| The day before the Senate took up hearings on HR 2454, the Climate Bill sent over from the House, Senate Majority Leader Harry Reid (D-NV) fired up the troops with this call to arms: “As a legislator, everything is negotiable.”
Just so. That’s exactly what has so many supporters of climate change legislation wondering if the bill won’t turn out to be a sheep in sheep’s clothing — thanks to the efforts of bleating heart liberals.
Of course, the already-watered-down bill from the House could be strengthened as it works its way through the Senate. According to Sky 1’s Jason Kowalski, that may be the case for draft legislation coming from the Environment and Public Works Committee, which was first at bat for the Senators, in a hearing yesterday.
(You can watch the recorded hearing here.)
Today’s hearing is the kickoff of a historic Senate effort to pass legislation that will reduce our dependence on foreign oil, create millions of clean energy jobs, and protect our children from pollution.
The central theme in Thomas Friedman’s book “Hot, Flat and Crowded” [Hot, Flat, and Crowded: Why We Need a Green Revolution–and How It Can Renew America] is this: The nation that aggressively addresses the issue of climate change will be the nation that will thrive; the nation that will lead; and will be the nation that will prosper. Here is what Friedman writes:
“…the ability to develop clean power and energy efficient technologies is going to become the defining measure of a country’s economic standing, environmental health, energy security, and national security over the next 50 years.”
We know that this premise is being borne out even in this recession. In California, which has been one of the hardest hit by the housing crisis and the financial crisis, the area that has out-performed every other has been the creation of clean energy jobs and businesses.
A recent report by the Pew Charitable Trusts found that more than 10,000 new clean energy businesses were launched in California from 1998 to 2007. During that period, clean energy investments created more than 125,000 jobs and generated jobs 15 percent faster than the California economy as a whole.
Our Committee has held more than 40 hearings and briefings on global warming since I took over the chairmanship in January of 2007 and we are well aware of the work done on the dangers of global warming by the Bush and Obama Administrations.
A few weeks ago, the Obama Administration released a sobering report on the impacts global warming is already having across the United States, and the devastating effects that will come in the future if we do not take action to cut global warming pollution. Droughts, floods, fires, loss of species, damage to agriculture, worsening air pollution and more.
Today, I am pleased to welcome leaders of the Obama Administration as they encourage us to act, on the heels of the passage of the Waxman-Markey bill in the House.
Today, I expect you will hear fierce words of doubt and fear and worse from the other side of the aisle regarding our legislative efforts to move forward with clean energy jobs legislation. This is consistent with a pattern of “No, we can’t.”
I believe that this Committee, when the votes are eventually taken on our bill, will reflect our President’s attitude, which is “Yes, we can, and yes, we will.”
Colleagues, this is the challenge to our generation that offers hope, not fear, and a way out of the environmental and economic challenges we face, so that our children will have a bright future.
Despite a 76-seat majority in the House, Speaker Pelosi passed her cap-and-trade energy tax bill on June 26 by just one vote over the majority required, 219-212. Against this backdrop, the Senate will begin the process of considering yet another cap-and-trade bill. I would note that the Senate has voted on cap-and-trade three times: in 2003, in 2005, and in 2008. In each and every instance, we defeated it. Now, Madame Chairman, here we go again.
As I understand it, you intend to hold a series of hearings with the hope of marking up a bill before the August recess. Madame Chairman, let me say I commend you for holding hearings. The minority jointly issued a letter today outlining our requests for a series of legislative hearings that are based upon actual legislation.
In the letter, the Republican members of this committee express concern about the process involved in considering the most complex piece of legislation ever before this committee.
Madame Chairman, as I look at the calendar, it appears that we will consider a massive bill in a very narrow window of time. So the question arises: when will we see the bill that you intend to mark-up? I hope we don’t repeat the process in the House, when the majority released a 300 page manager’s amendment at 3 a.m., the morning of the vote.
The American people and their elected representatives deserve an open, transparent, and thorough review of any legislation that, as the Washington Post described it, “will reshape America’s economy in dozens of ways that many don’t realize.”
You can be sure of this: once the American public realizes what this legislation will do to their wallets, they will resoundingly reject it. Perhaps that explains why we are rushing cap-and-trade through the Senate.
The public is already on record rejecting energy taxes. Consider a new poll by Rasmussen, which found on July 1 that 56% of Americans are not willing to pay ANYTHING to fight global warming. This includes higher utility costs, which under cap-and-trade, as President Obama said, would “necessarily skyrocket”.
