Hill Heat

2:22 PM Armey Environmental regulations would probably create shift from the private sector where freedom reigns to the public sector where command and control reigns. Whatever we do with concerns for the environment relates to energy, electricity, fossil fuel energy. These are among the highest linkage factors in the economy. There will be reduced output and reduced job opportunities. I found myself going back to Armey’s Axiom Number One: the free market is rational, the government is dumb. The market has a history that leads people to best utilize and effectively conserves resources. Government policy generally leads you in exactly the opposite direction. Look at how dramatically obscene agriculture policy is.

2:28 PM Boxer One of my most famous constituents is here. Dick talked about the private sector and capitalism, a perfect introduction to Vinod Khosla. Tell us what you think we should be doing with global warming.

Khosla I come before you not to make an environmental case but an economic one. I believe climate change legislation is good for our economy and our national security. I believe in free markets in a level playing field. We need to start mitigating our risks. We spend over $300 billion on oil imports. Should we spend more money lining the pockets of Hugo Chavez and those who fund terrorism? The uncertainty around climate change legislation is hurting the US economy. Delayed investment, job creation reduce our competitiveness. Solar CIP creates 20 times as many jobs as a coal-fired plant.

2:35 PM Ringo I’d like to suggest seven investment priorities. 1) Clean R&D, such as power storage. Solar PV were invented in the US but commercialized and built abroad. 2) Early commercialization of new technologies. 3) Congress needs to provide market certainty to renewable energy producers. 4) Incentives for clean energy components. 5) Green building retrofitting. 6) Carbon-cap policy must level the playing field to apply to importers. 7) Education and training initiatives. From Iraq to New Orleans, the tragic consequences of our excessive dependence on fossil fuels is driven home every day.

2:41 Winegarden I examined the impact of cap-and-trade on the US economy. Cap-and-trade legislation creates a few green jobs but destroys more jobs. Fossil fuels currently account for 86% of our energy consumption. In the short term, limiting greenhouse emissions only by limiting energy supplies. Energy supply shocks caused a 2% reduction in the US economy. Regardless of one’s position on the climate change consensus, cap-and-trade is an inferior price instrument. Price volatility decreases economic efficiency. Failure to achieve universality greatly reduces its environmental impact but the economic impact will remain the same. Dow Chemical and the aluminum industry have been moving industry out of countries with higher energy costs. The costs of reducing carbon emissions are by no means trivial. Cap-and-trade is wrong. However, if appropriately constructed, a policy with a carbon tax and a reduction in marginal income tax rates would be good.

2:46 Berrigan Any credible program to reduce greenhouse gases must include nuclear energy.

2:52 Sanders My impression is that you’re creating many small-business capitalists by allowing people to sell solar power back into the grid.

Gabriel Thousands of new jobs are being created in East Germany by companies including American companies creating solar wafers. You have the right to put the energy you produce back into the German grid. You get money for your energy production.

Sanders How many homes have this arrangement?

Gabriel Some hundred thousand. It’s a growing number. Some use geothermal, some use photovoltaic, some use wind.

2:58 Inhofe Dick, Dingell has proposed a gas tax. I’m not in favor of it. I think it’s a more honest way of doing it, not a cap-and-trade system.

Armey The early research in economic externalities was really part of the government’s failure to establish the proprietorship of the environment. I like about the Dingell proposal is that it sets a price. Cape Wind is clearly a governmental NIMBY problem. Same with nuclear. It is because of government regulation we’ve never developed the low-sulfur coal, in fact putting them into parks. The market encourages the genius of the private sector. The problem with cap and trade is where do you make the initial allocation? I say give them to Medicare. Let Medicare peddle them to the private sector. My guess is politicians will decide who are our best friends, for a politically defined redistribution of the wealth.

Inhofe Isn’t a carbon tax more honest than cap and trade?

Winegarden Absolutely. Taxes are a negative incentive. They need to be balanced out by a positive incentive by cutting marginal tax rates.

