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57–687PDF 2010

CLIMATE CHANGE FINANCE: PROVIDING

ASSISTANCE FOR VULNERABLE COUNTRIES

HEARING

BEFORE THE

SUBCOMMITTEE ON ASIA, THE PACIFIC AND 

THE GLOBAL ENVIRONMENT

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED ELEVENTH CONGRESS

SECOND SESSION

JULY 27, 2010

Serial No. 111–120

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

HOWARD L. BERMAN, California, Chairman 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

BILL DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

DIANE E. WATSON, California 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

MICHAEL E. MCMAHON, New York 

THEODORE E. DEUTCH, Florida 

JOHN S. TANNER, Tennessee 

GENE GREEN, Texas 

LYNN WOOLSEY, California 

SHEILA JACKSON LEE, Texas 

BARBARA LEE, California 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

MIKE ROSS, Arkansas 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

JIM COSTA, California 

KEITH ELLISON, Minnesota 

GABRIELLE GIFFORDS, Arizona 

RON KLEIN, Florida 

ILEANA ROS-LEHTINEN, Florida 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

RON PAUL, Texas 

JEFF FLAKE, Arizona 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

BOB INGLIS, South Carolina 

GUS BILIRAKIS, Florida 

RICHARD J. KESSLER, Staff Director 

YLEEM POBLETE, Republican Staff Director 

SUBCOMMITTEE ON ASIA, THE PACIFIC AND THE GLOBAL ENVIRONMENT

ENI F.H. FALEOMAVAEGA, American Samoa, Chairman 

GARY L. ACKERMAN, New York 

DIANE E. WATSON, California 

MIKE ROSS, Arkansas 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

GREGORY W. MEEKS, New York 

DONALD A. MANZULLO, Illinois 

BOB INGLIS, South Carolina 

DANA ROHRABACHER, California 

EDWARD R. ROYCE, California 

JEFF FLAKE, Arizona 

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C O N T E N T S 

Page

WITNESSES 

The Honorable Lael Brainard, Under Secretary for International Affairs, U.S. 

Department of the Treasury ................................................................................ 11

Jonathan Pershing, Ph.D., Deputy Special Envoy for Climate Change, U.S. 

Department of State ............................................................................................ 20

Rear Admiral David W. Titley, Oceanographer and Navigator of the Navy, 

U.S. Department of the Navy .............................................................................. 28

Maura O’Neill, Ph.D., Senior Counselor to the Administrator and Chief Innovation Officer, U.S. Agency for International Development ............................. 37

The Honorable Nancy E. Soderberg, President, Connect U.S. Fund (Former 

Alternate Representative to the United Nations) ............................................. 57

Mr. Elliot Diringer, Vice President, International Strategies, Pew Center 

on Global Climate Change ................................................................................... 67

The Honorable Reed E. Hundt, CEO, Coalition for Green Capital (Former 

Chairman of the Federal Communications Commission) ................................. 79

Redmond Clark, Ph.D., Chairman and CEO, CBL Industrial Services .............. 93

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Eni F.H. Faleomavaega, a Representative in Congress from 

American Samoa, and Chairman, Subcommittee on Asia, the Pacific and 

the Global Environment: Prepared statement ................................................... 4

The Honorable Lael Brainard: Prepared statement ............................................. 14

Jonathan Pershing, Ph.D.: Prepared statement ................................................... 22

Rear Admiral David W. Titley: Prepared statement ............................................ 30

Maura O’Neill, Ph.D.: Prepared statement ........................................................... 39

The Honorable Nancy E. Soderberg: Prepared statement ................................... 60

Mr. Elliot Diringer: Prepared statement ............................................................... 69

The Honorable Reed E. Hundt: Prepared statement ............................................ 81

Redmond Clark, Ph.D.: Prepared statement ......................................................... 96

APPENDIX 

Hearing notice .......................................................................................................... 118

Hearing minutes ...................................................................................................... 120

The Honorable Donald A. Manzullo, a Representative in Congress from the 

State of Illinois: Commission on Growth and Development, Working Paper 

No. 60 .................................................................................................................... 121

The Honorable Dana Rohrabacher, a Representative in Congress from the 

State of California 

List of 100 scientists ............................................................................................ 129

The Wall Street Journal article, ‘‘The Climategate Whitewash Continues’’ ... 132

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CLIMATE CHANGE FINANCE: PROVIDING 

ASSISTANCE FOR VULNERABLE COUNTRIES 

TUESDAY, JULY 27, 2010

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ASIA, THE PACIFIC

AND THE GLOBAL ENVIRONMENT, COMMITTEE ON FOREIGN AFFAIRS, Washington, DC. 

The subcommittee met, pursuant to notice, at 2:22 p.m., in room 

2172, Rayburn House Office Building, Hon. Eni F.H. Faleomavaega 

(chairman of the subcommittee) presiding. 

Mr. FALEOMAVAEGA. The subcommittee hearing will come to 

order. 

This is the Subcommittee on Asia, the Pacific and the Global Environment of the Committee on Foreign Affairs. The topic of discussion this afternoon is Climate Change Finance: Providing Assistance for Vulnerable Countries. 

As is the procedure in most hearings, I am going to give my 

opening statement; and then my good friend, the ranking member 

of the subcommittee, the gentleman from Illinois, Mr. Manzullo, 

will give his opening statement. He will be followed by my good 

friend from California, Congressman Rohrabacher, who will give 

his opening statement. Then we will invite our guests to give their 

testimony. 

Today’s hearing on climate change finance is the third in a series 

focused on the impact of global warming on the most vulnerable 

nations. Last December in Copenhagen, President Obama, along 

with other developed country leaders, pledged to raise $30 billion 

between 2010 and 2012 for ‘‘fast start’’ adaptation and mitigation 

efforts for countries most in need. Developed countries also committed to providing $100 billion annually by 2010 to developing nations, conditioned on all major economies agreeing to ‘‘meaningful 

mitigation actions and full transparency as to their implementation.’’

While the accord did not delineate precisely where the funds 

would come from or how they would be disbursed, Secretary of 

State Hillary Clinton said funding would be derived from public, 

private, bilateral, multilateral, and alternative sources. 

The commitments made by the developed world to developing nations were essential to achieving the Copenhagen Accord during 

the much-anticipated 15th session of the conference of the parties. 

Negotiations nearly faltered until developed nations agreed to contribute resources to counter the effects of climate change in developing countries. 

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As the Copenhagen Accord itself states,

‘‘Enhanced action and international cooperation on adaptation 

is urgently required to ensure the implementation of the convention by enabling adaptation actions aimed at reducing vulnerability and building resilience in developing countries, especially in those that are particularly vulnerable, especially the 

least-developed countries, small island developing states and 

Africa. We agree that developed countries shall provide adequate, predictable and sustainable financial resources, technology and capacity building to support the implementation of 

adaptation action in developing countries.’’

The Accord was an important step forward in achieving a legally 

binding global agreement to limit greenhouse gas emissions, a step 

which is essential to avoiding the worst consequences of climate 

change. While the pledges made by developing countries are substantial, they are both necessary and very much in our own interest. Ironically, the poorest countries, those that have contributed 

the least to global greenhouse gas emissions, will suffer 75 to 80 

percent of the cost of climate change-induced damages, according to 

the World Development Report of 2010. 

Moreover, as Anthony Zinni, retired Marine Corps General and 

former Commander of the U.S. Central Command, succinctly stated,

‘‘We will pay for this one way or another. We will pay to reduce 

greenhouse gas emissions today, and we will have to take an 

economic hit of some kind; or we will pay the price later in 

military terms, and that will involve human lives. There will 

be a human toll.’’

General Zinni’s views were confirmed by the 2010 Quadrennial 

Defense Review, which states,

‘‘While climate change alone does not cause conflict, it may act 

as an accelerant of instability or conflict, placing a burden to 

respond on civilian institutions and militaries around the 

world. Extreme weather events may lead to increased demands 

for defense support, to civil authorities for humanitarian assistance, or disaster response both within the United States 

and overseas.’’

Last week, I introduced House Resolution 1552 supporting finance for developing countries consistent with the Copenhagen Accord’s goals and calling for enactment of comprehensive energy and 

climate change legislation that includes provisions for international 

finance. 

Meanwhile, my good friend, Congressman Russ Carnahan from 

Missouri, is working on introducing the Global Climate Fund Act 

which will lay out a pathway for distribution of funding for mitigation and adaptation based on the Copenhagen Accord and modeled 

after the successful Global Fund to Fight AIDS, Tuberculosis, and 

Malaria, which received essential U.S. financial support under the 

George W. Bush administration. 

In addition, Congressman Pete Stark introduced H.R. 5873, the 

Investment in Our Future Act, which would direct revenues from 

a small tax on all currency transactions involving U.S. purchases 

3

to fund domestic child care programs and global health and climate 

change mitigation initiatives. 

These legislative efforts will help us meet the pledges of the Copenhagen Accord, provide essential assistance to the countries most 

vulnerable to climate change, and help avoid the mass migration, 

diminished food production, and competition over resources that 

could lead to conflict and instability requiring costly international 

response. 

Examples of the impact of developed countries’ emissions on 

poorer countries can be found around the world, including the 

South Pacific, where my own home lies. 

As Ambassador Marlene Moses of Nauru has said,

‘‘The Pacific island developing states bear almost no responsibility for the onset of climate change, yet we are suffering the 

consequences today. It is undermining our food security, water 

security and territorial integrity. Climate change is a manmade disaster, and redress for the damage being done to our 

island nations is long overdue.’’

We convene today’s hearing as the Senate takes up energy legislation, albeit vastly diminished in scope from the Waxman-Markey 

bill that was passed last year by the House. Among many other 

issues, the Waxman-Markey bill included provisions for international finance. Senate legislation does not consider such funding, 

let alone a cap on greenhouse gas emissions. Indeed, as rolled out 

yesterday, the bill is simply focused on raising the liability caps on 

spills for oil companies and encouraging modest energy efficiency 

improvements. 

The Senate’s small bill is discouraging for those of us committed 

to addressing climate change, but we will not give up the fight. I 

hope that today’s hearing will contribute in some small way toward 

that effort. 

Today’s hearing was organized by Melanie Mickelson-Graham, a 

presidential management fellow on rotation to the subcommittee 

from the Department of Energy. And I just want to note this personally. Melanie is a specialist on energy and climate change in 

Asia. She has lived and traveled in China and is fluent in Mandarin. She previously worked with the Cohen Group and the U.S. 

Department of Defense and the U.S. Senate. She graduated with 

distinction from the Nitze School of Advanced International Studies 

at Johns Hopkins University and received her bachelor’s degree in 

economics with honors from my alma mater, Brigham Young University. She is also the proud mom of an active 1-year-old boy who 

is learning Chinese. 

We deeply appreciate the work that Melanie has done for the 

subcommittee and look forward to the testimony from government 

officials and experts in the fields of climate change and finance who 

will share their thoughts on the Copenhagen Accord and on meeting its promise to raise and disburse funds for climate finance efficiently, effectively and transparently. 

Given that we have eight witnesses testifying before us today, I 

ask that you limit your testimony to 5 minutes and submit your 

complete statements which will be made available for the record, 

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without objection. And I also ask members to limit their opening 

statements and questions to 5 minutes each. 

I now recognize my good friend and ranking member from Illinois for his opening statement. 

[The prepared statement of Mr. Faleomavaega follows:]


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Mr. MANZULLO. Thank you, Mr. Chairman, for calling this hearing on foreign assistance funding for climate change and the U.N. 

climate change negotiations. 

This is an issue that generates a lot of strong feelings on both 

sides, and I know your keen interest in this matter. I applaud your 

passion for tackling challenging problems under the subcommittee’s 

jurisdiction, but this topic has a lot of agreements and a lot of disagreements. 

The current problem with addressing climate change through a 

massive cap and trade scheme and related energy tax is that it will 

do little to prevent the harm that is occurring to people on a daily 

basis. When the House of Representatives passed cap and trade 

legislation last year, supporters of that legislation included 1,000 

pages of new government spending on programs that fail to stop 

global pollution. 

I have long proposed that the best approach to addressing chemical pollutants is to attack the problem at its source: Work with foreign countries to stop emitting harmful pollutants into the atmosphere, the ground, and our water through practical and technical 

solutions. Unfortunately, the term ‘‘climate change’’ only encompasses narrowly what happens in the air and not on the ground 

and in the water. These pollutants do not respect boundaries and 

have found their way into our food system. 

During the 110th Congress, I authored legislation to address this 

during the debate on the International Climate Reengagement Act 

in the Foreign Affairs Committee. Given the fragile state of our Nation’s economy, particularly the unacceptably high unemployment 

rate, how can we seriously ask the American taxpayer to dig deeper into their pockets so that yet another government program gets 

funded? It is hard to tell good, hardworking Americans who have 

either lost their jobs or are in fear of losing them that borrowing 

money from China, which is now the world’s largest consumer of 

energy and emitter of greenhouse gases, to provide climate change 

mitigation assistance to the foreign nations is a good idea. 

The U.S. already provides over $23 billion a year on foreign assistance funding. Under the Obama administration, funding for climate assistance rose from $315 million in Fiscal Year 2009 to $1.3 

billion in Fiscal Year 2010, and the Fiscal Year 2011 budget request for climate change assistance is over 40 percent above current levels, to $1.9 billion. 

The unemployment rate in Rockford, the largest city that I represent, is officially 16.1 percent. Add 7 percent to that, and one out 

of four people are out of work. I know that cities across America 

are experiencing the same tragic job losses that my constituents 

are in Rockford. 

Policies such as cap and trade will do nothing other than to push 

America’s already fragile manufacturing sector over the cliff; and 

it will do nothing to reduce global levels of greenhouse gas emissions, because then other emerging economies would be doing the 

manufacturing in a less energy efficient manner that used to be 

done in our country. 

Thus, I want the American people to clearly understand that the 

intention of the administration and the majority party in Congress 

is to contribute more funding toward the U.N.’s $200 billion green 

8

climate fund. To underscore this point, the World Bank and Dutch 

Foreign Ministry sponsored a paper by renowned Yale economist 

Robert Mendelsohn confirming the largest threat to long-term economic growth is excessive near-term mitigation efforts. 

The report also notes that the total cost for mitigation could top 

$2 trillion. That is almost equal to the total amount of foreign assistance funding that the entire developed world spent in 50 years. 

In this document, Mendelsohn says grim descriptions of the longterm consequences of climate change have given the impression 

that the climate impacts from greenhouse gases threaten long-term 

economic growth. However, the impact of climate change on the 

global economy is likely to be quite small over the next 50 years. 

Severe impacts, even by the end of the century, are unlikely. The 

greatest threat that climate change poses to long-term economic 

growth is from potentially excessive near-term mitigation efforts. 

We are looking at a marathon and not a short sprint. Thus, it 

is our duty to ensure that we do not waste precious resources. And 

I respectfully ask that this report be included in the record. 

Mr. FALEOMAVAEGA. Without objection, so ordered. 

Mr. MANZULLO. Finally, Mr. Chairman, I want to welcome Dr. 

