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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

Skewed Composition Of Legislative Panel on Climate Change Criticized  Posted: November 14, 2007
November 14, 2007

Representative Jim Gooch, co-Chair
Senator Tom Jensen, co-Chair
All Members
Interim Committee on Agriculture and Natural Resources
Kentucky General Assembly
Frankfort, Kentucky 40601

Dear Representative Gooch, Senator Jensen and Committee Members:

I regret that I am unable to attend the 5th meeting of the Interim Joint Committee on Agriculture and Natural Resources today to present this brief statement of concern in person.

I am writing to express my disappointment that, regarding the agenda item “Presentation on Climate Change and the Scientific Community,” the committee has not been provided a broader selection of perspectives on the state of science regarding climate change. While the two panelists are certainly entitled to their opinions concerning the issue, notably absent from the panel is any representative of the scientific community to inform the Committee concerning the significant degree of consensus within the scientific community regarding climate change.

There is general consensus within the scientific community that emissions of greenhouse gases should be reduced by 60-80% by mid-century to minimize irreversible effects of climate change. There is also general consensus that we have a relatively brief period in which to restructure the manner in which we produce and consume energy, before the exigencies of climate change will impose dramatic costs on our communities and our economy and narrow our options to mitigate, rather than adapt, to climate change.

In June 2005, the U.S. National Academy of Sciences joined with the scientific academies of the G8 nations, Brazil, China and India, in the issuance of a Joint Statement underscoring that “the scientific understanding of climate change is now sufficiently clear to justify nations taking prompt actions.” I have attached the Joint Academies’ Statement for your reference.

The Intergovernmental Panel on Climate Change (IPCC), established in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP), is tasked with assessing on a comprehensive, objective, open and transparent basis the scientific, technical and socio-economic information relevant to understanding the scientific basis of risk of human-induced climate change, its potential impacts and options for adaptation and mitigation. Relying primarily on peer reviewed and published scientific/technical literature, the IPCC has issued a series of scientific reports on climate change, including a series of Assessment Reports. Executive summaries for policymakers, as well as the full texts of these reports, are available at http://www.ipcc.ch/ I would urge the Committee members to read the Summaries for Policymakers of each of the Three Assessments published by the IPCC.

I am concerned also that the agenda of the committee remains focused on questioning whether global warming is a crisis and emissions of greenhouse gases an issue of legitimate concern, rather than recognizing that both nationally and globally, the debate over climate change has passed and that within the scientific and business community, there is growing consensus on the need for mandatory federal action to reduce emissions of greenhouse gases into the atmosphere. PSC Chairman Goss, in a speech to the Harlan Chamber of Commerce earlier this year, said it well when he told the audience:

"Even if you do not believe that emissions from fossil fuel are a problem and do not believe that global climate change is a real phenomenon, your views are those of an ever-dwindling minority."

This year, Ford Motor Company, an important part of the economic landscape of this Commonwealth, along with the Chrysler Group joined the United States Climate Action Partnership, a group businesses and six of the nation’s leading environmental organizations that have issued a collective call for the federal government to swiftly enact legislation that includes mandatory significant reductions of greenhouse gas emissions from all sectors through a mandatory market-based cap-and-trade system. Members include Duke Energy, GM, GE, Ford, Alcoa and Alcan, and many others.

In a “Call to Action,” the CAP noted that

"each year we delay action to control emissions increases the risk of unavoidable consequences that could necessitate even steeper reductions in the future, at potentially greater economic cost and social disruption. Action sooner rather than later preserves valuable response options, narrows the uncertainties associated with changes to the climate, and should lower the costs of mitigation and adaptation."

The CAP proposed a U.S. policy framework that includes

mandatory approaches to reduce greenhouse gas emissions from the major emitting sectors including emissions from large stationary sources, transportation, and energy use in commercial and residential buildings that could be phased in over time, with attention to near-, mid- and long-term time horizons;

flexible approaches to establish a price signal for carbon that may vary by economic sector and could include, depending on the sector: market-based incentives; performance standards; cap-and-trade; tax reform; incentives for technology research, development, and deployment; or other appropriate policy tools; and

approaches that create incentives and encourage actions by other countries, including large emitting economies in the developing world, to implement GHG emission reduction strategies.

I would encourage you each to read the “Call for Action” which is available on-line at www.us-cap.org.