The bottom line is this: However you spin this debate, or whatever schemes you concoct to hide the higher costs consumers will pay, the public will find out. And when they do, they will reject those schemes and reject the spin, and they will look instead for solutions that create jobs, strengthen energy security, and increase our global competitiveness.
When it comes to legislative tools, there is a better way. Whether it is reducing dependence on foreign oil or increasing access to clean, affordable and reliable sources of energy, Republicans have answers.
We have been accused us of being the party of ‘no’ for too long. Well, it’s true that we say no to higher energy taxes, no to subsidizing the East and West coasts at the expense of the heartland, no to more bureaucracy and red tape, and no to sending our manufacturing jobs to China and India.
We say ‘yes’ to an all-of-the-above domestic energy policy, which includes nuclear, clean coal, natural gas, wind, solar, and geothermal. We say ‘yes’ to greater access to all sources of clean and reliable energy right here at home.
Finally, I welcome our witnesses before us today, including members of the Administration and the governor of the great state of Mississippi. I look forward to questioning the panel and in particular I look forward to hearing from Administrator Jackson regarding my letter sent last week on the Agency’s commitment to transparency.
Secretary of Energy Steven Chu
Chairman Boxer, Ranking Member Inhofe, and Members of the Committee, thank you for the opportunity to testify on moving America toward a clean energy economy.
We face many serious and immediate challenges. American families and businesses are struggling in a recession and an increasingly competitive global economy. We have become deeply dependent on a single energy source to power our cars, trucks and airplanes, and spend hundreds of billions of dollars a year to import nearly 60 percent of the oil we use. We face an unprecedented threat to our very way of life from climate change.
To solve these challenges, the Administration and Congress need to work together to spur a revolution in clean energy technologies. The President and I applauded the historic action by the House to pass a clean energy bill, and we look forward to working with the Senate to pass comprehensive energy legislation.
I want to focus today on the threat of climate change. Overwhelming scientific evidence shows that carbon dioxide from human activity has increased the atmospheric level of CO2 by roughly 40 percent, a level one- third higher than any time in the last 800,000 years. There is also a consensus that CO2 and other greenhouse gas emissions have caused our planet to change. Already, we have seen the loss of about half of the summer arctic polar ice cap since the 1950s, a dramatically accelerating rise in sea level, and the loss of over two thousand cubic miles of glacial ice, not on geological time scales but over a mere hundred years.
The Intergovernmental Panel on Climate Change (IPCC) projected in 2007 that, if we continued on this course, there was a 50 percent chance of global average air temperature increasing by more than 7 degrees Fahrenheit in this century. A 2009 MIT study found a fifty percent chance of a 9 degree rise in this century and a 17 percent chance of a nearly 11 degree increase. 11 degrees may not sound like much, but, during the last ice age, when Canada and much of the United States were covered all year in a glacier, the world was only about 11 degrees colder. A world 11 degrees warmer will be very different as well. Is this the legacy we want to leave our children and grandchildren?
Denial of the climate change problem will not change our destiny; a comprehensive energy and climate bill that caps and then reduces carbon emissions will.
America has the opportunity to lead a new industrial revolution of creating sustainable, clean energy. We can sit on the sidelines and deny the scientific facts, or we can get in the game and play to win.
Opponents of this effort claim the nation cannot afford to act at this time. I disagree, and so do the Environmental Protection Agency and the Congressional Budget Office. These organizations estimate that meeting the greenhouse gas targets in the House bill can be achieved at an annual cost between 22 to 48 cents per day per household in 2020. That’s about the price of a postage stamp per day.
History suggests that the actual costs could be even lower. The costs to save our ozone layer, to reduce smog with catalytic converters, and to scrub the sulfur dioxide from power plants were all far less than estimated. For example, according to the EPA, the SO2 reductions will be achieved for one-quarter of the estimated cost. The right clean energy incentives will start the great American research and innovation machine, and I am confident that American ingenuity will lead to better and cheaper climate solutions.
We can make significant near-term carbon reductions through energy efficiency. We use 40 percent of our energy in buildings. I firmly believe that, with today’s technologies, we can build new homes and buildings that use 40 percent less energy than today’s new buildings and therefore save money on energy bills. By developing a system integration approach, I believe we could eventually build buildings that use 80 percent less energy with investments that pay for themselves in less than 15 years through reduced energy bills. Similarly, we could retrofit existing buildings to achieve 50 percent energy savings with investments that will pay for themselves.
