Hill Heat

In the future, with continued global warming, heat waves and heavy downpours are very likely to further increase in frequency and intensity. Substantial areas of North America are likely to have more frequent droughts of greater severity. Hurricane wind speeds, rainfall intensity, and storm surge levels are likely to increase. The strongest cold season storms are likely to become more frequent, with stronger winds and more extreme wave heights.

Unfortunately, some of the cautions in this long-delayed report have come too late for the victims of the Midwest Flood:

Some short-term actions taken to lessen the risk from extreme events can lead to increases in vulnerability to even larger extremes. For example, moderate flood control measures on a river can stimulate development in a now “safe” floodplain, only to see those new structures damaged when a very large flood occurs.

Background

What is Ocean Acidification?

Ocean acidification is the process by which the pH of seawater is being lowered through the absorption of carbon dioxide (CO2) from the atmosphere. Atmospheric concentrations of CO2 have increased over the past 200 years from a pre-industrial level of about 280 parts per million to 379 parts per million in 2005.1 The concentration of CO2 in the atmosphere would be much higher if not for the absorption of CO2 by the oceans. The oceans have absorbed about 50 percent of the carbon dioxide (CO2) released over the past 200 years due to human activities resulting in chemical reactions that release carbonic acid and lower ocean pH. The Royal Society of London released a report in 2005 of the consequences of ocean acidification and indicated that the increase in acidity could be as high as 30 percent over the last 200 years.2

Impacts of Ocean Acidification While oceanic absorption of CO2 has reduced the atmospheric concentration of CO2 and therefore limited the greenhouse effect, acidification of the oceans may have negative consequences for sea-life that uses calcium carbonate to grow shells and other physical structures. A growing number of studies have demonstrated adverse impacts on marine organisms, including a decreased rate at which reef-building corals produce their skeletons; reduction in the ability of marine algae and free-swimming zooplankton to maintain protective shells and exoskeletons; and reduced survival of larval marine species, including commercial fish and shellfish. As ocean pH decreases, the amount of available calcium carbonate decreases. Many marine organisms require calcium carbonate to produce their shells and exoskeletons. Calcifiying organisms include coral, mollusks, echinoderms and crustaceans.

The U.S. is the third largest seafood consumer in the world – total consumer spending for fish and shellfish is approximately $60 billion per year. Coastal and marine commercial fishing generates as much as $30 billion per year and nearly 70,000 jobs. The organisms likely to be impacted by ocean acidity include both commercially important groups (e.g. clams, oyster, crab, shrimp, and lobster) and organisms that serve as primary food sources for other commercially important species. Healthy coral reefs are the foundation of many of these viable fisheries, as

1 Intergovernmental Panel on Climate Change. 2007. “Working Group I: The Physical Science Basis of Climate Change.” Fourth Assessment Report. Chapter 2, p. 137.

2 The Royal Society 2005, Science Policy Section, “Oceanic acidification due to increasing atmospheric carbon dioxide, www.royalsoc.ac.uk

well as the source of tourism and recreation revenues. Changes to the stability of coastal reefs may reduce the protection they offer to coastal communities against storm surges and hurricanes.

Many fisheries are also under stress from over fishing, pollution, diseases, and changes in water temperature. Changes to the ocean’s chemistry can be so long-lasting that they are basically irreversible once begun. According to the Royal Society of London’s report3, it would take ten thousand years for the oceans’ pH to return to their pre-industrial level. Chemical additives to the ocean to restore pH are unproven and could have many unintended consequences to ocean ecology and climate.

