chairman. 

Thanks to each of you for your testimony. 

I’ve been in and out of your testimony this morning because of 

a hearing where the Chairman of the Federal Reserve is testifying 

in the next building over, in the Budget Committee, and I had a 

chance to ask him questions about the topic you’re here testifying 

on, and was encouraged by his response on the cap and trade system. 

Indeed, it seems to me that the number of true global warming 

deniers is shrinking by the day, and more and more responsible 

businesses are coming forward, way ahead of this Congress, and 

suggesting that we need prompt action to deal with the realities 

that you’ve described to us. 

We need more to come forward and we need more to not only 

admit there’s a problem, but encourage us to take meaningful action about it. 

Unfortunately, in my home State of Texas, we have one of the 

most irresponsible corporations that is out of the mainstream, and 

that’s Texas Utilities, which has gotten a great deal of attention in 

its desire to use outdated technology and get in, as Dr. Schneider 

said in his earlier testimony, I think, as a good example of—you 

used the term ‘‘chicanery,’’ and that’s certainly applicable to Texas 

Utilities, in sneaking under the wire. 

Even with the encouraging developments of the last few days, 

that prospective new purchasers of Texas Utilities would go forward with only three of the 11 plants that it originally proposed, 

just the Oak Grove plant alone would burn 2.5 million pounds per 

hour of the dirtiest Texas lignite that I think we’ve got, and on its 

first day of operation, as projected, it would suddenly become the 

fourth largest emitter of mercury in the country. 

Together, the three plants that are proposed for online would 

emit approximately 22 million tons of carbon dioxide annually. 

Texas Utilities, under old or hopefully better, though it could 

hardly get worse, management, is not the only company that is proposing to build for the past instead of for the future. 

There are other companies in the utility industry that are still 

in the wrong direction, though many, many more are taking the 

approach that you suggest. 

I think my question is first to Dr. Schneider, about whether it 

isn’t necessary—we’ve had various members ask about carrots, but 

there’s also the stick side of tax policy, and don’t you think that 

we need some immediate and serious action to stop a probable race 

to the bottom where the irresponsible try to sneak in under the 

wire and engage in what you’ve called chicanery? 

Dr. SCHNEIDER. Thank you very much, Congressman, and I 

applaud your stand in your own State. 

We want to try to make certain that what we do, as I said earlier, has a degree of inexorability in it, because when you say that 

the United States is not a party to the Kyoto Protocol, in irony, 

through the capitalist system, we in a way already are, that many 


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investment banking companies believe there’s a fairly high probability that there will be a shadow price on carbon, which therefore 

means carbon emissions is a liability against the balance sheets of 

companies, whether it’s from cap and trade, taxes, or other policies, 

and therefore, they’re already affecting the loan rates to carbon 

emitters. 

I think that might be a way that the Committee could consider 

dealing with people in that ‘‘sneak under the wire’’ mode, which is 

if you have a retroactive date at which the baseline is set, that not 

only rewards the people who had the courage to be early adapters, 

but it prevents the idea of trying to maximize your emissions so 

that you can then have a baseline that’s high and cut below it. 

So, I think there may be ways that you could do that, because 

then, if they had a high liability, their own investment banking 

community may not be very wiling to give them the kinds of loans 

at the costs that they’d be willing to pay. 

So, I think there are instruments that you could use short of direct command and control that probably would take advantage of 

market forces and reduce the likelihood of the ‘‘sneak in under the 

wire’’ that we’re going to see not just there but in many other 

places. 

Mr. DOGGETT. These businesses are competitive. They’re not interested in having a competitor have an unfair advantage, and they 

need some certainty. 

You believe that taking some action now, perhaps even before we 

can get the Administration to agree to a cap and trade system, to 

provide a little of that certainty, that you can’t sneak in under the 

wire while you lobby for inaction, that that would be something 

that would be helpful to the forward-looking businesses that want 

to address climate change? 

Dr. SCHNEIDER. Yes. As our Chair knows, we actually talked 

about doing those kinds of things 20 and 30 years ago, and now 

that the evidence is so abundant, we’re finally moving to do it. 

What’s unfortunate is, had we taken small steps earlier, it would 

be cheaper and easier to do it now, so we’re rushing and looking 

at more costs than we otherwise would have had, but the more we 

delay, the most costs will build on top of that [continuing]. So, I 

think that your strategy to send inexorable signals is admirable. 

Chairman RANGEL. Mr. Linder. 

Mr. LINDER. Thank you, Mr. Chairman, and thanks to each of 

you. Dr. Montgomery, is it clear that we are talking mainly about 

carbon emissions here? 

Dr. MONTGOMERY. Yes. Well, we are all referring to carbon 

emissions. Carbon dioxide is clearly the most prevalent of the 

greenhouse gases. It is really important for—— 

Mr. LINDER. Isn’t water vapor more prevalent? 

Dr. MONTGOMERY. That is a question I am going to defer to 

Professor Prinn, because he really knows about water vapor. 

Dr. PRINN. Water vapor is, indeed, the most important greenhouse gas in the atmosphere. It, however, has a very short lifetime. 

It lasts maybe the order of a week or so, once it evaporates, before 

it condenses and gets back to the surface. So, it is short-lived. It’s 

budget in the atmosphere is largely—totally, I would say totally— 


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unaffected by the direct emissions of water vapor by humans. In 

other words, we are not controlling that. 

What we are worried about in the climate issue is that we are 

beginning to indirectly control the levels of water vapor in the atmosphere. When the oceans warm up, that does increase the water 

vapor, at least in the lower part of the atmosphere. 

So, water vapor is, indeed, very important as a greenhouse gas. 

It is incorporated in all of these climate models that you heard me 

talking about. It is a source of some of the uncertainty that you see 

in these forecasts, and so on, but it is there, it is important. 

What we are considering now for the climate issue that is being 

discussed here today, is the long-lived greenhouse gases, whose 

emissions are being dominated by human activity. That is the big 

difference between the two. 

Mr. LINDER. What role does precipitation play in your model? 

Dr. PRINN. What role does—— 

Mr. LINDER. Precipitation play in your model. 

Dr. PRINN. It is very important, because it removes the water 

vapor from the atmosphere, and keeps the atmosphere a lot cooler 

than it would otherwise be, but there are many other complexities 

as well. 

Evaporation and condensation and all of these complex processes 

that you think of to do with a water cycle, we try to encapsulate 

in these climate models—with imperfections, of course. 

Mr. LINDER. Dr. Schneider, you said you testified here in 1976 

and the consensus was that warming was going to be a bigger 

problem than cooling. Is that correct? 

Dr. SCHNEIDER. By 1976, it had tipped, and 5 years earlier it 

was much more confusing. 

Mr. LINDER. In 1975, we—Newsweek wrote an article called, 

‘‘The Clean World,’’ which was a—the article stated that scientists 

were ‘‘almost unanimous in the view that the trend will reduce agriculture productivity for the rest of the century. If the climatic 

change is as profound as some pessimists fear, the resulting famines could be catastrophic.’’ 

What clicked between 1975 and 1976? 

Dr. SCHNEIDER. Well, I would guess that Newsweek was probably a few years behind in reading the scientific literature. Because 

when we write things, it takes a while for them to get out. 

Back around 1970, it really was not clear whether the increase 

in hazes was going to reflect more sunlight away and cool the 

Earth down, relative to the amount of warming from increasing 

CO2. 

What happened—in fact, I personally thought that cooling was 

more likely in the first paper I ever wrote in 1971—but I was 

proud that by 1975 I changed my mind, and the reason was two 

facts. One is that we found out that those hazes were largely concentrated in industrial and agricultural burning areas, only one 

sixth of the world, whereas the greenhouse gases were global, so 

therefore, the aerosols had less total impact. The second thing we 

discovered was it wasn’t just CO2, but methane and 

chlorofluorocarbons that were greenhouse gasses. 

So, I would say by 1975 those inside the scientific tent had already pretty well switched over to warming. By 1976, I think that 


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was the dominant theme in most of the hearings in this body. Of 

course, with media, some lag behind that. 

Mr. LINDER. Recently there has been an article about research 

at the University of California that said that 300 million years ago 

there were 2,000 parts per million of volume of CO2 in the atmosphere. How do you explain that? 

Dr. SCHNEIDER. Well, it is a very important thing to study the 

history of the Earth’s climate, not to find analogies to today—I 

don’t think we could, because the continents were in different positions, the concentrations of the atmosphere were different, different 

plants and animals—but it’s the backdrop against which we calibrate our understanding of how the system works. 

Way back then, there was a change in the rate at which the 

ocean floor was spreading. There are mid-ocean ridges, and there 

is lava going on under there. This was discovered in the fifties, 

when we had an explosion of scientific research that went out and 

found it. When that floor spreads more rapidly, then it puts up 

more CO2. So, the geologic timeframes of 100 million years ago, 200 million 

years ago, saw that very much larger sea floor spreading. The consistency in that is if you’re making all that lava come up, you’re 

putting all the rubble in the oceans. Therefore, the oceans have a 

smaller volume, and the sea levels would be higher. 

In fact, most of the geologic evidence is 100 million years ago, for 

example, sea levels were something like 300 meters higher. All the 

ice in the world today couldn’t give you more than 70 meters. It 

had to be something else. 

So, then what we do, is we take the same computer models that 

we use to project the future, and then we try to move the continents around, we change the CO2, and we try to see if we can get 

anywhere near agreement to the kinds of scanty data we have from 

ancient history. It’s a mixed bag, but by and large, when the models projected it would be a lot warmer it was a lot warmer. They 

don’t get the numbers right, but they get the basic directions. 

Mr. LINDER. Thank you very much. Thank you. 

Chairman RANGEL. Mr. Pomeroy. 

Mr. POMEROY. Thank you, Mr. Chairman. I want to thank you 

for holding this hearing. For years, I aspired to the Committee on 

Ways and Means, only to find when I got here, we really weren’t 

talking about important stuff. I appreciate the leadership you 

brought to this Committee, when we do get to have these hearings 

exploring the depth of the problems, and then the role tax policy 

might apply in addressing those problems. 

Dr. Montgomery, I found your comments very interesting. I was 

just going to see if I tracked them through, because they don’t entirely strike me as consistent. You indicated that marketplace dynamics will incent new technology innovation above all other 

things, but you indicate that steps we might take, relative to global 

climate change, unless embraced across the developing world, 

would simply drive activity into developing countries and damage 

our competitiveness. 

It seems to me, the only thing you assert by way of pressure we 

can create, driving technological innovations which may save us 

from this problem, would be the R&D tax credit. I agree with you, 


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it’s critically important, and I agree with you, it ought to be broadbased, and I agree with you, it ought to be permanent, but it seems 

to me to be a bit of a slender reed to say this is it, in terms of responding to global climate change. 

Have I understood you correctly, or would you care to clarify 

where I am not complete? 

Dr. MONTGOMERY. I think there—let me try to clarify three 

parts of it. I certainly don’t think that R&D alone will lead to stabilization of greenhouse gas concentrations or temperatures. 

We need three things. We need R&D incentives and funding in 

order to create the technologies and put them on the shelf. At an 

appropriate pace, and over time, we need market-based incentives 

that could be provided by cap and trade systems, by a carbon tax, 

by a safety valve, by a number of approaches, to get those technologies off the shelf. 

We need to think about the timing of when we want to do those 

two things, because I think it’s very important that we not have 

financial disincentives for CO2 emissions, until the technologies are 

available that make it possible to reduce emissions effectively and 

cheaply. We don’t want to get the targets ahead of the technology. 

Mr. POMEROY. I agree with you in part—but in part, necessity 

is the mother of invention. So, if this is kind of an abstract undertaking, ‘‘Gosh, it will be neat when we get this technology,’’ you’ve 

got one dimension of urgency versus, ‘‘Holy cow, the new deadline 

is approaching.’’ 

Dr. MONTGOMERY. The general thinking among economic theorists—and my thinking, and what I was publishing on since the 

1970s—was if we can just get a cap-and-trade system out in the 

market, we don’t have to worry about anything else. I think that 

was overly optimistic. 

The problem is that in order to create incentives for R&D and 

the development of new technologies, we have to look at market 

conditions 10 to 20 years from now. I am now convinced that it’s 

not possible for the congress to create a credible enough incentive, 

because of your inability to lock in future congresses and future 

Administrations to this policy, to think that what is enacted today, 

in terms of the cap-and-trade system, will be convincing enough to 

the private sector about what’s going to happen 20 years from now 

to their investments, to induce the massive amount of R&D we 

need today. I wish I didn’t think this, but I—— 

Mr. POMEROY. I’m sorry, I do apologize, I keep interrupting, 

but I’m just in a dialog sense here. 

Dr. MONTGOMERY. Yes. 

Mr. POMEROY. Do you really think that the business community is betting on the heat coming off of global climate change, that 

the concentration of this congress may abate in a future congress? 

Dr. MONTGOMERY. No, but I do not think that they are willing 

to bet that future congresses will be taking a hard enough line to 

put the scale of resources that are needed into R&D today. 

The reason I don’t think the R&D is a slender reed is because 

we are probably talking about 10 times as much R&D investment 

as is taking place today across the board. It is a very difficult task 

and the Committee on Ways and Means’s job is to try to figure out 

where in the world all this money is going to come from. 


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Mr. POMEROY. Thank you for that. I—my remaining time, just 

a tiny bit of time, Dr. Prinn, I would ask you. You talked about carbon sequestration, putting CO2 under ground. By the way, North 

Dakota hosted a fabulous demonstration of that, with the gasification plant and the CO2 shipped to Canada, pumped into their oil 

wells, enhancing oil recovery. 

Are there other credible technologies under development? I have 

heard about an algae capture technology. Is there other things, 

when we talk about carbon sequestration, that are under development, other than what plants absorb, or what we pump into oil 

wells? 

Dr. PRINN. Yes. There—well, sequestration in geological reservoirs is certainly one. There has been quite a lot of discussion 

about the possibility of putting carbon dioxide in the deep parts of 

the ocean. 