A comprehensive energy and climate bill will drive American innovation in fuel efficient automobiles and the development of advanced batteries for electric vehicles. It will offer incentives to re-start our nuclear power industry and encourage utilities to invest in carbon capture and sequestration. It will drive investments in wind and solar power and next generation biofuels from grasses and agricultural waste.
In addition to deploying the technologies we have today and can see on the horizon, we must pursue truly transformative solutions. Climate experts, such as the IPCC, tell us we must reduce our carbon emissions by 80 percent by mid-century to stabilize atmospheric greenhouse gas concentrations at a level that may avoid the worst consequences of climate change. To achieve our long-term goals in a more cost-effective way, we will need a sustained commitment to research and development. Only R & D can deliver a new generation of clean technologies.
Let me close with a quote from Dr. Martin Luther King. His words seem so fitting for today’s climate crisis:
“We are now faced with the fact, my friends, that tomorrow is today. We are confronted with the fierce urgency of now. In this unfolding conundrum of life and history, there is such a thing as being too late.”
Now is the time to take comprehensive and sustained action. With the leadership of the President, the actions of this Congress, and the support and participation of the American people, I am confident that we will succeed.
Thank you. I would be glad to answer your questions at this time.
EPA Administrator Lisa Jackson
Chairman Boxer, Ranking Minority Member Inhofe, and members of the Committee, thank you for inviting me to testify about new legislation to get America running on clean energy. Let me begin by commending you for starting Senate hearings on this, the second legislative day after the House of Representatives passed the American Clean Energy and Security Act. Immediately after that historic vote on June 26, President Obama called upon the Senate to demonstrate the same commitment we saw in the House to building a clean-energy foundation for a strong American economy. I am grateful that this Committee has wasted no time in answering that call.
The House bill reflects the principles the President believes are essential for our nation’s energy future: decreasing our dependency on foreign oil, creating millions of new jobs in emerging clean-energy technologies, and reducing the pollution that is a danger to our children.
I know there are a variety of proposals pending in the Senate that have the same goals, and I am looking forward to working with all the Committee members as you move forward on this effort.
Clean energy is to this decade and the next what the Space Race was to the 1950s and ‘60s, and America is behind. Governments in Asia and Europe are ahead of the United States in making aggressive investments in clean-energy technology. American businesses need strong incentives and investments now in order for this nation to lead the 21st Century global economy.
We are also coming late to the task of leading the world’s major greenhouse-gas emitters to reverse our collective emissions’ growth in time to avert catastrophic climactic changes that would severely harm America’s economy and national security within our children’s lifetimes.
The necessary shared effort will not begin in earnest unless and until the United States leads the charge.
The advantage of the kind of legislation the President has called for is that it ramps up investment in developing new clean-energy technologies while giving companies an effective incentive to use those technologies to reduce greenhouse-gas pollution. It does so without raising taxes or increasing the deficit.
I do not mean to say that we can get something for nothing. But according to the Congressional Budget Office’s analysis of the American Clean Energy and Security Act, the net cost to the average American household in 2020 would be less than 50 cents a day. For the wealthiest fifth of American households, the net cost would be less than 70 cents a day. The poorest fifth would actually see a net gain of more than ten cents a day. That is what your economists have reported to you.
People have pointed out that the per-household impact would not be uniform across the country – that the costs would be higher in a few states where people drive very long distances and rely almost exclusively on coal for electricity. Yet even if the cost borne by the average family in such a state were double the national average, it still would be just a dollar a day.
That figure does not account for the economic benefits of saving our children from living with increased drought, fire, pests, flooding, and disease. It does not account for the benefit of decreasing our dependency on foreign oil. Can anyone honestly say that the head of an American household would not spend a dollar a day to safeguard the wellbeing of his or her children, to reduce the amount of money that we send overseas for oil, to place American entrepreneurs back in the lead of the global marketplace, and to create new American jobs that pay well and cannot be outsourced? Labor unions support this kind of legislation because they know it will indeed create millions of high-paying American jobs that cannot be exported. Manufacturing companies support it because they know it will provide needed investment in research and development while creating markets for the American clean-energy technologies born from that investment.
Electric utilities support it because they know it will expand our use of reliable, domestic sources of energy like wind, solar, geothermal – and, yes, safer nuclear power – and, yes, cleaner coal.
Consumer advocates support it because they know it will strengthen the long-term economic foundation for all Americans without imposing short-term economic hardship on any Americans.
And environmental groups support it because they know it is our best chance of preventing catastrophic harm to public health and our natural environment.
