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62–186 2010

PREPARING FOR COPENHAGEN: HOW DEVELOPING COUNTRIES ARE FIGHTING CLIMATE 

CHANGE 

HEARING 

BEFORE THE

SELECT COMMITTEE ON 

ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

MARCH 4, 2009 

Serial No. 111–4 

( 

Printed for the use of the Select Committee on 

Energy Independence and Global Warming 

globalwarming.house.gov 


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SELECT COMMITTEE ON ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

EDWARD J. MARKEY, Massachusetts, Chairman 

EARL BLUMENAUER, Oregon 

JAY INSLEE, Washington 

JOHN B. LARSON, Connecticut 

HILDA L. SOLIS, California 

STEPHANIE HERSETH SANDLIN, 

South Dakota 

EMANUEL CLEAVER, Missouri 

JOHN J. HALL, New York 

JERRY MCNERNEY, California 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

Ranking Member 

JOHN B. SHADEGG, Arizona 

GREG WALDEN, Oregon 

CANDICE S. MILLER, Michigan 

JOHN SULLIVAN, Oklahoma 

MARSHA BLACKBURN, Tennessee 

PROFESSIONAL STAFF

GERARD J. WALDRON, Staff Director 

ALIYA BRODSKY, Chief Clerk 

THOMAS WEIMER, Minority Staff Director 


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C O N T E N T S 

Page 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 1 

Prepared Statement ......................................................................................... 3 

Hon. F. James Sensenbrenner, Jr., a Representative in Congress from the 

State of Wisconsin, opening statement .............................................................. 5 

Hon. Emanuel Cleaver II, a Representative in Congress from the State of 

Missouri, opening statement ............................................................................... 6 

Hon. John Hall, a Representative in Congress from the State of New York, 

opening statement ................................................................................................ 6 

Hon. John T. Salazar, a Representative in Congress from the State of Colorado, opening statement ...................................................................................... 7 

WITNESSES

Mr. Carter Roberts, President and CEO, World Wildlife Fund ........................... 8 

Prepared Statement ......................................................................................... 11 

Answers to Submitted Questions .................................................................... 95 

Ms. Barbara Finamore, China Program Director, Natural Resources Defense 

Council .................................................................................................................. 25 

Prepared Statement ......................................................................................... 28 

Answers to Submitted Questions .................................................................... 108 

Mr. Lee Lane, Resident Fellow, American Enterprise Institute .......................... 39 

Prepared Statement ......................................................................................... 41 

Answers to Submitted Questions .................................................................... 118 

Mr. Ned Helme, President, Center for Clean Air Policy ...................................... 61 

Prepared Statement ......................................................................................... 65 

Answers to Submitted Questions .................................................................... 123 

SUBMITTED MATERIALS

‘‘Important Transitions in Emitting Countries Over the Coming Century’’, 

of 2007 from Global Energy Technology Strategy, Addressing Climate 

Change: Phase 2 Findings from an International Public-Private Sponsored 

Research Program, Battell Memorial Institute ................................................. 166 


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PREPARING FOR COPENHAGEN: HOW DEVELOPING COUNTRIES ARE FIGHTING CLIMATE 

CHANGE 

WEDNESDAY, MARCH 4, 2009 

HOUSE OF REPRESENTATIVES, 

SELECT COMMITTEE ON ENERGY INDEPENDENCE

AND GLOBAL WARMING, 

Washington, DC. 

The committee met, pursuant to call, at 9:35 a.m. in room 210, 

Cannon House Office Building, Hon. Edward J. Markey (chairman 

of the committee) presiding. 

Present: Representatives Markey, Cleaver, Hall, Salazar, 

Herseth Sandlin, and Sensenbrenner. 

Staff present: Joel Beauvais and Camilla Bausch. 

The CHAIRMAN. Good morning, and welcome to the Select Committee on Energy Independence and Global Warming. Over the last 

2 years the Select Committee has examined closely how the U.S. 

can fight climate change and improve our energy security. But we 

are not in this fight alone, and the progress that our country can 

make is deeply dependent on the progress that developing countries are making. 

That is the focus of today’s hearing, to take an assessment based 

on the facts that exist in 2009, not as they existed 5 or 10 years 

ago, of steps taken by the key developing countries to address global warming. This inquiry is important because Americans rightly 

want to know that they are not the only ones altering their policies 

to combat global warming. This inquiry is also important because 

many Members have rightly expressed concern about maintaining 

the competitiveness of critical industry sectors, and they want to 

know that other countries are joining the fight and requiring their 

industries to move away from business as usual. 

Our discussion on what developing countries are doing needs to 

be fueled by current facts and not by old perceptions. One old perception is that China is unwilling to join the fight against climate 

change and is wedded to growth at any cost. Our current reality 

is that China has already adopted an energy efficiency law that far 

exceeds anything on the law books of our country. 

Other examples abound of how developing countries are making 

progress. I am not suggesting that the developing countries are 

doing everything they can do, and they are certainly not doing everything that needs to be done. But as we undertake climate 

change legislation in our country, we should understand the steps 

taken by key developing countries around the world. 


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China, India, Brazil, Mexico, South Africa are some of the biggest 

emitters of the developing world. Over the last years, all of these 

countries have displayed an increasing awareness of the need to 

act. Just last week President Obama acknowledged China in his 

speech to the Joint Session of Congress for having launched the 

largest effort in history to make their economy energy efficient. 

Also last week Greenpeace welcomed India’s national climate 

plan’s first step, a market mechanism that could phase out 400 

million incandescent bulbs by 2012. 

In December last year, Mexico set an aspirational target to cut 

in half its 2002 carbon emissions by 2050, and the Brazilian Government released its national plan on climate change. 

These are encouraging signs of action, but the world has to do 

more, and the world has to act together. Despite the action and efforts shown around the world, emissions continue to rise. We have 

to reverse this trend, and certainly developed countries will have 

to show clear commitment and live up to their promises and developing countries will need the support when accelerating their action. 

To ensure that the world achieves the needed reductions, we 

need a strong agreement in Copenhagen, and we need to monitor 

and verify the efforts all across the world. We need to be sure that 

promises lead to action, that plans get implemented, that results 

live up to expectations. The United States must show that it will 

lead this effort. Only by doing so will we collectively be able to win 

the fight against dangerous climate change. 

Let me turn now and recognize the ranking member of the Select 

Committee, the gentleman from Wisconsin, Mr. Sensenbrenner. 

[The prepared statement of Mr. Markey follows:] 


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Mr. SENSENBRENNER. Well, thank you very much. I guess the 

cash register is on this side of the aisle because last week we 

learned how expensive our response to climate change is going to 

be. President Obama’s budget blueprint established potential domestic costs in today’s hearing will highlight the mounting international demands. The world is expecting increased energy efficiency from the developing world, and the developing world is demanding compensation in return. 

We have known for a while that the cap and tax policy, which 

is my name for the carbon trading system President Obama is advocating, will significantly harm the U.S. economy. In his budget 

blueprint last week President Obama sketched out a cap and tax 

plan that will require approximately $80 billion a year from U.S. 

taxpayers. By 2020, Americans will have paid $646 billion to fund 

this scheme. And while $646 billion is a shocking number, or at 

least it used to be, it pales in comparison to the demands of developing countries. 

India’s government stated that the developed nations owe billions 

of dollars to developing nations to compensate for climate change. 

In its submission to the U.N. Framework Convention on Climate 

Change, the Indian Government argued that this funding should be 

a legal obligation for developed countries that cannot be subject to 

the decisions of developed country governments or legislatures. 

How that flies in the face of our Constitution’s requirement that 

nothing be paid out of the Treasury except by appropriation, I don’t 

know. They added that this funding should not be in the form of 

loans and that the providers of finance cannot be discretionary donors but must be legally obligated assessees. 

In its own submission, China argued that the developed nations 

should provide new additional adequate predictable and sustainable funding at least half to 1 percent of the Nation’s GDP over 

and above the existing foreign aid. 

The Massachusetts Institute of Technology’s Joint Program on 

the Science and Policy of Global Change, a supporter of cap and tax 

policies, estimated that welfare costs to developed countries could 

be over $400 billion per year in 2020, rising to over $3 trillion per 

year in 2050. And over $1 trillion of this would come from the 

United States. As the MIT study notes, this scheme goes well beyond compensating for mitigating costs and turns the mitigation 

policy into an instrument for global income redistribution, unquote. 

Several developing countries have made effort to increase their 

energy efficiency, which is good. But many of these countries have 

publicly stated their good intentions and aspirational goals to reduce their emissions but it is their willingness and ability to actually implement these policies that will determine the ultimate success of our global efforts. 

China has already resisted enforcement of WTO’s trade rules. 

The U.S. Trade Representative found in its 2008 report to Congress 

on China’s WTO compliance that, quote, China has yet to fully implement important commitments and in other areas significant 

questions have arisen regarding China’s adherence to ongoing 

WTO obligations, including core WTO principles. 

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ment by China of intellectual property rights laws even though the 

Chinese law on the books looks as good as the United States’ law 

or the laws that are in the European Union. 

A post-Kyoto Treaty cannot succeed without China’s participation, but can we expect China’s compliance with the climate change 

treaty given its history with the WTO? I think the answer is obvious. 

Today’s witness Lee Lane, a Resident Fellow at the American 

Enterprise Institute, rightly recognizes that technological development is the crucial long-term priority. Politics is the art of the possible, but current proposals for emissions reductions go beyond not 

only what is politically possible but also what is actually achievable. 

Nations cannot afford to meet greenhouse gas reduction goals 

without substantial advances in energy technology. The development of technology, not higher taxes or global wealth redistribution 

schemes, should be where Congress focuses its efforts to confront 

climate change. 

I look forward to hearing from our witnesses today and learning 

more about what role technology can play in these important climate change negotiations leading to the U.N. conference of the parties in Copenhagen this December. Thank you. 

The CHAIRMAN. The gentleman’s time has expired. The Chair 

recognizes the gentleman from Missouri, Mr. Cleaver. 

Mr. CLEAVER. Thank you, Mr. Chairman. Thank you for this opportunity. 

Mr. Chairman, I am absolutely convinced that the American 

economy can be retooled to meet the challenge of climate change 

and that the second industrial revolution of this country can be a 

revolution that would green our economy in more ways than one. 

