Hill Heat

Witnesses

• Fred Krupp, President, Environmental Defense
• The Honorable Eileen Claussen, President, Pew Center on Global Climate Change
• Ron Sims, King County Executive, State of Washington
• Kevin Book, Senior Analyst and Vice President, Friedman Billings Ramsey & Company, Inc.
• Christopher Berendt, Director, Environmental Markets and Policy, Pace

Kevin Book is a pro-nuclear energy analyst. Chris Berendt ([email protected]) advises companies how to incorporate emissions management into their business.

10:16 Voinovich There is no reason to disregard CRA International’s analysis. Anne Smith is a highly regarded economist. I have seen nothing that would dispute with this analysis. We are staring down the barrel of a gun. In fact we are staring down two barrels. The evidence suggests this bill will do nothing to help climate change. In states like Ohio, we’re all too familiar with the results. Natural gas prices are up 300% since 2001. End-of-pipe technologies don’t exist. Solving this problem will require a wholesale technology revolution. This bill will be a gigantic administrative undertaking by the EPA. I suggest my colleagues slow down. There are alternatives that must be considered before we move forward.

Boxer My staff walked your staff through a different model yesterday from the Clean Air Task Force. Sen. Lieberman has asked the EPA to do a model.

Inhofe The costs of the bill will be a trillion dollars a year. It will require a wholesale transformation of our society. Manufacturing will be forced overseas.

10:24 Vitter I have very serious concerns about the bill. I agree with Sen. Voinovich about the need for more time. Every day I hear from Louisiana constituents about energy prices. I’d like to see a clear consensus on what this does to energy prices.

11:19 Krupp Not only will it ease the burden on the American economy if we act faster, it will get other nations to move faster. To achieve a cumulative emissions budget between now and 2020 if we act now we would have to average a 2% reduction each year. But if we wait two years we would have to have a 22% reduction instead of 15% because we would have to start from a higher level and cut to a lower level. There’s enormous benefit by acting early.

11:21 Inhofe Would you support new LNG plants?

Book? Yes, we have to have to do it safely. We would support increased funding by Congress to deal with nuclear.

Inhofe You have said a tax is more effective than a cap-and-trade.

Book There is already a SEC, IRS, and EPA. You can use a tax because we have a tax system.

Some folks are going to suffer more than others. The instability of the oil market is due to the maximum capacity. The only thing to do is to find more oil.

Boxer When you say a carbon tax is more honest, I disagree. In cap-and-trade, the free market sets the price.

Inhofe CRA International said this bill would be much more aggressive than $300 billion per year. I think a tax would be more honest.

Boxer This would be quite a switch, you supporting a tax, me supporting the free market.

Inhofe It would be great if you switched the gavel, too.

11:29 Carper Nuclear?

Claussen I think nuclear has to be part of the solution. I think the best thing to do for nuclear is to establish a cap-and-trade system. Nuclear has to solve the problem of waste. I think there are some interim solutions that could move us along the path.

Carper I want to thank the panel for helping us craft this legislation.

Book The world needs more BTUs and nuclear is one of those sources. It has a very high startup costs. Congress has produced significant incentives. It’s not exactly the free market. If we’re not going to use coal, we need nuclear.

Carper Mr. Sims, did you ever run for the Senate?

Sims Yes.

Carper If things had turned out slightly differently, you could have been sitting up here. How can we ensure that investments in transit generate credits or funding within this bill?

Sims We need to reduce total miles traveled.

11:36 Warner You talked, Mr. Sims about the need to reduce vehicle miles traveled. Maybe we need to add incentives to the states.

Sims I would be overjoyed to have states have to reduce overall miles traveled. Incentives for congestion pricing.

Warner Nuclear power will be addressed in our committee deliberations.

Claussen I worked a long time ago on submarines.

Warner I go back a few years myself.

Claussen On Monday Sen. Carper and I were talking about how we see nuclear as part of the solution. We talked about the need for education. If there’s a demand for nuclear, we’ll figure out the way. Again, I think the best way is to put a price on carbon.

11:51 Klobuchar How do we ensure that we can interconnect with other nations?

Claussen Remember that we’re not signatories to Kyoto. We need a global agreement, but I don’t think we’ll get that until we pass a bill. So the urgency of passing this out of committee and getting a law is high.

12:00 Krupp The sooner we have a cap, the sooner we have moral standing. I spent the last year researching all the technologies I could find that could reduce emissions. Doing this two years early will spur a technological revolution.

Lieberman You said the uncertainty created by Congressional inaction is creating problems for developing new energy infrastructure.

Berendt That is correct, Senator. It is very important that we move forward in a way that is functional and liquid. All advanced low-carbon technologies have high fixed costs.

Lieberman That’s why we put added incentives to the power sector to ease the transition.

12:07 Voinovich The AFL-CIO had real problems with this. Duke Energy said its prices would go up 50%. I have also, Mr. Krupp, looked at all the technologies available.

Claussen We work with 45 companies. 37 have already set targets to reduce emissions, and 22 have already met their targets. They’ve done it primarily through efficiency. I think there will be some time for CCS, for more nuclear, because I think we’re going to need that, for renewables. We need both carrots and sticks.

12:18 Craig I recognize the tolerance of the posteriors of those sitting here. I think it is critically important for us to have a EPA/IEA neutral analysis. I don’t disagree that there may be great new economies generated. Reasonable approaches by government can direct economies.