Of course, there are still interest groups out there opposing this effort. But I think the tide is turning against the defenders of the status quo, who want more of the same policies that made us dependent on foreign oil and that caused America to forfeit the lead in the burgeoning global competition to sell clean-energy technology. I think Americans want reform that harnesses the country’s can-do spirit. I think they want to fuel long-term economic recovery with a wise investment that sparks a clean-energy transformation in our economy and that protects our children and grandchildren.
That is what the President wants. That is what I want. I believe many Senators want the same thing. Please consider the Environmental Protection Agency a partner in this effort to get America running on clean energy. And, please, keep up the momentum.
Thank you. I look forward to answering your questions.
Secretary of Agriculture Tom Vilsack
Madam Chairman and members of the Committee thank you for the opportunity to discuss the role of agriculture and forestry in addressing climate change and in building our Nation’s renewable energy capabilities. I am pleased to be joined today by Secretaries Chu and Salazar and Administrator Jackson. USDA, the Department of Energy, and the Environmental Protection Agency maintain a close partnership in our work on climate change and renewable energy.
Climate change is one of the great challenges facing the United States and the world. The science is clear that the planet is already warming. While climate change will affect us all, there are particular vulnerabilities and challenges for farmers, ranchers, and those who make a living off the land. I would like to commend the House for its extraordinary efforts in developing historic, comprehensive energy and climate legislation that creates the framework for U.S. leadership on climate change. I, along with Secretary Chu, Administrator Jackson, and the Administration look forward to working with the Senate as you begin your deliberations. Our hope is that Congress enacts a bill that meets the President’s objectives of creating an efficient, cost-effective, and comprehensive approach that leverages the Nation’s capacity for innovation, creates jobs, reduces dependence on foreign oil, and protects our children from ills associated with pollution.
I believe it is crucial that we engage the participation of farmers, ranchers, and forest landowners. This issue is too important for agriculture and forestry to sit on the sidelines. A viable carbon offsets market – one that rewards farmers, ranchers, and forest landowners for stewardship activities – has the potential to play a very important role in helping America wean itself from foreign oil. It also represents a significant building block to revitalizing rural America. Landowners can also play an important role in providing low-carbon renewable energy.
The potential of our working lands to generate greenhouse gas reductions is significant. In fact today, our lands are a net sink of greenhouse gases. Based on the latest statistics from EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sinks, forest and agricultural lands in the U.S. take up more greenhouse gases in the form of carbon dioxide than is released from all of our agricultural operations. The situation is different in developing countries, where agriculture and deforestation play a much greater role in emissions. In aggregate, land uses are responsible for over one-third of greenhouse gas emissions. It is difficult to see how greenhouse gas concentrations in the atmosphere can be stabilized without policies that target emissions and carbon sequestration on agricultural and forestlands. As a result, it is vital that America demonstrate how the inclusion of agriculture and forests in our domestic approach to climate change can produce real and lasting benefits to both landowners and the climate.
Under climate change legislation the farm sector will experience both costs and benefits. Energy price increases can impact row crop production and other agricultural activities. For example, fertilizer and fuel costs account for 50 to 60 percent of variable costs of production for corn. Because of higher personal transportation expenditures, rural households are more likely than urban households to feel the pinch of increased gas prices.
But, I believe that there are significant opportunities for rural landowners in a cap and trade program that recognizes the contribution that farms, ranches, and forests can make in addressing climate change. Rural landowners can benefit from incentives in climate and energy legislation that reward production of renewable energy such as wind and bioenergy. A number of renewable energy technologies such as anaerobic digesters, geothermal, and wind power can reduce farmers’ reliance on fossil fuels. In cooperation with the Department of Energy, USDA will contribute to promoting these technologies and our outreach and extension networks will need to help make them available to farmers, ranchers, and land managers.
These technologies and promotion of a clean energy economy will also stimulate the creation of new jobs. As farmers, ranchers, and land managers look to install an anaerobic digester or build a wind farm – people will be needed to build the machines and install the systems. And, because many of these technologies will be utilized in rural areas – many of these jobs could be created in rural America. These farmers, ranchers, and forest owners can also benefit from legislation that creates markets for greenhouse gas offset credits.
To be effective in addressing climate change, the offsets market will need to accomplish two goals. First, the market will need to recognize the scale of the changes needed and the infrastructure that will be required to deliver information, manage data and resources, and maintain records and registries. Second, ensuring the environmental integrity of agricultural and forest offsets is critical to addressing climate change and maintaining public confidence in the carbon offset program.