But I think that we are really in a unique position, maybe even an 

awkward position because of the last decade, almost a decade, of 

ignoring the science of climate change. And we are faced now with 

an opportunity for the President to go to Copenhagen in December 

of this year. And I think that in Copenhagen the President is going 

to be watched and listened to perhaps in a more serious way than 

maybe ever a President or American official has dealt with this 

issue of climate change. 

And so I am interested in hearing from the panel the things you 

think we must do before Copenhagen, before next December, in 

order to have credibility when the President speaks on the last day 

of the conference. 

So I appreciate your presence. I hope to be able to probe your 

considerable knowledge of the subject in order to ascertain information that will be helpful as this committee continues to study this 

issue and make recommendations to the Speaker. 

Thank you, Mr.Chairman. I yield back the balance of my time. 

The CHAIRMAN. Great. I thank the gentleman. 

The Chair recognizes the gentleman from New York, Mr. Hall. 

Mr. HALL. Thank you, Mr. Chairman, for holding this hearing, 

and also for our panel of witnesses today. The world is on the cusp 

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national climate change ever. At least that is my hope for the Copenhagen meetings. 

An international agreement must have enforceable targets, must 

take care to rein in irresponsible practices by developing countries, 

particularly China and India. But we must realize that, while large 

and growing, these nations have much lower standards of living 

than ours, and we need to be sympathetic to their desire to achieve 

what we in this country have been calling the American dream for 

more than two centuries. 

At the same time, our economy is suffering and manufacturing 

is on the decline here at home. Any climate legislation that this 

Congress needs to consider needs to take into account the impact 

it will have on people and businesses in the United States. So there 

are twin challenges. How do we get China and India and the developing world to agree to climate change goals that do not stifle their 

own growth? And how do we limit our own contribution of greenhouse gases without further crippling the United States economy? 

I believe in that answer we can find opportunity. American businesses can lead the way in renewable and energy efficient technology. For example, just last week we had several witnesses testify about the work their companies are doing on energy efficiency 

and smart growth technology. In the Hudson Valley of New York 

we have innovators working on waste to energy, solar, biomass, 

and investors looking to fund renewable projects, and such low-tech 

solutions as weatherization, which would hopefully capture the 30 

to 40 percent heat loss or air conditioning loss, as the case may be, 

from individual homes. We in our stimulus recovery package 

passed a large enough amount that New York State this year will 

be receiving about twice for weatherization what the entire country 

received last year, and a proportionate effort is being made nationwide. It is a serious conservation effort, and I am very proud of it 

and proud of the fact that my county, Duchess County, will be hiring five times as many workers to go out and do insulation of storm 

doors, storm windows, weather stripping. We are not talking hightech new inventions. We are talking basic good building practices 

to save those homeowners money. 

It is time to harness our ingenuity to solve the climate crisis and 

export manufactured goods once again. We can fuel the carbon efficient global economy with just a little bit of investment. The economic stimulus was a good start but more can be done, and if we 

can do that we can help the developing countries meet their targets 

and make the planet a better place and make some money or save 

some money for our people at the same time. We should not be 

afraid of this challenge. We should welcome it. 

I thank you, Mr.Chairman, and yield back. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Colorado, Mr. Salazar. 

Mr. SALAZAR. Well, thank you, Mr. Chairman. It is an honor to 

be here with you here today and with you, Mr. Sensenbrenner. I 

share some of the same values as you do. 

I come from the Colorado San Luis Valley, which is very rich in 

solar. We have 150-day average of sunshine in Colorado. And I believe that, you know, in renewable energy and the world’s need for 

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ergy, I think that the world has a real need for some type of moderate commonsense legislation and talks and negotiations to move 

our climate change issues to the forefront. 

I also share the concerns of Mr. Sensenbrenner and Mr. Hall 

when we talk about what our current economic situation is in this 

country, but I want to talk a little bit today about how I believe 

that we can actually curb some of our carbon emissions. I want to 

make sure that agriculture is heard in all this debate. I believe 

that agriculture can be a part of our carbon sequestration issue. 

I am looking forward to today. Today is my first day, and the 

Speaker asked me to serve on this committee. While I am not an 

expert in energy issues, I do want to be part of the solution. 

So thank you very much, Mr. Chairman. And I yield back. 

The CHAIRMAN. I thank the gentleman very much. And whether 

it be solar or wind or fossil fuels or agriculture, Colorado in a lot 

of ways is a microcosm of all of the solutions that we can propose. 

Mr. SALAZAR. Mr. Chairman, if I may just say that in Colorado 

and the Colorado San Luis Valley we had up until last year the 

largest solar farm in the United States, an 80-acre solar farm that 

produced close to 12 megawatts of solar power. They are looking 

now at building somewhere in the neighborhood of a 550-megawatt 

concentrated solar farm in that area. So I am very interested in 

those issues. 

The CHAIRMAN. I thank the gentleman. I thank the gentleman 

for serving on the committee. It is going to make an invaluable contribution. 

Let me now turn to our panel. And our first witness is Mr. 

Carter Roberts. Mr. Roberts is the President and the CEO of the 

World Wildlife Fund. WWF is supported by close to 5 million members globally, and its affiliates work in more than 100 countries. 

Before joining WWF, Mr. Roberts worked on strategic planning and 

new international programs with the Nature Conservancy. 

We welcome you, Mr. Roberts. Whenever you are ready, please 

begin. 

STATEMENT OF CARTER ROBERTS, PRESIDENT AND CEO, 

WORLD WILDLIFE FUND 

Mr. ROBERTS. Thank you, Mr. Chairman. And thank you to the 

committee for your leadership and educating the American public 

and Congress about the threat of climate change and what we need 

to do about it. And I am grateful for the opportunity to provide testimony today on behalf of our 5 million members and on behalf of 

our programs around the world. 

As you point out, we operate in all these countries around the 

world, often with programs led by nationals, leaders in those countries who have a deep appreciation for the context in these countries, and we have an observer status for the UNFCC process, and 

often we serve as members of delegations from these countries to 

the negotiating process. So it is from this vantage point and with 

this perspective that I offer my testimony today. 

Conventional wisdom says that developing countries do not take 

climate change seriously and that they will be an obstacle to a 

global deal. Nothing could be further from the truth. Key developing countries are taking concrete steps to reduce emissions at 


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home. They are also leading in many ways the international negotiations as we speak. For the sake of our climate, our economy, and 

our international competitiveness, I urge us to follow their lead. 

I have three key points today that I want to make. One is that 

things have changed. The other is that they have changed for good 

reasons, and finally that the U.S. needs to respond in kind both in 

our domestic legislation and in our international negotiations. 

So first, throughout much of the 1990s the developed world 

looked to developing countries to take the lead in solving the climate change problem. That was clear. Their posture was understandable. They contribute little in the way of emissions and were 

suffering some of the greatest impacts, all at the same time that 

the world’s largest emitter was doing very little. Over the past year 

in particular, developing countries have taken action to reduce 

their own emissions at home and have been constructing advancing 

solutions at an international stage. 

Two examples: Renewable energy and deforestation or avoided 

deforestation. Renewable energy standard is a classic part of any 

country’s seriousness in replacing high carbon fuels with ones that 

produce zero emissions. During the past several years as the U.S. 

has debated whether or not to have a renewable energy standard, 

Brazil, India, China, Mexico, the Philippines and many others have 

adopted their own and have begun implementing it with some success. 

Second, deforestation. You know that deforestation is the second 

largest sector in terms of CO2 emissions around the world, more 

than all the cars, trucks, planes, trains and boats in the world, 

bringing Brazil and Indonesia to the top five emitters around the 

world. In December, Brazil announced a bold plan to cut their 

emissions from deforestation by 70 percent in 10 years. This would 

avoid 4.8 billion tons of CO2 emissions, equivalent to over twothirds what the U.S. produces alone. 

To back this up, Brazil has made a number of commitments at 

home. First, they have created one of the most impressive forest 

conservation programs in the world, creating a series of parks in 

the Amazon roughly equal to the size of the State of California. 

Second, they developed a world class system of monitoring that 

has few peers around the world and is now regularly reporting on 

their progress in avoiding deforestation. 

And finally, they are creating governance systems, particularly 

at a state level, that provide the resources and the enforcement 

with local communities to reduce deforestation right at the edge of 

the forest frontier. 

Meeting all these goals will be tough. Brazil is committed to it, 

but it can’t do it alone. It will need our help. It will need technology. It will need know-how, and it will need some financial flows 

to make this happen. 

The reason these developing countries are taking these steps are 

pretty obvious. They are very similar to our own, risk and opportunity. The risks that they see are even far greater than ours because they have billions of people who live below the poverty line 

and they lack the capital and the financial resources to respond, to 

adapt, and to change. And so for nations with populations living at 

the a subsistence level, even modest amounts of climate change 


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change their water supplies, change their food supplies, and runs 

the risk of severe crop failures. Wait and see is not an option. 

They also see that addressing climate change produces the promise of economic security and even growth. Dramatic swings in energy prices are problematic for countries with little financial reserves, and those countries who are able to develop homegrown energy supplies are able to become leaders in areas like renewables. 

Right now China leads the world in installed renewable energy 

capacity and is projected to be the world leader by the end of this 

year in exports of renewable energy solutions. 

Finally, my last point, the U.S. as we enact cap and trade legislation here at home and enter international negotiations, we should 

do so with developing countries in mind. Why? First, it is a global 

crisis and it requires a global solution just as the economic crisis 

requires countries to come together. 

Second, a ton emitted in China or a ton emitted in Brazil is just 

as costly to us at home as a ton emitted in Ohio. We need to ensure 

just as we are creating green jobs at home and sending funds at 

home to drive solutions that we also ensure that funds flow to 

those countries where low-cost solutions can be found. We need to 

solve the problem by solving it globally. 

Third, by building the capacity of other countries, we are building more stable societies. We are also building potential markets 

for technological solutions. For too long the U.S. has invented renewable technologies only to see other countries own those markets 

by having the right regulatory framework and by having good relations in markets of other countries. 