In 2006, Lloyd’s of London issued a Report titled “Climate Change or Bust,” acknowledging that “a growing body of expert opinion now agrees that the climate is changing – and that human activity is playing a major role. Most worryingly, the latest science suggests that future climate changes may take place quicker than previously anticipated.” Lloyd’s, an internationally recognized insurance concern and the world’s oldest insurance firm, with over 300 years in the business, recognized the impact of climate change on the insurance industry and called for better understanding and active management of climate change risk. The Report, part of the 360 Risk Project, can be read at http://www.lloyds.com, and I have provided a copy to staff electronically.

The economic implications for Kentucky of the coming national carbon mandate such as that proposed in the Warner – Lieberman bill or several others now pending before Congress, could be significant. As a state that both produces a significant amount of coal and which is almost entirely dependent on coal and other fossil fuels for electricity, Kentucky could see significant increases in electric rates as utilities recover costs associated with reduction in carbon emissions.

The National Academies of Science Report Coal: Research and Development To Support National Energy Policy, warned that:

"The context for any assessment of future coal production is inextricably linked with the development of a national carbon emissions policy. Potential constraints on greenhouse gases (especially CO2) emissions, and the technical and economic feasibility of CO2 control measures, are the dominant issues affecting the outlook of the future of coal use over the next 25 years and beyond. The difficulty of predicting prices and availability of alternative energy sources for electric power generation provides additional uncertainty.

If coal is to continue as a primary component of the nation’s future energy supply in a carbon-constrained world, large-scale demonstration of carbon management technologies – especially carbon capture and sequestration (CCS) are needed to prove the commercial readiness of technologies to significantly reduce CO2 emissions from coal-based power plants and other energy conversion processes. In addition, detailed assessments are needed to identify potential geological formations in the United States that are capable of sequestering large quantities of CO2, to quantify their storage capacities, to assess migration and leakage rates; and to understand the economic, legal and environmental impacts of both near-term and long-term timescales."

The General Assembly appeared to understand this issue when in HB 1 it commissioned the report on carbon emissions, research and strategies that is due at the end of this month. Yet from the composition of the Agenda for today’s meeting, it appears that we are lapsing back into a state of denial rather than moving forward in planning to address and to reduce the potentially devastating consequences of a carbon mandate on a state that is perhaps the most vulnerable among the 50 to the coming mandate.

We do the public, and particularly those least able to withstand increases in electricity rates, a great disservice by failing to acknowledge that national action to reduce carbon emissions is a virtual certainty within the next few years, and that what has historically been our strength is, in a carbon-constrained future, our vulnerability. The inevitable mandatory program for emissions reductions could hit hard on Kentucky’s ratepayers if we remain unprepared by failing to invest in energy efficiency and in diversifying our energy portfolio to reduce the dependence on coal-fired power.

If we act prudently, there are opportunities for the Commonwealth both to mitigate the impact of the carbon mandate, and to retool our economy for a carbon-constrained world. The most important area in which state investment could help hedge against the impacts of a mandatory carbon reduction program is energy efficiency. Investment in improving efficiency of conversion and use of energy offers a way to “mine” inefficiencies in the way that power is generated and consumed. Kentucky’s electricity is relatively low-cost, but our bills certainly are not, because we consume power inefficiently. In 2005, there were 20 states with lower monthly residential electricity bills than Kentucky’s. In that year, Kentucky’s residential ratepayers consumed more electricity than our counterparts in 43 other states; our businesses, more than 19 other states and our industries, more than counterparts in 47 other states. Efficiency improvements are a key to creating a sustainable Kentucky economy, and generate good jobs, increase disposable income, keep money circulating in the state, and make our industries and products more cost-competitive in the world market. Reducing waste, upgrading building codes, creating incentives for energy efficient home construction and renovation, enhancing demand management programs to encourage utilities to invest in more efficient use of power by customers, and increasing weatherization programs, particularly for rental housing – all of these are areas where our energies should be focused.

Under any of several of the bills under consideration in Congress, our regulated coal-fired power plants will be obligated to internalize carbon costs, either by retrofitting the existing fleet to capture and sequester carbon, by purchasing carbon credits, or by deploying new base-load plants that offer more efficiency or more effective carbon capture. The sticker shock, and the potential adverse effects on the most vulnerable ratepayers and on our economy, if we fail to plan now and to invest now in a strategy to reduce carbon emissions from the combustion of coal for electricity, will be staggering.

A steadfast refusal to recognize the scientific and political realities of climate change ill-serves all sectors of our economy – residential, commercial, and industrial – wasting valuable time and energies prolonging a debate that has long since ended outside of the walls of the State Capitol.

Thank you for this opportunity to present my concerns.

Cordially,

Tom FitzGerald
Director


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