Members will hear testimony on recent scientific, governmental, and corporate activities concerning climate change. Senator McCain will preside. Following is a tentative witness list (not necessarily in order of appearance):
Witness Panel 1
Mr. Jos Delbeke
Witness Panel 2
Dr. Tom M.L. Wigley
1. Introduction: Projections of future climate change made using state-of-the-art climate models suggest that changes over the coming century will be much larger than experienced over the past 100 years. The case for taking action to mitigate these human-induced (or ‘anthropogenic’) changes rests on the credibility of these models. There is a vast scientific literature on the development and testing of these models, summarized in the recent ‘Third Assessment Report’ (henceforth ‘TAR’) produced under the auspices of Working Group 1 of the Intergovernmental Panel on Climate Change (IPCC, Houghton et al., 2001). There are two main methods of model testing – comparing model simulations of the present state of the climate system (such as the geographical patterns of temperature, rain- and snowfall, sea-level pressure, etc.) against observations, and comparing model simulations of past changes in climate with observations. The most recent climate models are able to simulate present-day climate remarkably well – with errors often less than the uncertainties in observational data sets. Here, however, I will not dwell on this aspect of model validation, but concentrate on the second method – comparison of observed and model-simulated changes. I will show that models simulate temperature changes over the past 100+ years with considerable fidelity provided they are driven (or ‘forced’) by observed changes in both natural forcing agents (such as variations in the output of the Sun) and anthropogenic factors (such as changes in greenhouse gas concentrations and aerosol particle changes). Natural forcing factors alone cannot explain the past record. Using the results from this model/observed data comparison, I will give projections of future changes in global-mean temperature for a central scenario for future emissions. These results, which are consistent with projections given in the IPCC TAR, imply, for this particular emissions scenario, a future warming rate of three to five times the warming that occurred over the 20th century. The uncertainty range expands to two to seven times the past warming rate when emissions and other uncertainties are accounted for. Even at the low end, these projections are cause for concern. 2. Temperature changes over the 20th century: The simplest indicator of climate change is the global-mean, near-surface temperature – the average over the Earth’s surface area of temperature observations obtained primarily for the purposes of weather forecasting. After carefully correcting these data for instrumental and exposure changes, global-mean temperature shows a warming trend of about 0.7oC over the past 100 years. This warming trend has, superimposed on it, substantial variability on monthly, annual and decadal timescales associated with natural climate processes such as El Nino and other interactions between the land, ocean and cryosphere (ice) – see Figure 1. To understand the causes of the century timescale warming trend we make use of climate models. Such models are an efficient way to synthesize and integrate, in an internally-consistent way, the many complexities and interactions of the climate system. The basic procedure begins by defining, independently of the model, the changes in the external drivers of the climate system. We then use these drivers as input forcing factors for the model and run the model to see how well it agrees with observed changes. In doing so, we try to quantify any uncertainties in both the inputs and the model structure to see what affects these uncertainties might have on the model outputs. The forcing factors are of two types: natural agents like the effects of large volcanic eruptions and changes in the energy output of the Sun; and a variety of anthropogenic factors. Volcanic eruptions have a strong short-term cooling effect (Robock, 1999), and only a minimal effect on decadal or longer timescales. Since the goal here is to understand the century timescale warming, I will not consider volcanic effects further in this analysis, beyond noting that climate models are able to simulate the short-term coolings well. For changes in solar output, I use the recent estimates of Foukal (2002) from 1915 onwards and Hoyt and Schatten (1993) prior to 1915. Other estimates of solar output changes yield similar results. I do not consider the hypothesized amplification of solar forcing through the effects of cosmic rays, partly because there is no credible physical basis for this amplification. I note, however, that any assumed amplification of solar forcing degrades the agreement between model and observed results. The