Last but not least, the U.S. has had a long legacy of reaching out 

to other countries and solving global problems, bringing our knowhow, our capacity, our money and our resources to help countries 

in need and to create a leadership role for us abroad. We have done 

it with HIV/AIDS. We have done it on security issues. We need to 

do it on climate change. 

In summary, the developing world has changed as we speak. 

They are playing a leading role. They are taking action at home. 

It is time for us as we pass cap and trade legislation here at home 

and enter international negotiations to respond to their leadership 

and to respond in kind. It is in our best interest to do so. 

Thank you very much. 

[The prepared statement of Mr. Roberts follows:] 


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The CHAIRMAN. Thank you, Mr. Roberts, very much. 

And our next witness is Ms. Barbara Finamore. She is a senior 

attorney at the Natural Resources Defense Council and is the 

founder and Director of NRDC’s China Program. She is also cofounder and President of the China-U.S. Energy Efficiency Alliance. She has worked and lived in greater China for nearly 20 

years and she has flown in from Beijing for this hearing, for which 

we are very grateful. Whenever you are ready, please begin. 

STATEMENT OF BARBARA FINAMORE, CHINA PROGRAM 

DIRECTOR, NATURAL RESOURCES DEFENSE COUNCIL 

Ms. FINAMORE. Thank you, Chairman Markey, Ranking Member 

Sensenbrenner, and distinguished members of the committee. It is 

my pleasure to be here today to discuss China’s national greenhouse gas mitigation efforts and achievements and challenges. 

I also have three major points. One is that China is currently 

pursuing an aggressive and ambitious greenhouse gas mitigation 

program, as indicated by its 11th 5-year plan, which runs from 

2006 to 2010. That plan includes a goal of reducing its energy intensity, energy consumption per unit GDP, 20 percent from 2005 

levels to 2010, which equals 4 percent reduction per year. It also 

sets a target of increasing the share of renewables in the energy 

mix by 10 percent by 2010 and 15 percent by 2020. If China succeeds in achieving this goal and reducing its energy intensity by 20 

percent, it will avoid emitting approximately 1.5 billion tons of 

CO2, which constitutes the largest single greenhouse gas mitigation 

program by any country. And I will detail what that progress is on 

that in a moment. 

But I would also like to emphasize that China has reasons for 

the greenhouse gas mitigation programs that it has already 

achieved that provide a lot of room for reaching mutually beneficial 

common ground between the United States and China as they seek 

to achieve an international climate treaty. And these include, in 

particular, China’s growing awareness of the severe impacts on its 

own country of climate change. 

I think the turning point first came in 2006 when China issued 

a national climate change assessment program by 40 different ministries, a 400-page report which for the first time detailed the impacts that climate change would have on the areas where China is 

already most vulnerable. Its water supplies. It has only one-quarter 

of the average water resources per capita as the world average. 

They have already seen increasing droughts, increasing flooding in 

other regions. And just yesterday they announced their plan to 

build 59 new reservoirs to capture water resources in the west due 

to rapid melting of the glaciers. So the cost of adaptation is becoming increasingly apparent to China. 

Also impacts on their agricultural productivity and also on the 

economic development which is located primarily along their very 

long coastline and how it would be impacted by sea level rise. 

I would also mention energy security as a primary motivating 

factor for China in its greenhouse gas mitigation efforts. And also 

social stability. They are quite concerned about the high cost of its 

unsustainable energy path on the health of its people and on the 

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mated that 750,000 people die each year from environmental air 

and water pollution in China. Also the economic downturn as it has 

affected China these days is going to lead to increased social instability if they don’t create more green jobs. 

So there is a real opportunity here for holding hands across the 

ocean and finding green technologies that will benefit the global 

economic recovery. 

The third point is, despite all that China is doing, there is a tremendous amount more that needs to be done and that can be done, 

particularly through strengthening U.S. and China engagement on 

clean energy issues. 

But just to highlight a few of the efforts that China is already 

making in its greenhouse gas mitigation program, one of their 

major motivation factors is the desire to restructure their economic 

system away from the heavy industry that is the cause of the largest percentage of their greenhouse gas emissions, and in fact it is 

approximately 77 percent of all their energy demand. They have instituted policies already to help move their economy away from 

high-polluting, highly inefficient steel, chemical, cement industries. 

Not only that but even though they are continuing to grow their 

thermal power capacity to the tune of two coal-fired power plants 

a week, it is important to note that that is accompanied by the 

shutting down of the smallest, most highly inefficient power plants. 

So that there is a net increase in the efficiency of their thermal 

powered generation, which is leading to a dramatic reduction in 

greenhouse gas emissions from that sector. 

In the energy efficiency side, they are also closing backward production capacity, slowing the expansion of high-energy consuming 

industries through the elimination or reduction of export tax rebates for energy intensive products. 

They have a renewed emphasis on energy efficiency, particularly 

in the industrial sector, focusing on the top 1,000 highest energyconsuming industries, and our evidence indicates that they are on 

track to meet or surpass their target savings for that particular top 

1,000 factories, which would translate into a reduction in CO2

emissions of 300 to 450 million tons of CO2. They are putting money into funding energy efficiency at the national and provincial level. In 2007 they allocated 3.4 billion U.S. 

dollars to promote energy efficiency and reduce emissions and 41.8 

billion renminbi, or $6 billion in 2008 for the same purpose. They 

are beginning to implement provincial and municipal demand side 

management programs which use a portion of the revenue that 

utilities collect from their customers to reduce peak load and overall energy demand through large-scale investments in energy efficiency. And a World Bank study concludes that with the proper 

policies and incentives, these programs could avoid the need to 

build more than 100 gigawatts of electric capacity by 2020. 

The CHAIRMAN. Could you summarize, please? 

Ms. FINAMORE. Yes. Although they have made significant 

progress, much more can be done. China’s energy intensity is currently four times that of the United States and nine times that of 

Japan. In order to make further progress in meeting their ambitious goals there is a need for increasing technical capacity in energy auditing and energy efficiency retrofit design, monitoring and 


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enforcing standards in industry power plants and buildings. These 

are all areas in which the United States and China can profitably 

cooperate. 

So in sum, China is working aggressively to improve its energy 

efficiency, reduce the carbon intensity of its energy mix. A recent 

study by McKenzie Global Institute indicates that if China pursued 

energy efficiency to the full extent possible and cut coal to 34 percent of its power supply, it could cut its projected greenhouse emissions by 2030 nearly in half. 

[The prepared statement of Ms. Finamore follows:] 


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The CHAIRMAN. Thank you, Ms. Finamore, very much. 

Our next witness is Mr. Lee Lane. Mr. Lane is a Resident Fellow 

at the American Enterprise Institute and is Co-Director of AEI’s 

Project on Climate Engineering. Mr. Lane was previously a consultant to Charles River Associates International where he produced 

analyses of climate and energy issues. He also helped found the 

Climate Policy Center. 

We welcome you, Mr. Lane. Whenever you are ready, please 

begin. 

STATEMENT OF LEE LANE, RESIDENT FELLOW, AMERICAN 

ENTERPRISE INSTITUTE 

Mr. LANE. Thank you, Mr. Chairman, and Mr. Sensenbrenner 

and other members of the committee, I am delighted to have the 

opportunity to appear before you today and discuss these issues 

which I think are extremely important in the overall evolution of 

climate policy. 

My name is Lee Lane, and I am a Resident Fellow, as the chairman just said, at AEI. AEI is an organization that conducts policy 

analysis and research and education on a broad range of public policy issues. AEI does not take organizational positions on these 

issues, and the views that I am going to express here this morning 

are entirely my own, not necessarily those of the institute. 

Rising amounts of greenhouse gases in the atmosphere pose, I 

believe, several worrisome challenges. At the same time, many difficulties seem to rule out quick or easy solutions to the problems 

that are being posed to us. My statement suggests some ways in 

which the U.S. might nonetheless make progress. It makes three 

main points. I noticed that all three speakers who have spoken so 

far have three main points. So especially on that ground, we have 

grounds for agreement. 

The first point is that I think we need to acknowledge that 

whereas there seems to be an agreement, a global consensus even, 

on the need to reduce greenhouse gas emissions, that seeming 

agreement masks what I think is a distinct lack of consensus about 

who should pay to make these reductions in greenhouse gases. 

China, India, Russia and many other countries that have expressed 

agreement in principle that emissions should be reduced have not 

been especially forthcoming in incurring costs to actually achieve 

those emissions reductions. 

Now, I certainly hear and I have read the statements of my colleagues on the panel here, and I know that there have been a number of actions taken in China and elsewhere. But fundamentally 

those steps appear to me to be what we in this country used to call 

‘‘no regrets’’ policies. Well, that is fine. We should welcome whatever emissions reductions occur as a result of those policies. But I 

don’t think we should take those actions as suggesting that the 

world is any place close to being willing to bear the costs that 

would be required to really reduce greenhouse gas emissions to the 

level that would be required to halt climate change and actually 

stabilize concentrations of greenhouse gases in the atmosphere. We 

are very, very far from even discussing changes of that scale. 

My second point is I believe that it is true that the U.S. cannot 

create global consensus where none exists. Attempts to lead by exVerDate Mar 15 2010 02:08 Dec 02, 2010 Jkt 062186 PO 00000 Frm 00043 Fmt 6633 Sfmt 6602 E:\HR\OC\A186.XXX A186

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ample or to use trade sanctions to change China’s behavior are 

likely to be both costly and ineffective. For developed countries to 

pay China’s abatement cost is not an appealing option either. A recent MIT study, the one that Mr. Sensenbrenner referred to, estimated that carrying this principle to its logical conclusion would 

for the U.S. alone entail annual income transfers to the developing 

world of $200 billion by 2020 and nearly $1 trillion by 2050. Each 

dollar spent in this way is, in effect, a dollar added to the U.S. 

trade deficit. This would heap a huge additional burden on a U.S. 

economy that, during this same period, will already be struggling 

to make many other daunting structural adjustments. 

Third, and my final point, is that the U.S. climate policy should 

candidly consider the likelihood that the needed global consensus 

on paying for abatement will be long in coming. If so, the world 

will probably fail to reach today’s ambitious targets for stabilizing 

climate. Rather than striving to do the impossible, U.S. policy 

should focus on coping with the unavoidable. Adopting a modest, 

stable and gradually rising price on carbon emissions I believe is 

one step that we should take. 