Redmond Clark to testify before the subcommittee. Dr. Clark is a 

constituent from northern Illinois. It is an honor to have him here 

today. He is a business and community leader who has real-world 

insight on climate change, renewable energy, and global pollution; 

and he is my constituent. 

Thank you for calling the hearing. 

Mr. FALEOMAVAEGA. Thank you. I thank the gentleman from Illinois. 

I recognize my good friend, the gentleman from California, for 

his opening statements. 

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

Let us just note it is a bit unnerving that we are here at a time 

when we have such widespread economic hardship going on in our 

country and that we are seriously then talking about borrowing 

even more money from China in order to help other nations that 

might be affected by so-called man-made global warming. 

Mr. Chairman, even if the whole concept of global warming was 

not fraudulent, we can’t carry this burden for the whole world. And 

I happen to believe, of course, that the premise that we are talking 

about is wrong. I am a senior member of the Science Committee. 

I have gone through hearing after hearing on this, and it is evident 

to me that there are prominent scientists throughout the world 

who totally disagree with this concept that humankind carbon dioxide emissions are going to make the world warmer and warmer and 

that it is going to have such a deleterious effect and it is having 

a deleterious effect on the world. 

For the record, I would like to place the names of at least 100 

of the 1,000 prominent scientists, by the way, thousands of prominent scientists who put their names to petitions suggesting that 

the concept of man-made global warming is not correct. 

Mr. FALEOMAVAEGA. Without objection. 

Mr. ROHRABACHER. Thank you. 

9

I would highlight three of these incredibly respected scientists 

who have been published in peer-reviewed research that contradicts the orthodoxy of man-made global warming. 

By the way, these three scientists were recently included in a 

blacklist by the National Academy of Science in a last-ditch effort 

to save some vestige of their own credibility after the revelations 

that we found recently from purloined e-mails that underscore and 

tend to prove that there has been fraud involved in this whole effort. 

The first one is Freeman Dyson, who is a professor of physics at 

the Institute for Advanced Study at Princeton and one of the 

world’s most respected physicists. He was put on a blacklist for not 

going along with the man-made global warming theory. 

Frank Tipler, a professor of both mathematics and physics at 

Tulane University and one of the leading cosmologists in the world. 

Roy Spencer, a climatologist and a principal research scientist at 

the University of Alabama at Huntsville, and through his decades 

of work at NASA is a leading expert in the use of satellites to 

measure the temperature of the Earth. 

Now as you review the blacklist, it becomes very clear that these 

are leading experts in every scientific and technological field, and 

they have been blacklisted because they disagree with the so-called 

consensus which we hear every time in discussing global warming. 

The debate is over. Now how many times have we heard that? 

Debate over; case closed. For everybody who has heard that expression, which we have heard hundreds of times, it just underscores 

the fact that we have a con game going on, and people want to shut 

off debate, and there has not been an honest debate on this issue. 

Let us note that the purloined e-mails that were made public 

about 6 months ago now did demonstrate that those climatologists 

and researchers who had very generous research grants, both at 

East Anglica and their communication with researchers here, had 

conducted themselves in a very unprofessional way. They had 

talked together about suppressing dissent. They talked about constructing data and building up fraudulent claims against people 

who disagree with them. They actually used data that was based 

on idle speculation by graduate students, rather than by research, 

especially when it came to glaciers retreating and rainforests that 

are supposedly disappearing. Sometimes, they actually used data 

and wildly misrepresented it. 

And then there are actually e-mails suggesting that they are 

going to hide and destroy data if asked for it by people who were 

questioning their results. 

This type of arrogance on the part of those engaged in global 

warming research should be an alarm bell for all of us. We should 

not be basing our policy on this type of scientist who has benefited 

from major research grants and would do anything to protect their 

turf because that is their rice bowl. We should make sure that we 

have an honest and open look at this issue before we commit billions and billions of dollars that should be going to help our own 

people in order to give to other countries in order to balance off the 

effects of something that these scientists believe doesn’t really 

exist, and that is man-made global warming. 

10

I thank you very much for permitting me to at least insert in this 

part of the debate, when we are talking about these issues, into 

this discussion. It is important for us to note that this is not a fait 

accompli and that all people agree that man-made global warming 

is the threat that justifies some of the actions that are being advocated. 

Thank you, Mr. Chairman. 

Mr. FALEOMAVAEGA. I thank the gentleman from California. 

One thing I will say is that over the years, my good friend, the 

gentleman from California, and I have had healthy disagreement 

on certain issues. I think he was very poetic in his previous expression that global warming is global baloney, or something to that effect. 

I do respect my good friend’s opinion. It is unfortunate to hear 

that somebody blacklisted a group of scientists who may have differing views on global warming and climate change. The very reason we are having this hearing this afternoon is to have an open 

debate. I hope the gentleman will stay here so we will have this 

interesting dialogue with some of our expert witnesses and see how 

it goes. 

We have invited a very distinguished panel of experts, in my 

humble opinion, in their given fields to be with us this afternoon, 

and to share with us their expertise and understanding of the issue 

before us. 

With us this afternoon is Dr. Lael Brainard, the Under Secretary 

for International Affairs at the U.S. Department of Treasury, a position for which she was confirmed in the U.S. Senate. Dr. 

Brainard advances the administration’s agenda of strengthening 

U.S. leadership in the global economy to foster growth, create economic opportunities for Americans and address transnational economic challenges, including development, climate change, food security and financial inclusion. 

Most recently, Dr. Brainard was vice president and founding director of the Global Economy and Development Program at the 

Brookings Institution, where she held the Bernard L. Schwartz 

chair in international economics and directed the Brookings Initiative on Competitiveness. 

Previously, Dr. Brainard was also an associate professor of applied economics at the Massachusetts Institute of Technology’s 

Sloan School of Management. Dr. Brainard received her master’s 

and doctoral degrees in economics from Harvard University, where 

she was a National Science Foundation fellow. She graduated with 

the highest honors from Wesleyan University. She is also the recipient of a White House Fellowship and a Council on Foreign Relations International Affairs Fellowship. 

With us also is Dr. Jonathan Pershing, deputy special envoy for 

climate change at the U.S. Department of State. Dr. Pershing was 

appointed deputy special envoy for climate change last year. In his 

capacity he serves as the head of the U.S. delegation to the U.N. 

climate change negotiations and reports to Special Envoy Todd 

Stern, responsible for U.S. international climate change policy. 

Prior to arriving at the State Department, Dr. Pershing was at 

the World Resources Institute, a non-profit think tank, where he 

headed their climate and energy program and undertook research 

11

and policy analysis, and facilitated government, business and NGO 

climate efforts both domestically and internationally. 

Dr. Pershing holds a Ph.D. in geophysics, has worked as an oil 

geologist, served as a faculty member at American University and 

the University of Minnesota and is the author of dozens of articles 

and a number of books on climate change and climate change policy. 

There you go, Mr. Rohrabacher. I think we are going to have a 

very good dialogue this afternoon. 

With us also is Rear Admiral David Titley, oceanographer and 

navigator of the U.S. Navy. A native of New York, Rear Admiral 

Titley was commissioned through the Naval Reserve Officers 

Training Commission in 1980. He has served several assignments 

on several ships. 

Admiral Titley has commanded the Fleet Numerical Meteorological and Oceanographic Center in Monterey, California. He was the 

first commanding officer of the Naval Oceanography Operations 

Command. He served his initial flag tour as commander at the 

Naval Meteorology and Oceanography Command. 

He has had assignments in Pearl Harbor and Guam—both very 

interesting. Admiral Titley also served on the U.S. Commission on 

Ocean Policy, as special assistant to the chairman, James Watkins, 

for physical oceanography, and as senior military assistant to the 

director of net assessment in the office of the Secretary of Defense. 

Admiral Titley has a bachelor’s degree from Penn State University, a master’s in meteorology and physical oceanography and a 

Ph.D. in meteorology, both from the Naval Postgraduate School. 

I am very glad to have you, Admiral, this afternoon. 

Last but not least is Dr. Maura O’Neill. Dr. O’Neill is the senior 

counselor to the administrator and chief innovation officer of the 

U.S. Agency for International Development. In the public, private 

and academic sectors, Dr. O’Neill has focused on creating entrepreneurial and public policy solutions for some of the toughest problems in the fields of energy, education, infrastructure financing, 

and business development. 

Before coming to USAID, she served as chief of staff and senior 

advisor for energy and climate at the U.S. Department of Agriculture, and before that as chief of staff for U.S. Senator Maria 

Cantwell from Washington State. Dr. O’Neill has started four companies in the field of energy, digital education and high technology. 

She received her MBAs from Columbia University and the University of California at Berkeley and currently serves on the faculty 

of the Lester Center for Entrepreneurship and Innovation at U.C. 

Berkeley. She earned her Ph.D. at the University of Washington. 

I would like to have Dr. Brainard start us off with her testimony. 

STATEMENT OF THE HONORABLE LAEL BRAINARD, UNDER 

SECRETARY FOR INTERNATIONAL AFFAIRS, U.S. DEPARTMENT OF THE TREASURY 

Ms. BRAINARD. Thank you, Chairman Faleomavaega, Ranking 

Member Manzullo, and Congressman Rohrabacher. I appreciate the 

opportunity to discuss climate finance for vulnerable countries. 

In his national security strategy, President Obama highlighted 

the national security imperative of global climate change. With enVerDate 0ct 09 2002 16:08 Nov 17, 2010 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\WORK\APGE\072710\57687 HFA PsN: SHIRL
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vironmental degradation fueling instability and conflict, addressing 

climate change in developing countries protects our national security no less than it promotes our national interest and values. 

The President also noted there is no effective solution to climate 

change that does not depend upon all nations taking responsibility. 

Climate change is a global problem requiring a global solution. 

Climate and development are increasingly two sides of the same 

coin. Choices surrounding climate will greatly determine the fate of 

the poor, just as choices on the path out of poverty will greatly influence the fate of the climate. 

Let me make three brief observations about our work on climate 

and development, focusing on how Treasury directs and leverages 

multilateral financial tools to tackle these challenges. 

First, we believe U.S. investments in the multilateral trust funds 

are highly efficient, effective, and transparent. The funds are highly leveraged, ensuring a high return for U.S. taxpayer investments. 

By leveraging other donors, these funds maximize contributions 

which amount to nearly $5 for every dollar the United States invests. 

Moreover, because these investments are centered in the multilateral development banks, we utilize our leadership of those institutions to mainstream climate change considerations into their core 

lending portfolios in addition to the trust funds, which is a force 

multiplier. This is most evident in the more than tripling of World 

Bank core lending for renewable energy and energy efficiency over 

the last 5 years from $1 billion to nearly $3.5 billion a year. In 

short, these are wise investments at a time when we are faced with 

difficult fiscal choices. 

The multilateralism of the funds also give the contributions to 

them additional legitimacy. The cooperative and inclusive nature of 

those investments where developing countries sit on the governing 

boards are valued in international negotiations, and we design the 

funds to be innovative. They include country-owned plans and flexible financing mechanisms that catalyze private-sector investment 

and civil-society involvement, which means more traction, more 

scale, and more sustainability for the people they are intended to 

protect and serve; and they focus tightly on results and impact. 

Second, our investments in the multilateral climate trust funds 

strengthens the resilience of the most vulnerable nations. As this 

subcommittee recognizes, the countries most vulnerable to the impacts of climate change have the least capacity to respond. Therefore, one of our primary policy goals of our climate financing must 

be to help these countries climate proof. 

The pilot program for climate resilience, for example, works to 

integrate climate adaptation into core development planning, coastal and water management, food security and production, risk management and early warning systems, and infrastructure adaptation. It does so in a number of the poorest countries and regions, 

including the South Pacific, Bangladesh, Cambodia, and the Caribbean, helping to restore livelihoods and protect against natural disasters. 

Third, our investments in these funds promote low carbon development by protecting forests and promoting clean energy. Since 

emissions from deforestation constitutes about 17 percent of the 

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global greenhouse gas emissions, we must successfully protect forests if we are to successfully address climate change. The Forest 

Investment Program addresses the underlying causes of deforestation in places like Ghana that are especially dependent upon forest resources. 

The Tropical Forest Conservation Act forgives official debt owed 

to the U.S. in return for local in-country conservation activities in 

places like Indonesia. In the area of clean energy, multilateral climate funds are focusing on spurring the development and deployment of energy efficiency in wind, solar, and geothermal technologies to help curb the growth of greenhouse gas emissions, spur 

private sector investment, and provide clean energy jobs into the 

future. 

The Clean Technology Fund catalyzes shifts to cleaner energy in 

emerging economies while the Scaling-Up Renewable Energy Program helps the poorest countries grow on a cleaner path. 

These activities supported our efforts to secure the deal in Copenhagen where we had the experience and the credibility to talk 

about future financing arrangements, providing resources for the 

most vulnerable nations and creating the Copenhagen Green Climate Fund in exchange for commitments to mitigation and transparency from key emerging countries like China. 

So, in sum, congressional support of our efforts is vital to sustaining U.S. engagement leadership in the multilateral climate finance area. 

For Fiscal Year 2011, the administration requested $830 million 

for Treasury programs to strengthen resilience and promote lowcarbon development. We welcome congressional support of this request, which will help to galvanize action on adaptation and on 

mitigation by developing countries and leverage burden sharing 

contributions from other countries. 

Thank you. 

[The prepared statement of Ms. Brainard follows:]

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Mr. FALEOMAVAEGA. Thank you, Dr. Brainard. 

Dr. Pershing. 

STATEMENT OF JONATHAN PERSHING, PH.D., DEPUTY SPECIAL ENVOY FOR CLIMATE CHANGE, U.S. DEPARTMENT OF 

STATE 

Mr. PERSHING. Thank you very much. 

Mr. Chairman, Mr. Manzullo, and Mr. Rohrabacher, thank you 

very much for taking the time for this hearing and your interest 

in this particular issue. 

The reason for global change in my mind, notwithstanding what 

Mr. Rohrabacher has suggested, are I think quite clear. In spite of 

the minority views of a very few skeptics, the global community is 

in broad agreement that, left unchecked, climate change would lead 

to very dramatic shifts in the way the world lives. We understand 

that it will lead to significant population displacements and sea 

level rise. It will lead to a decline in global food supply. It will lead 

to massive losses in species biodiversity and to major shortages of 

water. These are quite fundamental elements of the way the economies of the world work. 

And to solve this problem, we have to shift the way the economy 

works to a low-carbon structure, and we need to move quickly if we 

want to avoid the kinds of damages that are anticipated. And, unfortunately, we are late in getting going, and so we are going to 

have to develop strategies to adapt to the change that we already 

see and the anticipated change that will occur in the future. 

While we know what needs to be done, we also know that there 

are limits to the capacity, particularly in developing countries and 

specifically among the most vulnerable and the poorest. These 

countries are going to need assistance to change their development 

trajectories and to adapt to the unavoidable consequences of climate change. 