Current Federal Research and Monitoring Programs on Ocean Acidification Although there are projects being funded through several federal agencies and some initial workshops and meetings have been organized to identify key research areas, there is no coordinated plan of research in place with identified funding to ensure that all aspects of ocean acidification are being monitored and explored to provide a comprehensive picture of this phenomenon. H.R. 4174 is intended to provide a statutory structure to ensure ongoing coordination of the relevant agencies to develop a comprehensive federal research, monitoring and assessment program to address the impacts of ocean acidification. A few of the recent activities undertaken by federal agencies are provided below. NSF, NOAA, NASA, and USGS have been working to develop and coordinate individual agency programs on ocean acidification. These efforts also involve the academic research community and international partners. Japan, Korea, Canada and the European Union are also developing research and monitoring efforts to better understand ocean acidification. The agencies produced a workshop report: Impacts of Ocean Acidification on Coral Reefs and Other Marine Calcifiers: A Guide for Future Research. NSF supported a workshop convened by Scripps Institution of Oceanography in October 2007 to discuss potential ocean acidification research projects and to identify key gaps in knowledge about ocean acidification and its potential impacts.

Through these efforts the following key research and monitoring needs have been identified: Monitoring of the changing ocean chemistry and biological impacts at selected coastal and open-ocean monitoring stations, including satellite-based monitoring to characterize reef habitats and to detect changes in surface ocean chemistry in response to ocean acidification; Research to understand the species-specific physiological response of marine organisms to ocean acidification and develop environmental and ecological indices that track marine ecosystem responses to ocean acidification; Modeling to predict changes in the ocean carbon cycle as a function of CO2 and climate-induced changes in temperature, ocean circulation, biogeochemistry, ecosystems and terrestrial input; and to determine impacts on biological systems; Technology development and standardization for carbonate chemistry measurements on moorings and autonomous floats; and Analysis of social and economic implications of ocean acidification and development of adaptation strategies to help society cope with and respond to climate-induced changes in marine ecosystems.

3 The Royal Society 2005, Science Policy Section, “Oceanic acidification due to increasing atmospheric carbon dioxide, www.royalsoc.ac.uk

There are several federal monitoring and research projects underway. The National Science Foundation recently awarded a grant through its Biocomplexity in the Environment area to support deployment of the first buoy to monitor ocean acidification in collaboration with scientists at NOAA’s Pacific Marine Environmental Laboratory in Washington and scientists at several universities. The buoy was launched in the Gulf of Alaska last year and will measure air-sea exchange of carbon dioxide, oxygen and nitrogen gases and it will measure pH of surface seawater. In 2005, NSF and NOAA collaborated on a cruise to collect field data on ocean acidification in the Pacific Ocean from the southern to the northern hemispheres as part of a long-term, cooperative hydrographic study. The results indicated decreases in pH and increases in dissolved inorganic carbon, both indicators of ocean acidification. NSF is also supporting individual extramural academic research projects on ocean acidification topics through several of its directorates and programs. For example, Dr. Victoria Fabry is leading a team to study a species of marine snail to determine how changes in seawater chemistry may impact its ability to extract calcium from seawater to form its shell and other impacts on its physiology.

H.R. 4174: The Federal Ocean Acidification Research and Monitoring Act

Section by Section

Section 1. Short Title and Table of Contents

Provides the short title of the legislation: The Federal Ocean Acidification Research and Monitoring Act of 2007.

Section 2. Findings and Purposes

Designates the purposes of the legislation: to provide for development of an interagency monitoring and research plan; establishment of an ocean acidification program at NOAA; assessment of the impacts of ocean acidification; and research on adaptation strategies.

Section 3. Interagency Committee on Ocean Acidification

Establishes an interagency committee on ocean acidification chaired by NOAA and designates the membership of the committee to include representatives from the National Science Foundation, the National Aeronautics and Space Administration, the US Geological Survey, US Fish and Wildlife Service, the Environmental Protection Agency, the Department of Energy and other Federal agencies. The section directs the committee to oversee the development of a plan to be submitted to Congress to coordinate federal efforts to understand ocean acidification and its potential impacts on marine ecosystems and to develop adaptive strategies to conserve marine organisms and marine ecosystems. Requires a report to Congress within 2 years of enactment and every 3 years thereafter of the progress of research and monitoring activities and recommendations for addressing impacts of ocean acidification.