An attached statement at the back of my statement discusses a 

number of other options that I think are important, especially focused on technological change, and I think several of these are in 

fact even more important than putting a price on carbon emissions. 

But I think a price on carbon emissions of the right kind would be 

an appropriate step, too. 

Finally, I guess I need to conclude with a note of caution. The 

U.S., like most other nations, has a real stake in curbing global 

greenhouse gas emissions. But if our good intentions lead us to 

incur costs that exceed the benefits to the United States, I fear 

those policies may not prove to be durable. And as many people 

have noted, climate policy is a marathon, not a sprint, and it is 

really important to muster a sustained effort. 

And I thank you very much, and I ask my statement be included 

in the record. 

[The prepared statement of Mr. Lane follows:] 


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The CHAIRMAN. Without objection, it will be included in the 

record in its entirety. 

Our final witness is Mr. Ned Helme. He is the President and Cofounder of the Center for Clean Air Policy. Over the last two decades Mr. Helme has advised not only Congress, State governments, 

and the European Commission, but also developing countries from 

Brazil to China. 

So we welcome you, Mr. Helme. Whenever you are ready, please 

begin. 

STATEMENT OF NED HELME, PRESIDENT, CENTER FOR CLEAN 

AIR POLICY 

Mr. HELME. Thank you very much, Mr. Chairman, Mr. Sensenbrenner, and other members of the committee. It is certainly a 

pleasure to have a chance to speak to you this morning. I am Ned 

Helme, the President of the Center for Clean Air Policy. 

My task this morning is to sort of set the stage in terms of where 

we are in the negotiation process and complement what we have 

heard from my colleagues. Let me start by putting a slide on the 

board here, and this sort of summarizes what you have heard from 

my colleagues to the left and right of me. 

This compiles the reductions that will be achieved by 2010 by 

China, Brazil, and Mexico under laws that are currently on the 

books in these countries. And as you can see, the red block is more 

than what we would do here in the U.S. under the Lieberman-Warner bill, as structured last year, by 2015, and it is comparable to 

the level of reduction we can expect from the Europeans with their 

minus 30 percent reduction target. 

So as my colleagues have shown you with the specifics, the sum 

total of this is quite substantial, and the world has really changed 

in terms of where we were in 1997 in Kyoto when very little was 

being done and where we are today where developing countries 

have really stepped up and carried their part of the burden here. 

Having said that, I want to build on what you said, Mr. Chairman, that this is great stuff but it is not enough. If we look at 

where we are going, we could zero out all the emissions of the developed nations by 2050 and we wouldn’t get to the targets we are 

talking about. So we clearly need a substantial additional effort by 

China and other key developing countries, and I think that will be 

forthcoming in the process. 

My second point is really to talk a bit about the Bali Action Plan. 

I think this is a major breakthrough from where we were in 1997. 

For the first time we have agreement among developed and developing countries that both sides will commit to specific actions that 

will reduce, in the case of developing countries, growth and emissions, and that is premised on monitorable and reportable and 

verifiable actions on both sides, and it is also premised on the 

thought that we will have support in technology, in finance, and in 

building capacity from developed nations to developing nations. 

That is the heart of the Bali Action Plan, And it is a real breakthrough in terms of the thinking and the way in which this process 

has evolved over the years. 

In that action plan we are talking about taking nationally appropriate mitigation actions, and there are three types of these actions 


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that are kicking around in the debate at this point. The first is unilateral action. And these numbers you see up here, a lot of what 

is here are actions that developing countries are doing on their 

own. These are not reductions that are being bought and paid for 

through the clean development mechanism. In the past, in the 

Kyoto Protocol, basically the only role was for projects in developing countries, could generate credits and those could be sold to 

the Europeans, for example, to meet the goals of their reductions 

by their companies. 

In this case we are talking about a real reduction by developing 

countries on their own that is a contribution to the atmosphere. So 

in addition to what developed nations do, we are going to see some 

real action by developing countries with some real costs—I would 

take issue with Lee’s contention that all this is just no regrets— 

that will really move us forward. So that is the first and most important piece. 

The second is a set of actions that would be premised on a conditionality. We will go further if developed nations provide support 

in the financing and technology and capacity building. 

And then third is, if we have set a law, let’s say China sets an 

RPS at 20 percent as they have done, If they do more than 20 percent, that could be turned into carbon credits to sell. So they have 

to meet the target on their own. If they go beyond it, they could 

market those on the carbon market. 

Let me take you to a specific example. Mr. Chairman, you alluded to this in your opening remarks. Mexico in December in 

Poznan put together the first really comprehensive approach that 

would show you what a national appropriate mitigation action on 

a sectoral approach would look like. Mexico proposed to set targets 

for reduction in cement, steel, oil refining and electricity, three of 

those very internationally competitive sectors. They have proposed 

that they would go further than the initial targets, significantly 

further, if there was support financially from developed nations to 

move that forward. And they said they would do this through a cap 

and trade program, a program that could combine with the U.S. 

cap and trade or a Canadian cap and trade program on a North 

American basis. So a very significant effort here. When we are 

talking about financing, we are not talking about big grants. In 

their case they are talking about loans that would help them overcome financial barriers. The banks in Mexico don’t have the ability 

to assess energy efficiency programs. 

This is the kind of thing we are looking at. So very significant 

and a concrete proposal for Mexico that could move us forward. I 

think when we think about mitigation actions, we want to focus 

really on the 6 to 10 largest developing countries. They’re responsible for over 80 to 90 percent of emissions. We don’t really care 

about Zimbabwe and Morocco and so on. We really care about 

Brazil, China, Mexico, Korea, India, South Africa. Those are the 

key players. So it is a more workable and doable deal than it might 

have first appeared. 

Let me turn to the question of the United States’ role in this. I 

think the U.S. is critical. We are the linchpin of a Copenhagen 

agreement. I think the positive reactions you have seen internationally to President Obama’s comments on minus 14 percent 


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below current levels is a very positive sign. I think it can have a 

very positive impact in terms of moving this debate. I think there 

will be two tests for us. 

The first test is what is our target? Can we get that target together? I am optimistic here with the Congress that we could move 

something through the House. At least it would give us a real signal to help our negotiators talk about what kind of target can we 

take. 

And the second question is, will we help financially? That is I 

recognize a tougher question, but it is a key question. To make this 

ball move, we need to do it. And again, let’s be clear. We are talking about help with technology. We are talking about capacity. We 

are talking about loans and breaking barriers. We are not talking 

about huge block grants like might be envisioned if you look at the 

India proposal, which is I think an outlier in terms of the real 

thinking on the table. 

Let me close by addressing—Mr. Hall has left, but he said there 

are twin challenges, and I think he is right on the money. He said, 

the twin challenges are: How do we deal with impacts on our companies in the United States? And how do we also encourage China 

and India to go further? And I think the answer is very clear. On 

the issue of carbon leakage, in the U.S. we have two choices. We 

could either give allowances free to key industrial sectors that are 

in danger, like cement, like steel, like oil refining, or we could do 

border tax adjustments, as I think one of you referred to this earlier that the—in fact Lee mentioned this in terms of—he said this 

is a real problem. Basically, any exports coming to the United 

States would have to buy carbon allowances. I think that is very 

provocative in the debate. Not very helpful. I think giving allowances out can take care of the carbon part of the problem. So that 

companies are held harmless in terms of this phase through 2020 

until China, Brazil, Mexico have taken similar action in the cement 

industry and the steel industry, which I think we will see. 

The second half of Mr. Hall’s challenge was, how do we get China 

to move? Border tax adjustments is not the way to go. China exports 1 percent of its steel to the United States. Putting a tax on 

Chinese steel is going to have no impact on their policies internationally. However, incentives like we just talked about, where we 

help them with the technology, where we take the CCS technology 

that we are working on and we do it with them in China at the 

same time we are doing it here. We don’t do the old game of develop it here and 20 years later we put it in the developing countries. As my colleague here said, two coal plants a week, we have 

got to deal with CCS now. 

Let me close. My final thought for you is, I think we had a real 

breakthrough 2 weeks ago when the U.S. in the negotiations on a 

mercury treaty switched its position. Seven years we have said no 

international agreement on regulating mercury emissions. In 2 

weeks the Obama administration changed direction and that completely dominated discussion. China, India, Argentina, Mexico, all 

of whom had been opposed to a mercury agreement, switched sides 

and said yes, we are onboard. I think it shows you what is possible 

from the kind of leadership we have from you guys and also from 

our President. 


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Thank you very much. 

[The prepared statement of Mr. Helme follows:] 


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The CHAIRMAN. Thank you, Mr. Helme, very much. We will now 

turn to questions from our committee members, and we will begin 

with the gentleman from Missouri, Mr. Cleaver. 

Mr. CLEAVER. Thank you, Mr. Chairman. Mr. Lane, on page 10 

of your testimony, in the fifth paragraph, you said, America is well 

endowed with the resources required to make the needed adjustments. On page 12 you said, our responses need to account for the 

limitations on our resources and our abilities to affect the preferences of other societies. Can you help me fix the difference? 

Mr. LANE. Sure. I think that the United States—and I think this 

is generally agreed—because it is a very big country, because it is 

quite a wealthy country, has—and because it is developed and has 

a well-developed public health service, and so forth, has a lot of 

human and material capital, is probably better able to adapt to climate change than most poorer countries are likely to be. It also has 

a more temperate climate to begin with, so that say in comparison 

with India or a country that is located much closer to the equator, 

we are less likely to experience in the early decades of climate 

change really severe harm. 

At the same time, all of that being true, it is still true that we 

don’t have infinite resources to help the entire world convert from 

fossil fuels to alternative energy and conservation, and so forth. 

Mr. CLEAVER. On that point—excuse the interruption but I only 

have 5 minutes. 

Mr. LANE. That is fine. 

Mr. CLEAVER. On that point I would like to engage all the panelists. 

Do you believe that it is possible for the United States in Copenhagen to create, for China and India in particular but all of the— 

many of the developing nations, the belief that there is a real connection between sustainable economic strength and hampering the 

environment? 