2:30 Boxer The time to act is well overdue. This is one of the steps the president and EPA administrator to take to demonstrate they will take action to fight global warming. The administrator will appear before this committee on June 21. EPA has granted CA a waiver 40 times in the past years. It has never denied a waiver. The president signed an executive order calling for interagency coordination on any action involving global warming. It may just be an instrument of delay.

I say the California waiver is ripe for action.

2:38 Inhofe As a rule I support states' rights. Air pollution knows no boundaries. The Clean Air Act for all its imperfections has led to cleaner air. The problem is that the state has not made much progress complying with existing federal laws. It is in violation with federal particulate standards, the same with ozone. When I introduced legislation to tighten penalties for counties not in compliance with pollution laws I found that California is the only state not complying with federal law. My bill is not a climate bill, it's a serious attempt to rein in the worst polluters. It is the height of hypocrisy for California to be the tail that wags the dog. The global warming we are now experiencing is part of a natural cycle. According to the NOAA over the last two decades California has cooled by .06 C. If Russia's top scholar scientist is correct that the world is entering a cooling phase then California is leading the world.

2:43 Boxer We have asked for extensions to deal with Clean Air Act because, you may not know, we have 37 million people. I don't think the word "grandstand" has any meaning at all. I don't think our attorney general is grandstanding, nor the governor, nor the legislature.

You can look at our energy use, while we have had an amazing energy use standard. I want to make it clear here that since my state has been attacked head on that noone here is grandstanding.

2:46 Lautenberg This "hoax" is taking over place after place after place. We're here today because the EPA has once again failed to act in the face of science. Last year was the hottest year on record and this year is going to be even hotter. California has been courageous and leaderly in what their going to do with global warming and New Jersey is right there with them. If all the wiavers were granted, 14 million metric tons of carbon reduced by 2020, the equivalent of 12 million cars off the highway. The committee is working to curb global warming. Sen. Sanders is working to cut emissions by 80% by 2050. I hope I won't have to keep running in 2050. Madame Chairman, don't relent.

2:48 Inhofe I would have to say, if we're talking polar bears, the population has doubled in the last 50 years. The thing is interesting that every day, more scientists that were strongly on your side, Claude Allegre, David Bellamy that were strongly on your side are now reevaluating the science.

Lautenberg How can you face every day knowing that catastrophes are happening to children's health? The are those who will continue doubting what is in front of their eyes and what reputable scientists are finding.

2:51 Boxer There are always a few people who say that the world is flat and that HIV doesn't cause AIDS and cigarettes don't cause cancer. It isn't about winning. It's about reality. And as long as I hold the gavel reality will govern this committee.

2:53 Brown Soot and ozone are exacerbated by warming climates. This waiver was signed into law by President Nixon. We're looking at the same problem. California has unique environmental conditions. I was at the hearing this morning. The technological and legal case is overwhelming. I am hoping the EPA administrator will grant the waiver. If he doesn't we will sue him.

3:00 Grannis This morning New York State called on the administrator to grant the waiver as soon as possible. The deabte over climate change is over. Global climate change is everyone's problem.

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3:04 Markey Today we will hear about economic opportunities ina green economy. We know that "green collar" jobs are growing and having an impact on the economy. Ethanol has created 155,000 jobs. That is just a fraction of the economic growth the green economy promises.

Sensenbrenner Republicans know something about creating jobs. One question I would like answered today is what exactly a green collar job is. Mr. Jones is dedicated to creating more jobs and for that he is to be commended. I think it is important to distinguish between jobs that create new technology and those which play a supporting role. I am worried that by creating big government programs for so called green-collar job training we are just duplicating the private sector's efforts. Is intalling a solar panel fundamentally different from installing a satellite dish? I am happy that Jerome Ringo of Apollo Alliance is here.

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Boxer I say, Mr. Adler, your argument is very weak.

Brown I believe he misstates the law. NITSA has no authority over the Clean Air Act. In Mass. vs. EPA the Supreme Court expressly held that the Clean Air Act runs in parallel with (some other law). When we look at compelling and extraordinary some is that California has always been out in front. It is the general condition that is compelling and extraordinary. Not each individual waiver. Even if you do, greenhouse gases contribute to warming and exacerbate soot, ozone. There's another standard that even if the EPA isn't regulating a standard. If auto companies twenty years ago had made more fuel efficient cars we would have less global warming. If you look at the train of consequences you make the compelling case that by California's action or inaction we affect global warming.