Generally, it is considered difficult, and may be, in fact, politically impossible, because of the law of the sea, and other concerns 

about its permanence. So, I don’t think the ocean is going to play 

the role that people might hope it would. 

Mr. POMEROY. Okay. 

Dr. PRINN. There has been some talk about fertilizing the ocean 

with iron, to increase the production of phytoplankton, and therefore, some small fraction of those sink down and become a carbon 

loss. My view on that is also that it’s not of the scale that is useful. 

Again, it runs into issues to do with dumping of stuff in the ocean. 

So, I would come back and say what are the things that are 

worth pursuing right now? Or at least should be on the table. The 

geological reservoirs—very big saline aquifers that, of course, the 

western states have vast volumes of, and also sequestration in soils 

and forests, as viable places where we can store carbon in ways 

that we can have some control over in the future. 

Chairman RANGEL. Thank you so much. Mr. Blumenauer. 

Mr. BLUMENAUER. Thank you, Mr. Chairman. I appreciate 

your continuing this effort. I feel like we might apply for college 

credits in the economics of poverty and trade. Today’s hearing was, 

I thought, really very helpful. I deeply appreciate it. 

I want to pursue the notion there is this expectation that somehow there is a lot of high-tech solutions. I appreciate, Dr. Montgomery, your talking about there is probably some stuff out there 

on the horizon that we should be looking at, and we might accelerate the progress. 

It seems to me that, for all intents and purposes, there is an 

awful lot that we can do right now. The reference from several of 

our experts 75, 80 percent of this is transportation, electricity, and 

agriculture. 

If we were to get serious—and I am from a region in the northwest, where I have—I represent a city that actually is about at its 

1990 emissions level right now. For the last 25 years, the largest 

single source of energy has been conservation. It has been achieved 

at, I don’t know, 3,000—at half the price of a coal-fired plant. We 

haven’t scratched the surface, it seems to me, in that area. 

I want to just throw a couple of ideas past the panel, and maybe 

get a little feedback. If we were to establish an oil import fee that 

would set a figure for oil in perpetuity at $50 a barrel, escalated 


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with inflation, if we were to move in an area of carbon tax, if we 

were to have the Federal Government’s carbon footprint’s reduced—I think it’s safe to say we are the largest generator of 

greenhouse gases of any entity in the world, and if we were to set 

aside one percent of our energy bill for conservation, if we would 

commit not to purchase any vehicles that did not meet a specific 

level, absent some sort of waiver, if we committed to have renewable portfolio standard for the Federal Government, these are little 

things that are within our power. 

I won’t even talk about the farm bill that is up for reauthorization, with an opportunity through the farm bill and the legislation, 

that we could use on this Committee to change the carbon footprint 

of agriculture in this country, both to reward the right stuff, and 

penalize some of the things that we don’t want. 

Aren’t there lots of simple, common-sense things that we can do 

that will make a difference now, over the next five or 6 years? 

Ms. CLAUSSEN. Let me try first to answer. Absolutely, yes. 

There is absolutely no question about it. Do we have a need for 

long-term technology in R&D? Yes, but can we do a lot in the short 

term? I think there is no question. 

I think the easiest way is not only to look at the City of Portland, 

or some states that have done these things, but just to look at what 

private industry has done, because virtually all of the companies 

that have set targets—and many of them are much more stringent 

than the U.S. target was—have found that they could meet those 

targets by efficiency improvements. 

They were, in many cases, just sort of things that I would consider silly things that were turning off the computers at night, 

changing the lighting. Doing all of these very simple things, which 

actually are great for the bottom line, and can result in significant 

reductions. 

That is why we, and a lot of the companies we work with, would 

like to see a price on carbon, because that would really motivate 

that kind of behavior, and in fact, we could make significant reductions without significant cost. 

Dr. SCHNEIDER. Yes. In California, we have had bipartisan 

support over the last 30 years for a whole series of performance 

standards in houses, in machinery, and so forth. 

In fact, Art Rosenfeld, with the California Energy Commission, 

then spent about a half-a-million dollars of taxpayer money in a 

competition that led to the invention of the electronic ballast that 

made the compact fluorescent possible. When I asked him what 

was the payback, he spent all lunch thinking about it, and then 

came up with a number like $1 trillion. It was a pretty good return. 

Why does California do it? It does it because it adheres to what 

I like to call the 7–11 principle. If you can do better than a 7 percent return on investment—typical of a mortgage rate—or an 11- 

year payback, it’s something to consider, a mandatory control, because you have a win-win associated with that. 

That, in fact, is why, in California again, about 15 percent of the 

electricity demand has been reduced by these actions, including 

about half of that in utilities in private sector, and the estimate is 


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about $5 billion a year saved. Again, it eliminates bipartisan bickering a great deal, when everybody wins. 

I also think that in the end, though, while we have a lot we can 

do to start—and the sequencing should certainly be on performance 

standards first; we have heard that from everybody, and I think 

we’re in agreement—but we also should remember the learning by 

doing, which means getting the costs and the prices down for available alternatives, not just exotic, uninvented technology, but hot 

tower solar, and batteries that you could use for plug in hybrids. 

The technology is here, it’s just not here at the cost we would like. 

Learning by doing first takes doing, just as return on investment 

takes investment. 

So, finding the ways to encourage the investment and the doing 

is what will bring these online cheaper, sooner. 

Chairman RANGEL. Mr. Thompson, please. 

Mr. THOMPSON. Could I just ask a question, Mr. Chairman, for 

a request from—— 

Chairman RANGEL. Yes. 

Mr. BLUMENAUER. Ten seconds. I just—if you have ideas of 

where the Federal Government can emulate what you are talking 

about in the private sector, or the State of California, I would welcome a little brief note, or something of that nature. Thank you for 

your indulgence, Mr. Chairman. 

Chairman RANGEL. Mr. Thompson. 

Mr. THOMPSON. Thank you, Mr. Chairman. I want to thank all 

the witnesses for being here for your testimony today. 

Ms. Claussen, if you would, please, I think we all know that forests have a certain benefit of absorbing CO2. Up in my district— 

I represent a district in Northern California—there is an organization, The Pacific Forest Trust, and they registered the state’s first 

forest carbon project with the California Climate Action Registry. 

They have got about 2,100 acres of working forest land that they 

have designated as this project. I highlight the fact that it is working forest land. 

I am told that that one project is expected to curb about 500,000 

tons of carbon dioxide CO2 emissions through sequestration. This 

seems like a pretty promising program. I would like to know what, 

in your view, what role projects of this nature can play, and if you 

believe that—this is the tax Committee—if you believe that, in our 

effort to deal with this, any comprehensive plan should take into 

account and include incentives for these types of programs. 

Ms. CLAUSSEN. I am not familiar with the very specific project 

you mention, but should sequestration in forests and soils play a 

role in this? I think the answer is yes. 

Now, it is—I’m not exactly sure whether this is a solution for the 

long term—and I suspect it is not—but while we move forward in 

other areas, and while we deal with new technologies that can be 

more permanent—— 

Mr. THOMPSON. Why do you say it’s not a solution for the long 

run? 

Ms. CLAUSSEN. Because I think it is very hard—although in 

some cases, you can do it—it is very hard to guarantee the life of 

the forest over a really long period of time. 

Mr. THOMPSON. It is certainly a part of any solution—— 


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Ms. CLAUSSEN. It is certainly a part of the—— 

Mr. THOMPSON. —short run or long run. 

Ms. CLAUSSEN. You bet. It is certainly part of the solution. It 

can do a lot in the short to medium term. It should be a part of 

any comprehensive program. 

Mr. THOMPSON. How do you quantify the value of the tax incentive? Is that—— 

Ms. CLAUSSEN. Off the top of my head, I can’t give you a good 

answer. If you would like us to provide one for the record, we 

would be happy—— 

Mr. THOMPSON. Would you, please? I would appreciate that. 

Thank you. 

Dr. Schneider? Can you—and I had to step out for a little bit, 

and you may have touched on this, and indulge me, please, if I am 

being repetitive—but what are your long-term estimates on the impact of global climate change, and a water supply for everybody, for 

municipal, agricultural, and natural resource priorities? On the 

West Coast, in western states? 

Dr. SCHNEIDER. I will start with California and the west, because there is probably a legitimately larger concern there than in 

some other areas. That is because when you have a Mediterranean 

climate, where the bulk of the rain comes in in the winter, and not 

in the summer, if you end up with warmer seasons—and a lot of 

our water is stored in snow pack, not just in reservoirs, something 

like half—and you start melting them sooner, then you have a flood 

management problem earlier in the spring, and you have less 

water availability downstream in the summer, when you need it. 

If you are several degrees warmer, you need it even more, and 

you increase substantially the risk of wildfire. If there has been 

any unifying factor in California—and I think in Oregon and Washington—in concern about not wanting to warm up more than a few 

degrees, it has to do with the risk of wildfire associated with that 

kind of Mediterranean climate, and the reduction of water supplies. 

It is less clear in other places. 

The IPCC collected the results from 20 models, and—roughly— 

and while there was disagreement about many parts of the world, 

where it rained more or less, there were a few areas where they 

were all in relative agreement for obvious reasons. 

First, you are going to get more precipitation in the high latitudes, both north and south, because the atmosphere holds more 

moisture when it’s warm. Second, the Mediterranean climates, the 

Mediterranean itself, South Australia, South Africa, California, 

West Coast, Mexico, will probably have substantial water resource 

problems because they are already stressed, and they are already 

dry in the summer, and adding heat is not a good thing. 

Mr. THOMPSON. So, do these studies look at things such as increased insalination levels, because of increasing water and effect 

on agricultural products, and things of that nature? 

Dr. SCHNEIDER. Well, there are studies that look at water 

quality, as well as water quantity. There are not thousands of 

them. We are still trying to collect the literature on this. 

Everybody admits that there are uncertainties, from how many 

people in the world, to the emissions, to what it means in those 

water sheds. The one thing we know is we are going to change the 


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drought/flood frequency, probably going to increase the extremes, 

pretty much everywhere, but the West looks like a particular problem, because of its Mediterranean climate. 

That would affect water quality, as well, because if you have runoff of pesticides or herbicides, or other things, at a time—in the 

summer, at a time when you have less actual run-off, then the concentrations would go up. That can also be controlled by local rules, 

so it will require a combination of Federal and local action to protect those systems. 

Mr. THOMPSON. Thank you very much. 

Chairman RANGEL. Thank you. Mr. Nunes. 

Mr. NUNES. Thank you, Mr. Chairman. Mr. Schneider, you, in your written testimony, you proposed a $400 billion tax on carbon. 

We’re producing about $1.7 billion U.S. tons. Simple math shows 

that that $400 billion per ton tax would be about $700 billion a 

year, and $7 trillion over 10 years. 

So, I have two questions for you. The first is that CVO has deter- mined our GDP in 2007 will be about $13 trillion. Given that tax 

collections are already at a historical high, do you believe that this 

tax, a tax of this type, is economically sustainable? That is my first 

question. 

The second question I would like for you to answer is how do you 

suggest—being that we are a tax-writing Committee—how do you 

suggest that we apply this tax to the American people, in what 

form? Gas tax, and so forth, and so forth. 

Dr. SCHNEIDER. Thank you very much for that question, be- cause I can clarify that I certainly would never advocate a $400 a 

ton carbon tax snapped on the day after tomorrow. 

What I was doing in that study was showing that even a tax that 

large, which was presumably ramped up over time, and using the 

standard growth rates that would be calculated in most economic 

models, even a number that large—and I acknowledged in the testimony that costs would be trillions of dollars—you still—when you 

look at it play out over a century—again, if you believe that we will 

have a 2 percent per year growth rate in the economy—even a $400 

per ton carbon tax only delays our getting 500 percent per capita 

richer per year or two 100 years from now. 

I also said in the testimony that it would be very important to 

take a look not just at who might be differentially injured by climate change—such as I had said earlier, people living on coast 

lines and high mountains—we also have to take a look at who 

would be hurt by any policy, and deal in fairness to help them 

through the transition. 

Mr. NUNES. Doctor, if I may, though—because I have limited 

time here—if not $400, then how much? We are—we need to know 

if we are serious about writing this into law, and taxing the American people with this carbon tax, if it’s not $400, is it $200? Is it 

$300? Is it $150? Where do you start, and how do you apply the 

tax? 

Dr. SCHNEIDER. Well, what I would do personally—and, of 

course, you are calling for my values of the relative merits of 

these—and in my value system, I want to try to send an inexorable 

signal that we are going to slow emissions down. I don’t believe 

that starts with a very, very high number, because of the dislocaVerDate Aug 31 2005 04:12 Jul 07, 2007 Jkt 035774 PO 00000 Frm 00063 Fmt 6633 Sfmt 6602 E:\HR\OC\35774.XXX 35774

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tion it would have for people who are currently locked in to the 

kinds of work for which those taxes would be really very critical. 

Just as a way of perspective, several people had made comments, 

politically and otherwise, that Kyoto, or some other similar type 

policy, would have bankrupted the United States. Yet gasoline 

price went up 2 years ago by $1.50 a gallon, which is the equivalent of $270 a ton carbon tax, and didn’t do very much damage to 

the economy, though it hurt individuals. 

So, I am a believer in ramping things up slowly, announcing it, 

and giving people time to adjust. In the end, the models themselves 

suggest if you want to control to 350 ppm—that is near current levels of CO2—that the numbers are somewhere on the order of $400 

a ton. I would not personally advocate it—it is not in my talks or 

my articles to say that—it was just simply scaling. 

Mr. NUNES. So, if we are going to stick with a number, though, 

what would you think it would be? 

Dr. SCHNEIDER. What would I—well, the market is all over the 

place these days, from 10 to 50 dollars per ton, depending on where 

you are. I think you start small, and you say, ‘‘I am going to crank 

the knob up every year, higher and higher, and then when we get 

new studies to find out if we’re lucky and we are coming out at the 

low end of climate change, we might crank it back. If we find out 

we’re unlucky and we’re coming out at the high end, let’s crank it 

up more.’’ 