To produce meaningful emissions reductions, an offsets program will likely require the participation of thousands of landowners. I believe USDA, working with EPA, the Department of Energy, the Department of Interior, and other relevant agencies can play a very important role in getting offsets to scale while ensuring the integrity of the offsets program. We look forward to partnering with our fellow agencies to work with the Senate in designing a credible offsets program.
Let me give you a few examples of the scale of activities that USDA provides nation-wide. Under the Conservation Reserve Program, USDA manages over 750,000 contracts with landowners who have taken environmentally sensitive land out of production for at least 10 years. USDA’s Natural Resources Conservation Service (NRCS) manages a network of over 1,300 registered technical service providers nationwide.
The Climate Change Program Office, within the Office of the Chief Economist, conducts research on technical guidelines for quantifying the greenhouse gas benefits of conservation and land management activities. In doing this research, the Office works closely with our Office of Ecosystems Service Markets, NRCS, and the Forest Service, as well as other federal agencies.
NRCS, Farm Service Agency (FSA), and the Forest Service have significant expertise in integrating greenhouse gas considerations into our conservation programs and landowner outreach;
NRCS and our Extension System also educate farmers, ranchers, and rural landowners on how to improve energy and fertilizer use efficiency;
State and Private Forestry provide rural landowners with the information they need to improve forest management;
It is important that agriculture and forestry offsets have high standards of environmental integrity. Quantification and reporting systems need to be rigorous, verifiable, and transparent – and review and auditing systems will need to be in place. Uncertainties must be accounted for and reduced. Greenhouse gas benefits accrued through carbon sequestration will need to be monitored over time to ensure that the benefits are maintained and that reversals are accounted for if they occur. If these principles are followed, the resulting offsets should be real, additional, verifiable, and lasting.
USDA can support this effort through its scientific expertise, and technical capabilities, specific to greenhouse gases, carbon sequestration, and offsets. For example, in 2006, USDA released guidance to farm and forest landowners to allow them to estimate their greenhouse gas footprints. We are developing user-friendly tools that can help farmers and landowners make these calculations.
I would like to close by again thanking the Committee for taking up this important issue for agriculture, rural lands, and the environment. I believe that agriculture and forestry can play a vital role in addressing climate change and that, if done properly, there are significant opportunities for landowners to profit from doing right by the environment. USDA is ready to help make this happen.
Secretary of the Interior Kenneth Salazar
Chairman Boxer, Ranking Senator Inhofe and members of the Committee, thank you for your work on this important challenge facing our Nation.
I am here today to urge this committee to join with the Administration in seeking strong and effective legislation that will steer our nation toward a new energy economy that brings new jobs to our nation and improves our energy security . As the President has said, there is a choice before us: we can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy.
Interior is our nation’s largest landowner with jurisdiction over 20% of the land mass of the United States and 1.75 billion acres of the Outer Continental Shelf (OCS). As America’s largest water provider and land and wildlife manager, Interior is already faced with the impacts of climate change on land, water and wildlife. Interior will thus play a key role in how the U.S. Government addresses and adapt to these climate change issues. Interior’s 6,000 scientists and 14,000 land managers are already documenting these impacts and developing systems to respond to them on and across public lands.
Interior’s land base includes some of the most productive renewable energy resources: solar in the Southwest; wind in the Atlantic, on the Great Plains and in the West; and geothermal in the West. We are working to develop these assets to help power President Obama’s vision for a new energy economy. Interior’s vast land ownership also gives it an important role in siting the new transmission lines needed to bring stranded renewable energy assets to load centers.
As the Secretary of the Interior, I can see the economic opportunity presented by the new energy economy. Since coming into office, we have prioritized the development of renewable energy on our public lands and our offshore waters. American business is responding. Companies are investing in wind farms off the Atlantic seacoast, solar facilities in the Southwest, and geothermal energy projects throughout the west. These new energy sources produce no greenhouse gases and, once installed, they harness abundant, renewable energy that nature itself provides.
The Senate Energy and Natural Resources Committee recently reported out legislation that will help to promote the development of this renewable energy opportunity. But we will not fully unleash the potential of the clean energy economy unless this committee, and the Senate, put an upper limit on the emissions of heat-trapping gases that are damaging our environment. Doing so will level the playing field and demonstrate that our nation is serious about building a new, clean energy economy. It will trigger even more massive investment in new clean energy projects throughout our nation.