anthropogenic factors include changes in the concentrations of greenhouse gases (carbon dioxide, methane, nitrous oxide, ozone, and various man-made halocarbons, of which the CFCs – chlorofluorocarbons – are the most well known), and changes in the atmospheric loading of small particles (aerosols) associated primarily with fossil-fuel burning. The greenhouse gases, of which carbon dioxide is the most important, have a warming effect. Aerosols, depending on type, may have either a warming or cooling effect. To date, the cooling effect dominates, but the magnitude of this cooling is still uncertain. In the results below I consider a range of possible values for the magnitude of aerosol cooling. For the climate model I use the model employed by IPCC to produce their global-mean temperature projections (see Wigley and Raper, 2002, and references therein). This is a relatively simple model, but it has been rigorously tested against much more complex coupled Atmosphere/Ocean General Circulation Models (AOGCMs) and is able to simulate the results of these models with high accuracy over a wide range of conditions (Raper et al., 2001). The simpler model has the advantage that it can be used to examine the effects of uncertainties in the parameters that control the response of the climate system to external forcing. The primary source of uncertainty is the ‘climate sensitivity’ parameter (designated by ‘S’ below). This is usually characterized by the eventual (or ‘equilibrium’) global-mean warming that would occur if we doubled the amount of carbon dioxide in the atmosphere. It has an uncertainty range of 1.5oC to 4.5oC with about 90% confidence. I will give results for sensitivity values of 2oC and 4oC to show the importance of this factor. For more information on sources of modeling uncertainty, see Wigley and Raper (2001). Figure 1: Observed versus model-simulated changes in global-mean, near-surface temperature. For observed data, see Jones et al. (1999) and Jones and Moberg (2003). Figure 1 compares observed near-surface temperature changes with model predictions. The four model-based curves consider two forcing cases; one in which the model is driven solely by the primary natural driving force, changes in the output of the Sun (lower two curves), and one where both natural and anthropogenic forcings are used to drive the model (upper two curves). The two curves for each case reflect the main sources of uncertainty in the modeling exercise, the magnitude of aerosol forcing, and the magnitude of the climate sensitivity. The upper two curves show that it is possible to obtain a good match between the model and observations by using a low aerosol forcing (–0.8W/m2 in 1990) combined with low climate sensitivity (S = 2.0oC), or by using a relatively high aerosol forcing (–1.3W/m2 in 1990) combined with low climate sensitivity (S = 4.0oC). Since these values are within their accepted ranges of uncertainty, it is clear that there is no inconsistency between models and observations. The observations, however, do not narrow the ranges of uncertainty for these two parameters, so, in making projections of future change, we need to account for these uncertainties. The lower two curves show the expected global-mean temperature changes in the absence of anthropogenic forcing. Up to around the mid 1970s both the natural-forcing-only and the natural-plus-anthropogenic forcing cases fit the observations reasonably well. After this, the natural-only case provides an increasingly bad fit, while the natural-plus-anthropogenic case fits the observed warming trend extremely well. It is clear from this that anthropogenic forcing effects must be considered in order to explain the observations. 3. Satellite-based temperature changes since 1979: One of the more puzzling aspects of recent climate change has been the apparent inconsistency between the linear trends in tropospheric temperatures (from satellite-based Microwave Sounding Units – MSU data), surface air temperatures, and model results (National Academy of Sciences (NAS), 2001). The original MSU data (see Christy et al., 2003, and earlier references cited therein – this data set is referred to below as the UAH data, since its developers are associated with the University of Alabama at Huntsville) showed little or no warming trend since the beginning of the satellite record in 1979, while both the surface data and model results for the surface and for the troposphere (as illustrated in Figure 1) showed a substantial warming trend. The NAS (2001) report concluded that there was no reason to suspect serious errors in any of the trends, but this rather down-played what is really an important inconsistency. More recent work has moved towards resolving this inconsistency. First, an entirely independent analysis of the raw satellite data (the MSU2 data specifically) has recently been carried by Mears et al. (2003 – these authors