I will be surprised if it doesn’t, in decades, settle somewhere well over $100 a ton, as an incentive to do both the R&D and to discourage wasteful use. 

Mr. NUNES. Thank you, Dr. Schneider. Thank you, Mr. Chairman. 

Chairman RANGEL. Mr. Kind. 

Mr. KIND. Thank you, Mr. Chairman. I want to thank our panelists for, not only their testimony, but your patience here today, on 

an incredibly important topic. I just returned from a few days over 

in Europe, to meet with the European parliament and the European Union, discussing this very topic, along with some other matters. They are absolutely obsessed, as you can imagine. 

Because whereas Al Gore says it’s an inconvenient truth for us, 

it’s a matter of survival for them, in regards to climate change, and 

the impact it’s going to have throughout the region. They’re wondering what we’re going to do in this session to step up, and start 

assuming some of the responsibility that we have to share on a 

global level. 

With that in mind, let me ask you just two questions, for each 

or any one of who that want to address it. What is the most important thing that we should be doing right away to help us reduce 

the CO2 emissions in this country? Secondly, what is the most important thing we can be doing to help the emerging and developing 

world, to try to leapfrog over a lot of the mistakes that we have 

made in the past, so that they don’t become a significant problem 

for the rest of us? 

Let me just leave it open to any of you that want to—— 

Dr. PRINN. I think it is very important to put a price on carbon 

emissions, even if it starts out at a very modest level. I think that 

needs to be done, one way or another. The issue of whether it’s a 


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tax or it comes under a cap-and-trade, is something that I think 

is not my area of expertise to comment on. 

I think it is extremely important that we work together with the 

other major developing countries, that the United States works 

carefully with China and India, and these other big, emerging 

economies, to see the ways in which we can help them develop 

their economies—we are not going to stop them doing that—but in 

a way that is looking very carefully at lowering the emissions that 

would otherwise occur from those developing economies, and with 

a clear understanding that, at some point, they take on restrictions 

to their emissions. They may not start in that direction initially, 

but at some point there is an agreement that they join in, along 

with us and the other OECD countries, to make a global effort at 

lowering emissions. The point—— 

Mr. KIND. I have—— 

Dr. PRINN. —is that it doesn’t matter where the gases are coming from. 

Mr. KIND. Right. 

Dr. PRINN. We all live here, it’s a global common problem. 

Mr. KIND. Dr. Schneider, do you have any thoughts? 

Dr. SCHNEIDER. Yes. As I had said in my written testimony, 

I think that a lot of this is a sequencing problem. It is probably 

easiest to start smart, start where you get the lowest cost and the 

highest paybacks, which is performance standards, not just have 

them selectively distributed around states, but take a look, federally. 

A Congressman made the comment which I agree with, that we 

also had better look at Government procurement. Because it’s always better to get your kid to believe you when you tell him to turn 

out the lights when you turn off the TV when you walk out the 

door. So, I think the Government being involved is a part of it— 

not just symbolic—but a good way to also have a learning-by-doing 

experiment, and send market signals to producers of those efficient 

products. 

Part of performance standards is CAFE, part of it is appliances, 

bulbs, and housing. I think next in the chain, which we have heard 

from everybody—and I hear no disagreement here, though we 

might have nuances about how we do it—is public/private partnerships, so that we can get that learning-by-doing experiment going. 

President Bush (the father) once said, ‘‘Let 1,000 flowers bloom.’’ I 

don’t think we need 1,000. A dozen, maybe. 

Mr. KIND. Sure 

Dr. SCHNEIDER. We have to have that competitive market of 

learning by doing, and it is not going to happen just on private investment returns. It will take the public partnerships. After all, 

there is a public benefit, which is—— 

Mr. KIND. Let me go to Ms. Claussen and Dr. Montgomery real 

quick, before my time expires. 

Ms. CLAUSSEN. The answer, I think, a price on carbon—and I 

would advocate through a cap-and-trade system—would be number 

one. In terms of the developing world, I think we have to engage 

with them in a constructive way, so that they can follow cleaner 

development paths. Because, obviously, they’re going to develop. 


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They obviously need electricity and transportation, but there are 

ways to do it better, and I think we can be helpful. 

Mr. KIND. Yes. Dr. Montgomery? 

Dr. MONTGOMERY. I would make my first priority creating a 

stable and growing source of funding for effective R&D, and sending it through an effective organization that is outside existing executive departments, and outside the appropriation process. We 

can expand on that one. 

Second, for the developing world, I think it is absolutely clear the 

developing world is not going to be able to make a big reduction 

in its growth in emissions without much stronger economic, legal, 

and market institutions. I would start with pushing that reform. 

Mr. KIND. Let me just say—and it really hasn’t been delved into 

in any great extent, but I don’t know how we can get there quicker 

or faster, unless we have a mature nuclear energy policy, as well, 

in this country, and it’s something that we can share globally with 

non-proliferation concerns in mind. 

Because everything else sounds great, but that seems to be the 

most obvious direction to get the biggest bang for our buck, in short 

term. Thank you all. 

Chairman RANGEL. Mr. Pascrell is recognized for 5 minutes. 

Mr. PASCRELL. Thank you, Mr. Chairman. Thank you, each of 

the four of you. You did a great job on this panel, and we need 

more dialog, we need more discussion. 

Mr. Montgomery, I want to start off asking you a first question. 

You are an economist, you have testified before this Committee 

about the economic impact of various ideas that have been proposed to address climate change. It’s kind of like a warning, ‘‘Better 

watch out what you’re getting yourself into, because this is going 

to cost a lot of money, that is going to cost a lot of money.’’ I have 

a question for you. 

If we fail to respond to global warming, if we fail to respond, 

would there be economic costs associated with higher temperatures, 

higher sea levels, and changes in weather patterns? Would you answer that question, Mr. Montgomery? 

Dr. MONTGOMERY. Yes, there would be economic costs. 

Mr. PASCRELL. Why don’t you tell us about those? 

Dr. MONTGOMERY. The economic costs we need to take into 

consideration in designing policies are the economic costs that we 

can avoid because of those policies. 

Changing the direction of the climate is going to be a slow process, no matter how rapidly we start doing things. Therefore, we 

have to think about time scales on which we can accomplish something, given that we need the whole world to do things—and which 

costs that allows us to avoid. 

Mr. PASCRELL. On that—— 

Dr. MONTGOMERY. The costs we’re looking at avoiding certainly are all of those things, and they are going to be occurring 

over the next century. 

Mr. PASCRELL. Well, it appeared from what you all said today, 

and what others have been writing lately, that we have come a 

long way in 6 years, the last five or 6 years. We seem to be all on 

the same page, that now we are dealing with sound science. 


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Now, Ms. Claussen, you talked about conservation. You gave us 

some very specific examples about how we can reduce emissions, 

and so forth, and so forth. In May of 2001—I want your response 

to what the Vice President of the United States said about conservation. He said that, ‘‘Conservation may be a sign of personal 

virtue, but it is not a sufficient basis for a sound, comprehensive 

energy policy.’’ Would you please respond to that statement by the 

Vice President of the United States? 

Ms. CLAUSSEN. It’s too easy, your question here. I actually 

think conservation is a good basis of a sound energy policy. It is 

the number one thing we can do. It is a win-win. It is not the whole 

game, but there is no question that that is where we should start. 

Mr. PASCRELL. By the way, he said that just a little while 

after—a second here, Dr. Schneider—he said that just a little while 

after the President reneged on a campaign promise that he made 

to all of us that he would cap emissions for coal-powered plants. 

Dr. Schneider? 

Dr. SCHNEIDER. I do agree with the Vice President, that it 

gives you personal virtue. The point is, it does more than that. The 

best example I can give you is that initially California started performance standards on refrigerators from 1975, in the OPEC embargo, that were then picked up by many states, and eventually the 

Federal Government. 

It has been calculated out that the amount of electricity saved 

alone through those performance standards is not only substantial, 

it is twice the maximum potential of the energy production of the 

Alaska national Wildlife Refuge, which I think is something the 

Vice President might note. 

Mr. PASCRELL. Thank you, Dr. Schneider. Dr. Montgomery, I 

want to get back to you. Utilizing—I believe utilizing conservation 

efforts, we can retrofit the Tax Code to help us encourage conservation. Do you think that that is hyperbole? Do you think that is pie 

in the sky? Or do you think it’s achievable? Then I have one other 

question to ask you. 

Dr. MONTGOMERY. Okay. Then I will try to be brief. I think 

you get what you pay for. If you are prepared to pay for energy conservation through tax incentives or subsidies—that means taking 

resources away from other uses, because you’re collecting taxes— 

and by expending those resources, it’s certainly possible to bring 

about conservation. 

I think that is the experience in California, too. California has 

incurred economic costs, it has chosen a particular path of industrial development, and it has—by expending those resources, it has 

accomplished something in reducing its energy consumption. 

Mr. PASCRELL. You said on page three of your testimony, when 

you were talking about developing nations, and why should we ask 

this of ourselves if we’re not going to ask this of others, you said 

the implication of these observations is not that the United States 

should do nothing, it is that gaining the participation of developing 

countries is probably the highest priority for climate policy, because 

without that participation, it is impossible to prevent large temperature increases. That’s what you said. 

Are you implying, or would you accept, or would you support this 

idea, that with participating countries—and whether they are deVerDate Aug 31 2005 04:12 Jul 07, 2007 Jkt 035774 PO 00000 Frm 00067 Fmt 6633 Sfmt 6602 E:\HR\OC\35774.XXX 35774

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veloping or they have been developed—that you could actually deal 

with trade agreements with those countries to work on these climate changes? Would you accept something like that, that we—it 

be part of our trade deal with countries around the world? 

Dr. MONTGOMERY. Yes. I think that trade negotiations are an 

important route to doing something about climate policy. Global 

trade negotiations are tricky enough. We have immense problems 

in dealing with things like the Europeans’ insistence on subsidizing 

agriculture, which is impoverishng developing countries. 

I would be more inclined to go with regional trade agreements. 

I think that bilateral or Pacific rim negotiations, where we talk 

about trade, we talk about climate, we talk about technology transfer, we talk about maybe even incentives for U.S. investment in 

countries, if they will change their behavior, I think that’s a very 

important route. 

Mr. PASCRELL. Thank you. 

Chairman RANGEL. Thank you. Mr. Porter. 

Mr. PORTER. Thank you, Mr. Chairman, and thank you all for 

being here today. As you know, I represent the State of Nevada, 

as does my colleague to my right, Congresswoman Shelley Berkley. 

A huge issue for us is, of course, Yucca Mountain and opposition 

to Yucca Mountain. 

We have heard, for probably 20 years, that the Federal Govern- ment and all of the scientists, who have spent $12 billion or $13 

billion, have told everyone that that site is safe for burial of nuclear waste. I said jokingly the other day, ‘‘If it was a Saturday 

Night Live skit, it would probably be pretty funny, but it’s actually 

too serious of an issue, the Yucca Mountain.’’ 

It’s a problem, it’s broken, and I know that you, I believe, support nuclear energy, as do I, but I please ask, as you look at that 

as an option, that when we use sound science, it’s not happening 

at Yucca Mountain. 

Now, I would also like to add, I guess, the food chain of this debate is huge. There is millions, if not billions, that have been spent 

on both sides, and which makes it very difficult for the average 

American to cut to the chase of the debate. I’m not questioning 

your expertise today at all, but I know that the American people 

are in question. 

What can we tell the American people who are residents in Nevada, right now, one thing that they could do to help? Because I 

believe there is a problem, and we need to find the solution. What’s 

one thing a family can do to make a huge difference? I may be 

oversimplifying, but I have been asked that question by schoolchildren, by businesses, by individuals. 

The second part of it is geothermal, of course, is huge for the 

country, one of the largest in the world. Nevada is number two in 

production. I hear constantly from the business community that 

they need more incentives, more incentives for solar and geothermal. So, I guess the third part of this is what can we do to encourage that? Can we start with Dr. Prinn? 

Dr. PRINN. Yes. Beginning with the issue of geothermal that 

you brought up, I think it is there with great potential, particularly 

in the western states, because you don’t have to drill down so far 

to get to the hot rock. I have not seen a careful consideration of 


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the cost of getting very large amounts of energy from geothermal, 

and I think that has to be looked at very carefully. 

Obviously, in your State, you could look at wind energy as an important source, because you have got lands that nobody looks at, 

right? 

Mr. PORTER. We have lots—— 

Dr. PRINN. You’ve got lots of land, and you don’t have to worry 

about what we worry about at the Cape Wind project, where rich 

people don’t like to see these windmills in their horizons. 

On the issue of what the individual person can do, well, the way 

I answer this in the many public talks I give when that comes up, 

is about every four or five or 7 years, depending on how frugal you 

are, you buy a new vehicle. This is one way where people can, I 

think, make a very significant difference. They can go for a vehicle 

that gets twice the mileage, and that will half their gasoline cost, 

right, in doing so, but in doing so they will have made an important contribution, particularly if it then becomes a popular thing to 

do. That’s something everyone can do. 

The way we run our households, of course, the ways we waste 

energy, and we waste money in doing so, and that would apply in 

Nevada and in Massachusetts, and everywhere else. I would now 

leave it to others to—— 

Mr. PORTER. Thank you. 

Dr. SCHNEIDER. Yes, I too get asked that question all the time. 

One young lady said, ‘‘I can’t negotiate with the Chinese. What can 

I do?’’ Of course, I said, ‘‘Do you turn your light out when you walk 

out of the room?’’ She said, ‘‘Well, most of the time, not all of the 

time.’’ ‘‘How about the computer?’’ 