Mr. HELME. I certainly agree. I think that is very much in line 

with the kinds of things you see in the submissions from those 

countries. South Africa has been the leader, but this idea of dealing 

with carbon and at the same time promoting sustainable development is a key element of the G–77 of developing countries’ perspective, and I think they are already on that page. What they are looking for is help with the technologies and with some of the new opportunities to really pursue that ideal. I think we are on the same 

page on that issue. 

Mr. CLEAVER. Mr. Roberts. 

Mr. ROBERTS. I think for most developing countries the environment is clearly in their minds where their food comes from, where 

their water comes from, and they see the risks of that environment 

changing because of climate change. They see it more clearly than 

we do because in places like Indonesia, they walk out their back 

yard and catch the fish. Now as the ocean is becoming more acidified, they are seeing the coral reefs and fisheries change in front 

of their eyes. And they are seeing the sea level rise in their backyards, and they don’t have the ability to move like we do. 

I find in those countries a profound awareness of the relationship 

between their livelihoods and keeping their environment intact, 

and that is the main motivation for moving forward. I see that as 


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a powerful impetus for having that conversation in Copenhagen. I 

think it is going to happen. 

Mr. CLEAVER. Thank you. 

I want to find out whether the three witnesses agree with Mr. 

Lane’s testimony that a global agreement, a global pact on greenhouse gases, gas caps, with full trading of emissions allowances is 

probably not possible in Copenhagen. Do you believe there is an 

agreement to be made in Copenhagen? 

Mr. HELME. I think there is. I suggested in my testimony that 

we will have agreement on the targets for the developed nations. 

I think we will have agreement on this architecture of how we proceed with developing countries. So we will have agreement on developing countries putting a series of nationally appropriate mitigation actions on the table and conditioning that on the financing. 

And I think we will see the Annex 1 countries coming forward and 

saying here is the range of financing we might be able to put forward. And in 2010 I think we will really negotiate the final deal 

in terms of we will do this, and you will help us here, and here is 

what it amounts to. 

We are talking about a registry where developing countries will 

record what they are proposing, what they are looking for, and, at 

the end of the day, exactly what we have agreed to. So I think it 

doable. I think it is a two-step. I think in Copenhagen we get the 

structure done, and after Copenhagen, after we have passed our 

law and we know what financing we can help with, I think we get 

into the details. Clearly, with U.S. leadership, it is quite possible. 

Mr. CLEAVER. It is possible to go to Copenhagen shooting for the 

stars, and we may hit the Moon? 

Mr. ROBERTS. I think Copenhagen is an important step along the 

way. I think right now we are seeing these important bilateral conversations occur between the U.S. and China and the U.S. and 

Brazil and the U.S. and Europe. That lays the groundwork for differentiated commitments and the kind of exchange and financing 

and technology that we have talked about. 

I believe in Copenhagen we will see breakthroughs in framing 

issues like forests and deforestation and making them credible in 

the context of a global deal. We will see the creation and the framing of financing mechanisms, from funds to markets. I also believe 

that we will make some progress in terms of framing differentiated 

commitments. 

But I agree with my colleague to my right that it is a step along 

the way. We will also see follow-up in 2010. We are on the right 

path. Copenhagen is an important moment, but it is going to be a 

combination of bilateral discussions and agreements, in addition to 

the UNFCCC process. 

The CHAIRMAN. The gentleman’s time has expired. The Chair 

recognizes the gentleman from Wisconsin, Mr. Sensenbrenner. 

Mr. SENSENBRENNER. Thank you very much, Mr. Chairman. Ms. 

Finamore, welcome back home from Beijing. 

My first question is what makes you believe that the Chinese are 

going to act any different in keeping commitments in this area 

than they have failed to do in keeping commitments under the 

WTO, particularly in the area of intellectual property rights? 


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Ms. FINAMORE. I think there is a big difference between the WTO 

Agreement and the Climate Change Agreement. As I said earlier 

and detailed it in my testimony, there are strong motivations and 

driving forces compelling China to agree to some sort of international climate negotiation that are unrelated to just growing its 

economy or competitiveness concerns. In fact, they believe that improving their energy efficiency is going to increase their global competitiveness. And I would also say that there is a lot of common 

ground here that I think needs to be explored in China’s desire to 

move away from its high-energy-consuming industries which are 

responsible for the largest percentage of their energy carbon emissions. 

Mr. SENSENBRENNER. I can quote the head of China’s National 

Development and Reform Commission who said our general stance 

is that China will not commit to any quantified emissions reduction 

target. That is what the chief Chinese negotiator told me when I 

met with him in Poznam. 

Energy efficiency in reducing greenhouse gas emissions are two 

separate and distinct issues, and China is now emitting more 

greenhouse gases than the United States. Maybe the Chinese are 

believing their own press releases, but given their track record, I 

can say that I read their press releases and I don’t believe them. 

That being said, given the unanimous vote in the Senate before 

Kyoto in 1997 and the fact that the treaty requires a two-thirds 

vote to ratify, what we are talking about here, how do you get it 

ratified, particularly when China is talking about this wealth 

transfer as mandatory spending which effectively makes China the 

recipient of a new foreign aid entitlement program. 

Ms. FINAMORE. You quoted the comments made by the chief negotiator in China at the International Climate Agreements. And I 

would just say to you, for anybody who has spent any time in 

China, you have to understand that China, at least to my mind, 

has some of the best negotiators in the world. So what you are seeing is their negotiating position. Of course I would suggest that 

they are not necessarily going to make concessions at this stage in 

the negotiations until there is some opportunity for reaching a 

deal. 

Mr. SENSENBRENNER. My time is running out. Let me say that 

given the last meeting in Poznam that lasted from 6 p.m. to 3 a.m. 

on Saturday morning, the Third World, led by China, was asking 

for more money. And this is money that the first world doesn’t 

have. Our economy is in the tank, so is Europe’s. So aren’t we talking about an academic exercise here, because I don’t know who is 

going to vote for a treaty that ends up transferring a trillion dollars 

of U.S. money to China and India? 

Ms. FINAMORE. I think there has been a real sea change since 

Poznam that has been brought about by the new administration 

here. 

Mr. SENSENBRENNER. Well, I have a minute left. I am looking at 

submissions that have been made to the UNFCCC by China and 

India last month, in February, which was after the change in administration. Maybe the administration has changed its negotiating 

policy, but certainly China and India haven’t. 


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I think one of the reasons Kyoto failed was because even President Clinton, who signed the Kyoto protocol, recognized that it was 

unratifiable and thus never submitted it to the Senate for its consideration. I guess my point is to do anything in this area, we are 

going to have to do something that is politically feasible as well as 

accomplishing something. 

I heard the comment of shooting for the stars and hitting the 

Moon. I think probably the way we are going now is that this rocket will crash 100 kilometers down range because of overestimations 

of what can be accomplished. Remember, you do need a two-thirds 

vote in the Senate. My time has expired. 

The CHAIRMAN. The gentleman’s time has expired. Although if 

you would like more—— 

Mr. SENSENBRENNER. No, that is fine. 

The CHAIRMAN. The gentleman is a very good lawyer. 

The Chair recognizes the gentleman from Colorado, Mr. Salazar. 

Mr. SALAZAR. Thank you, Mr. Chairman. 

Mr. Helme, you mentioned that you thought the legislation moving forward in the House was the way to go. I know many of us 

in the Blue Dog Coalition believe the Senate should move before 

the House when it comes to climate change legislation that is moving forward. We certainly believe we would be more successful if 

we could get a bill that would actually pass having the votes in the 

Senate before it moves to the House. 

Mr. HELME. My sense is, given the election results, if you asked 

me this back in September, I would have said right, let’s do the 

Senate first because that is our high water mark. I think the 

change has shifted the game. And once we are clear, and Mr. Markey has the key subcommittee, and Energy and Commerce will be 

the initial battleground, but once we are clear there, we have a 

good chance of moving a good bill, that is well-thought through, 

through the House in a timely manner. 

I think in the Senate it is a bit more divided. We will have to 

deal more with the gang of 15, the members who are sort of swing 

votes. So I think starting out in the House makes sense. It is basically a political calculation. Can we get something done that sets 

a good marker and a good piece out there? I thought the DingellBoucher bill last year raised a lot of key issues. I didn’t agree with 

the target. I thought the target was too weak, but a lot of the other 

stuff was very helpful. So you are further along; whereas what happened in the Senate was a big battle over the pot of money, and 

it wasn’t very constructive. And I think we are in a better position 

in the House to move first, so I think it makes sense. 

Mr. SALAZAR. I can almost assure you that what comes out of the 

House won’t come out of the Senate. That is our biggest concern. 

Mr. Lane, if you had to choose one action before all others to address global warming, what would that be? 

Mr. LANE. It would be to develop and implement a really carefully structured energy research and development program. I think 

that actually Secretary Chu is talking about some of the changes 

that are exactly on target with what is needed, especially in the 

area of basic science and doing some of the longer-term more basic 

scientific research that is necessary to produce real cost breakthroughs for the future. 


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It is terribly important when we talk about R&D to focus on the 

earlier parts of the research process that are more basic and that 

the private sector will not do under any circumstances. Government has to do what only it can do. That is the most important 

thing, in my judgment, for reaching a solution. 

Mr. SALAZAR. Thank you. 

Ms. Finamore, given that China is one of the leading solar manufacturers in the world, what do you think we can do to encourage 

them to use more solar instead of building more coal fire plants, 

and are they engineering the coal fire plants so that in the future 

they can be retrofitted to eliminating carbon emissions? 

Ms. FINAMORE. You are right that China is a leader in manufacturing and exporting of solar technologies, but it hasn’t caught on 

yet domestically. A large part of that is the need to strengthen the 

policies and incentives that are listed actually in the renewable energy law that was passed in 2005 to implement them, and to also 

find ways to make sure that these renewable energy technologies 

are connected to the grid. So there are policy incentives that need 

to be strengthened in China because it already has the manufacturing capability. 

I would add, it is already the leader in the world in solar hotwater heating technology. I think it captures 80 percent of the 

world market. Wind power is growing 150 percent a year. Solar has 

lagged behind, and I think there is a lot more to be done in the 

policy and incentive areas. 