Section 4. Strategic Research and Implementation Plan

Directs the Committee to develop a strategic research and implementation plan for coordinated federal activities within 18 months of enactment. Establishes criteria and topics to be included in the interagency program and requires the plan to include goals, priorities, and guidelines for coordinated research over a 10-year period. Requires the Committee to consider and utilize other relevant reports and studies in developing the research plan.

Section 5. NOAA Ocean Acidification Program

Directs the Secretary to establish an ocean acidification program within NOAA to implement activities consistent with the strategic research and implementation plan. Requires the program to provide grants through a competitive, merit-based process.

Section 6. Definitions

Defines the terms Committee, Ocean Acidification, Program, and Secretary.

Section 7. Authorization of Appropriations

Authorizes appropriations that escalate each year beginning in fiscal year 2009 at a funding level of $6 million through fiscal year 2012 when the funding level reaches $30 million. The authorization is permanent at a level of $30 million thereafter. The section also directs the Secretary to distribute sixty percent of the funds to agencies other than NOAA to carry out the purposes of the Act and directs that at least fifty percent of all funds be used for competitive grants.

10:03 Domenici: The more of these hearings we can do the better off this country will be. We have five cap-and-trade bills in the Senate. Every single day, 11 out of 11 studies have concluded that these bills will result in higher energy costs, lower economic growth. The analyses of L-W don’t agree on much. Addressing global climate change is one of the greatest challenges of our time. I remain concerned about the dire consequences L-W could have for our nation. The best estimates of our capable minds often prove inaccurate. The EIA projection for oil prices in 2010 was $25. Even the projected environmental impacts of climate change have varied. IPCC’s assessment of sea level rise was reduced from three feet to 27 inches. Very few will have been able to provide input on the manager’s amendment. We’re all working on a bill that will be irrelevant. It is critical to look at what other countries have tried to do.

Assume the president signs L-W. What will we have achieved for the environment? Close to nothing. Without international participation, L-W will have reduced greenhouse gases by 1% by 2050.

China has surpassed us in global warming emissions. Addressing climate change is a great challenge, but not the only challenge we face.

Rather than choosing among cap-and-trade programs, we could look at promoting nuclear power and other tax incentives.

10:16 Bingaman Orzag recently testified before the Finance Committee.

10:17 Yacobucci explains a cap-and-trade system.

10:22 Parker CRS has conducted a review and synthesis of models projecting costs of S. 2191. Long-term cost projections are at best speculative.

10:30 Gruenspecht The projected impacts of L-W are highly sensitive to assumptions about availability of low and no-carbon energy sources and access to international offsets. Costs are roughly three times larger under least favorable assumptions than under most favorable assumptions. 80-90% of emissions reductions are in the electricity production sector. Over 90% of coal, the main emissions source impacted by a cap, goes into electricity production.

10:37 McLean discusses EPA report.

10:43 Orzag Addressing climate change will involve short-term economic costs. Timing is important. An inflexible cap is bad. Giving the permits away is equivalent to auctioning the permits and giving the money to the polluters. Two key factors of a cap-and-trade system include timing flexibility and auction revenue.

10:49 Bingaman A NAM/ACCF study envisions 75% higher allowance costs than the EIA study but economic impact three times higher. Can you explain why?

Gruenspecht The allowance price difference reflect some of the assumptions, like the absence of banking. We were surprised by the size of macroeconomic losses done for NAM. We asked to look at some of their modeling results and met with their contractor. They used EIA’s high-priced oil policy scenario but compared it to the low-price scenario. We think there are some abnormal results in their report.

Bingaman Basically there’s double-counting?

Gruenspecht They’re mixing the impact of two different things.

Bingaman A price ceiling and floor is the best mechanism?

Orzag I don’t want to say best, but yes.

10:55 Barrasso Effect on gas prices?

Gruenspecht If electricity sector can’t reduce emissions, gas price effect can range from $0.40 to $1.00.

Barrasso I want Americans to be aware of the effects on their pocketbook. You talk about uncertainties. The uncertainties are one of magnitude, not direction: how many jobs will be lost. Will a safety valve help?

Parker A safety valve – putting an upper limit on price – is a very effective of limiting economic impact.