To this end, of course, all nations need to rapidly and substantially ramp up domestic investment. The wealthier countries are 

going to have to do some work providing new financing, along with 

technical and technological assistance to encourage new private investment in a more sustainable future. 

It is unsurprising that mitigation and adaptation, as well as financing to help poor countries deal with both, have been the central themes in the Copenhagen Accord; and I note that no deal 

would have been possible without both elements. 

First, on the action side. All majors economies in Copenhagen, 

both developed and developing, committed to take actions to limit 

their emissions, to list those actions in appendices to the agreement, and committed to implement those actions in an internationally transparent manner. 

To date, 136 countries have associated with the accord; and more 

than 75, including all of the major economies, have inscribed domestic targets or actions. We in the United States have to do our 

part. 

Second, the agreement included provisions for significant new financial assistance in the context of action by all major economies. 

And there were three elements in these financing components: 

First, developed countries committed to provide short-term ‘‘fast 

21

start’’ finance approaching $30 billion over the period 2010 to 2012 

to support adaptation and mitigation in developing countries. It is 

vitally important for our overall climate diplomacy goals and for 

the credibility of the accord that developed states make a strong 

contribution to ‘‘fast start’’ finance. 

The President’s Fiscal Year 2010 budget and the 2011 budget request puts us on track to meet our share, and we thank you here 

in the House for your support of the past budget and look forward 

to your support for the 2011 budget. 

Second, although the goal of mobilizing long-term public and private finance of $100 billion per year by the year 2020, again in the 

context of meaningful action on mitigation and transparency implementation, is a package, it is part of a deal, the goal must be seen 

for what it is, a catalytic effort to help jump-start the world onto 

a pathway to a cleaner economy. It is a large figure, but a shift to 

a low-carbon global economy will only result from private investments in clean and sustainable energy and economic growth. This 

is a catalytic effort. 

Third, we have agreed to establish a new Copenhagen green 

fund. Under Secretary Brainard spoke about it. The U.N. Convention already has one financial operating entity, the Global Environment Facility, to which the U.S. is a donor. And where the GEF 

might focus more on capacity building, the new fund could concentrate on financing larger-scale mitigation and adaptation investments. 

Overall, our finances are divided among multilateral initiatives 

and institutions as well as bilateral programs and activities. The 

balance provides us with maximum value. Leveraging contributions 

in the global community and multiplying our finances, as Secretary 

Brainard suggested, and on the bilateral side, as Maura O’Neill is 

likely to speak to, targeting key allies, promoting specific initiatives, generated the most value in the policy arena. 

Let me leave you with a couple of points in closing. 

In our view, the U.S. and the world must act quickly and aggressively to curb our emissions if we are to avoid the most damaging 

effect of climate change. A key element will be robust actions here 

at home. For that, we need a combination of legislation, regulation, 

American ingenuity, and investments. 

At the same time, we must assist the world’s poorest and most 

vulnerable people to adapt to the effect of climate change and help 

support developing countries in setting low emissions and sustainable development pathways that are resilient to a changing climate. 

Finally, I believe that taking domestic and international action 

are not choices we can politely turn down. Rather, they represent 

both an opportunity and a responsibility. We look forward very 

much to working with you here in Congress as we take on this 

task. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Pershing follows:]

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Mr. FALEOMAVAEGA. Thank you, Dr. Pershing. 

Admiral Titley. 

STATEMENT OF REAR ADMIRAL DAVID W. TITLEY, OCEANOGRAPHER AND NAVIGATOR OF THE NAVY, U.S. DEPARTMENT 

OF THE NAVY 

Admiral TITLEY. Mr. Chairman, Congressman Manzullo, Congressman Rohrabacher, I want to thank you for the opportunity to 

address you today regarding climate change and the military. 

I am Rear Admiral Dave Titley, and I am the Oceanographer of 

the Navy, Director of the Navy’s Task Force on Climate Change. 

The Chief of Naval Operations, Admiral Gary Roughhead, established the Task Force on Climate Change in May 2009 to address 

implications of climate change for national security and naval operations. Today I am speaking something about the impacts of climate change on the Navy. 

Rather than read from my written statement, I would like to provide some introductory remarks on the topics and then invite any 

questions. 

The 2008 National Defense Authorization Act, the 2010 Quadrennial Defense Review, and 2010 National Security Strategy all required the Department of Defense to take action regarding climate 

change by recognizing the effects climate change may have on the 

operating environment, roles, missions, facilities, and military capabilities. Taking into account this guidance, the Navy recognizes 

the need to adapt to climate change and is closely examining the 

impacts that climate change will have on military missions and infrastructure. 

The Navy is watching the changing Arctic environment with particular interest. The changing Arctic has national security implications for the Navy. The Navy’s maritime strategy identifies that 

new shipping routes have the potential to reshape the global transportation system, possibly generating sources of competition for access and natural resources. For example, the Bering Strait has the 

potential to increase in strategic significance over the next few decades, and China is actively exploring ways to increase its presence 

in the Arctic. 

There are other impacts of climate change on missions that the 

Navy must consider, including water scarcity and fisheries redistribution that may influence future Navy missions regarding humanitarian assistance and disaster relief. 

Conversely, some areas of the world such as Russia may benefit 

from longer growing seasons and an increase in water availability, 

providing opportunities for economic growth. Large-scale redistribution of fisheries is a concern in areas of the world that depend 

heavily upon this industry as a primary food source. 

The Navy must understand where, when, and how climate 

change and its silent cousin, ocean acidification, will affect regions 

around the world and work to build resilience and partnerships 

with foreign militaries. 

The Navy must also be aware of impacts to military infrastructure, both within and outside the continental United States, due to 

increased sea level rise and storm surge. The Navy’s operational 

readiness hinges on continued access to land, air, and sea training 

29

and test spaces; and many overseas bases provide strategic advantage to the Navy in terms of location and logistic support. 

Any adaptation efforts undertaken are required to be informed 

by the best possible science and initiated at the right time and cost. 

The Navy is currently beginning assessments for areas of major potential funding that will inform Navy strategy, policy, and plans to 

guide future investments. The Department of Defense is already 

conducting adaptation efforts through a variety of activities, including two road maps on the Arctic and global climate change and the 

leveraging of cooperative partnerships to ensure best access to 

science and information. 

The Navy understands the challenges and opportunities that climate change presents to its missions and installation. We are beginning to conduct the assessments necessary to inform future investments and are initiating adaptation activities in areas where 

we have enough certainty with which to proceed. 

Thank you, sir. I stand ready to answer any questions the subcommittee may have. 

[The prepared statement of Admiral Titley follows:]

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Mr. FALEOMAVAEGA. Thank you, Admiral. 

Dr. O’Neill. 

STATEMENT OF MAURA O’NEILL, PH.D., SENIOR COUNSELOR 

TO THE ADMINISTRATOR AND CHIEF INNOVATION OFFICER, 

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT 

Ms. O’NEILL. Thank you, Chairman Faleomavaega, Ranking 

Member Manzullo, and Congressman Rohrabacher. Thank you for 

the opportunity to testify today. 

I will briefly summarize my written testimony, which I ask to be 

submitted for the record. 

Mr. FALEOMAVAEGA. Without objection, all statements are made 

part of the record. If you have any additional materials that you 

want to include to be made part of the record, you are welcome to 

do so. 

Ms. O’NEILL. I am pleased to be here today with my colleagues 

from State, Navy, and Treasury. Our agencies work closely to ensure a robust response on the part of the U.S. Government to the 

critical threat of global climate change. 

In my role as Senior Counselor to the Administrator and Chief 

Innovation Officer, I have been working with the agency’s significant technical expertise to spearhead our approach to innovative 

climate financing. 

Climate change is one of the century’s greatest challenges; and 

low-carbon, climate-resilient growth must be a priority for our diplomacy and development work for years to come. Climate change 

is not just an environmental problem but a problem with huge 

human consequences of hunger, poverty, conflict, water scarcity, infrastructure integrity, sanitation, disease, and survival in the region, as well as U.S. security. 

It is imperative to address climate change in Asia and the South 

Pacific. Over half of Asia’s 4 billion people live near the coast, and 

about 87 percent of the world’s small-scale farmers operate in Asia. 

They are susceptible to sea level rise, stronger cyclones, changes in 

monsoon patterns, and either too much or too little water. 

The small island states of the Pacific are among the world’s most 

vulnerable to climate change. The small size of the islands and the 

concentration of their economies into a few climate-sensitive activities such as tourism and fishing limit the adaptation options of 

many of these states. However, by improving the management of 

the limited fishery and other resources and reducing the stresses 

within the island’s control, the resilience can be greatly improved 

and with it the lives and livelihoods of the people. 

USAID’s expertise in agriculture, water, biodiversity, health, and 

other climate-sensitive sectors provide an opportunity to implement 

innovative cross-sectorial climate change programs in partnership 

with these countries. 

Together with State and Treasury, USAID’s climate programs 

are budgeted according to three climate change pillars: Adaptation, 

clean energy, and sustainable landscapes. We received $308 million 

in Fiscal Year 2010 appropriations and have requested $491 million for these efforts in Fiscal Year 2011 and appreciate your support. 

38

The USAID is especially attuned to the unique threats small island developing states and other coastal areas face. We have developed tools for assessing their vulnerability and adaptation options 

at the national and local levels. For example, recently, we worked 

with the Marshall Islands group developing a guidebook for development planners to help them identify areas that are most vulnerable to extreme weather events. 

The Asia Pacific region is of particular importance in conversations about climate impacts because of the vast wealth of highly 

sensitive coral reefs. These are among the most vulnerable ecosystems due to threats from rising surface temperatures and sea 

levels, increasing frequency of storm surges, and ocean acidification. Healthy and resilient coral reefs are vital to the well-being of 

many small island states and communities contributing to the food 

security of over 1 billion people around the world. 

As you know, Mr. Chairman, the coral reefs are a critical spawning habitat for tuna and other profitable fisheries in the region. 

The United States was the first donor to support the Coral Triangle Initiative for Coral Reefs, Food Security, and Climate 

Change, and provide early and sustained support to this diplomatic 

and development initiative. 

Investment by the private sector in the developing world, including foreign direct investment, plays a dominant role in whether 

these countries will have the infrastructure and economic basis to 

prosper or be damaged by climate fluctuations. 

USAID seeks innovative approaches to climate change that draw 

upon scientific research, technologies, and strength in partnerships 

with the private sector. We have a number of ongoing efforts which 

I would be happy to elaborate on, either in this hearing or in follow-up. 

In Indonesia in particular we are creating an innovative publicprivate partnership to develop new business opportunities at scale 

throughout the country and create good business and employment 

income for local people. 

USAID Administrator Shaw, whether it is in his strategic direction on food security or governance and stability work or economic 

development assistance, has conveyed the importance to all of us 

of reducing emissions and increasing the climate resilience of all 

partner countries. He knows that the countries in which we work 

and the people who live there are the most vulnerable in the world 

to adverse effects. 

In closing, I would like to emphasize the seriousness with which 

we view this threat both to U.S. national interests and to the prosperity of our future country partners around the world and the 

commitment we bring to the efforts to mitigate the worst impacts 

and improve resiliency of the most vulnerable. 

Thank you. I am happy to take any questions. 

[The prepared statement of Ms. O’Neill follows:]

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Mr. FALEOMAVAEGA. I thank the members of the panel for their 

most eloquent statements. 

Before I turn the time over to my colleagues for their questions, 

I just want to get a sense of your views. Do I get a strong feeling 

that all of you are very much in support of the climate change crisis that we are faced with? 

Mr. MANZULLO. In support of the climate crisis? 

Mr. FALEOMAVAEGA. Recognizing that there is such a thing as climate change—is that a better phrase? 

Admiral TITLEY. I am not sure I would call it a crisis. It is a strategic challenge. It is a challenge that we have to understand better. 

It is always easy when looking back to say whether something was 

or was not. 

Mr. FALEOMAVAEGA. So you are saying it with qualification. 

I am going to let my colleagues ask the direct questions. 

The gentleman from Illinois for his questions. 

We will switch a little bit and start with the gentleman from 

California. 

Mr. ROHRABACHER. Admiral, you mentioned the change that is 

taking place in the Arctic and the waters there are now navigable. 

Has that ever happened before in history? 

Admiral TITLEY. It has not happened in the recorded history. If 

you talk to the tribal elders who were up there—I had the opportunity to ride the U.S. Coast Guard cutter Healy last year, and 

they had some of the tribal elders on board. They said in their oral 

history—the Native tribes——

Mr. FALEOMAVAEGA. Inuits or Eskimo? 

Admiral TITLEY. Yes, from the Barrow area of Alaska. They in 

their time did not know of a time when the Arctic was navigable. 

So that goes back about 10,000 years. 

Mr. ROHRABACHER. And 10,000 years is relatively short in the 

history of the world, of course. 

At times, I know in the case of Greenland and Iceland, where 

there were dramatic changes—for example, when you talk about 

adaptation of different peoples, there were large populations in 

Greenland and Iceland, and they were farmers at one point, and 

that changed, did it not? At some point, it became not navigable 

anymore for people to live in Iceland; isn’t that correct? 

Admiral TITLEY. There were certainly times when people have 

lived in Iceland and Greenland. They continue to live there to this 

day. 

Also, I believe what you are referring to, perhaps, is the medieval 

warming period, sir? 

Mr. ROHRABACHER. Actually, I am referring to the period of cooling that happened after the medieval warming period. I am glad 

that you recognize that there was a medieval warming period. Because, as we know, one of the fraudulent attempts by the head researchers of this global warming effort was trying to erase that 

from the charts, that there had actually been a warming period 

and how high and what level of temperature that raised to. Because if indeed there was a warming back in medieval times, it 

would be hard to suggest that it was modern technology or carbonrelated energy that was creating the change in the weather. 

46

Dr. Pershing, do you discount or discard Richard Lindzen, who 

is one of the most distinguished scientists at the Massachusetts Institute of Technology, and these other thousands of scientists? Are 

they just a few skeptics, I think is what you called them? You don’t 

pay attention to their arguments at all? You just sort of brush 

them aside? 

Mr. PERSHING. No. I think you know I don’t brush them aside. 

I have done a fair amount of work with Dr. Lindzen. I have had 

a number of opportunities to interact with him. My sense about it 

is that there are elements of his analysis that are certainly worth 

considering. He has done some of the best cloud seeding theory 

that is out there. Collectively, it is one of the unknown issues about 

the details. 

But on the basic issue, I think he is wrong. My own sense about 

it is the skeptical scientists who you have been citing represent a 

very small minority. 

I know that you commented in your opening remarks about the 

e-mails coming out of East Anglia. There have been a series of 

analyses done by the research community, both at the university 

and by others, and they have concluded resoundingly that there 

was no malfeasance. There was perhaps some inappropriate or inadequate release of data, and on that context we should be very 

careful, and we should hold the scientific community accountable 

to be transparent. But there is a different model here about the 

adequacy and results. 