On coal fire plants, number one, all of the plants that are coming 

on line now are what is considered super critical or ultra super 

critical. So they are more efficient to begin with. They are actually 

blowing up the smallest, most highly polluting plants, coal-fired 

plants, so there is a gradual improvement in the energy efficiency 

and the emissions of those plants. 

But China is already in the process of building its first IGCC 

plant which is going to be coming online in the next couple of 

years, and they are going to be designing that so the carbon can 

be captured and stored. I think this is another area where there 

is tremendous potential for cooperation between the U.S. and 

China on these two technologies that are in the beginning processes in both countries. 

Mr. SALAZAR. Thank you. 

The CHAIRMAN. The gentleman’s time has expired. The Chair 

recognizes the gentlelady from South Dakota, Ms. Herseth Sandlin. 

Ms. HERSETH SANDLIN. Thank you, Mr. Chairman. 

If I could just follow-up, Ms. Finamore, on Mr. Salazar’s question 

and what you just stated with regard to coal-fired facilities in 

China. I think including developing nations like China in any 

international climate change system is an important element and 

a practical climate change strategy that is going to be broadly acceptable to the American people, as some of the other questions 

from the Members on the committee have noted. And in your testimony and your response just now to Mr. Salazar, you note that 

China’s thermal power expansion has been accomplished by replacing older plants with more modern plants and that China is pursuing clean coal technologies, including integrated gasification combined cycle. 


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I represent the State of South Dakota, and South Dakota like 

many States throughout the Great Plains and the southwest utilize 

coal power for a very high percentage of our power, and there are 

some very exciting plans underway, whether it is integrating IGCC 

technology or other clean coal technology in the region. And as you 

also I am sure know, the President has spoken favorably of clean 

coal projects, and I think it is clear that from a practical standpoint, that coal-fired power generation will play a significant role 

in the United States for years to come. Given that fact and China’s 

interest in more efficient coal-fired facilities and in clean coal technologies, do you agree that the United States should commit the resources needed to be the world’s leader in this area? 

Ms. FINAMORE. Well, I am not an expert on what the United 

States should do, so I would defer to some of my colleagues on that. 

Ms. HERSETH SANDLIN. Let me ask you, do you know comparatively in terms of what we have committed here in the United 

States versus what China has committed in terms of financial resources to developing these technologies to date? 

Ms. FINAMORE. No, I don’t; but I would be happy to follow up 

with you. 

Ms. HERSETH SANDLIN. Please do. 

Ms. FINAMORE. I would also say that I think it is important to 

note that the best way to reduce emissions from coal-fired power 

plants in China is to improve the energy efficiency. Studies have 

shown that China can cut its growth in energy demands by half 

just through becoming more efficient in its industrial technology 

and its buildings. Half of new building construction in the world is 

going on in China. So that has to be the first focus; and that is indeed China’s primary climate change initiative. 

Ms. HERSETH SANDLIN. Perhaps you can get us the statistics on 

how many financial resources China has devoted to energy efficiency, and we can compare that to what we have done here in the 

U.S., including what was recently included in the economic recovery plan. 

Ms. FINAMORE. I would be happy to. 

Mr. HELME. Also, China has been a participant and committed 

some financing to the Future Gen Project which was shelved, but 

I guess it has been resuscitated by the stimulus bill. They are also 

committing financing to the Europeans. Both the U.K. and the European Union have committed to building a demonstration plant in 

China, and China will contribute to that. And in the MIMM negotiations, the NDRC have basically said we are ready to put the 

equivalent of the supercritical kind of coal plant that Barbara was 

talking about. We will pay that part; but what we are looking for 

is could the U.S. give a tax credit to GE, to the vendor, to help 

write down the cost? It is 30 percent more expensive, just like it 

is here, and they would like to have that help on the technology 

to jointly work together. So there is a lot of interest in this, but 

they haven’t done as much because it is higher cost, as it is here. 

Ms. HERSETH SANDLIN. Thank you, that is very helpful. That is 

the only question I have. 

The CHAIRMAN. We are going to a second round so if members 

have any additional questions, I will be able to recognize them for 

that purpose. 


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I am going to recognize myself right now for a question, and that 

will be for any of you to raise the issue of India for us briefly. If 

any of you would like to add that to the discussion, China is obviously, you know, the issue of the day, but India is moving rapidly 

as well. Would one of you like to address that issue? 

Mr. HELME. I think in the negotiations, as I said sort of in response to Mr. Sensenbrenner’s question, I think India is the 

outlier. They have been the most hard-line on the rhetoric about 

we have to have equal per capita emissions. They have been very 

hard-line on the financing and hard-line on not supporting unilateral actions. 

You notice I talked about countries are doing things and not 

being paid for it. To date, India has done very little that was not 

paid for in the CDM. If you look at the spectrum of the debate, 

India is at the far right, along with the Saudis. And we can expect 

a pattern like we saw in the mercury negotiations where China 

moved, India was embarrassed, and India had to sort of follow behind China. India is the toughest nut to crack. 

We do some work in India. Our perception is Indian industry is 

quite progressive on these issues, particularly in key sectors, cement, steel and so on. They are pushing the envelope in terms of 

improving intensity and efficiency. The difficulty is getting the government to come around. I would put them in a special category 

in terms of where we stand. 

The CHAIRMAN. Let’s talk a little bit about the implementation 

problems in these developing countries. There are impressive renewable energy targets in India, Brazil, Mexico, but give me your 

honest views as to the implementation probability in each of these 

countries. That would be very helpful to us. Ms. Finamore. 

Ms. FINAMORE. I think you have hit upon the key problem in 

China. And responding to what some of the members asked earlier, 

I believe there is tremendous political will at the national level to 

achieve its renewable energy targets and energy efficiency targets. 

The problem where they fall down is in implementation at the 

local level, provincial government leaders, heads of the major enterprises or factories. What I am very heartened to see is movement 

in this direction as well, although much needs to be done. And I 

think one of the most effective mechanisms that the government 

has just put into place is a system whereby the job promotions and 

actually ability to keep the jobs of the provincial governors is going 

to depend in part upon how well they meet these ambitious renewable energy, energy efficiency and emission reduction goals. I have 

found that single initiative has done more to concentrate the minds 

of the provincial leaders who are responsible. 

The CHAIRMAN. So are you saying in Beijing they tell the provincial governors, you are going to be in or out of a job based upon 

your implementation of renewable energy and efficiency targets? 

Ms. FINAMORE. In fact, yes. That is not the only factor that is 

going to be considered. 

The CHAIRMAN. That would be the most important factor, 

though. 

Ms. FINAMORE. Absolutely. But until recently, their job security 

was only based upon how well they grew their local GDP. Because 

they have a different political system, we could not do this in the 


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United States, but they have an integrated political system where 

provincial governors do in fact report to the central government. So 

the government has the ability to do so. It has made a huge difference. 

The CHAIRMAN. We understand how Tammany Hall politics 

work. It didn’t end that long ago in Boston. We understand how the 

local bosses, if they don’t get the job done, might not hold onto 

their jobs. Do you think that is something that is likely to be enforced? 

Ms. FINAMORE. Yes. When the rubber meets the road, it will be 

at the end of 2010. At the end of this current 5-year plan. That is 

when the numbers have to come in. There will be some scapegoats 

whose heads will roll. However, the concern I have is that the provincial governors are responsible. 

The CHAIRMAN. Metaphorically, we hope. 

Ms. FINAMORE. Not always. 

Mr. ROBERTS. Mr. Chairman, I would like to refer to page 11 in 

my written testimony which I hope is going to be included in the 

record. 

The CHAIRMAN. It will be, yes. 

Mr. ROBERTS. It lists the progress that various countries have 

made against renewable energy targets. It is an impressive track 

record. It gives you the indication that they are actually making 

progress. 

I wanted to also comment on, while we are talking about Governors and States, I don’t know if any members of this committee 

attended the Governors Conference in L.A. that Governor 

Schwarzenegger held this past fall, but the ownership that Governors in States in the Amazon and Indonesia and China and elsewhere are taking of this issue, and the leadership that they want 

to demonstrate to the people who vote them into office is quite 

clear and impressive, and particularly their desire to join as part 

of global agreements and bring technology and solutions to bear to 

local populations. 

The CHAIRMAN. You are saying this might be a tale of two countries. In Brazil, we might be better off with the provincial governors running the program, whereas in China we might be better 

off with the central government running it rather than the provincial governors. So it all depends upon where the most committed 

public officials are within the Nation’s structure. But at the end of 

the day, we don’t care what their governmental structure is as long 

as there is a measurable improvement in their production of renewables and their energy efficiency. 

Mr. Lane, I am going to give you 1 minute to answer and then 

I am going to turn to Mr. Cleaver. Then I will come back and follow-up on my questions. 

Mr. Lane. 

Mr. LANE. My impression is that the provincial communist parties are actually a very important force in the central government, 

and we shouldn’t I think look upon the Chinese Government as an 

entirely top-down enterprise in which the provincial governments 

are operating at the behest of the central government. That is why 

some of the 5-year plan targets in the past about restraining heavy 


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industry’s growth have not been implemented, because the provincial governments have simply overruled the central government. 

The CHAIRMAN. Thank you, Mr. Lane. 

The Chair recognizes the gentleman from Missouri, Mr. Cleaver. 

Mr. CLEAVER. Thank you, Mr. Chairman. 

Mr. Helme, you made the comment, and Mr. Roberts as well, 

there were steps needed before Copenhagen, and that is down the 

road. But inevitably there is going to be a lot of talk here about 

how we cap emissions and there are all kinds of opinions on that. 

The Ranking Member mentioned, as he often does, cap and tax. I 

am intrigued by a concept that I have not heard a lot about, and 

it is cap and dividend. Are any of you familiar with this system? 

I would like your reaction to it if you are familiar with it. 

Mr. HELME. I think this goes to the heart of Mr. Obama’s budget 

proposal of last week where he is basically saying we will auction 

all of the allowances and then we will recycle that revenue in the 

form of paying for the middle-income tax cut, perhaps assisting 

people in terms of paying their electric bills and that kind of thing. 