In addition to seeing the potential economic opportunity presented by addressing climate change, the Interior Department is in a unique position to see the negative impacts that climate change is having on our land, water and wildlife resources. Our land managers are confronting longer and hotter fire seasons, new incursions of invasive species, and the early impacts of sea rise; our wildlife managers are dealing with climate change-induced impacts on wildlife mating and migration habits and species interactions; and our water managers are factoring new precipitation patterns into their planning decisions, as snow packs diminish and more extreme wet and dry periods challenge long-standing water management practices.
The Interior Department is participating actively in the interagency process on adaptation policy being led by the White House, and I look forward to working with your committee as well as you consider adaptation strategies that address the impact that climate change is having on our resources. We have been developing a unified approach to adaptation challenges through the Department of the Interior, and we look forward to providing the committee with the benefit of the expertise that our land, wildlife and water managers can provide on this subject. Our Department’s developing experience with adaptive management strategies for resource management can provide a template for future efforts. For example, snowpack declines in the Northwest and Mountain-West have been accompanied by earlier annual peaks in river run-off as documented in stream gage monitoring and analyses across the lower 48 States and throughout Alaska. Land managers facing this reality are analyzing potentially substantial changes in management requirements for fish and wildlife and water resources. Interior managers are also learning to be strategic in rebuilding facilities that are lost to such natural disasters as Hurricanes Katrina and Rita. The Fish and Wildlife Service has repaired or replaced dozens of facilities at refuges along the coast damaged by these storms. In the process of rebuilding facilities for people across the region to enjoy, the Service decided not to replace some facilities judged to be too vulnerable and has relocated others to more secure locations.
In all of these activities, the Department of the Interior is putting a premium on integrating our dual science and land management roles. Scientists in our United States Geological Survey (USGS), the Fish & Wildlife Service, and the National Park Service, for example, are working hand-in-glove with our land, wildlife and water managers who are responsible for the more than 500 million acres of public lands that we oversee. We are focused on ensuring that our USGS and other agency scientists are collecting and analyzing data that are providing relevant scientific information about natural resource conditions, issues, and problems to decision-makers in the Department, at all levels of government, and the general public. This is, and needs to be, an interactive process, as our land, wildlife and water managers work with our scientists and help focus the nature of their research and analysis on the reality of on-the-ground changes. This information – baseline scientific information, trends detection, modeling and forecasting, together with the effective dissemination of information and decision support tools – is key to understanding and addressing climate change and its effects.
Finally, I look forward to working with the committee as you address the opportunities for carbon reduction provided by the “biological sequestration” of carbon in our Federal lands. As you know, pursuant to section 712 of the Energy Independence and Security Act of 2007 (P.L. 110-140), the USGS has the responsibility, in consultation with the Secretary of Energy and others, to conduct national assessments of biologic carbon sequestration, ecosystem greenhouse gas fluxes, and potential effects of management practices and policies on ecosystem carbon sequestration and greenhouse gas emissions. The USGS is well underway with this work. Combined with the work of other agencies, it will help to enhance the scientific underpinning needed for a domestic offsets program that focuses on carbon reductions from land use practices.
I also would like to point out that the Interior Department has been engaged in a variety of projects that will teach us a great deal about biological sequestration, ranging from wetlands restoration projects in the mid-Atlantic and southeast, to afforestation projects in the lower Mississippi Valley, and habitat restoration projects in the west. The methodologies that USGS is developing at the direction of Congress, and the experience of our land managers in pursuing these projects as part of our broader ecosystem responsibilities, should be useful to the committee as you develop an offsets program that credits verifiable carbon reductions that are associated additional and with environmentally sound land management practices.
Madame Chairman, a problem as complex as climate change takes the coordinated efforts between all the branches of the government and all the governments of the world. The Department of the Interior stands ready with our shoulder to the wheel to contribute to this effort.
Thank you. I look forward to answering your questions.
VP, Energy, The Dow Chemical Company
The Dow Chemical Company appreciates the opportunity to submit these written comments to the Committee on Environment and Public Works.
Dow was founded in Michigan in 1897 and is one of the world’s leading manufacturers of chemicals and plastics. We supply products to customers in 160 countries around the world, connecting chemistry and innovation with the principles of sustainability to help provide everything from fresh water, food, and pharmaceuticals to paints, packaging, and personal care products. (Long statement, continued here.)