So, you begin with the things that you can control. You can control the number of trips that you take. Do you bother mom and dad 

to drive you downtown the second you want, or with a little bit of 

planning can you do two trips instead of four? It’s not just simply 

that those acts are symbolic. They are, but when a billion people 

do them 10 times a day, they go beyond symbolic. Plus, they also 

create the mindset for being efficient. 

I agree with Ron Prinn, that you have to take a look very carefully at the labels of the air conditioners, the refrigerators, the 

automobiles. 

When you remodel your house, do you build to the minimum of 

the building code, or do you build to a payback criteria, like 7–11? 

You need to get some help to try to do that. So, I think there are 

a lot of things we can do. 

Finally, we need to get into organizations. We need to talk to 

people of like mind, or even differences, but who agree in a conservation ethic. We talk to each other, we learn from each other, 

and then we network to other groups, because that’s what makes 

it politically more possible for leaders to act when they have supporting constituents. So, I think there is a whole hierarchy of steps. 

Of course, then, from the top down there are the taxes and the 

caps and trades. 

Ms. CLAUSSEN. I think we are all asked this question. I usually 

give a three-part response. When you make a purchase, make it 

with carbon in mind, and that could be whether it’s your vehicle 

or your refrigerator or your washing machine. 


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I think it is important, if you are going to invest your money, 

that you invest your money in companies that are taking steps in 

the right direction here, and that are advocates for good public policy. 

I know I shouldn’t probably say the third in hearing, but I always say it’s important who you vote for, because we need a national policy. I would say you should vote for people who are going 

to come up with a sound one. 

Mr. PORTER. Thank you. 

Dr. MONTGOMERY. Mr. Levin started the questioning by asking us about why there was such a huge divide in opinions on climate policy. I actually think the advice I would give everyone in 

their homes and their families is to study the subject seriously, 

think critically about the extreme statements that you hear from 

any side, read everything Ron Prinn has ever written for general 

consumption, understand the subject. 

This really gets to the question of long-term incentives for businesses, as well. The expectation of what climate policy is going to 

be, and what businesses need to do in order to prepare for it, is 

driven less by what this congress votes than by business’s expectation about what the electorate is going to expect and demand over 

20 years. 

Businesses are not going to be confident of that until we have 

much more consensus among our citizens about what the climate 

problem is, and how you can address it. So, I would say study it, 

and encourage your children to study hard and do science and engineering, because we need them in order to get R&D to create the 

future that we are going to depend on. 

Chairman RANGEL. Ms. Berkley. 

Ms. BERKLEY. Thank you, Mr. Chairman, and thank all of our 

witnesses for being so patient and staying the extra 45 minutes. 

Whenever I hear anybody talk about a nuclear energy as a possible part of a solution, and part of our future energy portfolio, I 

get a little bit nervous. I would like to echo some of the things that 

Mr. Porter said. A nuclear energy has a very nasty byproduct, and 

that nasty byproduct is nuclear waste. This nation’s only solution 

for its nuclear waste problem is to store—ship and store—77,000 

tons of very toxic radioactive nuclear waste across 43 states to be 

buried in a hole in the Nevada desert, where we have got groundwater issues, seismic activity, and volcanic activity. 

When people talk about nuclear energy being clean and cheap 

and safe, it is—I would like to disabuse everybody of that myth. If 

it is so cheap, it costs $2 billion, minimum, to build another nuclear 

power plant—that’s why there hasn’t been one in the last 20 

years—I don’t think that sounds very cheap. If it’s such a great 

cheap source of energy, how come the taxpayers, me included, have 

to keep subsidizing this energy source? 

We are already 20 years behind schedule, after the so-called 

‘‘Screw Nevada’’ Bill, and nothing much has been done, other than 

we have spent a fortune studying it. 

It requires gazillions of gallons of water for nuclear waste. We 

don’t have any water. You may have noticed that Yucca Mountain 

is in the middle of the Nevada Desert. We are now in the middle 

of our seventh year of a 5-year drought, and we don’t know how 


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long this 5-year drought is going to last. There is no water resources in the State of Nevada for the storage of nuclear waste. 

We know—and actually, Congressman Porter was the Subcommittee Chairman when they were—when we did an investigation that found over 1,000 e-mails in—well, I don’t have a direct 

quote, let me paraphrase what some of these e-mails were when we 

are talking about so-called sound science for Yucca Mountain. ‘‘I 

don’t know any of the numbers, so I just make them up.’’ That was 

one of the better e-mails, but there are hundreds of others that 

said exactly that. I don’t—‘‘Whatever they ask me for, I give them,’’ 

and I don’t know—‘‘I just make it up.’’ That’s not exactly sound 

science. 

The U.S. Circuit Court of Appeals, as you know, overturned the 

EPA radiation standards that were at 10,000 years. They said they 

were short by 290,000 years, and that the EPA is yet to come up 

with adequate radiation standards, because radioactive nuclear 

waste has a half-shelf life of 300,000 years. 

There is water at Yucca Mountain. Originally—and I was a 

youngster, just out of law school when the ‘‘Screw Nevada’’ Bill was 

passed—but they told us that it was so dry that they would store 

the nuclear waste, and the mountain would collapse over the nuclear waste, and it would be encased in there for gazillions of years. 

The reality is the last time I took a tour of Yucca Mountain there 

was water dripping. It is not as dry as people say it is, as our socalled scientists say it is. 

In an era of terrorism, why would we be generating more nuclear 

waste, when we know there are terrorists out there that would love 

to get their hands on the nuclear waste and use it? Why? To harm 

our country. 

Then last—hardly last, but another issue is transportation. 

There is no safe way to transport nuclear waste across this country. For the 77,000 tons that currently exist throughout the United 

States at the nuclear reactor sites, it would take 108,000 truck load 

shipments over a 35-year period to now transport the nuclear 

waste that currently exists. Now we’re proposing to rely more on 

nuclear waste and nuclear energy? 

Perhaps the most important thing to me is Senator Harry Reid, 

and I have already publicly said that if any nuclear waste gets 

transported to the State of Nevada, we will lay down on that railroad track. I am sincerely hoping he is in front of me. 

Nonetheless, I can assure you that nuclear waste is not an option 

for this country. It is 20th century technology in a 21st century 

world, and we better start figuring out how we’re going to make 

up the extra 20 percent of our energy needs that, currently, nuclear 

energy satisfies. Thank you very much. Anyone have a comment? 

Chairman RANGEL. What timing. The record will remain open 

for the response to that. We are about to conclude the hearing. Mr. 

Becerra is recognized for 5 minutes. 

Ms. BERKLEY. Thank you. 

Mr. BECERRA. Thank you, Mr. Chairman. I will be brief. I want 

to thank you all for your patience and your wonderful testimony. 

I think it is refreshing to have a discussion where we don’t talk 

about whether there is global warming, but what we can do to address it. 


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So, I hope this will be the last time we have to come before Congress to have a discussion about whether there is such a thing as 

global warming, and what we have to do to address it. So, thank 

you for that. 

I hope, as you go on and continue to give your expert opinions 

and your great advice and counsel on these matters, that you will 

also help us formulate policies that will address some concerns that 

I have, that as we try to move toward cleaner energies, alternative 

energies, and alternative methods of implementing these new approaches, that we don’t forget that there are a lot of folks in America, modest income folks, who will have a tougher time making the 

switches over to these new energies, or the new methodologies, because it will cost them to do so. 

I think everyone in America would love to drive one of these fuelefficient hybrids, or would love to have their hands on an electric 

vehicle. The reality is, for a lot of folks, they can’t even afford to 

get a newer, cleaner burning engine car, and they have to deal 

with the 10-year-old vehicle that they can afford, which is spewing 

out much more emission than would be a new car. They don’t have 

a choice. So, please, please, please, as you are coming up with these 

ideas, don’t forget that we have to make amends and make do for 

modest income Americans. 

The other thing I would mention is that I hope we will continue 

to talk about our responsibility, as a nation. Because while we talk 

about the polluters that we see—and every time I go to one of these 

developing countries, you see these large municipal buses that are 

transporting people—Mr. Chairman, I will try to be brief. 

Chairman RANGEL. There is a vote on the floor, and Ms. Jones 

wants to be recognized, and I want to say so long to the panel. 

Mr. BECERRA. I will conclude, then, by just finishing that remark, and leaving a question for you to answer, if you can, for the 

record. 

As much as we see these big buses that are spewing pollution in 

these developing countries, the reality is that we are the biggest 

polluters per capita, as a nation in the world. I hope that we will 

continue to focus on the fact that we need to be the leaders, to 

make sure the rest of the world follows. 

Finally, the question I would have is, please let us know in your 

written comments the importance of predictability. If we want to 

have the private sector invest in these large scale projects to get 

us more energy efficient, what—how can we provide them the predictability to make these investments, to know that there will be 

a return on these investments into the future? So, the more you 

give us on that, the better off we are. 

With that, I will yield, Mr. Chairman. Thank you very much. 

Chairman RANGEL. Ms. Tubbs Jones. 

Ms. TUBBS JONES. Mr. Chairman, thank you very much. Committee panelists, thank you for coming. Two questions I am interested in. Coal. Ohio is a big producing coal State, I want to know 

what you think about coal. 

Secondly, about wind power, the first inventor came from Cleveland, of turbo-power. So, I would ask you about wind power. Mr. 

Chairman, thanks for being such a great Chair, and giving me a 


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1Katzer, Doug, ed. 2007. MIT Study on the Future of Coal—Options for a Carbon-Constrained 

World. Cambridge, MA: Massachusetts Institute of Technology. 

chance. I would like to get some answers back in writing from you. 

Thanks. 

Chairman RANGEL. I cannot tell you how impressive your testimony has been with this Committee. I have just advised staff that 

I would like to consolidate your testimony, and distribute it to the 

House for us to have, as a guideline, for the things that we have 

to learn in order to do the things that we have to do. 

I also want to thank you for your patience for a very long hearing that we have had today. Take my word for it, your investment 

in time has made us better Members of Congress. Mr. McCrery. 

Mr. MCCRERY. Amen. 

Chairman RANGEL. Thank you again. 

[Whereupon, at 12:55 p.m., the Committee hearing was adjourned.] 

[Questions submitted by the Members to the Witnesses follow:] 

Questions Submitted by Ms. Tubbs Jones to 

Ms. Claussen, Dr. Montgomery and Dr. Schneider 

Question 1: Coal Energy—Almost 90% of Ohio’s electricity comes from coal 

and Ohio has an enormous coal reserve. Coal production has been increasing in recent years, with production growing by 1.7% from the Appalachian 

region since 2004. 

• What place does coal have in the low-carbon emission future of this 

country? Does it have a place? 

• If so, what kind of further research must be done and what can this 

Committee do to support that research? 

Response from Ms. Claussen: The United States has significant coal reserves 

and likely will continue to burn coal well into the future. However, coal is inherently 

higher polluting and more carbon intensive than other energy alternatives. Largescale implementation of carbon capture and sequestration (CCS) projects will be 

needed if climate change is going to be addressed in a meaningful way. 

The first step is to fund research, development, and demonstration of technologies 

to separate and capture carbon as well as tests of carbon storage in a variety of settings. The United States has the geological capacity to store the emissions from its 

coal-fueled plants in depleted oil and gas reservoirs for several decades. Capacity 

in other geological reservoirs is estimated to be in the hundreds of billions of tons 

(500 billion tons of capacity); enough to store current levels of domestic emissions 

for over 300 years. 

Once developed, these CCS technologies will need to be deployed to demonstrate 

their feasibility and to determine the costs associated with the various options. This 

would entail some 10–30 demonstrations, at scale, of commercial coal plants of a variety of configurations capturing and storing their CO2 as well as multiple demonstrations of CO2 injection in a variety of geological formations and geographic regions across the country. The estimated cost per CO2 storage project (not including 

the acquisition of the CO2) is estimated to be $15 million/year for a ten-year period.1

This could be generated through public support, such as tax incentives or feebate 

programs. 

Beyond research and early demonstration projects for commercial viability, the development and deployment of CCS technology will require a national, economy-wide 

policy—such as ‘‘cap-and-trade’’—that provides the incentive for greenhouse gas reductions from all sectors, including electric power. Most recent estimates indicate 

that a price of at least $25 to $30 per ton of CO2 would be needed to drive coalbased electric power plants to install CCS. Because states have substantial authority over electricity generation and environmental protection, they can play an important role in demonstrating, incentivizing and requiring CCS. However, they are no 

substitute for a nationally consistent program that promotes CCS for all large 

sources of emissions. Policies beyond cap-and-trade (such as performance standards) 

may also be needed to stimulate the development of CCS technology. 


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Finally, a regulatory framework for carbon storage is needed. This framework 

should include proper site selection, permitting processes, monitoring requirements, 

and public participation. 

Response from Dr. Montgomery: Coal will continue to be used for many decades as a fuel for power generation in existing facilities under all but the most extreme proposals for carbon emission limits. However, unless carbon capture and sequestration technologies are developed and prove successful, the amount of coal production and use is likely to fall dramatically from current levels over the next few 

decades. 

The recent MIT report on ‘‘The Future of Coal’’ lays out the R&D needs for carbon 

capture and sequestration in detail. I would emphasize two points: 1. that current 

research funding and plans fall far short of what is needed and 2. regulatory oversight and liability rules for carbon sequestration must be clear, realistic and flexible 

if there is any chance of sequestration technology succeeding. 

Response from Dr. Schneider: Coal-burning is the most carbon dioxide emitting per unit electricity produced major system and thus expansion of coal as currently practiced is inconsistent with major reductions in greenhouse gases over time. 

However, the key is to transform the ‘‘as currently practiced’’ part to include end 

to end management of CO2—probably by a crash R&D program to develop safe, 

long-term underground storage in saline aquifers or other suitable formations to 

keep the CO2 sequestered and thus harmless from a climate point of view. It is not 

assured that the promising start with underground CO2 storage in the enhanced oil 

recovery business (tens of millions on tons sequestered so far) will ‘‘scale up’’ if anything like business as usual emissions occurs over the twenty-first century (i.e. over 

a trillion tons of CO2 would have to be safely and permanently stored). 