That is the heart of it. It is very intriguing because you look at it 

from an economic standpoint, the way to reduce the overall cost of 

climate regulation, the best way is to recycle money and use it as 

tax-shifting, eliminate more distortionary taxes. It could cut the 

cost by 50 percent so we get more environmental bang for our buck 

by doing a portion of that. That is what we are talking about, the 

idea of putting it back through the Tax Code and taking it out. 

Obviously, we have some other needs. We have some key energy 

technologies we want to see developed and so on. The administration is starting by saying that is where they would like to go, a 

small piece is for technology and small piece is for the poor, which 

is important. It is an opening bid. I think the idea is a very intriguing one and one that makes it possible to do more in terms of climate target for less, which of course we want to do in today’s economic context. 

Mr. CLEAVER. Essentially, we will be giving permits to pollute, 

and there are those who would say when those permits to pollute 

are granted, that many businesses will just consider that the cost 

of doing business, and that we don’t inhibit or prohibit their ability 

to emit greenhouse gases because they just pay for it and continue. 

Do you think that is realistic? Maybe the tough economic times 

today would also have an impact on businesses where they would 

be a little hesitant about creating another cost of doing business. 

Mr. HELME. Remember this auction idea, you are basically setting a cap which requires—in his case he is saying 14 percent reduction below 2005 levels, the President’s proposal. So we are going 

to cap the total pollution that is allowed, and we are only going to 

sell permits up to that level of cap. So we are going to get a significant emission reduction. We are not going to let them buy as many 

as they want and then pollute to their heart’s delight. We are basically saying we are setting that cap. Wherever you set the cap determines the environmental results. I think it has both in it. 

Mr. CLEAVER. Thank you, Mr. Chairman. 

The CHAIRMAN. The Chair recognizes the gentleman from Washington State, Mr. Inslee. 

Mr. INSLEE. Hello, thank you. 


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I am sorry I have just been able to join you and you may have 

talked about this, but I would like your thoughts on what we 

should ask China on either a bilateral or multilateral agreement. 

So, should we address a bilateral agreement with China; and second, whether it is bilateral or multilateral, what is a realistic request of China? Is it an intensity number of CO2 in their economy? 

Is it an investment number? Is it a cafe number? Is it a combination of those things? I would appreciate any and all of your 

thoughts on those subjects. 

Mr. HELME. My sense is that China, in their climate plan of 

April last year, laid out reductions they would achieve in various 

sectors. I think they are very focused on sector-based rather than 

national targets. So we will do this in cement, this in steel, this in 

electricity, and this in oil refining. I think that is what we should 

look for. 

What China talks about all of the time is doing this via technology. So in a 5-year plan, they have said to us you want us to 

make reductions in cement; we can do so many pounds of carbon 

per ton of cement, but we would rather say in 2020, 80 percent of 

our plants will have waste-heat recirculation, 70 percent will blend 

the cement with waste slag and that sort of thing, and 40 percent 

will do these other things. 

So putting this in terms of technology is what China really understands and relates to. Their negotiator said to me, setting that 

emission target, if there is a lot of growth, we will have a lot of 

plants and the intensity will improve. If the economy tanks, like 

it is doing now, we will build less new plants and we will do worse 

in terms of the intensity target. So we are not sure we can get to 

that emission number, but we can confidently say to you that we 

can do this much of this technology, or its equivalent, and this 

much of that technology. 

The discussion with China has to be how big; is it substantial 

and material in terms of total reduction? But in the specifics of 

help with technologies, you look at their submissions and their talk 

in the debate. That is where they are focused. They see this as the 

piece that is missing. The CDM doesn’t help them build new, innovative technology. It just pays for today’s technology. And that next 

round, as Barbara was saying, is what improves their efficiency 

and makes them more competitive. 

Ms. FINAMORE. I do agree with that, and I would like to add two 

more points. One is that there is a tremendous amount of mistrust 

that has grown up between the two countries over the years on this 

issue. I believe there is a lot that can be done outside—both within 

and outside the context of the international climate negotiations to 

help prepare for Copenhagen—between the U.S. and China, which 

together account for 40 percent of all CO2 emissions in the world. 

So we have developed a set of recommendations for how to 

strengthen the U.S.-China climate engagement, and that includes 

both suggestions for how the two countries should focus their bilateral discussions to come up with common ground on some of the 

key sticking points in the international climate negotiations such 

as the financial mechanisms and the technology transfers. 

But I also suggest, and this is I think very much in line with 

Secretary Clinton’s statements on her trip to Beijing recently, 


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which is there is tremendous opportunity here for bilateral cooperation on clean energy in particular, and this has two effects. One is 

that it can help to reduce the amount of mistrust that has built up. 

I think it can provide economic benefits for both countries. 

Most importantly, no matter what agreement is reached at Copenhagen, you are going to have this implementation problem in 

China and other developing countries, and whatever bilateral efforts that you jump-start right now are going to help jump-start 

the implementation process. I believe there is a lot that can be 

done at a very low cost to the United States in helping to provide 

technical assistance to China, and that is the key area that should 

be explored now. 

Mr. INSLEE. Mr. Roberts and Mr. Lane, I will take your answers 

in writing. I have limited time here. 

Should there be an international research and development coalition or entity that is funded by the countries of the world? Should 

there be one unified, which will not be the exclusive place for R&D, 

but should there be one institute that we all contribute to to generate new technologies in this regard? Mr. Roberts and Mr. Lane, 

if you have thoughts on that? 

Mr. LANE. Yes. 

Mr. ROBERTS. Not necessarily. I believe that there needs to be 

some mechanisms for developing new technologies. Does there need 

to be one institute that drives that? I am not so sure. I believe 

what we have seen in bilateral negotiations between countries are 

a wealth of possibilities for cooperation between the U.S. and 

China, U.S. and India, and U.S. and Brazil. Does all of that need 

to be centralized? I am not sure. We need to reach economies of 

scale and ensure the fastest possible transfer of technology so we 

are not all trying to reinvent the same wheel at the same time. 

Mr. LANE. I just wanted to say as I interrupted your question, 

sir, you were not indeed saying the opposite, that it didn’t have to 

be the only vehicle, but there should be one. 

Mr. INSLEE. Senator Voinovich asked Tony Blair this question 

the other day. To me there is a certain maybe romantic attraction 

to this idea that we are going to have some joint global R&D program, and maybe it is only 1 percent of our entire national R&D 

budget, but to me there is a certain charm of the entire world uniting in an R&D project, even if it is only a small portion of our global research budget. It is just one Congressman speaking. 

Mr. ROBERTS. There is no question from our perspective that the 

more the world can come together and bring technology and finance to bear on these issues in a focused way, the better. So there 

will be opportunities, in fact an imperative, for us to take the cooperative, consolidated approach. And it will mean creating some new 

global institutions along the lines of what you described. 

Mr. INSLEE. When you think how we eradicated smallpox, these 

were global, unified efforts. And they were not exclusive, but they 

were unified. 

Thank you. 

The CHAIRMAN. If I could follow up on Mr. Inslee’s question and 

go to you, Ms. Finamore, China just passed a new stimulus package. 

Ms. FINAMORE. Yes. 


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The CHAIRMAN. Could you tell us a little bit about how much 

money they put into energy environments and how much they put 

into research? Because all of these global stimulus packages are 

constructed differently, but it would be interesting for us to understand what China did in this one particular field. 

Ms. FINAMORE. I would be happy to. 

Last November China announced a stimulus package equaling 4 trillion renminbi which is equivalent to almost $600 billion U.S. It 

is a 2-year program and spreads out over ten sectors. There is a 

big discussion this week, it is the annual meeting of the National 

People’s Congress and there is a big debate whether or not it 

should be expanded. So we could be hearing from the Premier on 

Thursday when he announces the National People’s Congress, he 

may expand the stimulus package. 

Almost all of this 4 trillion renminbi is for infrastructure construction, particularly railways. As opposed to developing its highway system, which also gets a lot of funds but not that much, it 

is good for mass transit purposes for reducing emissions from 

transportation. There is some concern that it is going to require 

greater manufacturing of steel and concrete to build out the railway system; 350 billion renminbi, or $50 billion, is earmarked for 

energy efficiency and environmental protection projects specifically. 

But I would argue that there is an opportunity here for China to 

spend a lot of the remaining parts of the stimulus package in a 

way that is going to promote sustainable development and reduce 

emissions. In particular, a lot of the money, 1 trillion renminbi is 

going to go. 

The CHAIRMAN. How much is that, again? 

Ms. FINAMORE. To get dollars divide by 7, will go towards rehabilitating the areas devastated by the earthquake; in other words, 

building. If China puts environmental criteria on this building, it 

could go a long way in reducing emissions. 

The CHAIRMAN. Mr. Roberts. 

Mr. ROBERTS. Recently a report issued by HSBC Global Research 

compared stimulus packages across many countries and looked at 

what percentage of the overall stimulus package was devoted to a 

low-carbon economy. While it praised the United States for their efforts toward a green economy, it evaluated our package and determined that about 12 percent is going to a low-carbon economy. And 

by contrast, about 38 percent of the Chinese stimulus package, by 

the same definition, is going toward a low-carbon economy. So it is 

much more oriented toward the things we are talking about. 

The CHAIRMAN. So you are saying 12 percent of $800 billion is 

going to a low-carbon economy, but 37 percent of $600 billion is 

going to a low-carbon economy? 

Mr. ROBERTS. According to the HSBC Global Research study, 

which is a global bank. It is a consumer bank out of London, and 

it has taken a keen interest in these issues because it is a consumer-based bank with branches throughout China and Europe 

and the world. 

The CHAIRMAN. There is a measure of energy efficiency in China 

that caught my attention. It is the top 1,000 program. Could any 

of you elaborate on that program, how it works and how effective 

it is? 


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Mr. HELME. I think that was the same one that Ms. Finamore 

was referring to in her testimony, the energy efficiency program. 

My recollection of the data is they wanted 4 percent a year, and 

in the first year they got 1.2; but in the last 2 years, 2007 and 

2008, we were close. We were just under 4 in 2007 and over 4 in 

2008, so well on track. As Barbara indicated, it is 300 million tons 

a year which is very significant. 