Mr. ROHRABACHER. Mr. Chairman, I would like to place in the 

record a column that was written for the Wall Street Journal about 

the point just made by our witness about the supposed investigation into East Anglia where it points out that this so-called investigation into the charges was done by people who they themselves 

had benefited from many of the research grants that they themselves were investigating and also that they neglected to call anyone as a witness who was a critic of those people who were being 

charged with wrongdoing. I submit this for the record at this point. 

Let me just note that what we have heard time and again, even 

today, as we talk about climate change—and, first of all, we all remember for a decade it was global warming and now it is climate 

change. But even that isn’t adequate to really lay the foundation. 

What we are really talking about is man-made climate change. Because there has been climate change throughout the history of the 

word. I mean, I was trying to review that with the admiral. 

Clearly, we have cycles of warming and cooling, and the only 

question is whether or not, as is being proposed to us by this very 

what I consider to be fanatic clique of scientists who have big research grants, is that it is mankind’s production of carbon dioxide 

which is causing this particular change in the climate. And up 

until 9 years ago the word was always global warming, but then 

it started getting cooler for a number of years, so they had to 

change it to climate change. 

Mr. Chairman, people have always had to adapt to changes in 

climate; and that is why when we hear the testimony from some 

of our witnesses, all I am doing is calling into question basically 

the premise that humankind is causing this. We are going through 

a period of change in our climate, just as we have in the past. It 

47

does not then justify the dramatic controls and taxation that are 

being proposed by this administration, but it does suggest that we 

should be working with peoples, vulnerable peoples, to help them 

adapt as the climate changes. Not that we can change. The climate 

will continue to change throughout our history. 

But as we go through the hearing today, I would be in agreement 

with those who are saying how do we adapt, not how do we confront a change in the climate of the earth and how is mankind 

going to change the weather patterns. That is ridiculous. 

But there is very substantial—when the Admiral talks about the 

changes in the Arctic and, as you are fully aware, the changes in 

what is going on among island life and the Pacific and various peoples who live along the oceans, I would suggest the best way is to 

focus on adaptation rather than trying to think that we are going 

to halt the climate evolutionary processes that have been going on 

for millions of years. 

Thank you very much, Mr. Chairman. 

Mr. FALEOMAVAEGA. I thank the gentleman from California. 

The gentleman from Illinois. 

Mr. MANZULLO. I thought we would get that out of the way at 

the beginning. 

Thank you, Mr. Chairman. 

Dr. O’Neill, let me ask you a question. Let’s say that you were 

ambivalent on the question of whether or not the earth is warming. 

In other words, you didn’t have an opinion one way or the other 

on it. I looked at your suggestions in your testimony. Am I incorrect in assuming that, even if you had that view, you would still 

promote many of the programs and adaptations that you state in 

your testimony? 

Ms. O’NEILL. Thank you, Congressman. 

There is clearly extreme weather conditions; and, as you say, one 

could debate exactly the causes, et cetera. But Asia and the island 

nations in particular are extremely vulnerable. So, yes, we would 

support the adaptation work and the planning work that goes on 

to assess that, to plan and to put these nations in the best position 

to be climate resilient or, as Under Secretary Brainard said, climate-proof their economies. 

Mr. MANZULLO. I am looking at page three of your testimony, 

and you talk about—let me see—new approaches to conservation, 

including using genetically modified organisms (GMOs) on crops. 

Am I reading that correctly? Genetically modifying crops to withstand heat and insects and things of that nature? 

Ms. O’NEILL. We do believe that new variates of drought-resistance agriculture is one of the key adaptation efforts available to, 

not only the U.S., but the rest of the world that can be quite effective. 

Mr. MANZULLO. So the answer would be yes? 

Ms. O’NEILL. Yes. 

Mr. MANZULLO. Okay. I find that encouraging. 

I guess what I am trying to—in the midst of this debate that is 

going on, and with all deference to my colleague, I don’t think a 

person has to arrive at a decision as to whether or not global 

warming is, in fact, occurring to come to the conclusion that we 

48

have to do everything possible to stop global pollution, regardless 

of the impact that one may see from it. 

Would you agree with that statement? 

Ms. O’NEILL. I would agree. 

Mr. MANZULLO. And as I shared before we started, my brother 

is deeply involved in anti-litter, organized an entire county, of 

cleaning that up and that doesn’t go into the waters, et cetera. I 

was just in Jordan last year, where they are having a lot of problems with the plastic grocery bag that they now call the ‘‘Jordanian 

state flower.’’

I am not trying to insult my friends in the plastic industries, but 

I am trying to find a way here where the emphasis can be upon 

remediation or attacking global pollution on a nonpartisan, nontheoretical level, to simply recognize that all the stuff we put in the 

air and bury and put into the waters somewhere along the line is 

going to have a significant impact. 

Ms. O’NEILL. Could I add something? 

Mr. MANZULLO. Sure. 

Ms. O’NEILL. So, yes, I think you are absolutely right. And I also 

believe that in addition to GMOs or technology, we also have the 

opportunity to identify existing native plants or existing hybrids 

that actually perform much better under a range of climate conditions. So I think that both, in terms of new discoveries but also existing discoveries, are out there for us to help with this challenge. 

Mr. MANZULLO. Admiral Titley, would you like to comment on 

that? 

Admiral TITLEY. What the Navy is working on on their Task 

Force Climate Change—and I should mention that when I say the 

Navy is working on this, we are working with over 125 other Federal agencies, international partners, academic partners, NGOs—is 

primarily adaptation. It is kind of what you said, sir, in that, 

whether or not you believe or don’t believe climate change is occurring, what we do see, the data tells us, not the models, not theory, 

but the observations are telling us that there are some very, very 

significant changes going on in the Earth’s ocean atmosphere system. And it would, frankly, be negligent for the Navy not to plan 

for future contingencies or future states of the world if we just assume that, all of a sudden, the changes are just going to stop in 

2010 or 2011. 

So we are taking a look at these multiple types of adaptation. 

Where can we work with partners? The Quadrennial Defense Review states that, in many countries, the militaries, foreign militaries, are perhaps the one component of a country that really has 

the capacity and capability to adapt. So just right now, I mean, the 

United States Navy is working with Cambodia, with Vietnam, Indonesia, Thailand, we have done visits in Palau, Papua New Guinea, all at building partnerships. And those partnerships can, when 

and if required, lead to mutual cooperation on adaptation for climate change. 

Mr. MANZULLO. Dr. Pershing, do you want to tackle that question?

Mr. PERSHING. Yes, thank you very much. I think there are two 

items that I would just like briefly to speak to. 

49

The first one is that I certainly agree with the admiral and with 

Dr. O’Neill that there is a component that has a value both for climate and for local changes. And we can speak to both of them on 

the adaptation side. So I think there is not really a question about 

that. 

But I want to come back a bit to the diplomatic side. Because, 

clearly, we are also immersed in a diplomatic conversation with 

countries around the world in the context of the international negotiations. And on that side, climate change is actually the basis for 

our effort. And if we are not acting on that basis as well as on 

other bases, we will be accused of gross negligence, of inadequate 

performance, and there are consequences to that. 

So there has to be, I think, some balance——

Mr. MANZULLO. Well, I—let me—I mean, the issue is pollution. 

I mean, pollution is what causes this, correct? 

Mr. PERSHING. I think the issue is more complicated than we 

think of, in terms of criteria pollutants like sulfur and——

Mr. MANZULLO. Well, I mean, it is something that is going into 

the air, the ground, or the waters that may or may not be causing 

the change in the climate. Is that correct, in your opinion? 

Mr. PERSHING. That is correct. 

Mr. MANZULLO. So my question is, I mean, it is the politics of 

polarization I think is very—it is very hurtful here. 

Mr. PERSHING. I agree with that. 

Mr. MANZULLO. And I am not being critical of you. I am just trying to find—not a middle ground, but there are a lot of us that are 

very concerned about global pollution. I mean, at one time, ships 

used to dump their waste and—I mean, you know the stories. And 

now they have equipment on the ships that discharge clean water, 

et cetera. 

But I interrupted you, and I wanted to let Under Secretary 

Brainard also have a stab at that question. 

Mr. PERSHING. No, I was going to say, I think that is completely 

correct, sir. And my sense is that, in the larger context of what we 

do, I think that we need to be bold and look at the opportunities 

for coexisting benefits, on climate, on security, on food and climate, 

on pollution and climate. They are a set of these pieces. But I am 

not clear that if we only do those pieces we would do enough on 

the climate side, and I think that is what we have to consider more 

extensively. 

Mr. MANZULLO. Under Secretary Brainard, do you want to tackle 

that? 

Ms. BRAINARD. I appreciate very much that I am hearing from 

all of the distinguished members here that there is a common concern, how do we frame it, about helping the poorest countries become more resilient to pollution of our climate. I mean, that is a 

common ground. 

I think the question that we are all very seized with, is how best 

to work with other donors, to work with nations that are vulnerable to the effects of pollution of the climate, of climate change, to 

steer of course into the future that makes them more resilient, that 

allows them to adapt their food production systems, to engage in 

much more effective disaster preparedness, to grapple with a whole 

50

host of existential threats that they are likely to confront into the 

future. 

I also think it is very important for us to work to move our economy and the major economies of the world onto greener development paths. And so the tools that you are focusing on here in this 

hearing today I think are the right focus. How most effectively do 

we leverage very scarce resources to get the international commitment to action on the part of some of the largest emerging economies, which my colleague from the State Department is very focused on; how best to leverage assistance to help developing countries steer a path into the future that is less prone to conflict and 

more promising, both for their people but also for our national interests here. 

Mr. MANZULLO. Thank you. 

Mr. Chairman? 

Mr. FALEOMAVAEGA. I thank my colleagues for their questions. I 

have a couple of questions myself that I would like to ask of the 

members of the panel. 

Obviously, in our own country, we face some very tough economic 

times. How do I explain to my constituents that we should be adding to the U.S. Federal deficit by sending money abroad to our industrial competitors? How do we justify increasing the deficit and 

giving more money to help our competitors if we are to seriously 

address the question of climate change? 

Dr. Brainard? 

Ms. BRAINARD. For the most part, the clean energy programs 

that we are investing in through the Clean Technology Fund, 

through the multilateral development banks more generally, are 

really designed to address the needs of developing countries as they 

move onto cleaner energy paths. They are really not providing financing to industrial competitors in any direct way. 

What we are doing is building legitimacy in the international 

community by helping those nations that need the most help, 

charting a more climate-resilient and a greener path into the future, and building agreement among those fastest-growing emerging markets that they, too, as they did in the Copenhagen Accord, 

for the first time need to take on commitments to reduce their carbon emissions, commitments that are verifiable by the international community. 

So what we are trying to do is invest in climate resilience on the 

part of the poorest countries, invest in mitigation on the part of a 

set of developing countries who are moving onto cleaner energy 

paths, but build international legitimacy to get other of the fastestgrowing emerging markets to take meaningful actions, which, of 

course, we will be taking here, as well. 

Mr. FALEOMAVAEGA. Dr. Pershing? 

Mr. PERSHING. Yes, thank you very much. 

I think that is the question that I have also heard when I have 

been around the country and having conversations with people. I 

think there are two answers that are also compelling in addition 

to the ones that Dr. Brainard suggested. 

The first is that there is a cost to inaction. And the cost comes 

in the context of climate change and its consequences. When we 

look at the world, we say, well, ‘‘if I don’t pay anything now, what 

51

is the alternative going to look like?’’ If nothing were to change, 

then my cost is a sunk cost with no value. But if I can prevent a 

damage—and that is a great deal of what I think we try do in the 

government collectively, is to manage damages and manage risks—

then I have a clear value. So that is the very first point. 

And the second one has to do with what kind of investments are 

we making, and where do they go, and can they redound to our 

benefit and our credit. And this is very much what I think Mr. 

Manzullo had suggested earlier in his question. Are there aspects 

of things that we are doing that we will start with that are good 

for our economy, that create jobs for us at home, that create political and diplomatic initiatives and tie-ins that we seek. I think the 

answer is yes. 

If we can reduce the cost of energy around the world by lowering 

the price of solar, that is good for us as well as the world. If we 

can change the dynamics and the food issues that Dr. O’Neill was 

speaking to, that is good for the world by reducing security risks 

where there are tensions over food quality. The same for water, the 

same for disease. There is a set of those things that I think are 

part of the puzzle, as well, that we can address. 

Mr. FALEOMAVAEGA. Transparency is always a beautiful word 

when we talk about the ability of governments to function. There 

was a recent report that our Government had spent about $100 billion that it cannot account for. This is our own Government. This 

is not a case of us telling other countries how terrible they have 

been operating their systems of government. It is within our own 

Government, $100 billion of waste. That is not pennies. 

And I was wondering—I am sorry, I didn’t mean to—I want to 

go to Admiral Titley and Dr. O’Neill for their response to the question that I raised. 

Admiral TITLEY. Just very, very briefly, sir, I would absolutely 

concur with Dr. Pershing’s response there. Whenever our country 

spends money, we need to understand what its return on that investment is, be it for security, be it for social means, be it for whatever. 

The maritime strategy, our Navy’s maritime strategy states that 

preventing wars is as important as winning them. Make no mistake, our Navy will prevail in any kind of conflict, but it is very, 

very important that we prevent wars. As the Quadrennial Defense 

Review states that climate change can be an accelerant to instability, it is therefore just logical that we would want to take a look 

at how can we minimize or lessen that potential or decrease that 

accelerant, if you will, minimize the destabilizing impacts of climate change. 

Nobody wants additional conflicts, least of all anybody inside the 

Department of Defense. So it just makes sense that we would look 

at all options—all options—to minimize the chance of conflict over 

something whose cause could be climate change. 

Mr. FALEOMAVAEGA. Dr. O’Neill, I know you are our expert this 

afternoon on our foreign assistance programs. We love to give 

money away to foreign countries, sometimes even to those countries 

that spit at us. I wonder if, in terms of your understanding, this 

proposed funding for addressing of the issue of climate change is 

fully justifiable. 

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Ms. O’NEILL. Thank you, Mr. Chairman. 

I would say that I would second most, if not all, of what my distinguished panelists have said. So rather than repeat it, I would 

just add one note that hasn’t been discussed yet, and that is that 

developing countries represent one of the most important emerging 

markets for U.S. goods and services. 

And so, to the extent that these countries are functioning, that 

people are being fed, that economies are working——

Mr. FALEOMAVAEGA. I don’t mean to interrupt you, but of the 

some 192 countries that make up the United Nations, how many 

are least-developed countries? What is the number? With a total 

number of countries before the U.N. at about 195 or 198, how many 

are LDCs? Anybody have that? 

Ms. O’NEILL. We operate in 80 countries around the world and 

have non-presence relationships with about 20 others. 

Mr. FALEOMAVAEGA. Dr. Pershing? 

Mr. PERSHING. Yes, I think it is about 50 countries technically 

in the U.N. system are titled least-developed countries. 

Mr. FALEOMAVAEGA. Okay. Would I be correct to say the leastdeveloped countries are also identified as developing countries? 

Mr. PERSHING. Oh, yes. The least developed tend to be about $1 

a day of income. 