As noted above, a major R&D program to evaluate the safety and permanence of 

massive scale carbon capture and sequestration is needed, along with efforts to 

lower the unit costs per ton CO2 stored. This clearly will involve public/private partnerships and thus a clear role for the Ways and Means Committee in setting up 

tax or other incentives to spur such partnerships. 

Question 2: Wind Power in Northeast Ohio—A Cleveland inventor, Charles 

Brush, was the first person to use a wind turbine to generate electricity as 

far back as 1888. Today, we have a power-generating wind turbine at the 

Great Lakes Science Center in downtown Cleveland and there are plans for 

more turbines in the works. Just last month, the Cuyahoga County Energy 

Task Force met to move forward with a wind farm off the coast of Cleveland in Lake Erie. 

• What can we do to continue to encourage the development of wind 

technology? Are there any policies in place today that we can build 

upon to make this technology a central part of our alternative energy 

plan? 

• Most importantly, what can this Committee do to help cities and programs like the Energy Task Force continue to support this technology? 

Response from Ms. Claussen: To encourage the development of renewable energy, including wind technology, a mix of policies to encourage generation and production and to reduce barriers for distributed sources is needed. Policies in place 

today, such as the federal production tax credit (PTC), have helped provide an incentive for additional investments. Our work suggests that creating a uniform system to track renewable energy credits (RECs) in a consistent manner could facilitate 

trading these credits across the country. In addition, incentives for uniform grid 

interconnection standards at the state level would also help to reduce the barriers 

to further development of wind technology. 

Response from Dr. Montgomery: When wind generation is economic, it will be 

brought into the mix by electric generators and utilities who are motivated to obtain 

energy from the lowest cost sources. Putting a price on carbon emissions will provide that incentive for wind power and other forms of generation with zero carbon 

emissions. This Committee has jurisdiction over tax matters, and could investigate 

the adoption of a carbon tax as an alternative approach to managing carbon dioxide 

emissions that would increase the profitability of wind generation and aid all cities 

and programs that support the technology. 

Response from Dr. Schneider: Similar to my answer for carbon capture and 

sequestration above, public/private partnerships to create incentives for innovation 

in technology and lowering of unit costs of electricity are also needed for renewable 

energy systems like wind power. In particular, storage systems to deal with the 


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intermittency of wind and very efficient transmission lines are still in the early development stages but could get a big boost by tax or other incentives to potential 

developers of these important energy alternatives. 

Clearly, working with them on a balanced program of ‘‘carrots and sticks’’—incentives for R&D exploration as well as penalties for dumping tailpipe and smokestack 

wastes in the atmosphere—clearly can move our development program forward. 

Question 3: National Standards on Renewable Energy—Almost half the 

States of the Union, twenty-four, have enacted some sort of state-wide 

standard for renewable energy. These standards range from a certain percentage of power usage to a set number of megawatts produced from renewable sources. My home State of Ohio is one of those currently without 

a standard on renewable energy. 

• Do you believe that a national standard is needed to curb the release 

of carbon dioxide or should we continue to pursue policies state-bystate? • If a national standard is needed, are there any state policies or aspects 

of state policies that we should implement on a federal level? 

Response from Ms. Claussen: As you have correctly pointed out, various states 

have established standards for renewable energy. These state standards include targets ranging from modest to ambitious and their definitions of renewable energy 

vary. Though climate change may not be the prime motivation behind some of these 

standards, the use of renewable energy does deliver significant GHG reductions. For 

example, Texas is expected to avoid 3.3 million tons of CO2 emissions annually with 

its RPS, which requires 2000 MW of new renewable generation by 2009. Increasing 

a state’s use of renewable energy brings other benefits as well, including job creation, energy security, and cleaner air. 

The Pew Center’s preferred approach to federal policy is a cap-and-trade program 

that covers all major sectors of the economy. However, there may be a role for complementary programs to promote reductions in key sectors such as electric utilities. 

One potential role for the federal government would be to establish a uniform platform for defining renewable energy and establishing a uniform trading mechanism. 

Although the states may be in a better position to craft a portfolio tailored to their 

unique local resource mix, the current variation in state programs makes linkage 

across states difficult, so federal involvement in creating a platform is desirable. 

Response from Dr. Montgomery: Managing climate risks requires reducing 

carbon dioxide emissions in the most cost-effective fashion. Renewables have a role 

to play, but they are not the only option and they frequently are not the most costeffective option. Our research finds that a Renewables Portfolio Standard can increase the cost of achieving climate goals under a comprehensive cap and trade program or carbon tax. The RPS forces adoption of specific renewable technologies, and 

these technologies supplant more cost-effective options such as coal-fired generation 

with carbon capture and sequestration. We find that basing climate policy on an 

RPS alone could cost four times as much as achieving the same emission reductions 

through a comprehensive carbon tax or cap and trade program that allowed free 

choice between renewables and other zero emission technologies such as carbon capture and sequestration from coal fired generation. An RPS is a solution in search 

of a problem, and it is not a cost-effective solution to the problem of carbon dioxide 

emissions. 

Response from Dr. Schneider: Yes. But, if enough states adopt such standards, 

it will have a major impact on the reduction of greenhouse gas emissions and lowering unit costs regardless of whether there is national policy. However, in homogeneity in both obstacles and opportunities makes it more difficult for the private 

sector which develops the technology—or the investment banking community that 

backs them up—to play on a level field. National scale rules do indeed provide more 

predictability to industries on how to invest. While I would never advocate denying 

states the opportunity to have tougher standards—California has led the nation and 

the world on this in pollution control for decades—I certainly think that some minimum national standards will make it easier for the business community to function 

in more cost-effective ways as they help us ‘‘invent our way out of the problem.’’ 

A study of the experiences of various states or nations in renewable portfolio 

standards might be useful to the Committee in assessing any minimum national 

standards and avoiding potential pitfalls and encouraging demonstrated opportunities. California has long insisted on performance standards for buildings and appliances and now automobiles and their experience shows it not only reduces pollution, 

but if carefully crafted, provides a return on investment for the average consumer 


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better than the mortgage interest rate—and thus can lower their effective monthly 

cost of living. That partially explains the strong bipartisanship in California on climate policy and energy efficiency—not only does it work for the environment, but 

it saves money too. 

[Submissions for the Record follow:] 

Statement of John A. Fees, The Babcock and Wilcox Companies 

Chairman Rangel, Mr. McCrery and Members of the Committee: 

My name is John Fees and I am the Chief Executive Officer of The Babcock & 

Wilcox Companies. 

It is my privilege to provide this testimony on the combustion-based technology 

alternatives available today, and on the near horizon, that are designed to capture 

carbon dioxide emissions from electric power plants and to provide testimony on 

commercial nuclear power—carbon-free generation. 

The Babcock & Wilcox Company has a rich legacy of providing reliable engineered 

technology solutions for efficient, base load electric generation throughout the U.S., 

North America and across the globe. We have sustained our business by developing 

and commercializing realistic solutions. Over many decades, we have successfully 

met the challenges of power generation and provided the technologies and equipment to resolve the associated environmental control issues. We provide commercially viable solutions to meet emissions control requirements of regulated pollutants. We will provide practical technologies to resolve the challenges of greenhouse 

gas emissions as well. B&W is a premier, comprehensive provider of clean energy. 

The Babcock & Wilcox Company was formed in 1867. The first utility power plant 

in the United States had a boiler designed and supplied by B&W. B&W is the 

world’s expert on steam which is still the most economic medium to generate electricity worldwide. B&W has literally written the book on ‘‘Steam.’’ ‘‘Steam, Its Generation and Use’’ a text book produced by The Babcock & Wilcox Company, is the 

longest continuously published engineering textbook of its kind in the world, first 

published in 1875 and last updated in 2005. 

Our manufacturing capabilities have also powered national security since the 

start of the last century. Teddy Roosevelt’s Great White Fleet was primarily powered by B&W boilers. At the end of World War II, at the surrender of Japan, 395 

of the 400 U.S. Navy ships in Tokyo Bay were powered by B&W boilers. In the 

1950s, B&W became a major U.S. manufacturer and supplier of components for the 

U.S. Navy’s fleet of nuclear powered ships and submarines. 

Beyond defense, nuclear power is a route to carbon-free electricity generation for 

civilian purposes. We are the only U.S. manufacturer of the heavy nuclear components that will be required for the emerging civilian nuclear power plant build-up. 

As such we anticipate playing a critical role in the coming nuclear renaissance to 

provide clean, safe nuclear power. 

Coal-fired and nuclear power plants provide the vast majority of the reliable and 

lowest cost electricity generation in this Country. Coal-fired and nuclear power 

plants combined comprise 41 percent of the Nation’s electric generation capacity. 

Due to their cost effectiveness these plants generate 69 percent of all the electricity 

in the Country. These technologies are the foundation of our economic competitiveness, energy security, and increasing standard of living. 

B&W’s position as a premier developer and manufacturer of coal technologies and 

facilities is widely recognized. Thirty-eight percent of U.S. coal-fired boilers have 

been designed and manufactured by B&W. B&W supplies around one-third of all environmental control technologies and equipment to the U.S. coal power marketplace. 

We have been selected to provide many of the emission control technology solutions 

used by electric power generators to meet the strictest requirements under the 

Clean Air Act, the Clean Air Interstate Rule (CAIR) and various stringent air permitting requirements in the states. B&W has also been awarded a number of the 

new, highly efficient supercritical coal fired power plant projects, including the first 

high efficiency Ultra Supercritical Power plant in the U.S. in four decades. 

Advanced Coal Power Technologies 

Efficiencies 

Efficiency at a power plant is measured by the ratio of the electricity generated 

compared to the energy in the fuel used. Increasing steam temperatures and pressures provides more energy to the steam turbine, enabling higher efficiency and allowing the same amount of electricity to be generated by burning less coal. This results in less production of CO2 and pollutants derived by coal combustion, and reduced fuel costs. 


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Many existing U.S. coal-fired plants operate with relatively low steam temperatures and pressures (subcritical steam conditions). These old plants are generally 

used during high electricity demand periods because of the low generation efficiency, 

typically in the 30–35 percent range. When steam conditions exceed the combination 

of both 760F and 3200psi, the steam (or working fluid) is said to reach supercritical 

conditions. Efficiencies of these plants exceed 37 percent. Replacement of a relatively common 37 percent efficient sub critical unit with a 40 percent supercritical 

unit of same generating capacity would reduce CO2 emissions by about 8 percent. 

Supercritical plants with efficiencies around 40 percent are already commercially 

available and being increasingly deployed. R&D projects with advanced materials 

and manufacturing methods are underway to permit increases of working fluid temperatures to 1200F, and then to around 1400F. When this happens efficiencies will 

rise above 43 percent toward 48 percent. 

It is important to note when evaluating coal plant performance, that efficiency 

numbers, taken at face value, can be misleading. The U.S. convention for calculating 

efficiency, called ‘‘higher heating value (HHV),’’ is different from that used in Europe, ‘‘lower heating value (LHV).’’ One of the factors responsible for the difference 

is the way moisture in coal is treated in the efficiency calculation. There are other 

factors that enter into the calculation as well. The result is that, for virtually identical plant performance (coal fuel in vs. power out), the U.S. efficiency (HHV basis) 

would be reported as being 2 to 4 percentage points lower than European efficiency 

(LHV basis). 

Pollutants 

The emissions from pulverized coal-fired power plants have been reduced tremendously over the past three decades, with this achievement due in part to market 

based regulatory structures pulling technology forward for deployment. Great 

strides have been made in SO2 and NOx reduction through scrubbing and selective 

catalytic reduction technologies. Fabric filters and improvements in electrostatic 

precipitators have reduced particulate emissions and more recently, technologies 

such as wet electrostatic precipitators and sorbent injection are capable of further 

reductions including fine particulates (PM2.5). 

With technologies available to address regulated pollutants and major programs 

to retrofit the existing fleet in progress, public and industry attention turned to 

mercury. As a result, commercially available mercury control, for both eastern and 

western coals are being deployed. Now, concerns about climate change have intensified leading to the pressing need for the development of ways to address carbon dioxide emissions. 


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Carbon Dioxide Capture 

There are several promising technologies to address capture of CO2 from the use 

of fossil fuels and all are dependent upon development of a safe means of permanent 

storage. Assuming storage technologies can be commercialized and enabled, the 

challenge for coal combustion processes becomes one of extracting the CO2 from the 

combustion process. A modern power plant using sub-bituminous coal will produce 

about 1,800 lbs of CO2 per MWh. In an uncontrolled state, the CO2 is diluted in 

the exhaust gas to about 15 percent of its volume; this creates a challenge to 

produce a concentrated CO2 stream for storage. 

Three approaches are presently seen as plausible carbon capture techniques: 

(1) Oxy Coal Combustion for new and existing plants that burn coal, 

(2) amine scrubbing and other CO2 sorbents for new or existing plants that burn 

coal, and 

(3) pre-combustion processes utilized by IGCC fitted with facilities designed to accommodate carbon dioxide capture. 

Oxygen combustion produces a concentrated CO2 in the combustion process by 

supplying pure oxygen instead of air for combustion eliminating nitrogen which dilutes the CO2 concentration. Pre-combustion and amine scrubbing process extract 

the CO2 from the gas stream using a regenerable solvent such as monoethanolamine 

(MEA). Some current studies now show oxygen combustion as the least costly while 

other studies lean toward pre-combustion or advanced amines, indicating that technology development is underway and competition is strong. None of the technologies 

has been demonstrated at significant size in an integrated full-scale system for electricity generation. 

Oxy Coal Combustion 

Only the Oxy Coal Combustion process is based upon equipment and systems that 

are already commercially available at the required scale. However, there are integration requirements, operating parameters and final designs that require 

verification at larger scale. Oxygen combustion and the major operational processes 

have been demonstrated at pilot scale and a new 300 MW commercial plant using 

this technology is being developed by B&W for the SaskPower Corporation to be located at Estevan, Saskatchewan. 