Ms. FINAMORE. Just as Mr. Helme said that we can reach a global climate initiative by focusing on just five or six developing countries, China has found that it can go a long way towards achieving 

its ambitious energy efficiency goals by focusing on just 1,000 factories, and that’s what this top 1,000 factory program is. Together 

this 1,000 enterprises constitutes 33 percent, one-third of national 

energy consumption, and nearly half of all of its industrial energy 

consumption. They have targeted these plants and required every 

one of them to do an energy audit, hire energy managers. There 

are quotas, and they are apparently on track to achieve their 

quotas for each one of these 1,000 facilities. 

The CHAIRMAN. Let’s move to Mexico. We heard the testimony 

here that they want to cut their emissions in half by 2050. Some 

people might doubt the effectiveness of the Mexican Government, 

given what is going on with the drug cartels down there, and that 

will be the first issue that the people raise. What is the capacity 

for the Government of Mexico to implement such a bold plan? Do 

any of you want to speak to that issue? Mr. Helme. 

Mr. HELME. Mexico is the thing I cited in terms of the details. 

The minus 50 is their aspirational goal. The President has put that 

in. They are going to release their national climate strategy in the 

next month or so. And as part of that, they will have specific goals 

for specific sectors. I cited the four sectors—cement, steel, oil refining and electricity. Importantly, we have looked at those sectors. 

Steel and cement are fairly efficient, more efficient than U.S. production, for example. The two other sectors, electricity and oil refining, are national companies, if you will. They are nationalized. 

They are incredibly inefficient. Oil refining, PMEX, is the worst 

scored refinery in the world, compared to any of the other world 

oil refining companies. 

But the good news is these are nationally run agencies, so we 

have a good chance, I think, with the government being able to 

take this on. And President Calderon is very knowledgeable. He 

was the Energy Secretary before he became President. He knows 

these agencies inside out. He has brought them in and got a commitment from both of them to play and step up and do some 

things. 

There are some huge opportunities. For example, there are 3,000 

megawatts of cogeneration right there on the table today at these 

oil refineries and chemical plants they could do tomorrow. They 

haven’t been able to do it because Mexican law basically says CFE, 

the utility, decides what they pay—like we all used to do before you 

all passed the energy reform in 1992—decides what they pay. And 

of course they pay nothing and so nobody builds a cogeneration. 

So these things can be turned around. They are not costly. That 

is my point for Mr. Sensenbrenner. This is not buckets of money. 

This is simple loans to get them over the top to capitalize this 


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thing. So you are right, there are some real issues there. But I 

think there is a deep commitment at the President’s level, and he 

has the legal authority. He doesn’t have to pass a new law. He has 

authority to move forward with these efforts. 

The CHAIRMAN. My time has expired. I would like to give Mr. 

Cleaver and Mr. Inslee time for additional questions if they are interested. 

Mr. INSLEE. No, thank you. 

The CHAIRMAN. Mr. Roberts, did you have a point on Mexico? 

Mr. ROBERTS. I have been to Mexico seven times this past year, 

and I would agree with the assessment that President Calderon is 

serious about climate change. Mario Molina, the Nobel Prize winning scientist, is adviser on these issues. 

The CHAIRMAN. From Lexington, Massachusetts, in my district. 

That is great. 

Mr. ROBERTS. Mario Molina. 

The CHAIRMAN. That is great. 

Mr. ROBERTS. And the business leaders in Mexico, most of the 

business leaders in Mexico are quite committed to this and moving 

their industries in the right direction. I think there is a real opportunity in Mexico. 

You raise that the President has his hands full in addressing the 

drug cartels in Mexico, but at the same time among the leaders of 

the world, I have seen him make a stronger commitment to this 

than most. 

The CHAIRMAN. Remember that scene in Annie Hall where 

Woody Allen was listening to somebody critique a movie and Marshall McLuhan turns around to comment. Well, I had a session like 

that in my district in 1995 with 1,500 people. And I had it in Lexington, to critique all of the analysis of ozone depletion and all of 

that. And then this other man went over to the microphone and 

said, ‘‘Well, you know, I won the Nobel Prize on that subject.’’ That 

is what can happen in Lexington when you are having a discussion 

on issues of this nature. 

Let me give each of you then 1 minute to summarize what it is 

that you want us to remember as we are going forward in terms 

of these developing countries and what are reasonable expectations 

for our country and the world, both in 2009 and the years ahead, 

because I think that is going to be the way in which this debate 

gets framed. It will be in that long-term economic context of where 

the burdens are and how they are going to be shared. 

So why don’t we go in reverse order? We will begin with you, Mr. 

Helme. 

Mr. HELME. This may not be a popular answer, but I think, 

Chairman, the key issue here in the negotiations is the financing. 

It is a tough sell here in the Congress, but I think it is, in terms 

of our good faith—as I said, there are two tests of the U.S.; one is 

do we have a real target and is it strong? I think we can deliver 

on that side. And can we step up and show we are willing to help? 

The developing countries feel that the 1992 Rio Treaty and the 

1997 Kyoto protocol both said Annex 1 will pay incremental costs. 

They will contribute to this, this and this, and the track record has 

been dismal and very little to show. Obviously we are in tough ecoVerDate Mar 15 2010 02:08 Dec 02, 2010 Jkt 062186 PO 00000 Frm 00096 Fmt 6633 Sfmt 6602 E:\HR\OC\A186.XXX A186

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nomic times here, but I think we need to think of targeted ways 

where we can show good faith and move this ball forward. 

I think China is ready to act. Mexico, Korea, Brazil, they are 

ready. India is in a different category. The others are serious. 

China will step up and outdo us if we show good faith. I don’t think 

that it is about billions, it is about good faith in saying we will help 

you with technology and help you with capacity building, as my colleagues have said. I think that is the bottom line. 

The CHAIRMAN. Thank you, Mr. Helme. 

Mr. Lane. 

Mr. LANE. Mr. Markey, I guess I would say that the sign of commitment on the climate issue is really a willingness to impose a 

price on carbon emissions. I would be inclined to use that as the 

standard for assessing whether developing countries and developed 

countries are actually serious about reducing their greenhouse gas 

emissions. Are there comparable prices being put on greenhouse 

gas emissions? I don’t think it necessarily has to be a high price 

to begin with, but I think we need to keep an eye on the relative 

prices and to make sure that ours don’t get out of line with the rest 

of the world. 

I guess the only other point I would add to that is it seems to 

me that this is likely to be an iterative procedure. We need to continue to monitor this and adjust our behavior to make sure that it 

stays in line with the behavior of our major trading partners. 

The CHAIRMAN. Using your measurement of serious, would you 

say that the price that is being set in the European Community 

right now is serious? 

Mr. LANE. Yes, I would. I would point out that their price applies 

to only a relatively small percentage of their total greenhouse gas 

emissions, though. It is important to keep in mind what emissions 

are covered and how much of a country’s total emissions are actually being covered by the control system. 

The CHAIRMAN. But they are serious about the proportions that 

they are covering? 

Mr. LANE. I believe, yes. Anything that gets us started toward 

having a price on emissions, I think is a step in the right direction 

and a good point for further negotiations. 

The CHAIRMAN. Thank you, Mr. Lane. 

Mr. Roberts. 

Mr. ROBERTS. There is no substitute here at home for putting a 

price on carbon. All of the things that we are talking about will not 

go to scale. The investments won’t happen without putting a price 

on carbon. At the same time, we can’t expect every other country 

to make the same kind of commitment that we make. It has clearly 

been established that there will be differential commitments that 

reflect different countries’ political contexts. 

My final comments would be we need global reductions to solve 

the problems we have here at home. The smart money is not to 

spend all of our money here in the U.S., but to provide financing 

and technology to achieve low-cost solutions elsewhere in the 

world, because a ton in China and a ton in Mexico affects us just 

as much as a ton created here in the U.S. 

So I believe a smart provision of financing, not just to clean technologies but also to adaptation through instruments like the Global 


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Environmental Fund, are essential to address the problem. And I 

believe that we need to create partnerships with other countries 

through bilateral negotiations and through Copenhagen to make 

this happen. 

The CHAIRMAN. Thank you, Mr. Roberts, very much. 

Ms. Finamore. 

Ms. FINAMORE. I would once again like to urge the committee to 

look beneath the negotiating posture of China to the tremendous 

progress that has already been made and the tremendous areas of 

common ground that exist between the two countries in order to 

break through the stalemate that has existed for so many years on 

climate issues. 

A lot of the work that can be done should be going on now with 

bilateral dialogues. Some of the efforts going on now are to bring 

together legislatures from the U.S. and China to talk about these 

issues. Whenever we go to China—my executive director is there 

right now—we get questions about what is the U.S. thinking. 

There is not a lot of understanding about what is happening with 

this new administration, but a tremendous amount of interest. 

I would also say that the bilateral work that needs to be done 

has already begun. In fact NRDC has been working for over 13 

years in bringing together experts from both the U.S. Government 

and California and other leading States in the U.S. on these kind 

of technology transfer technical assistance programs, so this can 

form the backbone of an expanded effort. 

Just last week, for example, we brought the new acting chairman 

of the Federal Electricity Regulatory Commission to China to speak 

at a major energy efficiency conference that we sponsored, and we 

got the new Secretary of Energy to participate by video. We look 

forward to working with you as we move forward on these issues. 

The CHAIRMAN. Thank you, Ms. Finamore, very much and thank 

you for traveling from Beijing to deliver your testimony today. 

There is no evidence of any jet lag in your performance here today, 

and we thank you for that. 

So there is good news of a sort. We have learned that China’s 

goal by the end of this year is to be the leading exporter of renewable energy technology in the world. That is good news; and, of 

course, it is bad news because that should be something that we 

are touting in the United States. Brazil has established a goal of 

reducing deforestation by 70 percent, and we have heard the litany. 

But at the end of the day, as our witnesses have told us, to construct a global treaty, we are going to need measurable goals that 

are accepted by all of the developing countries in the world as well. 

That must be articulated in partnership with the developed nations 

and the United States in order to achieve this goal must be a leader, not a laggard, when it reaches Copenhagen. 

That is the goal the Congress has set for itself this year, to develop legislation that will allow the President to go to that negotiation as a credible negotiating partner with the other nations in the 

world. 

We thank each of you for your testimony. 

With that, this hearing is adjourned. 

[Whereupon, at 11:20 a.m., the committee was adjourned.] 


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