Mr. FALEOMAVAEGA. Is one of the biggest problems that we have 

in providing funding the transparency of these least-developed 

countries? Some of these countries spend more money on their military budgets than they do in actually giving help to their citizens. 

How do we justify giving them money if the leaders turn around 

and spend it for programs that don’t provide for the needs of the 

people? 

Dr. Brainard and then Dr. Pershing. 

Ms. BRAINARD. Yeah, just for most of these countries, when we 

are providing them climate financing, we also normally have multilateral programs with them through the multilateral development 

banks, through the World Bank, through the regional development 

banks, and also often with the IMF. 

As a result of that, there are a lot of safeguards that are put 

around that financing. They are generally placed in the context of 

overall governmental budgets. And there is auditing and transparency requirements, procurement requirements. There are a 

whole host of safeguards that we built up through the multilateral 

institutions over the years that gives us a high degree of assurance, 

not a complete degree of assurance but a very high degree of assurance, that we can see that these funds do go to the adaptation programs that they are intended to fund and that they are additional 

to other efforts and that, more broadly, these are programs that the 

governments themselves and the people themselves are committed 

to and the priority of those governments. 

So we have a broader architecture of assistance and engagement, 

diplomatic engagement, engagement through USAID as well as 

through the multilateral development institutions, so that these 

funds go into environments where we are broadly engaged with the 

governments on increasing transparency and effectiveness of our 

development funds. 

Mr. FALEOMAVAEGA. Dr. Pershing? 

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Mr. PERSHING. No, that was excellent. I wouldn’t add anything 

to that. 

Mr. FALEOMAVAEGA. Are we realistic enough to suggest that by the year 2020 we could come up with $100 billion in funding for 

this climate change program, given the deficit problems we are 

having right now in our country? I am not an economist, so you are 

going to have to help me on this. 

Ms. BRAINARD. So I think as Dr. Pershing was saying earlier, the 

size of the likely investments to transition to a greener economy 

worldwide is a large multiple of that number. And the $100 billion 

number itself, I think it is very important to recognize that that 

is a combination of public sources but also, importantly, we think 

the majority will be coming from private investment. 

And that is why it is so critically important for us to be able to 

enable those market mechanisms to send the right price signal, to 

ensure that investments, private investments, are going to be the 

primary mechanism for moving us all onto greener development 

paths. Public financing will be very important, particular in the 

area of adaptation, but will not, we don’t foresee, be the majority. 

The other thing I think is very important is to remember that 

the point of working with other countries in the multilateral context, in the context of the Copenhagen Accord, is the burden-sharing. So this is not a burden that we plan to shoulder alone. We 

plan to shoulder it with other countries who have capacities and 

only in return for verifiable actions on the part of some of the largest developing emitters. 

Mr. ROHRABACHER. Mr. Chairman, I am going to have to leave. 

We a vote on. 

Mr. FALEOMAVAEGA. That is all right. 

Mr. ROHRABACHER. I thank you very much for this hearing. I am 

sorry I won’t be able to join you more. 

Just one point. Pollution—I have always said that global pollution should be the focus of our efforts. However, let us note that 

where we disagree and where Dr. Pershing and I disagree and 

these very prominent scientists is whether or not CO2 is a pollutant, the CO2 that we pump into our greenhouses in California to 

grow bigger plants and things, that CO2 does not hurt human 

beings. Focus on those other pollutants, we have an agreement. 

Focus on CO2, that is another matter. 

Thank you very much, Mr. Chairman. 

Mr. FALEOMAVAEGA. No problem, Dana. 

I think getting back to the basic arguments that we made since 

the time of the Kyoto Protocols, to such an extent that by a vote 

of 93 to 0 in our own U.S. Senate rejecting the Kyoto Protocols 

about the climate change issue, how serious is it in the private sector to realize that the more demands made to the private sector 

about gas emissions and all of this, that is really going to cause 

economic chaos in our own economy? Is that true? I mean, is there 

really a serious problem where the private-sector community, corporations and industries, are going to be so—you know, they are 

just not going to operate properly because of the expectations and 

demands made by this climate change issue? 

Ms. BRAINARD. Well, let me just speak briefly, that I think the 

President has been very, I think, compelling on this point. I think 

54

that a large majority, actually, of businesses here in the U.S. agree 

with this perspective: That the country that figures out how to 

produce and distribute energy in the cleanest possible ways, that 

country is going to be the most competitive nation of the next century; and that, for the U.S., it is critically important for us to be 

that nation, to be the most innovative, the most focused on cleaner 

energy, more cost-effective cleaner energy in the future. And so it 

is a huge competitiveness opportunity for us. 

In order to get from here to there, we need to make sure that 

the investment environment is rewarding investments in those 

technologies of tomorrow, that the price signals are there. So I 

think there has been a huge change in our business community, 

and they are clamoring to be able to take full part in the opportunities presented by the transition to a greener future. 

Mr. FALEOMAVAEGA. Well, this seems to be the other reason why 

the Senate has had a very difficult time working on the climate 

change issue—simply because the corporate community feels that 

there will be too much regulation, too many demands made of 

them, to the point where they can’t make a reasonable profit. And 

so therefore kill the legislation. 

And now we end up with a stalemate in the Senate. Of course, 

their rules are quite different from ours. This is what makes our 

democracy very unique. 

Dr. Pershing, I am sorry, I didn’t mean to——

Mr. PERSHING. Thank you. I wanted to add just one more point 

to the one that was just made, which has to do a little bit with certainty in the environment. We try on a regular basis to engage 

with the private community as part of our negotiations process. We 

do regular briefings to make sure people know where the administration is going and how the process is working. And there have 

been two consistent messages that have come back. 

The first one is that, over the long term, the private sectors do 

expect action. They expect Congress to act, the United States to 

have laws in place that would move to us a lower-carbon economy. 

And they look at the rest of the world and expect to see the rest 

of the world acting. And the consequence of our inaction and other 

action is a degree of investment uncertainty, which they are concerned about. They come back and they say, ‘‘We would like to do 

something, but we don’t know which way you are going to move, 

and therefore we can’t invest without that greater certainty.’’

There is this hang-up in terms of where things are and a degree 

of tension around the domestic politics and domestic policy and domestic investment, and those same companies working very profitably in places around the world that have chosen to make those investments already. 

Mr. FALEOMAVAEGA. I believe the latest reports now are that 

China is the largest consumer of energy, past us now, to the extent 

that, of course, providing for the need of 1.3 billion people. I also 

believe China is one of the leaders in such innovative technologies 

as wind power. And here we are still sitting, fighting with each 

other, wanting to know if we are going to excel and do more things 

to enhance the technologies of wind, solar, and other green technologies. 

Dr. O’Neill? 

55

Ms. O’NEILL. I would just add to what Dr. Pershing said about 

the value of policy and tax certainty with respect to this. 

Prior to joining the administration, I was an entrepreneur and 

a technologist. And what you care about is building markets for the 

long term. We actually had all of the leadership in this country in 

solar. We have had the leadership in a number of electric technologies. And, yet, we have not always given policy and tax certainty as well as regulatory, and there are other countries that are 

bypassing us. 

So I think that that speaks to the issue that Under Secretary 

Brainard talked about, is there is a choice that we have before us, 

whether to be a leader or a lagger in the new clean-energy economy. And I think that there is a huge prize out there for the ones 

who really go boldly into that future. 

Mr. FALEOMAVAEGA. Well, the fact that we import over $700 billion worth of oil from foreign countries should tell us about the reality that we are faced with and why we have not really gotten off 

in doing what we should be doing and developing better sources of 

energy. 

Admiral Titley, you mentioned—and I am very impressed in 

terms of how much the Navy has gotten into this. Do you work 

with the Coast Guard also? Or, this is a smaller branch, I suppose, 

and it doesn’t deal that much with meteorological science? 

Admiral TITLEY. Yes, sir, actually, we work very, very closely 

with the Coast Guard. When we stood up our Task Force on Climate Change back in May of last year, at the very initial meeting, 

in addition to having flag officers and Senior Executive Service 

from the Navy as my executive steering group, we have a Coast 

Guard senior officer and one from the National Oceanic and Atmospheric Administration. We realized from the very first start that 

we could not do this and should not do this by ourselves. 

I have gone up to Juneau, Alaska, in addition to Barrow, talked 

to Admiral Chris Colvin. He is the commander of the 17th Coast 

Guard District, which is the Coast Guard district responsible for all 

the arctic waters. We have a good professional as well as personal 

relationship, because we really see the challenges in the arctic really as spanning the lower end of maritime security, which is very, 

very appropriately a Coast Guard mission—search and rescue, 

some of the humanitarian assistance. If, God forbid, there was a 

significant oil spill up in the arctic, the Coast Guard will be very 

involved. 

The cruise ships which are going up there now—I mean, cruise 

ships go up there, and where do they go? They go to the most dangerous places, because that is what people want to see. They want 

to see wildlife and ice, and those are poorly charted regions. 

So the Coast Guard has tremendous challenges. And we, in the 

Navy, are looking to see how we can assist them. And between 

NOAA, the Coast Guard, and the Navy, we can collectively show 

U.S. Government presence in an area that is rapidly growing in 

what we believe is strategic importance. 

Mr. FALEOMAVAEGA. Don’t get me wrong by thinking that I don’t 

want a strong defense. I think we are now at about a $760 billion 

budget for expenditures of the entire military forces of our country 

for a period of 1 year. And I am told, according to reports, it is alVerDate 0ct 09 2002 16:08 Nov 17, 2010 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 F:\WORK\APGE\072710\57687 HFA PsN: SHIRL
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most 50 percent of the entire military budgets of the entire world. 

Half, almost half of the entire world’s budgets of their militaries is 

the U.S. budget on the military. 

Do you think perhaps we can shave a little bit off some of those 

things that we might need in our military requirements, Admiral? 

Now, I am not suggesting that we ought to be passive. We want 

a strong military, but at $760 billion? 

Admiral TITLEY. I think Secretary Gates has talked previously 

about how he sees the future of the Department of Defense’s budget goes. I know he has publicly stated very strong support for the 

Secretary of State and their budget. But I really would defer to the 

Secretary of Defense on this specific budget. 

But I believe the senior leadership is very aware of the size of 

the budget and the large-scale fiscal environment, sir. 

Mr. FALEOMAVAEGA. 20,000 subcontractors in Iraq doing business 

for Uncle Sam—unbelievable. 

Well, ladies and gentlemen, I know I have detained you long 

enough, and I do want to sincerely thank all of you for your statements. Thank you very, very much. 

We now have on our next panel Ambassador Nancy Soderberg, 

Mr. Elliot Diringer, Mr. Reed Hundt and Dr. Redmond Clark. 

See if we have the right parties there. 

I really want to thank all of you for your patience. This is the 

problem with having hearings. Thank you very much for joining us 

this afternoon. 

Our first witness this afternoon is Ambassador Nancy Soderberg, 

president of the Connect U.S. Fund. With well over 20 years’ experience in foreign policy, Ambassador Soderberg has served in the 

United States Senate, the White House and in the United Nations. 

She has a deep understanding of policymaking negotiations at the 

highest level of the U.S. Government and at the United Nations. 

She has promoted democracy and conflict resolution worldwide. 

She has achieved international recognition for her efforts to promote peace in Northern Ireland and advised the President on policies toward China, Japan, Russia, Angola, the Balkans, Haiti, and 

various conflicts in Africa. 

Ambassador Soderberg is a distinguished visiting scholar at the 

University of Northern Florida in Jacksonville and president and 

CEO of Soderberg Global Solutions—quite a tremendous depth of 

experience that Ambassador Soderberg has. She served as president of the Sister Cities Program for the city of New York. And she 

earned a master’s degree from Georgetown University’s School of 

Foreign Service, a bachelor’s degree from Vanderbilt University 

and speaks fluent French. 

You certainly will be welcome in Tahiti, if you ever come there. 

With us also is Elliot Diringer. Mr. Diringer is the director of 

international strategies at the Pew Center on Global Climate 

Change. He oversees the center’s analysis of the international challenges posed by climate change and strategies for meeting them. 

And he directs the center’s outreach to key governments and actors 

involved in international climate change negotiations. 

Mr. Diringer came to the Pew Center from the White House, 

where he was deputy assistant to the President and deputy press 

secretary. In this capacity, he served as principal spokesman for 

57

President Clinton and advisor to the senior White House staff on 

press and communications strategy. 

Mr. Diringer holds a degree in environmental studies from Haverford College and also is a Nieman Fellow at Harvard University, 

where he studied international environmental law and policy. 

Mr. Reed Hundt is the CEO of the Coalition for Green Capital, 

a nonprofit based in Washington, DC, as well as a principal at 

REH Advisors. He is the chairman of the International Digital 

Economy Accord Project and was a member of President Barack 

Obama’s Presidential transition team where he was the economic 

agency review group head. Mr. Hundt is on the Board of Directors 

of Intel Corporation, a public company—a tremendous background 

here for this gentleman. 

He graduated from Yale magna cum laude with a bachelor’s degree. He also graduated from Yale Law School and is a member of 

the executive board of the Yale Law Journal. 

Dr. Redmond Clark, whom I believe my colleague from Illinois 

had introduced earlier. I would like to welcome him as well. Dr. 

Clark completed both his master’s and doctoral programs in 

human-induced climate change and the effects of climate change on 

natural systems. 

He has served as an assistant professor at the college and university level, providing instruction and performing research in 

human-climate interactions. He is a graduate of Boston University, 

as well as Elmhurst College. He has a tremendous variety of experience in dealing both in the private as well as in the public sector. 

Thank you very much for accepting this invitation to testify before the subcommittee. 

And I would like to begin with Ambassador Soderberg. 

STATEMENT OF THE HONORABLE NANCY E. SODERBERG, 

PRESIDENT, CONNECT U.S. FUND (FORMER ALTERNATE 

REPRESENTATIVE TO THE UNITED NATIONS) 

Ambassador SODERBERG. Well, thank you very much, Chairman 

Faleomavaega, of an island that not only speaks French but also 

has really already been experiencing the damaging effects of climate change on your coral reefs. 

And I commend the subcommittee for recognizing the economic, 

human, and national security implications of climate change and 

for giving me the opportunity to comment on how the U.S. can 

make smart public investments today and combat these threats tomorrow and to continue to grow the green jobs sector. 

Investing in climate change in the developing world will benefit 

the American people and the world’s most vulnerable populations. 

It will create jobs here at home, advance our national security, and 

reduce global poverty. These investments will also enhance our national security, as mentioned in the Defense Department’s Quadrennial Defense Review and in your own resolution introduced last 

Thursday. 

Climate change will contribute to food and water scarcity, will increase the spread of disease, and may spur or exacerbate mass migration. It may act as an accelerant of instability or conflict, placing a burden to respond on civilian institutions and militaries 

around the world. 

58

And as someone who has worked at the National Security Council, as well as at the United Nations Security Council, I strongly 

believe the national security concerns of inaction on climate change 

are clear. In addition to the destabilizing effects of climate change 

in unstable countries, our reliance on fossil fuels adversely affects 

our foreign policy. Russia is playing hardball with its oil, our ongoing military presence in the Middle East, and the tragedy in the 

gulf near Louisiana is linked to our dependence on petroleum. And 

we need American leadership to change this dangerous course. 