In spite of the additional cost to concentrate a CO2 stream for storage, recent 

studies show oxygen combustion to be competitive with the other capture technologies. Since this technology utilizes conventional equipment, it is likely to have 

a considerably lower deployment and operational risk, and has potential for retrofit 

to the existing fleet of conventional plants, where tenable. 

Additionally, recent studies by the U.S. Department of Energy indicate oxygen 

combustion will be the lowest cost solution for coal and that the incremental cost 

increases of electricity using oxy combustion is less than the increase associated 

with amine CO2 scrubbing. 

Oxygen combustion provides a means of replacing the nitrogen in air with CO2

gas exiting the combustion chamber. By recirculating a portion of the combustion 

stream the oxy coal combustion plant effectively replaces the nitrogen in a conventional system with CO2 thereby inherently creating a concentrated CO2 stream for 

permanent storage. The net effect is that the system looks and acts like a conventional power plant with which power plant operators are comfortable, but which is 

capable of near zero emissions given carbon storage. Additionally, by excluding air 

conveyed nitrogen from the combustion chamber there is a sharp reduction in nitrogen oxide emissions from this technology, which is likely to obviate the need for selective catalytic reduction facilities. 

Although the properties of the flue gas differ from those with air firing due to the 

lack of nitrogen, it has been found that with the proper recycle ratio, an existing 

boiler can be converted to oxy coal combustion without changing heat transfer surfaces and only experiencing a small impact on fuel efficiency in the boiler island. 

For new units, optimized arrangements are being studied that offer some reduction 

in equipment size and improved performance. 

The first generation of full-scale units is intended to require minimal change to 

the conventional power plant as reasonable to permit retrofit application and minimize risk. Advanced air separation technologies and optimization of the product gas 

specification and the cleanup/compression process are also expected to improve both 

performance and cost. 

Radical Innovations 

We see Oxy Coal technology as one of the potential carbon management solutions 

for the relatively near future. B&W is developing a portfolio of potential solutions, 


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including some that are radically different from any that are currently approaching 

readiness for full scale testing. One of these approaches involves destruction of carbon dioxide, using naturally occurring enzymes to catalyze the reaction. While clearly still at the research stage, this approach may bear the potential for greatly reducing the costs for carbon dioxide reduction in the longer term. 

Closing Comments on Combustion-Based Climate Change Technologies 

The first wave of near-zero emission coal plants will start operations around 2012. 

As industry learns from these early commercial deployments, we will make adjustments to improve efficiency and competitiveness. Technology development, economic 

and market incentives can accelerate the timeframe for implementing widespread 

carbon capture deployments on a commercial scale. This will only be successful if 

legislation does not favor one technology over another. Therefore, when considering 

any incentives for deployment, Congress should avoid provisions that provide marketplace advantages or disadvantages for any specific technology. 

We are confident that our Oxy Coal Combustion technology can provide the most 

cost-effective solution for some power plants, while other technologies are better 

suited for others. 

We are encouraged by indications that a consensus is building toward a marketbased system for carbon management. A market-based system should encourage an 

efficient allocation of resources for reductions of carbon emissions both at new 

plants and, where tenable, at some existing plants. It is important to recognize that 

to significantly reduce our nation’s CO2 emissions, capture of CO2 will have to occur 

at existing fossil-fired plants, where tenable. 

We ask that the legislation support the acceleration of resolving and expanding 

Research and Development associated with carbon storage. In addition there is a 

need for clear policies regarding legal ownership of and liability for the injected CO2, and concise communications to overcome local concerns with large annual injections 

at storage sites. We believe that unless the regulatory and technical obstacles to the 

long-term storage of carbon dioxide from electric power plants are resolved, these 

will become the limiting factors in reducing carbon emissions. 

Commercial Nuclear Power 

As the European Union recently realized with its decision to count nuclear power 

toward renewable energy goals, nuclear power will be central to any efforts to reduce our carbon dioxide emissions. Commercial nuclear power provides carbon-free 

baseload electric power. Approximately 20% of all electricity generated in the U.S. 

is generated from carbon-free nuclear energy. While European and Asian countries 

aggressively work to meet the demands of a growing commercial nuclear market, 

America is losing its industrial capacity, intellectual expertise, and competitive 

edge. For reasons of economy, environment and national security, this must change. 

America’s Nuclear Industrial Base is Insufficient 

The unfortunate reality is that the United States does not have the domestic resources to build even one power reactor. Once the large, heavy forges and piping 

are acquired from overseas, we have the domestic capacity to manufacture about 

one and a half reactors annually. To construct enough reactors over the next twenty-five years to just maintain nuclear power’s 20% contribution to America’s total 

electricity production, we will have to triple that manufacturing capacity. 

The Babcock & Wilcox Companies is the one domestic source of commercial reactor pressure vessels and steam generators. General Electric is the only U.S. manufacturer of commercial fuel assemblies. Meanwhile, foreign companies like Alstom, 

Toshiba, Ansaldo-Camozzi, Doosan, Equipos Nuclereas, S.A., Hitachi, IshikawajimaHarima, and Mitsubishi are positioned to supply the vast majority of reactor vessels, 

steam generators and vessel heads that will go into the next generation of nuclear 

power plants. 

The Nuclear Industrial Base: A Strategic Asset 

Other nations understand the strategic and environmental significance of having 

a nuclear industrial base to support its nuclear activities. As carbon dioxide controls 

in whatever form, are legislated, nuclear energy will move towards being the lowest 

economic cost alternative. Furthermore, nations understand the vulnerability that 

they open themselves to by becoming overly dependent on foreign energy sources. 

The result is that many nations own and/or support their nuclear industrial base, 

make significant investments into their nuclear infrastructure, and artificially protect their domestic nuclear markets. 

The only exception to this rule is the United States. Foreign firms, for the most 

part, compete openly and freely in the U.S, even if they are state-owned. On the 

other hand, unless the state makes specific provisions, most foreign markets are 


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very difficult for U.S. firms to access. This, along with the fact that no U.S. commercial nuclear power plant has been ordered in three decades, has caused major consolidation of the U.S. nuclear industrial base and a loss of our dominant position 

in the commercial nuclear industry. 

Leveling the Playing Field 

One of the problems with growing America’s domestic commercial nuclear infrastructure is that the playing field is not level. Much of the global nuclear industry 

is either heavily subsidized, state owned, or enjoys other state-sponsored cost saving 

or risk mitigating measures. This environment makes competing very difficult for 

American companies. Some of the broad structural problems with the international 

nuclear market that perpetuate unfairness and U.S. disadvantage include: 

• Insurance and Indemnification. Many countries provide insurance for nuclear 

firms or cap liability exposure. This non-tariff protection afforded to foreign 

companies disadvantages U.S. manufactures. It allows foreign, state-owned and 

supported companies to freely operate in the United States, but because U.S. 

firms do not enjoy the same protections, they often can not compete abroad. In 

cases where U.S. firms do compete abroad, they do so with increased risk or 

within the context of additional regulation. The Convention on Supplementary 

Compensation for Nuclear Damage (CSC) is a Treaty that the Senate ratified 

that would address this problem. Unfortunately, Congress has yet to pass the 

implementing legislation that the State Department requires before the instrument of ratification can be filed with the International Atomic Energy Agency. 

The CSC Treaty will establish an international indemnification regime that 

would commit the international community to common standards for handling 

nuclear facility accident claims, and provide for a supplemental international 

fund to pay victims. Without the Treaty, U.S. companies will not only be prohibited from competing for work overseas, but prevented from fully supporting the 

President’s non proliferation agenda—ceding many of those activities to foreign 

suppliers. This is a serious trade/export issue. 

• Tariffs. Many nations and international political groupings maintain significant 

tariffs on nuclear components. While the United States maintains tariffs on 

some components, it has in the past unilaterally waived the tariff on heavy nuclear components, placing domestic manufacturers of these components at a distinct disadvantage over established foreign competitors. The recently passed 

pension bill contains a provision that lifts the waiver after 2008 except for 

heavy nuclear components contracted for before July 31, 2006. This was a compromise position between industry and the utilities. Moving forward, the United 

States must assure tariff parity between the United States and its nuclear trading partners. 

• Domestic preferences. While nations can compete openly with private U.S. firms 

in the United States, they often maintain domestic preferences for their domestic markets. The preferences include everything from raw materials to entire reactors and result in foreign states having much broader access to U.S. markets 

then the U.S. has to foreign markets. And given their ability to sell at discounted rates, private U.S. manufactures are severely disadvantaged in their 

own markets. 

• Overregulation. The nuclear industry is inherently regulation heavy but some 

foreign states use gratuitous regulation to restrict foreign access to their markets. The additional cost for U.S. companies to transverse the regulatory environment is often too substantial to maintain competitiveness. 

An Energy Policy Act for the Industrial Base 

The Energy Policy Act of 2005 has successfully encouraged progress toward constructing the first new U.S. nuclear power plants in thirty years. While a critical 

first step, these efforts focus only on new nuclear power plant construction rather 

than on nurturing and building a robust domestic nuclear industry. Recent federal 

efforts only benefit a small portion of the nuclear industry, such as construction 

companies, reactor designers and utility firms. This approach ignores the broader 

domestic nuclear industrial base required to support a growing nuclear industry and 

its employment of highly skilled manufacturing jobs. As a follow on to the Energy 

policy Act of 2005, Congress should provide incentives to invest in America’s nuclear 

supplier base. These are the companies that will manufacture the components, pour 

the forgings and extract the raw materials needed to support a nuclear renaissance. 

Such a program would help to offset the economic advantages of heavily subsidized 

foreign companies. 


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Similar programs are now needed to resurrect America’s nuclear industrial base. 

American manufacturers need a tax incentive program geared to offset economic advantages of heavily subsidized foreign companies. 

Congress should level the playing field. These efforts should focus on stimulating 

the production of those components that are either not available in the domestic 

commercial market or for which there is a single domestic supplier; new nuclear 

technologies; and nuclear workforce training programs. Loan guarantee should focus 

on facility capitalization and other capital growth investments. These incentives 

should go directly to companies that manufacture components as well as to utilities 

for buying domestically. This would provide the same sort of stimulus for the nuclear industry that existing efforts have provided to the commercial reactor design 

and plant construction industries. Congress should include a sunset clause that 

eliminates the incentives once domestic industry has had the opportunity to compete 

on a level playing field and reestablish itself. 

Having a domestic supplier of these components to compete with the heavily subsidized international nuclear industry, not only provides jobs for American workers, 

but will be essential to keeping prices in check and quality high. Without such an 

incentive program, it will be difficult, at best, for American companies to reenter 

the commercial nuclear business. The U.S. could, thereby, be relegated to spectator 

status as nations such as Russia, France and China, lead the world through the 

emerging nuclear renaissance. Their control of the manufacturing base and fuel 

business could lead to secondary treatment in delivery priority for critical components and higher prices. In the end, the United States is in danger of shifting its 

foreign dependence from oil and natural gas to nuclear industrial components and 

technology supply and in the process weakening our participation in developing nuclear non-proliferation efforts. 

Thank you for the privilege to provide testimony to the Committee on these critically important matters. 

f 

Statement of NGVAmerica 

Introduction 

NGVAmerica appreciates the opportunity to provide the following statement concerning America’s energy policy. NGVAmerica is a national organization of over 100 

member companies, including: vehicle manufacturers; natural gas vehicle (NGV) 

component manufacturers; natural gas distribution, transmission, and production 

companies; natural gas development organizations; environmental and non-profit 

advocacy organizations; state and local government agencies; and fleet operators. 

NGVAmerica is dedicated to developing markets for NGVs and building an NGV infrastructure, including the installation of fueling stations, the manufacture of NGVs, 

the development of industry standards, and the provision of training. 

The Ways and Means Committee has indicated it will hold a series of hearings 

to address energy and tax policy. This effort also will address global warming and 

the climate change implications of energy use. The first hearing on this issue was 

held February 28, 2007. NGVAmerica’s comments respond to the committee’s invitation for interested organizations to provide statements for the record. Our statement 

also addresses the Bush Administration’s goal for 2017 of using 35 billion gallons 

of non-petroleum fuels. NGVAmerica has submitted a similar statement for consideration by the Senate Finance Committee, which is holding hearings on the same 

issues. 

NGVAmerica is pleased to provide the following statement to the committee as 

it considers these very important issues. NGVs can and will play an increasing role 

in replacing petroleum motor fuels and reducing emissions that contribute to climate change. Congress already has taken a number of steps to encourage greater 

use of natural gas and other alternative transportation fuels. These steps were enacted as part of the Energy Policy Act of 2005 and SAFETEA–LU. These incentives 

include tax credits for alternative fueled vehicles, alternative fuel infrastructure and 

alternative fuel use. Consumers and businesses alike are benefiting from the congressional action that was taken to encourage the increased use of alternative fuels. 

However, much more must be done if the U.S. is to begin the long process of 

transitioning away from the use of petroleum motor fuels—especially if America is 

to achieve the goal called for the President in his State-of-the-Union address of displacing 35 billion gallons of petroleum transportation fuels by 2017. This effort will 

require sustained and significant federal support since the risks associated with this 

effort are simply too great for private industry to undertake them alone in the timeframe needed. Moreover, this effort will require a mix of different transportation 


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1See—American Gas Associations (U.S. Resource Base)—http://www.aga.org. 

2See State of California Department of Resources Press Release June 29, 2006—http:// resources.ca.gov/press_documents/CaliforniaSwedenBioenergyMOURelease_06_29_06.pdf 3See Memorandum of Understanding Between State of California and Sweden; http:// resources.ca.gov/press_documents/CaliforniaSwedenBiofuelsMOU.pdf 4See GreenCar Congress (January 25, 2007)—http://www.greencarcongress.com/2007/01/prometheus_prod.html; or Prometheus Energy—http://www.prometheus-energy.com/whatwedo/ 

bowerman.php 

fuels to fill the void provided by petroleum since no one single fuel appears likely 

to supplant petroleum. 