Director, Climate Center, Natural Resources Defense Council
Thank you, Chairman Boxer and Senator Inhofe, for the opportunity to testify today on legislation to build a clean energy economy and reduce global warming pollution. My name is David Hawkins. I am Director of Climate Programs at the Natural Resources Defense Council (NRDC). NRDC is a national, nonprofit organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. Founded in 1970, NRDC has more than 1.2 million members and online activists nationwide, served from offices in New York, Washington, Los Angeles and San Francisco, Chicago and Beijing. (Long statement, continued here.)
Mayor, Braddock, PA
Chairman Boxer, Mr. Inhofe, members of the Committee, thank you for inviting me here today. I am John Fetterman, and I’m the mayor of Braddock, Pennsylvania- Allegheny County’s poorest community.
My testimony this afternoon will be short and straight to the point. I don’t pretend to be an expert in economics or energy policy, but I do know what I’ve seen with my own eyes: The path we are on has failed. In my part of Pennsylvania, we’ve lost a quarter of a million jobs in the steel industry in the last several decades. Braddock, a once thriving steel town of over 20,000, is now a shattered community of under 3,000 residents today.
Ninety percent of our community is gone. Communities and families face desperate times. We need change, and we need it now.
For decades we’ve watched jobs leave America. For decades we’ve heard about the danger of America’s oil addiction. For decades we’ve see real change blocked by those who profit from the status quo. If there is a silver lining in the current economic crisis, and from where I sit it is awfully hard to find one, it is that America may now finally be ready to find a new path and to face the tough questions we’ve ignored for so long.
I believe that new path starts with cap on carbon pollution. By driving massive new private investment into clean energy industries, a cap offers us the chance to create jobs.
And not just high tech positions making solar cells and exotic technology, but the kind of blue collar jobs that could revive towns like Braddock, or Akron or Detroit. Jobs making the 250 tons of steel or 8,000 parts it takes to build a wind turbine. Jobs making new windows, like they do in the old factory in Vandergrift, Pennsylvania, a factory that shut down until it was revived to make energy efficient windows. Or LED lights, like they make in North Carolina and export to China. Or one of the thousands of other products it will take to build this new energy economy.
The government investment in clean energy in the Recovery Act was a good start, but we will not truly transform this economy until we spur the private sector to action. This nation is full of entrepreneurs, investors, inventors, and Steelworkers, prepared to jump start a true energy revolution. And that will only happen once you pass a cap on carbon pollution. To win the most jobs, and the most economic opportunity, we must be a market leader in these new products and technologies – and a cap on carbon in the US will spur our companies to be early mover in these new markets, supplying solutions at home and then selling these solutions across the globe.
Two weeks ago, the House of Representatives passed the American Clean Energy and Security Act of 2009 (ACES). This legislation was supported by the United Steelworkers, the UAW, the AFL-CIO, and the AFL-CIO Building and Construction Trades Department, which includes the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers; the International Brotherhood of Electrical Workers; the International Brotherhood of Teamsters; and the Sheet Metal Workers’ International Association. These workers of America recognize that a cap on greenhouse gas pollution is the surest way to create the jobs of the clean economy.
So I respectfully ask the Senate to be as bold as the House has been. To overhaul our economy and free us from our addition to imported oil. I ask you to ignore the scare tactics of the well funded interests and answer the call of Braddock to build a new energy future, and a New American Century, with the ready hands of America’s workers.
Madam Chairman, Senator Inhofe and committee members: Thank you for inviting me to testify before you on the critical issues of energy policy and America’s future.
America’s future is so tied to our energy policy that this hearing could be held before the Senate Armed Services, Foreign Relations, Finance, Energy or Budget Committee and be equally important and relevant to their work.
Energy policy significantly impacts every aspect of American foreign and domestic policy. Energy is the lifeblood of our economy; our national security depends on it. When we consider energy policy, it must be in the broadest context.
As we all know, our country is in the worst economic crisis in decades. It is being felt at the kitchen table of every family, as unemployment is at the highest rate since 1983. Our government is vastly increasing our national debt to get our economy “back on track.” Even though everyone knows the national debt is increasing at an unsustainable rate, we are taking the risk because robust economic growth is the only way to solve our economic problems.
Yet, as we strive and stretch to get our economy back growing and more Americans back on the job, our government is considering an energy policy, as set up in the Waxman-Markey bill and the President’s budget, that would make it much harder for the economy to grow; a policy that is, in fact, anti-growth because it will necessarily and purposefully raise the costs of energy for families and businesses, especially manufacturing … for our economy as a whole.
The cap and trade tax, the $81 billion of tax increases on the oil and gas industry contained in the President’s budget and the Waxman-Markey renewable energy standard would all drive up costs and drive down economic growth.