So what specifically can be done? One clear, far-reaching idea is 

for America to invest. In order to prevent the economic and security costs of current and future climate stresses and in order to ensure that the United States acts as a leader and standard-bearer 

for the new global energy economy, we need to invest in climate 

mitigation and adaptation solutions right now. 

Investments in international climate financing, however, will not 

occur on the scale that is necessary without the support of public 

institutions, both domestic and international. And that is why public financing is critical. 

There is a wide array of feasible innovative public financing 

sources being considered at the moment, which the U.S. could and 

should implement. Among other benefits, these financing options 

help reduce the amount of money the U.S. Government would need 

to appropriate from Congress to meet the administration’s Copenhagen commitment. In a difficult fiscal environment, these are very 

attractive solutions. I will briefly just mention five of them and 

then be happy to go into any details during the questions. 

The first is to redirect fossil fuel subsidies. The Obama administration has begun taking steps to phase out fossil fuel subsidies 

and has been a global leader in moving the G–20 toward that same 

goal. It has yet to embrace the opportunity, however, to move these 

revenues into climate and energy investments for the developing 

world. And in light of the tragedy on the gulf coast, this is a simple 

and politically powerful case of stop funding the problem and start 

investing in the solution. 

Second is international aviation and shipping mechanisms. This 

proposal would raise revenue for climate financing from aviation 

and shipping through a variety of proposed mechanisms. And it 

would constitute a tiny cost compared to the overall cost of airline 

and shipping travel. And, furthermore, the political will exists. The 

Waxman-Markey bill approved by the House in June 2009 included 

a version of this proposal. 

Three is special drawing rights. These are reserve assets that are 

created at no cost and issued by the International Monetary Fund 

to member countries. Philanthropist George Soros, the IMF, and a 

broad cross-section of the NGO communities have offered proposals 

for generating $100 billion worth of SDRs for capitalizing or 

collateralizing a green climate fund or regularly converting SDRs 

into hard currency for climate financing. These are an untapped resource that should be considered a boost, not a burden, for a struggling American public. 

Fourth is a financial transaction tax. And this would entail a 

very small levy on the international financial transactions, such as 

currency exchanges, stock trades, and bond trades. And it would 

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take advantage of the current sentiments of regulating the finance 

sector. 

Lastly is setting aside a dedicated portion of the emission allowances. And this would offer an important avenue for generating climate finances that is connected directly to the source of emissions 

and, therefore, the cost of the climate changes. There is also one 

included in the Waxman-Markey legislation. 

In conclusion, a full range of sources of public investments are 

needed in order to meet and hopefully exceed U.S. Commitments 

made at Copenhagen and bring us closer to resolving a crisis which 

could put many Americans at risk. It is time to recognize that global warming is directly linked to our core national security interests 

and act accordingly. 

Once again, let me commend you, Mr. Chairman, for your leadership on this issue and for the committee for taking on this important issue. And I would be happy to answer any questions. Thank 

you. 

[The prepared statement of Ms. Soderberg follows:]

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Mr. FALEOMAVAEGA. Thank you, Madam Ambassador. 

Mr. Diringer? 

STATEMENT OF MR. ELLIOT DIRINGER, VICE PRESIDENT, 

INTERNATIONAL STRATEGIES, PEW CENTER ON GLOBAL 

CLIMATE CHANGE 

Mr. DIRINGER. Thank you, Mr. Chairman, for the opportunity to 

appear before you today. I would like to begin by thanking you also 

for drawing attention to this critical issue and by voicing our full 

support, Mr. Chairman, for the resolution that you have introduced. 

I would like to emphasize three points. We believe, first, that it 

is in the strong national interest of the United States to provide 

sustained support for climate efforts in developing countries; second, that Congress should consider a dedicated source of funding 

for this support; and, third, that stronger climate finance should be 

accompanied by stronger accountability from the major developing 

countries on their efforts to reduce greenhouse gas emissions. 

Some developing countries have adequate resources to finance 

their own climate efforts, but most do not. You have heard already 

why supporting these countries is important from a national security perspective. It is also in our economic interest. Other countries, 

including China, are taking a lead in the global clean-energy market. As the United States positions itself to compete, U.S. assistance will help foster strong, stable markets for American technology. 

Beyond that, sustained support for developing countries is essential if we are to achieve a meaningful global response to climate 

change. Strong action on a global scale requires durable agreements, ensuring that all major economies are doing their fair 

share. Developing countries will sign on to such agreements only 

with a reasonable assurance that the United States and other developed countries will significantly scale up their support. Stronger 

U.S. support is therefore essential for the global deal we need to 

reduce our exposure to potentially catastrophic climate impacts. 

The Copenhagen Accord represents an important political consensus among leaders that provides a basis for negotiating a strong 

international framework. We believe our goal should be a binding 


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agreement with commitments from all major economies, but we 

will have to get there in stages. The objective for Cancun should 

be to build on the Copenhagen Accord, with operational decisions 

in key areas. 

On finance, three steps are needed in Cancun. The first is creation of the new multilateral climate fund envisioned in the Copenhagen Accord. We favor a fund with an independent board, balanced between contributor and recipient countries. Contributions 

should be based on an indicative scale of assessment, establishing 

countries’ relative shares, with an aggregate funding target set 

through periodic pledging. Donor countries should decide for themselves how to generate their respective contributions. 

The second step is creation of a new finance body to advise the 

conference of parties on finance needs and policy and to promote 

coordination among the multilateral and bilateral programs providing climate finance. 

The third priority in the finance area in Cancun is agreeing on 

ways to verify financial flows and the actions they are meant to 

support. Further agreement on this financial architecture must 

come, however, as part of a balanced package. An absolutely essential element of this package is a system to verify the mitigation actions taken by developing countries without international assistance. These unsupported actions represent a substantial majority 

of the efforts pledged by China and other major emerging economies. It was agreed in Copenhagen that these actions would be 

subject to international consultations and analysis. We need an 

open process that lets us see clearly whether countries are, in fact, 

doing what they have promised. 

Progress in the negotiations depends heavily on action here at 

home. We recommend three specific actions on climate finance. 

First, we strongly urge Congress to increase appropriations for 

climate assistance, as proposed in the President’s Fiscal Year 2011 

budget. These funds would help address urgent needs. They would 

enable the United States to provide a reasonable share of the $30 

billion in ‘‘fast start’’ resources pledged by developed countries in 

Copenhagen. And, as an important signal of Congress’s intent, they 

would help advance U.S. negotiating objectives. 

Second, we urge Congress to consider a dedicated source of funding to maintain higher levels of support over the longer term. We 

believe the best source would be a set-aside of emission allowances 

under an economy-wide cap-and-trade system. Others that we believe are worth exploring include revenue generated through an 

agreement addressing emissions from international aviation and 

shipping, some redirection of U.S. fossil fuel subsidies or royalties, 

or a levy on international emission offsets. 

Third, Congress should establish a standing body, comprised of 

Cabinet Secretaries, to coordinate U.S. climate assistance and to allocate funds across bilateral and multilateral programs, with appropriate congressional oversight. 

In conclusion, Mr. Chairman, we believe sustained U.S. support 

for climate efforts in developing countries is a sound and prudent 

investment in the environmental, economic, and national security 

of the United States. 

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I again thank you for your attention to these issues, and I would 

be pleased to answer any questions. 

[The prepared statement of Mr. Diringer follows:]


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Mr. FALEOMAVAEGA. Thank you, Mr. Diringer. 

Mr. Hundt? 

STATEMENT OF THE HONORABLE REED E. HUNDT, CEO, COALITION FOR GREEN CAPITAL (FORMER CHAIRMAN OF THE 

FEDERAL COMMUNICATIONS COMMISSION) 

Mr. HUNDT. Thank you very much, Mr. Chairman. It is an honor 

to be here. 

The Coalition for Green Capital comprises business investors, 

financiers, project developers, and technology companies that are 

involved in either the production or the consumption of clean energy. 

There are, in our view, three fundamental inputs to global development. They need to be affordable, they need to be universal, and 

they need to be continuously available. And they are communications, finance, and energy. No economy in the world can develop 

without these three inputs; no economy that has developed has 

been able to do so without them. 

We urge Congress to create, as a vehicle to facilitate the development all around the world of clean energy, something called the 

Energy Independence Trust. It would be what the law recognizes 

as a patriotic organization. An example would be the Red Cross. 

There are more than 90 such examples. The Boy Scouts of America 

is an example. Congress, from time to time, has created these corporations for special purposes. 

They are typically charitable organizations, and so they are used 

to aggregate charitable contributions from all around the world. 

Like the United States Postal Service, we would urge that Congress permit the Energy Independence Trust to borrow from the 

United States Treasury. It is also the case that the Energy Independence Trust, while it would not seek regular annual appropriations, could on an ad-hoc basis be the subject of specifically designated appropriations. 

Most importantly, on an international level, this would be a vehicle to complement and supplement the multilateral development 

banks that already exist, so that we would have another institution 

on the landscape but one that was not an agency or instrumentality of the United States Government. 

The reason we are urging a new institution is because the status 

quo is not adequate. The global need for sustainable and affordable 

electricity is staggering. Roughly 3 billion people in the United 

States burn wood products in order to live day to day. About half 

of those people, about 1.5 billion, have no access to electricity at all. 

The problem in the developing world is that electricity is not affordable, and that is the reason that it is not available. The problem in the developed world, in many cases, is that it doesn’t contain a price for carbon. It is a very, very different problem. In Kentucky, electricity is all based on coal, or almost all based on coal, 

and is very, very cheap. But when we turn to the developing world, 

it either doesn’t exist at all or the only source of it is going to be 

some carbon-emitting and nonsustainable resource. 

Roughly speaking, the total amount of foreign investment that 

occurs from one country into another on a global basis every year, 

even in the downturn that we are now in, is about $1 trillion. And 

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it is more than that when the global economy is growing faster. We 

need, in order to have the world wrapped in affordable and sustainable electricity, we need about 10 percent of that $1 trillion every 

year to be dedicated to clean electricity. Instead, less than 1 percent is dedicated to that purpose. And that number has fallen as 

the global economy has dropped. 

So that gap between 1 percent of total FTI and 10 percent of FTI 

has to be met by some set of governmentally led actions and, most 

importantly, private-sector-led actions. So Ambassador Soderberg 

has suggested a number of very, very creative ideas for how money 

could be obtained. I have just heard testimony that also supports 

this basic idea. And what I am suggesting, Mr. Chairman, is a 

legal framework for receiving, aggregating, and mobilizing the 

kinds of capital that is necessary. 

Just 2 weeks ago, the United Nations, in a meeting hosted by the 

richest man in the world, Carlos Slim, in Mexico City, said that it 

is clear now that the private sector has do more and that governments are unfortunately going to be constrained and are going to 

end up doing less to meet the funding gap. 

Just within the same month, the 11 nations in the Pacific Small 

Island Developing States said that they were worried about the bureaucratic red tape that is already ensnaring the fairly limited government funds that are available, as they think about their threatened future. 

So what we are suggesting here is this new institution that can 

provide a new channel for low-cost, long-term financing of clean energy in the developing world. 

Thank you very much. 

[The prepared statement of Mr. Hundt follows:]

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Mr. FALEOMAVAEGA. Thank you, Mr. Hundt. 

Dr. Clark? 

STATEMENT OF REDMOND CLARK, PH.D., CHAIRMAN AND 

CEO, CBL INDUSTRIAL SERVICES 

Mr. CLARK. Thank you, Mr. Chairman. Thank you for inviting 

me back again. You are showing extraordinary patience in that regard. 

When I listen to all the comments that have been made here, a 

number of points that I wished to make have been covered, so I 

will excerpt remarks from some of the written testimony I have 

supplied. 

In terms of my background, I am different, I think, than a number of people who have testified today because I am at the other 

end of the feeding chain. I am one of the doers. We are the people 

that actually go out, if you will, and execute on a whole host of different policies. In that regard, our view is a little bit different; perhaps the way we look at these problems is, as well. 

I would like to touch on the fact that there are a number of different definitions of adaptation that are being used today. Mine is 

narrower. I am simply talking about the measures necessary to reduce vulnerability, primarily focused on natural hazards. And 

when I use the term ‘‘mitigation,’’ I am not talking about cutting 

down on carbon emissions; I am just talking about responses to 

natural hazards. 

Well, climate change—if and when it happens and wherever it 

occurs—means that the local climate is going to change. Distributions are going to change. And, as a result, it changes risk that we 

are all exposed to. Ultimately, therefore, adaptation to these new 

hazards or newly defined hazards is local. The idea of adaptation/

response to climate change is not a single problem. It is from a policy standpoint and from a financing standpoint. But from an operational standpoint, it is not one problem, it is 10,000 different problems, all culture-, location-, and climate-specific. 

Here in the U.S. over the last 40 or 50 years—which, unfortunately, has been the bulk of my career—we have hammered out a 

way to deal with environmental hazards. We study the magnitude 

and frequency of the risk; we quantify them. We develop options. 

We look at cost-efficiency of those options and try to come up with 

a priority methodology for dealing with those hazards, and then we 

execute those plans. We try to spend the least amount of money 

and get the most amount of coverage. We don’t do a perfect job, 

and we don’t come up with a way of climate-proofing anything. We 

reduce risk. 

If you look at the literature surrounding estimates of the cost of 

global adaptation, you come up with extraordinary ranges of numbers. In the past 5 years, I have run across studies that talk about 

a $9–109-billion-a-year cost. The ranges that we see here are important because of the differences that we see. Each report is assuming a different discount rate to look at future damages. They 

range upwards from 0 percent, and, therefore, they look at problems very differently and over- or understate problems as a result. 

Secondly, everyone is looking at a different universe of impacted 

systems, of cities, countries, at different stages of preparation and 

94

evolution, and all dealing with different hazards. Third, we don’t 

have an inventory of problems at the project level yet. Everyone is 

still feeling their way forward. And, finally, there is no clear climatic path ahead. 

When we talk about the climate change issue—and you are going 

to ask me a question, as you have, Mr. Chairman, in the last two 

sessions that I attended. You asked the same question about 

whether we are comfortable with climate change. I held my tongue 

before, and now I will say: I don’t know, because I don’t know 

which change we are talking about. 

The IPCC has said we have a vast array of possibility out there 

to deal with. Well, when you talk about hazard quantification, 

identification, and response, ranges aren’t good. They increase risk, 

and they increase cost. If you will, uncertainty equals height in a 

seawall. Uncertainty equals increasing cost. And when we don’t 

know what the future holds and we have to design today, we build 

and waste extraordinary amounts of money as a result. If we look at New Orleans, they are estimating $15 billion just 

to bring the levees up to a Category 3 hurricane capacity. I think 

the costs are in the area of $100 billion to get the city ready for 

a Category 5 storm. They are not talking about spending that kind 

of money. 