The comments provided below discuss the potential benefits of increasing the use 

of NGVs and ways in which the committee can assist in achieving them. Increasing 

the use of natural gas vehicles (NGVs) can: (1) reduce America’s dependence on foreign oil, (2) improve air quality in urban areas, (3) reduce emissions of greenhouse 

gases, and (4) pave the way for the more rapid introduction of hydrogen transportation technologies. 

Summary of Recommendations 

1. Extend and amend the tax incentives for purchasing natural gas vehicles, 

using natural gas in those vehicles and building natural gas fueling infrastructure. 

2. Provide the same tax incentive for biogas converted to biomethane as currently 

exists for biogas used for electricity generation. 

3. Provide tax incentives for natural gas use in off-road vehicles. 

Rationale for Recommendations 

Reducing Petroleum Reliance 

There has been much discussion and controversy about the energy balance of various alternative fuels and their ability to reduce petroleum consumption. In the case 

of natural gas, each gasoline gallon equivalent of natural gas used for transportation displaces nearly 100 percent of the petroleum that would otherwise be used 

in the form of gasoline or diesel fuel. Furthermore, nearly 85 percent of the natural 

gas currently consumed in the U.S. is from domestic sources—produced right here 

in the continental U.S., the Gulf of Mexico, or Alaska. Most of the remainder is imported from Canada. The total U.S. natural gas resource base, including proved reserves, is more than 1,300 trillion cubic feet, over a 65-year supply of natural gas 

at current production levels.1 Thus, U.S. supplies of natural gas are abundant and 

secure. With sufficient will, supplies of conventional natural gas will continue to 

grow as U.S. demand for this valuable fuel grows. And with the right incentives, 

non-conventional, renewable sources of natural gas also could increasingly be available to U.S. consumers. For example, an analysis previously conducted for DOE estimated that the U.S. could feasibly produce 1.25 quadrillion Btu annually. This is 

equivalent to 10 billion gasoline-gallon-equivalent of biomethane from landfills, animal waste processing facilities, and sewage. 

Biomethane is pipeline-quality natural gas produced by cleaning up and purifying 

biogas. Biogas is a mixture of methane and other gases produced from the decomposition of organic materials such landfill waste. Thus, biomethane is a renewable 

source of natural gas. In the U.S., the production of biomethane has been overshadowed by the production of electricity from biogas. This is partly because the 

U.S. tax code encourages renewable electricity production but does not encourage 

biomethane production. In addition, many of the incentives recently adopted in the 

Energy Policy Act of 2005 (grants, loan guarantees, demonstration projects) favor 

bio-refineries that produce liquid fuels, or more specifically ethanol. If these incentives were expanded to be biofuels-neutral, the U.S. could more quickly realize the 

potential of this valuable fuel source. Other countries are moving forward with biomethane development even as they also move forward with increased ethanol use. 

In Sweden, twenty-five biomethane production facilities are in use and there are 

sixty-five fueling stations now dispensing biomethane for transit buses and other vehicles.2 Some positive developments are occurring here in the U.S. California officials recently signed a memorandum of understanding to work with officials from 

Sweden to advance the use of biomethane as part of California’s bioenergy initiative.3 And just this year, Prometheus Energy, a Washington State-based company, 

began producing biomethane at the Bowerman Landfill in Irvine, California.4 This 

facility will be producing 5,000 gasoline-gallon-equivalent of biomethane per day. 

The biomethane will be used to fuel low-emission, transit buses operated in Orange 

County. 


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5The President’s Advanced Energy Initiative now includes a target of achieving 35 billion gallons of non-petroleum motor fuels. Few details have been released on this target but it is believed that it is based largely on increased use of ethanol. A gallon of ethanol, however, has 

far less energy than a gasoline gallon, about 35 percent less energy content. If the 35 billion 

gallon target is based on the energy content in ethanol, achieving 10 billion gasoline gallon 

equivalent of biomethane would actually represent about 43–44 percent of the President’s target. 6See Argonne National Laboratory, GREET Model (2007); http://www.transportation.anl.gov/ 

software/GREET/ 7See National Renewable Energy Laboratory, WMATA Emission Testing Report, December 

2005; http://www.cleanenergyfuels.com/pdf/NREL-WMATA_DieselvNG21606.pdf 

If fully utilized, biomethane could offset nearly all or most of the future demand 

for natural gas as a transportation fuel. As noted above, the potential exists to 

produce an estimated 10 billion gallons equivalent. This amount of fuel represents 

nearly a third of the President Bush’s announced target for 2017 of achieving the 

production and use of 35 billion gallons of non-petroleum motor fuels.5 Current demand for natural gas as a transportation fuel in the U.S. stands at about 200 million gallons per year. Thus, the increased use of natural gas for transportation could 

grow substantially in the coming years, offsetting a large amount of petroleum, and 

be supplied almost exclusively by renewable sources. Importantly, most of the fuel 

inputs that would be used to produce biomethane (e.g., sewage, landfill gas, animal 

waste) are currently underutilized or not used at all. Therefore, encouraging the 

production and use of biomethane would not harm other industries and would provide additional revenue stream for those industries that currently process and handle these feedstocks. Farmers and other operators of animal facilities can install anaerobic digester systems to convert their animal waste to usable biomethane—with 

valuable, sanitary fertilizer as a byproduct. Longer term, cellulosic crops could be 

used to produce biomethane. Currently, the focus on cellulosic biofuels is on cellulosic ethanol. However, cellulosic crops also could be used to produce biomethane 

if the government were to provide biomethane refineries the same level of incentives 

as currently being given to ethanol biorefineries. 

Climate Change Benefits 

The use of conventional natural gas in motor vehicles reduces greenhouse gas 

emissions by 15–20 percent.6 More recent emission testing programs indicate that 

greenhouse gas reductions from using natural gas in heavy-duty applications may 

be as much as 20–30 percent, based on improvements to natural gas engine technology and changes to petroleum fueled vehicles.7 These emission benefits are in addition to the very large reductions in volatile organic compounds, nitrogen oxides 

and air toxics provided by using natural gas as a motor vehicle fuel. 

The greenhouse gas benefits provided by natural gas vehicles are significantly 

greater if the natural gas is biomethane. This is because capturing and using biomethane offsets flaring or venting of methane emissions that would otherwise occur, 

and also offsets the emissions associated with producing, refining and burning gasoline and diesel fuel. Methane is a significant greenhouse gas—estimated to be 21 

times as intense a greenhouse gas as carbon dioxide. Capturing and ‘‘flaring’’ biogas 

reduces the methane to carbon dioxide. But, in doing so, its energy value is wasted. 

An energy-wise and greenhouse gas-wise alternative is to capture the biogas from 

these renewable waste sources, convert that biogas to biomethane, and use the biomethane to displace petroleum or other fossil fuels in transportation or other energy 

applications. If the potential biomethane resources in the U.S. were realized (i.e., 

10 billion gallons per year), the estimated greenhouse gas reductions would be on 

the order of 500 million metric tons of CO2 per year—or the equivalent of removing 

90 million light-duty gasoline vehicles from the roads. 

Paving the Way for Hydrogen 

DOE’s long-range plans to address energy independence and lessen the environmental impact of motor vehicles call for a transition to hydrogen fuel cell vehicles 

(FCVs). This goal includes producing hydrogen from renewable energy sources, such 

as solar, wind, or even landfills. In the near-term, however, hydrogen will most likely be produced by steam-reforming natural gas. Currently, natural gas steam-reforming represents nearly all U.S. hydrogen production (used mostly by refineries) 

and about half of world hydrogen supply. Natural gas is used because methane (the 

main constituent of natural gas) has the highest hydrogen-to-carbon ratio of any hydrocarbon fuel. Thus, natural gas provides a near-term, widely available feedstock 

with a proven technique for separating out hydrogen molecules. During the initial 

launch of hydrogen-fueled vehicles (both FCVs and internal combustion engine vehicles, or ICEVs), it is likely that demand for hydrogen fuel in the transportation sector will be met through the steam reforming of natural gas. 


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There is another equally important link between natural gas and hydrogen, however. That link is the infrastructure, technology, and experience currently being developed to use compressed natural gas and liquefied natural gas as transportations 

fuels. By advancing the market for CNG and LNG, it just might be possible to accelerate the transition to hydrogen. Attached is a list of some of the ways increased 

use of natural gas is making the hydrogen future more viable. 

Tax Policies and Incentives Needed to Increase Natural Gas Use 

In order to achieve the potential benefits of increased natural gas use, 

NGVAmerica urges the Ways and Means Committee and Congress to consider the 

following measures. 

1. Alternative Fuel Excise Tax Credit 

The 2005 Transportation Law (SAFETEA–LU, § 11113, Pub. L. No. 109–59) provides tax incentives for natural gas and other alternative fuels when used as vehicle 

fuels. That alternative fuel credit expires on 9/30/2009. This short timeframe sends 

the wrong message to businesses and consumers about the government’s support for 

using natural gas and other alternative fuels, and is inconsistent with the President’s 2017 goal of replacing 35 billion gallons of petroleum with alternative fuels. 

Therefore, the incentive for alternative fuels should be extended until the end of 

2016. Moreover, Congress should clarify that the tax credits provided for alternative 

fuels are not includable in income since such treatment would significantly discount 

the benefit (and, therefore, the impact) of this incentive. The IRS is currently looking at the treatment of the tax credits when taken by taxable entities, and has indicated that they may be includable income. Also, the tax credits for alternative fuels 

should be amended so that they are available on an accelerated basis just like the 

alternative fuel mixture credits; taxpayers filing for alternative fuel credits currently must wait until end of year to file certain claims (over and above excise tax 

offsets) while persons filing for alternative fuel mixture credits may file multiple 

claims during the year for payments from the government. 

2. Alternative Fuel Vehicle Purchase Income Tax Credit 

The 2005 Energy Law (EPAct 2005, § 1341, Pub. L. No. 109–58) provides tax credits for the purchase of dedicated alternative fuel vehicles, including NGVs. The alternative fuel vehicle credit expires on 12/31/2010. As with the fuel credit above, the 

short timeframe for this incentive sends the wrong message to businesses and consumers about the government’s support for NGVs, and is inconsistent with the 

President’s petroleum replacement goal. Therefore, the incentive should be extended 

until the end of 2016. The existing credit covers 80 percent of the incremental price 

for dedicated vehicles that meet the most stringent emission standards, and 50 percent for other dedicated vehicles. Since much of the emphasis on promoting alternative fuels has shifted to petroleum replacement and since dedicated NGVs displace 100 percent of the petroleum that would otherwise have been used, the credit 

for dedicated vehicles should be expanded to 90 percent of the incremental price. 

Congress also should provide a credit of 50 percent of incremental cost for the acquisition of bi-fuel NGVs since some businesses and consumers will continue to demand 

the flexibility of a multi-fuel vehicle until alternative fueling infrastructure is more 

widespread. In order to make these credits attractive to businesses, they should be 

exempt from tentative minimum tax provisions. Imposition of the minimum tax 

means that most large fleets are only able to use the tax credits as an incentive 

to acquire a very small number of new NGVs each year. Fleets represent the best 

opportunity to maximize the use of alternative fuels but this opportunity will not 

be realized if fleets receive an incentive that encourages no more than one or two 

NGV acquisitions each year. 

3. Alternative Fueling Station Income Tax Credit 

EPAct 2005 (§ 1342, Pub. L. No. 109–58) provides for an income tax credit of 30 

percent up to a maximum of $30,000 for the installation of business NGV fueling 

stations and $1,000 for home refueling equipment. This incentive is inadequate to 

spur fueling station expansion. Large natural gas fueling facilities, capable of fastfilling frequent customers, cost up to $1 million. The cost of even the least expensive 

home refueler (with installation) can be upwards of $5,000. Therefore, the fueling 

station credit should be increased to 50 percent with a maximum of $300,000, and 

the home refueling credit to a maximum of $2,000. The tax credit for fueling infrastructure also should be exempt from the minimum tax provisions. Most fueling facilities are currently being developed by a small number of companies that build 

and operate stations for customers. If tax credits are subject to minimum tax, these 

businesses will only be encouraged to install a minimal number of new stations each 

year. 


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8See 26 U.S.C. § 45. 

4. AFV and Fueling Infrastructure Tax Credit for Not-For-Profits 

As mentioned above, EPAct 2005 (§§ 1341–1342, Pub. L. No. 109–58) provides an 

income tax credit for part of the incremental price of new alternative fuel vehicles 

and alternative fuel stations. In an effort to ensure that public agencies also could 

benefit from this incentive, Congress provided that, when the purchaser is a public 

entity, the income tax credit can be passed back to the vehicle or equipment seller— 

with the expectation that the seller would pass some or all of the incentive to the 

buyer in the form of a lower purchase price. For a number of reasons, however, very 

few public agencies have benefited from this provision. Frequently, the sellers do not 

have sufficient tax liability. Transit bus manufacturers are a good example. In other 

cases, the alternative minimum tax eliminates the seller’s ability to capture (and, 

therefore, pass on to the public agency) the tax credit. To provide public agencies 

with a clear and certain incentive to buy alternative fuel vehicles and install associated fueling stations, Congress should provide public agencies with the option of receiving the value of the credit as a federal grant or other direct federal payment. 

5. Biomethane Production Credit 

Biogas (i.e., methane-rich gas produced from animal waste, crop waste, crops, sewage and landfills) that is used to produce electricity is eligible for a Section 45 production tax credit.8 However, if that same biogas is used directly (e.g., for on-site 

steam production) or is converted to pipeline quality methane and used for any 

other purpose, the biogas producer receives no credit. All use of renewable biogas 

should be encouraged. Therefore, the Section 45 biogas credit should be redefined 

to include all energy uses of biogas. 