Don’t take my word for it. President Obama, then a candidate, said to the San Francisco Chronicle in January 2008, “Under my cap and trade plan, electricity rates would necessarily skyrocket.”
And before becoming Energy Secretary, Steven Chu told the Wall Street Journal in September 2008, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”
President Obama’s OMB Director, Peter Orszag, in April 2008 said, “Under a cap-and-trade program, firms would not ultimately bear most of the costs of the allowances but instead would pass them along to their customers in the form of higher prices. Such price increases would stem from the restriction on emissions and would occur regardless of whether the government sold emission allowances or gave them away. Indeed, the price increases would be essential to the success of a cap-and-trade program because they would be the most important mechanism through which businesses and households would be encouraged to make investments and behavioral changes that reduced C02 emissions.”
Just last month in an interview with Forbes magazine, the CEO of American Electric Power (AEP), Mike Morris, said the cap and trade tax would cause his electricity rates to go up 30% to 50%.
The gigantic effect of energy policy on American life means Congress should work particularly hard to ensure Americans know the facts about the policies Congress is considering: To the contrary, the House of Representatives added more than 300 pages of its 1200 page energy bill a few hours before it was brought to the floor and passed. That is just the opposite of what is needed.
Last month the Southern Growth Policies Board, a forty-year old regional economic development group for thirteen states, held its annual conference. The more than four hundred attendees were most concerned about the costs associated with the cap and trade tax, the renewable energy mandate and the $81 billion in tax increases on the oil and gas industry. They were concerned about the costs to families as well as the costs to the economy.
At this conference there was a great deal of support for conservation and energy efficiency – both indispensable measures in our energy future – and a lot of hope and confidence was expressed for renewables like wind, biofuels, solar and even some more exotic sources in the future.
Nevertheless, it was agreed that for a long time there will be a need for traditional fuels like oil, gas, coal and nuclear, which generates no greenhouse gas emissions. Clean coal technologies and projects were presented and praised.
But the biggest and most discussed issue at this conference was the cost of energy policy proposals like the cap and trade tax, the renewable electricity standard and the tax increases proposed for the oil and gas industry.
There was no question about who would bear these costs: the consumer. The one who turns on the light switch, starts the washing machine, fuels up the car with gas or drives the truck delivering goods across town or across the country; that is who will pay.
Moreover, these increased energy costs will hit small businesses hard and will particularly hurt energy-intensive industries like manufacturing or computer processing. Some manufacturers even predicted these energy policies would cause electricity rate increases that would make their U. S. manufacturing facilities uncompetitive compared to facilities in China, India, Brazil or Russia.
Dan DiMicco, the CEO of Nucor Steel, America’s largest steel manufacturer, said the cap and trade tax would mean his company would close U. S. plants, shifting production to China. Making a ton of steel in China results in five-times greater emissions of greenhouse gases than to produce that same ton of steel in the U.S.
It is hard to believe that at a time when growing our economy is our number one priority, Congress is considering a bill that would reduce economic growth. When families are suffering because of a serious recession, Congress is considering a bill to drive up the cost of the electricity that cools those families’ homes and the gasoline that runs their cars. As U. S. manufacturing faces stiff foreign competition, Congress is considering a bill that would make our manufacturers less competitive.
The concerns I’ve cited are serious, even if the cap and trade tax works as planned. But many Americans worry it will be an Enron-style financial scheme where Wall Street manipulators make giant profits while ratepayers, motorists and Main Street businesses pay greatly increased costs.
Environmentalists rightly worry about the assumed large scale use of international offsets, saying they are not verifiable. Others say the foreign offsets are claimed by CBO to reduce the price of allowances by 70%, but that’s highly questionable.
A particularly scary feature of the cap and trade tax regime is that anyone can purchase emissions permits. There is nothing to stop a large government like China from investing heavily in C02 emission permits instead of U. S. Treasuries. The effect, of course, would be that U. S.-located industries could not buy those permits or that they would have to pay much higher prices for the permits, thereby making our businesses even more uncompetitive with foreign (read: Chinese) manufacturers. Market manipulation by speculators is bad enough; driving up demand and prices by foreign competitors is anathema.
The right energy policy for our country is more American energy, using all sources of American energy … all of the above. We have abundant, affordable, reliable American energy. Let’s use it rather than having a policy that makes energy more expensive.
I’d be glad to discuss more American energy during questions or to try to answer any other questions.