My point is that figuring out what we are responding to is going 

to be a big, big deal when we try to figure out where money goes. 

Spending on structures in addition to all the other developmental 

dollars that out there is going to be a major sink for money in this 

area. 

So how does that tie back to financing? Well, if we look at what 

the private sector is doing in this area—and I am by no means capable of covering every element of this—what I see is that there 

isn’t a lot of investment happening right now for one very simple 

reason: Risk. There is too much risk. Not only the risk that the 

companies have the ability to pay back any money that they would 

borrow from the private sector, but we don’t know what we are 

spending the money on. When it comes to climate response, we 

don’t know what we are responding to. And that is probably a single largest issue that we are going have to get past sometime in 

the next decade. 

Earlier this week, the U.N. Secretary-General’s High-Level Advisory Group on Climate Change Financing Report came out, and one 

of the members of the committee, Koch-Weser from Deutsche Bank, 

indicated $400 billion a year is available right now from the private 

sector in Europe, but they can’t put the money in because the risks 

are too high. There is no insurance. They are not prepared to put 

the money forward, as a result. 

So one of the questions we may want to consider from a policy 

standpoint is, what can the government do to reduce risk? And I 

am over time here, but I will just briefly run down a list. 

First and foremost, we have to improve the accuracy of our models. We have to make them more local and not so much global in 

scale. We have to slow our heavy-lift investments. We are not in 

a position to invest widely in large-scale construction from a hazards-management standpoint because we don’t have the data in 

most of the areas that we are concerned about. And then, finally, 

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of course, we are going to prioritize our projects and standardize 

our evaluation criteria, as I know agencies have a desire to do at 

any rate. And, finally, develop some level of guarantees, which a 

number of the other panelists here are, I think, already taking 

about. 

Thank you. 

[The prepared statement of Mr. Clark follows:]

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Mr. FALEOMAVAEGA. Thank you very much for your statements. 

Without objection, all your statements will be made part of the 

record. If there are additional materials you want to add to your 

statements, please do so. I will be more than happy to receive 

them. 

You have already heard some of the dialogue and opinions that 

were given by my colleagues before they left. This is not new. I 

have always had a healthy disagreement with my good friend from 

California over whether there is such a thing as climate change 

and whether it really is affecting our own national interests. 

I think, Ambassador Soderberg, with your background at the National Security Council and the White House, security issues seem 

to be another factor mentioned quite often when we talk about climate change. Is this really a matter that should be part of the debate and part of our substantive review of the issue of climate 

change? It does have serious implications about our national security, does it not? 

Ambassador SODERBERG. Thank you, Mr. Chairman. 

In my opinion, and this is based on decades of experience in national security issues, it is absolutely a key challenge for our national security officials. And I was pleased to see the Pentagon officials are in fact a little ahead of the game in some cases on thinking and planning about this. 

I did have the opportunity to hear a little bit of the debate in 

the last panel; and I just find it perplexing that those would question, first of all, the science and, second of all, the need to move 

and move quickly on this issue. We are behind the curve. If we fail 

to act, fail to come up with creative solutions and fail to have the 

United States in a leadership position there, we will not meet this 

challenge. 

If we fail to do so, the facts are simply very clear. We will have 

more violence, more poverty, more race to scarce water, which is 

already becoming a source of conflict in central Asia, and I think 

we need to show U.S. leadership in a much stronger level than we 

have to date. I commend your leadership on this issue and am 

happy to continue to make the case that we need to act and act 

now. 

Mr. FALEOMAVAEGA. Over the months following the Kyoto Protocols, I always felt there was no question about the understanding 

and the technology for the developed countries. They know what is 

going on. 

But what I am more concerned about is, if we are focusing also 

on the needs of some 50 least-developed countries and if they are 

impacted also by climate change, and I think if some of you were 

here and heard from witnesses from State, Defense, Navy, and 

from USAID, this is what the focus of this subcommittee is trying 

to bring out. I let Congressmen Henry Waxman and Markey and 

Senator Kerry and the others take on as a policy what is being developed in our country. My concern is should we also focus on the 

situation dealing with the least-developed countries? Because it 

seems that they are the ones crying for help. I am sure that the 

developed countries have the resources. But what do we do with 

those that are not at the same level of development technologically, 

socially, economically, and all of that? Where does it leave us? This 

106

is where we are trying to keep plugging along and trying to see—

this $30 billion that seems to be a commitment among the Copenhagen member countries of the accord, any comments on this 

amount that has been deliberated? Is $30 billion a good amount to 

consider or should it be more? Obviously, it should be more, but 

what can we do, given the economic straits that we face right now 

in our own country? 

Ambassador SODERBERG. I believe it is actually $100 billion. The 

commitment in Copenhagen was to come up with $100 billion to 

help address the cost of climate change by 2020, and a lot of estimates believe the actual figure will be much higher than that. 

Initially, advocacy groups were calling for $150 billion. They 

came up with 100, and other estimates say it will be five times 

that. But we cannot expect others to pay for this and shoulder the 

burden on their own. We simply have to do it or they will not be 

able to do it. 

I have laid out some financing. We need both a public and private commitment to that. There is concern that the administration, 

while strongly committed to it, has not figured out the financing of 

it and is relying very heavily on the private sector to come up with 

the $100 billion, which is highly unlikely. 

I was encouraged to hear the comments from my colleagues at 

the table for some additional ideas, but unless we come up with 

some creative solutions to come up with that, and probably more, 

we will be failing in that challenge. 

Mr. FALEOMAVAEGA. I think Mr. Diringer made some recommendations to Congress to increase the funding. 

Mr. DIRINGER. Yes. The goal of $30 billion you referenced with 

respect to the fast track funding from now through 2012, I think 

that is an achievable goal. Should it be more? Perhaps. But it reflects a significant political consensus, and I think the objective of 

the moment should be to ensure that we deliver on that promise. 

If one looks at the pledges on the table from the developed countries, I think we are approaching $30 billion. But I will emphasize 

the word ‘‘pledges.’’ The delivery over the next couple of years will 

be vitally important. 

The European Union has pledged on the order of $9 billion, 

Japan on the order of $14 billion, and with the increase of appropriations approved by Congress for Fiscal Year 2010 and with the 

proposed increase for Fiscal Year 2011 that the President has proposed, the U.S. contribution would be on the order of $3 billion. So, 

together with some others as well, that is beginning to approach 

$30 billion. 

We have talked a lot about why this type of funding is in the 

U.S. interests from an economic perspective, security perspective, 

and diplomatic perspective. I think it is worth noting that it is also 

quite consistent with some of our cherished American values, and 

here I would emphasize our humanitarian values. Time and again 

we have seen the generosity of the American people when others 

around the world are in need. Most recently, the earthquake in 

Haiti, for instance. Increasingly, I think the U.S. humanitarian 

record will be seen against the backdrop of increased climate impacts. So I think it is not only in our interest but very consistent 

107

with our values to step up and to provide the increased support 

that is needed. 

Mr. FALEOMAVAEGA. Mr. Hundt. 

Mr. HUNDT. I think that it is going to be necessary to supplement these government commitments by something like the energy 

independence trust which would aggregate charitable contributions 

from many sources, the exact same way that the Red Cross currently operates and does so in an international concert of similar 

institutions created in other countries. 

The reason is that the essential problem here is a great deal 

more has to be invested in alternative energy production and consumption everywhere in the world. 

In addition to the fact that this is consistent with American values, as Mr. Diringer has correctly said, it is also the case that 

when we mobilize resources to create alternative energy markets in 

the developing world we are creating markets for the export of 

some our highest value goods and services. 

We are right now a significant exporter to China of solar technologies. We are a significant exporter and we are a significant investor in R&D in alternative energy. In fact, we are probably leading the world right now in the wake of the Stimulus Act in investment in research and development in alternative energy. So if we 

create in new, developing economies growth markets for alternative 

energy, we are not only doing the right thing for the world and the 

right thing for the climate, but we are also doing the right thing 

for American businesses and American workers. 

Everywhere in the world the imperative is to have scale, massive 

investment and massive deployment in wind and sun and all other 

alternative energies. If we have that scale built in part of the developing world, it will lower the overall cost and make it easier for 

us to deploy those exact same products and technologies here in the 

United States. 

Mr. FALEOMAVAEGA. Dr. Clark. 

Mr. CLARK. I have to agree with the comment Mr. Diringer made 

about American values. Ranking Member Manzullo brought up the 

counterpoint, which is an extraordinary challenge for us right now. 

We have people here that are also in need, people that are today 

feeling a great deal of pressure. 

I don’t envy your position. I know that simple spending, simple 

additional spending without a larger plan, without a larger context 

I think is, from a taxpayers’ perspective, is going to be very, very 

difficult to push in this country. 

It is worth the effort. I certainly agree it is worth the effort. I 

don’t see an immediate solution, but the one item of hope I guess 

that I would bring and the comments I made were these changes 

that we are looking at are—the changes now, not preventive action—are gradual. They are not going to be upon us in a matter 

of 3, 4, or 5 years. There are a number of other significant economic forces that are at work right now that may come in and significantly alter our plans. I have spoken to this committee before 

about some of the issues of energy supply and the importance of 

alternatives within that context. 

108

So we face a significantly uncertain future. I don’t see a clear 

path through. But I understand the effort that you are at least in 

concept committing to, and I certainly support it. 

Mr. FALEOMAVAEGA. Do you agree with the administration’s initiative in making more investments into the alternative energy 

sources other than just our dependence on fossil fuels as we have 

been for all of these years? And I guess your talk about green energy seems to be the spoken word and that we are doing this. It 

seems we are not moving fast enough, or am I wrong on this? Any 

comments on this? 

Mr. HUNDT. I will say one thing, if I might. 

The Department of Energy is making the single largest focused 

commitment of funds and brain power to alternative energy that 

any government in the world has ever done, and I am talking 

about over the last 2 years and on into the next year. The central 

problem is we actually don’t have a large market for alternative energy here in the United States. The reason we don’t is because of 

the economic slump. The overall demand for electricity in the 

United States dropped in 2009, and it will be down in 2009 and 

2010, the only 2 years since World War II that demand for electricity in the United States is down. 

And because we haven’t taken the measures that encourage people to phaseout their existing generation sources based principally 

in coal, since we haven’t taken those measures, people are not 

phasing out and moving to alternative; and they are not turning 

to their customers and saying I guess I need to get new electricity 

for you. 

The last couple weeks in Washington have been an exception in 

the local area, but, in general, this is the big truth: Where is demand? It is in China, and it is in the developing world. We need 

to recognize that the Chinese Government is awake and alert and 

is meeting that demand, and they are bringing low-cost financing 

tools to the whole rest of the world with this one little proviso: You 

have to buy the Chinese products in order to have the financing. 

So as a matter of geopolitical strategy, as a matter of opening export markets and as a matter of having markets to sell our wonderful taxpayer-paid research into, we have to have a plan to create 

alternative energy markets all around the world. 

Mr. FALEOMAVAEGA. You might also be interested to know that, 

as of March, 2010, China has a foreign exchange reserve of almost 

$2.5 trillion. I don’t know how this compares to us. 

I turn the time to my good friend, Congressman Inglis, for his 

set of questions. 

Mr. INGLIS. Thank you, Mr. Chairman. 

I was interested in that last exchange and wondering whether 

you all might want to comment on this. It seems to me that, broadly speaking, there are three approaches we can take. One is to subsidize various technologies by having the government basically pick 

winners or losers. The second is to mandate certain technologies, 

which is sort of like the first except it is a more direct mandate. 

And the third is just to set an elegant price on carbon and watch 

the free enterprise system in all of its creativity solve the problem. 

The third, obviously, the way I am describing it, is what I prefer. 

I wonder whether you might want to comment. 

109

My sense is cap and trade soon is going to have a death certificate. When that death certificate is issued, and it seems to be in 

the process of being issued now, we have an alternative; and the 

alternative is a revenue-neutral tax swap. Basically, what you do 

is reduce payroll taxes or marginal rates or corporate taxes, pick 

one, but the one that I picked in a bill was FICA taxes. Reduce 

FICA taxes, and then in equal amount shift the tax to emissions 

so that it is revenue neutral. The government is not taking any additional money out of the economy, and then you apply that mixture to imported goods as well as domestically produced, and it is 

a border adjustable tax. It is removed on export and imposed on 

import, we think in a WTO-compliant way. 

What I think would happen is the free enterprise system would 

figure out all kinds of ways to fix this problem. But the challenge 

is you can’t get there from here because the incumbent fuels, being 

petroleum and coal that we are mostly concerned about, natural 

gas to some extent—when it comes to petroleum, we are concerned 

about it for national security reasons. When it comes to health indicators, we are concerned about coal, very much concerned about 

coal. But the negative rationalities are not recognized, and, therefore, there is a market distortion, and fixing that market distortion 

is what we should be about. It seems to me that is a key role of 

government. 

Does anyone want to comment on that, that the pricing of carbon 

is really the thing that would cause the free enterprise system to 

deliver a solution? 

Mr. CLARK. I appeared before the committee about a year ago, 

and a year before that, and in the course of those discussions, especially in the Q&A afterwards, one of the comments that I made—

which is in line with Congressman Manzullo’s comments earlier 

today—was that there is a presupposition here when we talk about 

policy: The price of carbon is going to remain relatively stable. In 

the past roughly 12 to 14 months, data that has been coming out 

of the IEA and other like agencies indicates that oil may very well 

be the first of the global fuels that may experience some form of 

supply-related upset. Their suggestion was that as early as 2016 

we could, in theory, have some supply-side problems where supply 

can’t meet demand, in which case we would have an insertion of 

an ‘‘elegant price for carbon,’’ I think you called it. It would be 

something more than elegant, I suspect. And one thing we want to 

avoid is speed of onset. 

Obviously, what you are talking about is not fundamentally different than other approaches that look at ways of putting a price 

on carbon, that buys us time to begin to adjust away from that. 

My second comment would be, in 1980, U.S. EPA designated a 

category of waste as hazardous waste, and the market that evolved 

from that regulation drove the cost of treatment and disposal to 

somewhere in the 400 to $1,200 a ton range. At that time, the U.S. 

was generating 300 million tons of hazardous waste a year. Today, 

the U.S. generates 4 million tons of hazardous waste, and the disposal price for most of it is now under $50 a ton. It is precisely the 

kind of model that you are talking about, and the question is, how 

do we do it in a way that is economy-neutral? 

110

One other point I would make is, today, the greatest negotiating 

lever the U.S. has is access to its own markets. We are a necessary 

part of China’s economic renaissance, and we are a necessary part 

of the European Union’s economic activities. As long as we limit access to our market and as long as China doesn’t fully swing over 

to more of an internalized demand and supply system, we have an 

opportunity to use that lever in a manner that you are describing. 

If we don’t take that step probably within the next decade, I expect 

that China will simply be immune to that influence. But since 

China is now the leading energy consumer and expects to continue 

to grow through 2030 in terms of energy demand, if we are going 

to deal with the problem, we have to start there. 

Mr. FALEOMAVAEGA. Go ahead, Mr. Diringer. 