Adler Because climate change is a global phenomenon California does not have distinct needs. I don't think it's an open and shut case. But I do think there are grounds for the EPA to deny the waiver. Notr do I think that if they were to grant the waiver it would ncessarily stand up in court.

It establishes that if California is to regulate greenhouse gases it must apply for a waiver. When we're looking at preemption of state law the Supreme Court decision noted that these obligations may overlap. If a federal standard overlaps with a state standard that would be grounds for preemption.

Inhofe I've always contented the IPCC is very political. On the other hand when the IPCC came out downgrading the estimates of sea level rise they cut this in half in the worst case scenario. In the same month they're downgrading the sea level rise they're downgrading the level of contribution from human activity, saying the contribution from livestock outweighs the transportation sector. Unless we're absolutely certain we're right I don't want to pass what would amount to a huge tax increase.

3:36 Grannis We don't think we're nuts. Clearly this is an issue of national importance.

Lautenberg We see it in marine ecology, we see it in the loss of coral.

Grannis The spawning seasons for striped bass are changing. It all adds up.

Brown California doesn't have to say that the compelling reason has to be unique to California. Number two as climate goes up the criteria pollutants get worse. We're on very solid ground. In the Massachusetts case the minority said that the damage to Massachusetts was so trivial Massachusetts didn't have standing to sue. The majority did. The standing will be judged by the majority. You're right. Depending on the Supreme Court. Very clearly, Scalia and Thomas said what they think, which is why it matters who will be the next president.

3:39 Whitehouse We're one of the EPA 12, logjammed by the EPA. I know Adler said two months is a fast time for the EPA to act. But the EPA has sat on its hands for years. The backside of Mr. Adler's argument is that this isn't a local problem but this is a problem for our species. The arguments that were made in our favor in Mass v. EPA were not frivolous arguments. They were not nonsensical arguments. Indeed, they prevailed. The idea that the EPA has to start from a cold-standing start, I'm not willing to give the EPA a pass on how long it takes. They could have run on parallel tracks. There is no reason for them to be hiding behind the skirts of bureaucratic delay. I can't tell you haow frustrating it is. I regret the position you're taking, Mr. Adler.

Adler That's never been EPA's practice. Congress has forced action when it feels EPA is moving too slow. At the end of day, if urgent action is needed, Congress can move much more quickly. I'm not going to defend that system. That is the norm. That is what is set up. I can give examples where EPA lost years ago and still haven't taken action.

Whitehouse I'm not comforted by the argument they could be slower.

Boxer That's a ridiculous argument. Excuse me for being so blunt. You can shake your head all your want. If the EPA were true to its mission instead of the Environmental Pollution Agency under this administration. The fact is if an agency is dedicated to its mission, what it used to be like under Republican and Democratic administrations, each day it works to help the American people.

I'm just going to close this and make a few points. Global warming is real. There's 100% agreement that it's real by the world's leading scientists. They're 90% certain humans are the cause. If a doctor told you your child had 90% chance of having cancer and an operation would cure that child you would act. And all the leading doctors agreed. This isn't a rush job. The waiver was requested in 2005. I read that Supreme Court decision. It's plain English. It's pretty clear. They chastised this administration. I will send a signal to Mr. Johnson if Mr. Johnson uses this as a platform and says he is granting the waiver I would leave this podium and give him a hug.

This is a bipartisan issue. Only here it's not. Everyone has said this is a challenge, we're not afraid of it, we're going to act in a neighborhood we call California. And for those who say they champion states' rights to block our efforts is at the very least hypocritical. I will save my stronger language for another day.

Mr. Adler, I appreciate you coming here. Even though you were wrong.

So many years ago when Mr. Brown was governor he started a solar panel initiative. In the 70s he said we have to do more to be energy independent. So thank you for your eloquence and the committee stands adjourned.