6. Tax Credits for Off-Road Vehicles 

The vehicle, infrastructure and fuel use credits for alternative fuel vehicles included in the 2005 Energy and Transportation laws are generally limited mostly to 

on-road vehicles. However, about a quarter of the fuels used in transportation are 

used in off-road vehicles. Since these vehicles do not have to meet on-road vehicle 

emission standards, they tend to produce far more emissions than comparable onroad vehicles. To help reduce our dependence on foreign oil as well as air pollution, 

off-road vehicles should be provided financial incentives to move to non-petroleum 

fuels and technologies. 

Conclusion 

NGVAmerica appreciates the opportunity to provide these comments. We look forward to working with the committee as it crafts legislative proposals to address our 

nation’s energy policy in ways that will diversify the mix of fuels used in transportation, provide greater energy security, reduce reliance on petroleum fuels, and increase the use of fuels that address climate change. 

Attachment 

How NGVs and Helping to Paved the Way for a Hydrogen Transportation Future 

Fuel Storage 

Until major breakthroughs in hydrogen storage technologies are realized, hydrogen will most likely be stored on-board vehicles as a compressed gas or a cryogenic 

liquid. Today’s prototype hydrogen vehicles are able to use existing tank technology 

for CNG or liquefied natural gas (LNG) vehicles as base technologies for hydrogen 

storage. However, to achieve commercialization objectives (e.g., sufficient driving 

range), FCVs and other types of hydrogen vehicles will require ongoing advancements in on-board hydrogen storage technology. Fuel storage capacity also must be 

safely increased, while reducing cost and weight. Because of similar material and 

manufacturing issues, several companies that make NGV tanks are also designing 

improved fuel-storage systems for hydrogen vehicles, applying their vast experience 

from years of developing onboard CNG and LNG tanks. 

Fuel Management and Safety Systems 

As with fuel storage technologies, commonality exists among companies working 

on fuel management systems for NGVs and FCVs. Generally, advancements made 

for natural gas systems also have application to hydrogen systems. Onboard safety 

technology designed for NGVs (e.g., gas detection and fire suppression) are also 

being applied to hydrogen vehicles. 


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1 NEI is the organization responsible for establishing unified nuclear industry policy on matters affecting the nuclear energy industry. NEI members include all companies licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect/engineering firms, fuel suppliers, and other organizations and individuals involved in the 

nuclear energy industry. 

Fueling Station Infrastructure & Dispensing Equipment 

Fuel cell vehicles will deliver the greatest benefits (zero emissions, highest system 

efficiency) if they are designed to operate on direct hydrogen, rather than operating 

on hydrogen reformed onboard the vehicle. FCVs, therefore, require access to hydrogen fueling stations. It is unlikely that, early on, hydrogen for these stations will 

be produced at large methane-reforming plants, and transported to the stations via 

trucks or pipelines. A far more likely scenario is that the hydrogen will be reformed 

in relatively small volumes at the local station using pipeline natural gas. Pre-existence of the necessary natural gas pipeline infrastructure makes this feasible. The 

U.S. has more than 1.3 million miles of natural gas transmission and distribution 

lines. In addition, the U.S. has more than 1,000 fueling stations that currently supply natural gas for motor vehicle use. It only makes sense that some of these stations also would be modified to serve fleets using hydrogen fuel. In fact, some already are providing hydrogen. The existing natural gas infrastructure makes reforming of natural gas at existing gasoline stations a convenient, relatively cost-effective option for producing hydrogen. Today’s natural gas dispensers are a bridge 

technology to pumps that will fuel tomorrow’s vehicles using either compressed or 

liquefied hydrogen. Much commonality exists between systems that dispense and 

meter these two fuels, whether in gaseous or liquid form. Consequently, today’s natural gas dispensers are paving the way for affordable, user-friendly hydrogen dispensers. NGVs also can be refueled overnight at home—a major advantage compared to gasoline vehicles. Today’s home refueling appliances (HRAs) that dispense 

CNG are also being designed for longer-term capability to refuel FCVs in the residential setting. In this way, home refueling of NGVs provides a clear pathway to 

the longer-term scenario of fueling FCVs at home. 

Natural Gas/Hydrogen Blends 

Compressed hydrogen can be blended with CNG to produce an exceptionally clean 

transportation fuel. With relatively minor vehicle modifications, this blend can be 

used in today’s heavy-duty NGVs. For example, transit buses at SunLine Transit 

Agency in the Coachella Valley are operating in revenue service on a blend of CNG 

and hydrogen. This is helping SunLine to gradually transition its bus fleet to 100 

percent operation on hydrogen. Similar efforts are underway in other areas, such 

as Las Vegas. Many members of the NGVAmerica are cooperating in efforts to develop and demonstrate vehicles that operate on this type of hydrogen-natural gas 

mixture. 

Codes & Standards, and Safety Training 

A host of other ongoing issues must be addressed for hydrogen to become a common transportation fuel. Many of these issues currently are being addressed by 

users of natural gas vehicles. As hydrogen transportation technologies gradually 

move from the demonstration phase into commercial deployment, a new structure 

of human support services will be needed. This includes specialists such as mechanics, inspectors, and fire marshals who are familiar with FCVs, hydrogen fuel, and 

fueling stations. The NGV industry is already helping to create such a support 

structure. To serve today’s well-established markets for NGVs and natural gas fueling stations, thousands of people have been trained in related jobs. This support 

structure continues to grow, serving as a harbinger for training of America’s future 

hydrogen workforce and the people who will be responsible for deploying hydrogen 

vehicles and fueling stations on a commercial scale. 

f 

Statement of Nuclear Energy Institute 

Mr. Chairman, Ranking Member McCrery and members of the Committee, the 

Nuclear Energy Institute 1 appreciates this opportunity to express the nuclear energy industry’s views on ensuring America’s energy future in a carbon constrained 

world. We are committed to ensuring that clean, safe, and reliable nuclear energy 

is part of that future. 


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2Sources: Cambridge Energy Research Associates, Edison Electric Institute. 

Clearly, the challenge of addressing climate change is a priority with the 110th 

Congress. The leadership of both houses is committed to meeting this challenge with 

policies that will both protect our global environment while preserving America’s 

economy. 

The climate legislation introduced to date recognizes the need to provide incentives to stimulate the development and deployment of a portfolio of clean-energy 

technologies, including nuclear energy. 

Innovative tax policies are needed to ensure construction of the significant 

amount of new infrastructure that will be required to reduce greenhouse gas (GHG) 

emissions, meet increasing demand for electricity, and maintain economic growth in 

the United States. 

Nuclear Energy Is A Non-GHG-Emitting Source of Baseload Electricity Generation 

Nuclear energy plays the single-largest role in the U.S. electric industry’s contribution to greenhouse gas emissions reductions. At present, approximately 30 percent of America’s electricity comes from sources that produce no air emissions or 

greenhouse gases: nuclear energy, hydroelectric power, wind and solar. Nuclear energy alone produces 73% of this carbon-free electricity, enough for one of every five 

U.S. homes and businesses. 

In 2005, the 103 existing nuclear plants avoided the emission of 682 million metric tons of carbon dioxide (CO2), which is more than double the emissions avoided 

by all the other non-emitting sources of electricity combined. 

According to the newly released annual report to the U.S. Department of Energy 

from Power Partners—a voluntary partnership between DOE and the electric power 

industry—improvements and expansion of the existing nuclear plants accounted for 

54 percent of greenhouse gas reductions reported on a project basis by the electric 

sector in 2004, the equivalent of taking 100 million automobiles off the road. 

Although continued improvements by the existing nuclear fleet will achieve further emission reductions, additional large-scale reductions in U.S. GHG emissions 

will require building new nuclear plants. The Energy Information Administration 

estimates that U.S. electricity demand will increase 45% by 2030. America must 

build 50,000 megawatts of new nuclear generation by 2030 just to maintain nuclear 

energy’s current 20% share of electricity supply. 

Tax Stimulus Is Needed For Building New Clean-Energy Generation 

The electric sector must spend over $750 billion by 2020 2 to meet increasing electric demand and more stringent environmental requirements—before considering 

any climate change policies. Part of that investment will be in new baseload generation, some of which will be new nuclear power plants. 

The Energy Policy Act of 2005 provided limited financial incentives to encourage 

deployment of new, advanced nuclear plants. Since its passage, fifteen companies 

and consortia have announced plans to license more than 30 new nuclear plants. 

Turning those licensing plans into the construction of new nuclear power plants will 

require federal and state government policies that recognize the large capital outlay 

during construction. 

The electric sector is the most capital-intensive among major industrial industries. 

The electric companies shown in Figure 1 have all announced plans for new nuclear 

construction. They are significantly more capital-intensive than the major oil companies also shown—and significantly smaller. 


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Figure 1—Capital Intensity Versus Company Size 

Constructing a new nuclear power plant is a capital-intensive project—between $3 

and $5 billion each. This is a major investment for companies the size of U.S electric 

companies. To build baseload plants that will provide 40–60 years of stable-priced, 

non-GHG-emitting generation, many of these companies will require investment 

stimulus and investment support, to enable them to maintain sound financials and 

ratings during the four to five year construction period. 

Carbon-free Nuclear Energy Must Play a Key Role in Our Nation’s Energy 

Future 

The nation’s energy portfolio must include clean, reliable and affordable energy 

sources available today, such as nuclear energy. Nuclear energy offers several 

unique advantages. It is the only expandable baseload energy source that does not 

emit carbon or other greenhouse gases into the atmosphere during operation. Nuclear energy safely and reliably provides price stability for electricity customers as 

the prices for fossil fuels fluctuate. 

There are exciting new opportunities in areas such as hydrogen production and 

plug-in hybrid automobiles, enabling nuclear energy to help reduce carbon emissions 

from the transportation sector. 

Although our nation must continue to employ a mix of fuel sources for generating 

electricity, it is important that nuclear energy maintain at least its current 20 percent contribution to U.S. electricity production. Maintaining that level of production 

will require construction of a significant number of new nuclear plants beginning 

in the next decade. 

To ensure the electric industry builds capital-intensive new nuclear power plants, 

policies must be in place to stimulate investment and provide limited construction 

support to companies willing to build the first plants. 

f 

Statement of Mark Willers, Minwind Energy, Rock, Minnesota 

In our small community of Rock County we have 9,600 people. We have put together 360 farmers and local townspeople to participate in the only local-owned 

multi stockholder commercial wind farm in the United States. 

We are asking for review of the policy in section 45 of the IRS Tax Code which 

prohibits farmer, military personnel, and local citizens from receiving Production 

Tax Credit (PTC), and the removal of restrictions on alternative minimum tax 

(AMT) on their income. This is accomplished currently by restricting PTCs (for 

wind) to be used only on passive income and not ordinary income. We request that 

PTCs be available on ordinary income with no AMT applicable. 


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Local people have no or little passive income. Section 45 tax code is penalizing 

the middle class, working people and promoting more foreign ownership. Foreign 

companies are renting up sites for wind turbines for which they can use U.S. tax 

credits to offset their income. We can not compete in this environment. There is 

presently no cap on total PTC outlays so this should be scored at zero. I am requesting a chance to explain this to your full committee. I will come to Washington, DC 

to explain in greater detail. 

Please help U.S. citizens first!! There is a GAO report on our company putting 

71⁄2 times more income in the local economy. Thank you. 

f 

Conyers, Georgia 30012 

February 28, 2007 

While the use of fossil fuels by mankind may have a slight impact on the Earth’s 

climate, the level is insignificant when compared to the dynamics and subsequent 

GHG emissions of the Earth itself. The burning of fossil fuels is simply recycling 

the carbon molecules that have been present on Earth since it began 4 billion years 

ago. 

The single largest anthropogenic forcing on our climate comes in the form of solar 

radiation from our own Sun. The largest protector the Earth has in preventing dangerous amounts of radiation from penetrating our atmosphere in the first place is 

the magnetic field generated by the core dynamo of the Earth itself. The magnetic 

flux lines that are generated in parallel lines of force from the south magnetic pole 

to the north magnetic pole create a shield the reflects much of the energy before 

it ever reaches the upper atmosphere. 

It is also the weakening of this very same magnetic field for the past 150 years 

that is responsible for the rapid climate change we perceive is occurring. The weakening of the field can only be theorized at this point that the Earth’s magnetic field 

may be in the infancy stages of a pole reversal, which has not occurred in over 

780,000 years (see MSNBC article ‘‘Earth’s Weakening Magnetic Field,’’ by Andrew 

Bridges, 12/10/2003). The most significant indicator and possibly the cause of the 

degrading field coincides with the rapid acceleration of the magnetic poles movement, which is now calculated to reach Siberia by 2040 and is moving at a rate of 

nearly 40km per year. And since the Earth’s poles are shaped like a traditional bar 

magnet, this also means the South magnetic pole is also moving at the same rate. 

The normal movement up until the late 1980’s dictates the movement has been 5 

to 6 km per year. 

The effects of this movement are proven to cause a distortion and bending of the 

normally parallel lines of the protective magnetic shield (flux lines). This distortion 

automatically weakens the effectiveness to shield out the solar radiation and has 

been measured to be at least 10% weaker than 100 or 150 years ago (see National 

Geographic ‘‘Earth’s Magnetic Field is Fading,’’ by John Roach, Sept. 2004). In layman’s terms, this means that 10% more solar radiation is getting through to heat 

up our atmosphere and oceans, causing hot spots to occur and violent storms to 

spawn. 

In addition to the increased thermal activity, the atmosphere is also being 

bombarded with 10% more photon/electron penetration as a whole. This increase on 

the molecular level causes increased electrical activity between the Earth and the 

atmosphere as the unlike charges naturally try to cancel the imbalance. This is simply one more effect that is noted during thunderstorms, tornadoes, and hurricanes 

when referencing the amount of electrical activity within the storms and the increase of ozone production due to lightning. 

Donald Williamson 

Æ 


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