Barrasso There’s going to be lower wages and lower returns for retirement plans no matter what you do.

Parker Prices will go up but whether or not bills will go up depends on individual action. We found bills may go down.

Barrasso Nuclear energy.

Gruenspecht Public acceptance is important.

11:07 Sanders What happens if you don’t act?

Orzag I think climate change is among the nation’s and world’s highest long-term risk. There is some danger of catastrophic change. The question is one of timing. It’s like paying an insurance premium.

Sanders We’re paying $10 billion more for Katrina. What will flooding, drought, war cost? That’s really what we’re debating. It’s disaster if we don’t go forward. I believe you’re underestimating efficiency and renewable energy. Of course there going to be economic dislocation.

McLean On the impacts. I think this is an area that concerns us greatly. It’s a very hard area to quantify and monetize. We’re working on that. On energy efficiency and renewables, there’s a lot we can say about that. We show a huge increase in renewable energy.

Corker The bill that came out is not just a cap-and-trade bill. It’s a huge spending bill. It spends every penny in a non-discretionary way. I think the whole issue of allowances because we’re passing out what is like public shares in a public company. I know the romance of this is interesting. There’s a lot underneath this that is going to affect us. Transfering trillions of dollars of wealth. $7.2 trillion, maybe $23 trillion. I think that’s important. I don’t understand why we would be allocating credits out to middlemen.

In essence this bill transfers out hundreds of billions of dollars to states for no reason.

Orzag It is a key insight that much of this money represents a windfall.

Corker It makes absolutely no sense to give allowances to people not involved in emissions. This bill provides for us to provide international credits. What it does do is transfer out, when we have a trade deficit, hundreds of billions of dollars to projects that are often wracked with fraud.

McLean What would states do with money? I’m not defending the amount of money or the policy decision. A lot of efficiency programs are run at the state level.

Corker I hope this is a dry run.

11:24 Salazar What we’re doing is defining a new energy future for America. There’s a lot of learning yet to be had. On the allocation of the auction revenues. Is this the right allocation?

Orzag It depends what your objective is. Low-income households, minimize macroeconomic costs, spur innovation. A more effective approach to cushion macroeconomic costs would be to auction the permits and use that to reduce payroll taxes.

Salazar A lot of people have talked about a Manhattan-style project. Would it be better to put the money into that pot than to lower costs on low-income consumers?

Orzag It’s big, but there is a given size. You can’t do all things for all people at all times. The price signal will do some things. You can auction revenue and explicitly fund R&D. Or allocate permits to entities that do the work, but that would be more opaque.

Gruenspecht There are issues of economic efficiency and fairness.

Salazar We have these great thoughts and great programs. We talk about hybrids and clean-coal technology. This is an opportunity to marry our work to deal with climate change to make our vision a reality.

11:32 Domenici You’re talking about this as if it is another huge Federal Reserve System. You have made it eminently clear. I think people are going to be very quizzical about what we’re doing. I believe is what we really need to do is develop new technology as rapidly as possible to clean up what we need to clean up, and then clean things up.

Murkowski Is it fair?

Parker None of the models will give you the answer reliably what the cost will be. What the models can do is whether we’ve designed the bill to hold the price down. How can they be modified to bring these reductions at the most economic level.

Murkowski Most useful, but for whose end? If I’m opposed to cap-and-trade, I’ll look at NAM’s model. We can use these models as we use statistics to support our particular situation.

Gruenspecht The different studies start from different baselines. They analyze different provisions. CRA gets a large impact from the low-carbon fuel standard. I already had a long discussion with NAM may have wrapped up two different scenarios. It’s technology and technology acceptance.

12:00 Craig I don’t know if I’m willing to risk Idahoans on the environmental or economic models of climate change. We spent years shaping energy legislation. You’re all over the field, as is the country. I’m not quite sure I can remember, have we as a Congress ever tried to micromanage the market. And I think the answer is no, never before. We’re averaging about 1.9 hurricanes in the United States. An average of $5 billion. The impact of this bill is between three to nine hundred hurricanes. We’ve spread the hurricane hit nationwide. It isn’t just Florida and the Gulf Coast and the East Coast. Now the whole country gets hit, from an economic point of view. Old speak, new speak or green speak, I don’t know where we are. But I suspect no speak is the best way for us to go.