Mr. DIRINGER. Mr. Inglis, we would wholeheartedly endorse your 

preference for choice number three, the use of market-based mechanisms to price carbon for a wide range of reasons, first because 

we believe that they would provide for the most cost-effective 

means of reducing our emissions but also because the pricing mechanism provides an ongoing incentive to companies to innovate and 

to develop the technologies that would be needed to cost-effectively 

reduce emissions and thereby allow the market to pick the winners, as you say. 

I am not sure that we are quite prepared just yet to join in signing the death certificate on cap and trade, but we would certainly 

be happy to explore with you any alternative market-based mechanisms that you think might find some favor in the near future in 

the Congress. 

Beyond pricing mechanisms, though, we believe there are probably some other targeted policies that we would need to ensure 

that certain types of technologies that might not get the necessary 

incentive through a pricing mechanism are developed and demonstrated and deployed, in particular, carbon capture and storage. 

Mr. INGLIS. Thank you, Mr. Chairman, for the time. 

I might just point out that cap and trade is 1,200 pages. The bill 

I just described is 15 pages, 15 pages. So it can be done much more 

elegantly than 1,200 pages. 

Thank you, Mr. Chairman. 

Mr. FALEOMAVAEGA. Thank you. 

I yield to my good friend, the gentleman from Illinois, for any 

further questions. 

Mr. MANZULLO. Thank you, Mr. Chairman. 

I am concerned by statements by Ambassador Soderberg quoting 

the World Wildlife Fund that 850,000 new permanent jobs will be 

created if U.S. businesses capture 14 percent of the export market 

in just four clean energy technologies. Then they are laid out there. 

Government doesn’t create jobs. The cap and trade, even the 

threat of it, cost a $1-billion investment in Rentech over on the 

Mississippi River in East Dubuque, Illinois, in my district. They 

were going to have the first Fischer-Tropsch conversion in the 

United States, using coal coming up the Mississippi River as a 

feedstock for anhydrous ammonia, urea, and other agriculture application products. When then-candidate Obama in June 2008 

made the statement about taxing carbon emissions, the banks 

pulled the plug on that. 

111

You would have had diesel fuel. Airplane fuel would have been 

a by-product of that. It would have triggered a green technology 

revolution across the top part of the State of Illinois. 

There wasn’t a time when 535 Members of Congress woke up at 

6 o’clock on a Tuesday morning and decided that Congress knows 

how to invent green technology. Green technology is nothing more 

than what is called productivity; and, given to its own devices, the 

private sector can well take care of that. Let me just give you an 

example of that. 

Epson is a German-equity-owned company in the congressional 

district that I represent. They make the world’s only vacuum hardening machine. It sells for less than $20,000. It is very efficient. It 

is portable. It is programmable in different languages. Their issue 

is not getting Congress involved in more tax breaks, because it is 

a very efficient machine, but a free trade agreement with Brazil. 

Danfoss is a Danish firm that has about 400 jobs in the congressional district that I represent. They make a machine that hooks 

onto other machines that modulates the exact amount of electricity 

that goes in to run a power system. 

All World manufacturing in Harvard, Illinois, makes a machine 

that replaces a tank into which you pump air to run a hydraulic 

pump, whereby the amount of electricity is reduced by 80 percent. 

This goes on all the time in manufacturing; and manufacturers 

are really upset, very upset when Congress says it can create jobs. 

Congress is destroying jobs in manufacturing. This cap and trade 

and the health care bill that we passed have made the manufacturers so jittery about business expansion that jobs are going to 

China. I mean, if you really want to help out manufacturing to 

make us in a better position, then we need to back off things such 

as cap and trade and get back with more expensing and more 

bonus depreciation and items like that. 

If anyone wants to comment, that is fine. And I picked on you, 

Ambassador, so you have the first response. I did withdraw the 

word ‘‘bothered’’ and substituted ‘‘concerned.’’ The record will note 

that. 

Ambassador SODERBERG. Thank you very much. 

I appreciate being both bothered and concerned, particularly 

when you represent a district that gets so directly impacted by 

many of the decisions in this issue. Any government approach for 

trying to change the mix that is used to address the problem of climate change has to take into effect the impact on real people 

whenever you change industry approaches. And that is real, the 

stories are real, those people are real, and I think that is an impact 

that has to be taken into account in any public decision. So I understand your concerns about the impact of some of these decisions 

on your constituencies. 

I look at it as a national security expert, and as a national security expert I don’t have to represent people in your home district 

or any home district. But I look at the U.S. national interest as a 

country. 

Mr. MANZULLO. Well, my district isn’t much different than the 

other congressional district with regards for the need for national 

security. 

112

Ambassador SODERBERG. That is true. And I would argue that 

the national security of this country has to take a hard look at our 

dependence on fossil fuel in terms of the national security both on 

the countries on whom we rely for those fossil fuel imports, which 

will not change even if we increase our domestic energy sourcing 

exponentially in any significant way in the next decade or several 

decades, probably a generation, and the climate change impact for 

our reliance on fossil fuel from a national security perspective is 

something that we need to address. 

Mr. MANZULLO. But the coal comes up the Mississippi River from 

central Illinois, that is not being imported. 

Ambassador SODERBERG. No, but what we are talking about here 

is how to address the issue of our reliance on fossil fuel for our 

main sourcing of energy and how can we expand that so we are not 

reliant on the most polluting sources of energy. That is what all of 

us are trying to address. 

To do that, we are going to have to have a shift away from the 

fossil-fuel reliance on our industry. The way we can do that is there 

are elegant ways. The pricing of the carbon tax is one way to do 

it, I would argue. 

Mr. MANZULLO. But that destroys jobs. You go out there and you 

tax people for using carbon-based energy. Solar and wind power 

make up about 1 percent of our energy today in the United States, 

1 percent. 

Ambassador SODERBERG. The challenge is, if you can invest more 

in some of these alternative energies, people in your district may 

have alternative options of job-creating sources. 

Mr. MANZULLO. But the government cannot create jobs. That is 

theory. 

Ambassador SODERBERG. I am not saying that the government 

should create these jobs. But the government can, for instance, stop 

supporting fossil fuels with subsidies, which it is already very 

much involved in supporting that industry. 

Mr. MANZULLO. So that would do away with ethanol. 

Ambassador SODERBERG. The point is the government is already 

very involved in some of these issues, and the question is can you 

come up with a mix that is both promoting less reliance on fossilfuel industries and creating jobs in other areas. I am convinced 

there is a mix there. 

Mr. MANZULLO. At the same time, the government—to use that 

term—is in the process of shutting down offshore drilling where we 

get the source of 30 percent of our oil, will not allow drilling to take 

place in the ANWR, will not allow the new pipe to come through 

Canada to the United States, and has a moratorium on offshore 

drilling in a good part of Alaska. So where is the energy supposed 

to come from? 

Ambassador SODERBERG. Well, that is our point, is we are supposed to try and invest, as we have heard today, in ways of getting 

past—and you can look at what is happening in the Gulf—and 

there are lots of problem with offshore drilling, and this is not a 

hearing on offshore drilling, nor am I an expert on that—but I believe we need to look at a creative mix of how you get past it. 

Mr. MANZULLO. But it won’t work. If you take all of the windmills that are going to go up on Cape Cod, they will put out as 

113

much energy as an oil well that is pumping about 10 barrels a day. 

It is not very much. I mean, wind power is fine, but there is never 

going to be enough wind power and never enough solar power, 

maybe 100 years down the line, to be able to compensate for arbitrarily in my opinion shutting down offshore drilling. 

Ambassador SODERBERG. Let me just close and give my colleagues a chance to respond. 

On your original point on investment, I think it is important to 

just come back to you on the 14 percent of the export market. The 

fact is, if we can invest in smart grid equipment, mass transit, 

wind turbines, solar, investing in the technology, we will——

Mr. MANZULLO. But the technologies are there. Why is the government investing in technologies that the private sector has already developed? I mean, Nissan has the Leaf and GMC has the 

Volt; and now the President was in Holland, Michigan, opening up 

a factory to invest in developing an automobile battery. I mean, 

what these manufacturers want is just to be left alone. They don’t 

want the help of Washington. 

I have to go vote in Banking in about 3 minutes. 

Mr. DIRINGER. Before you go, Mr. Manzullo, I agree completely 

with you that it is the private sector that we have to look to to deliver, whether it is jobs or technology. But when we have important 

social priorities, I think that the market may need some regulatory 

incentives and some regulatory certainty. 

You cited the example of a Danish firm. I am not familiar with 

the particular example, but I do know when we look globally at the 

countries that have established themselves as leaders in the clean 

energy marketplace, each of them has accomplished that by adopting policies at home to create incentives for those technologies. 

They have provided their private enterprises with the incentive to 

develop those technologies, to market those technologies, and now 

they have surpassed the United States in that marketplace. 

Whether we are talking about Denmark or Germany or China, 

each of them has quite strategically made use of public policy to 

advance those technologies and to advance their economic position 

globally. 

I think it is important for us to look at the policy choices. Our 

preference among instruments would be a market-based approach 

that in fact harnesses market forces to achieve our objectives as 

cost effectively as possible. 

Mr. CLARK. Congressman Manzullo, as you know, among other 

things, I have manufacturing operations inside your district. It is 

very easy to operate at a policy level and lose sight of the fact that 

there is trench warfare going on right now for all our manufacturers. What we are all struggling with—and I heard some very impressive things said about an hour ago when people were talking 

about getting beyond the gridlock, the problem—the transition we 

are talking about today is if a laborer in China is put into the appropriate factory resources and is satisfied living at $5 a day in salary—compared to a laborer here in the U.S. that is barely getting 

by with $30 or $40 an hour in total cost—it is extraordinarily difficult for a U.S. company to compete. We are at that point in many 

of our manufacturing industries, and we cannot look at the U.S. 

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economy as a functioning entity absent manufacturing. That is a 

simple truth. There is no easy way through this transition. 

I truly believe that—looking 60, 70 years down the road—we are 

going to be looking at a fundamental energy transformation globally. It has to happen just because the way energy supply and demand is working right now. It is coming. Whether we deal with climate change or not, it is coming. So the question is how effectively 

can we maneuver our way through this. 

I don’t have a lot of answers, but I can you this: China is dominating in solar cell production because they are well on their way 

to turning it into something that is not different than making hamburgers. They are talking about making incredibly low-cost cells in 

order to justify the technology and make it work. 

Their operating plan is no different than any other manufacturer: Find a way to make it as incredibly cheap as possible, utilize 

your domestic resources as much as you can, and the chances are 

you are going to win. That is exactly what they are doing. 

So we are fighting them directly and indirectly in a number of 

different industries. They are all playing the same game. Right 

now, they have fewer regulations, lower labor costs and fewer taxes 

from their government, and it gives them a competitive advantage 

that is greater than the freight cost to ship their goods into the 

United States. 

If we are going to legislate, if the legislature is going to get involved and do anything at all, they had better take real care and 

pay real attention to the impact on this major portion of the U.S. 

economy. 

Congressman Inglis, you were referring to an idea where there 

would be effectively a carbon tax that would equalize energy costs. 

Well, that doesn’t cut both ways, because a carbon tax equalizes 

imported products, but it doesn’t equalize exported products. What 

we have to do is we have to get to a uniform global price for carbon. We are not there yet. We want the price to be very high because of the environmental ramifications. The rest of the globe—

Europe aside—generally does not want that to occur. 

China is engaging in neocolonial activities right now by going out 

and buying out vast amounts of energy—carbon energy resources—

because they fully intend to use those to fund the expansion of 

their economy. 

I mean, this is a trade war—if you will—that is evolving, and our 

challenge isn’t just to find a way to make a technology operate so 

it can generate energy. Our challenge is to find a way to deal with 

the international trade implications of a transfer away from carbon 

fuels in a way that doesn’t destroy our economy. 

Mr. INGLIS. Just to follow up on that briefly, actually, my idea 

is a border adjustable tax. So it is removed on export, imposed on 

import. So it is like the VAT in Europe. The European VAT is removed on export, imposed on import. So your goods would actually 

leave here without the revenue-neutral carbon tax attached to 

them. 

Mr. CLARK. That is a great step in the right direction. 

Mr. INGLIS. Then you don’t decimate American manufacturing. 

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mates American manufacturing. That is the problem with cap and 

trade. That is where I agree with Mr. Manzullo. 

Where I disagree with Mr. Manzullo is that he is overlooking the 

fact that in South Carolina we would love to have more nuclear 

power plants, but the Public Service Commission probably wouldn’t 

approve a private investor-run utility constructing a nuclear power 

plant because it is more expensive. It is more expensive power. It 

is a great source of power, in my view. It is very clean, but that 

is because coal doesn’t have to be accountable for all of its emissions. If you force that recognition, you force the accountability, 

coal is nowhere near as cheap as it looks. Talk to the 

pulmonologists about that. The small particulates involved in coal, 

even if you think climate change is hooey, the small particulates 

associated with hospital admissions that the pulmonologist would 

tell you about, it is a real and quantifiable cost. 

So force that recognition and say to coal, be accountable. Then 

all kinds of other technologies become possible. Nuclear becomes 

possible. Right now, it is not possible. 

The same with petroleum. If you did just a little bit of cost accounting and said, listen, some of the costs that we are spending 

right now in the Straits of Hormuz to keep that supply line open 

for that product that we have to have, that we are absolutely addicted to, just attribute some of it to gasoline. Gasoline is not $2.50 a gallon. It is way higher than that. It is 

just it is hidden from the consumer. So the consumer can’t make 

a choice. It makes a logical choice, because it is a subsidized price. 

It is hidden. But if you force that recognition, wow, all things 

would start happening. 

We would be doing what Israel is doing. We would be trading out 

batteries in cars, right? The reason we don’t do batteries, as Mr. 

Manzullo mentioned, is it is expensive and cumbersome. But if you 

are in need, like Israel is, then you figure out a way to swap out 

battery packs, and it becomes cost effective in a situation where 

you force the recognition of all of these negative externalities. 

Thank you, Mr. Chairman. I am going on and on. I am preaching 

about my bill. I hope you will take a look at it. It is 15 pages. It 

is a quick read. 

Mr. FALEOMAVAEGA. I thank my colleague and friend for his line 

of questions. 

I just want to comment on Dr. Clark’s earlier statement about 

China’s development. I think it is not so much out of greed but out 

of necessity that we find that China has no choice. To provide for 

the needs of some 1.3 billion, we have to give those people some 

sense of credit. How is it possible that they have to feed some 1.3 

billion people? We can’t even feed our own 300 million that we 

have here in our own country, it seems like. 

But I want to thank all of you for your participation. We kind 

of nibbled at how to come up with better ideas for financing the 

needs of least-developed countries in terms of climate change. But 

I think we were able to discuss quite well issues related to climate 

change. I think it was very productive. 

So I sincerely want to thank you for your patience and for your 

being here to testify before the subcommittee. 

With that, the subcommittee is adjourned. 

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[Whereupon, at 5:03 p.m., the subcommittee was adjourned.] 

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