12:08 Bingaman Second-order impacts like employment?

Parker Once you move from first-order to second-order impacts you lose even more certainty. You’re making a whole host of assumptions about a quality of life of a generation that doesn’t even now work. My concerns would be increased when talking about employment numbers.

Orzag The main effect will be on the type of jobs, not the number of jobs.

Bingaman There’s no effort to adjust for dynamic effects.

Orzag I tend not to focus on the job numbers that come out of these assessments.

Gruenspecht I too tend to be very skeptical of job numbers.

Corker Right now 52% of auction proceeds go into technology development. A five-person board, not the Congress, decides how this money is spent. Would this distinguished, mind-numbing panel agree that upstream is a direct tax, pretty much?

Orzag In economics, direct and indirect taxes have a specific meaning. But consumers will bear pretty much all of the cost no matter what.

Corker Upstream is easier to monitor. This is in essence a tax. It is in fact a carbon tax. What’s happened is interest groups have gathered around the table and have made what could have been very simple with a carbon tax very complicated. I’d like you to address the efficacy of a carbon tax that increased over time.

Orzag Economic analysis generally suggest that a carbon tax is more efficient. You can make the cap-and-trade similarly efficient by auctioning all the permits and offering significant flexibility in timing.

Corker And we’re allocating about 70% up front.

Orzag At the very start it’s even greater.

Yacobucci You’d still have to decide where that money goes if it’s a tax.

Corker We’re going to be offering an amendment to return all the revenues to consumers. We’re going to be debating on the floor a tax. Two candidates for president advocated a gas-tax holiday. I think we need to be very transparent about this. Citizens need to know we’re driving up the price of petroleum.

Murkowski Is there something we can do to get the technology in place first?

Orzag Pricing carbon will create a strong incentive for technologies to be developed and diffused throughout the economy.

Murkowski And the impact might be higher in certain areas.

McLean A price signal and investment in R&D both have impact. I think we need to do both.

About EDTA: The Electric Drive Transportation Association is a trade association representing battery, hybrid and fuel cell electric drive technologies and infrastructure. EDTA’s membership includes major automotive and other equipment manufacturers, electric utilities, technology developers, component suppliers, and government agencies.

A September 2007 Harris National Study found that more than one quarter of vehicle owners would consider purchasing a PHEV for their next vehicle purchase. On January 31, GM’s vice president for global program management, Jonathan Lauckner, said GM plans to build “tens of thousands” Chevrolet Volt plug-in hybrid electric cars by 2011. A shift to manufacturing flexible-fuel PHEVs could be central to revitalization of the American auto industry by positioning domestic automakers as leaders in this emerging technology. Plug-in hybrids can be recharged in standard electric sockets, then driven 20 to 60 miles without the use of gasoline. This means the commute of millions of Americans could be completed with the use of little, if any, gasoline. Such savings are critical in these tight economic times.

Federal and state support of this technology can accelerate commercial deployment. More than 45 bills have been introduced in the 110th Congress that include provisions for plug-in hybrid electric vehicles. A national campaign to raise awareness of PHEVs has received tremendous response from state and local governments, businesses, utilities, as well as national security, environmental and public interest groups. More than 630 entities have joined the National Plug-In Partners Campaign (spearheaded by Austin Energy), including a number of the nation’s largest cities including Austin, Chicago, Dallas, Los Angeles, Salt Lake City, Memphis, Philadelphia, Phoenix, San Francisco, Portland and Seattle. In addition, the campaign has now surpassed 8,000 fleet orders, helping to prove to automakers that if they build plug-in vehicles, Americans will buy them.

This event is open to the public. No RSVP is required. For more information, please contact Fred Beck at 202-662-1892 or [email protected].

Location: Capitol Mall between 4th and 14th Streets