are with Remote Sensing Systems, Santa Rosa, CA, so their data set is referred to below as the RSS data). This new analysis has a warming trend that is both larger than the UAH trend and more consistent with both the surface and model data (Santer et al., 2003a). Second, a new reanalysis product (the ERA-40 data produced by the European Centre for Medium-range Weather Forecasting), when used to construct equivalent MSU2 temperature trends, also shows a larger warming trend than the UAH data. (Reanalysis is a technique for synthesizing diverse observational data sets, including both satellite and radiosonde data, to produce an internally-consistent picture of changes in atmospheric meteorological conditions – the ERA exercise is described in Gibson et al., 1997.) Third, analysis of changes in the height of the tropopause – the boundary between the lowest layer of the atmosphere, the troposphere, where temperatures decrease with height, and the layer above this, the stratosphere, where temperatures either change little or increase with height – show that these changes can only be explained if the troposphere is warming (Santer et al., 2003b). Trends in the three observed data sets, UAH, RSS and ERA-40 are shown in Figure 2, along with model results consistent with those shown in Figure 1. The observed trends have substantial statistical uncertainty because of the ‘noise’ of inter-annual variations about the underlying trend. The statistical uncertainty ranges shown in the Figure are the ‘two-sigma’ ranges, corresponding to 95% confidence intervals. For the model results there are additional uncertainties associated primarily with radiative forcing and climate sensitivity uncertainties, as explained above. Figure 2: Trends over 1979–2001 and trend uncertainties for different tropospheric data sets. In a statistical sense, Figure 2 shows that there is no significant difference between any of the trends. While it is clear that the UAH results are qualitatively different from the other results, because of the uncertainties involved it is too soon to pass judgment. As noted by Santer et al. (2003a), model results cannot be used as a basis for selecting one observed data set over another. The key result of this comparison is that it exposes uncertainties that are larger than hitherto suspected. If, however, the UAH data are found to have underestimated the warming trend in the troposphere, then this will resolve an important climatological ‘problem’ and provide a strong endorsement for the validity of current climate models. 4. Supporting evidence for 20th century climate change: a The temperature results above provide strong evidence for the reality of a strong warming trend over the 20th century. The warming is consistent with model expectations and can only be explained if one includes anthropogenic factors as part of the cause. From Figure 1, the natural warming trend over the 20th century accounts for only 23–32% of the total trend. The observations are also consistent with a climate sensitivity in the standard 1.5oC to 4.5oC range, and are not consistent with a lower value. These results are consistent with many other lines of evidence that there are unusual changes occurring in the climate system. Not only are global-mean temperature changes consistent with models, but the horizontal and vertical patterns of change also agree with model predictions (TAR). In addition, a sharp cooling trend has been observed in the stratosphere that agrees well with model predictions (Santer et al., 2003a). Sea level has been rising steadily (TAR), partly as a result of warming in the ocean that agrees with model expectations (Barnett et al., 2001) and partly due to the melting of glaciers and small ice sheets (TAR). Sea ice area and thickness have also been decreasing in accord with the changes suggested by models (Vinnikov et al., 1999). Sea-level pressure patterns have shown significant changes and, once again, these changes are similar to those predicted by models (Gillett et al., 2003). The frequency of precipitation extremes has also been increasing (Karl and Knight, 1998; Groisman et al., 1999), a result that agrees both with simple physical reasoning (Trenberth et al., 2003) and with model predictions (Wilby and Wigley, 2002). Finally, based on paleoclimatological evidence, the warmth that characterizes the late 20th century is, at least for the Northern Hemisphere, unprecedented in at least 1000 years (Mann and Jones, 2003). 5. Climate change over the 21st century: Given the weight of evidence endorsing the credibility of climate models, at least at large spatial scales, we can safely use these models to estimate what changes might occur over the next 100 years. To do this we must first estimate how the emissions of all climatically-active gases will change in the future. As part of the IPCC Third Assessment Report process, a large set of future emissions scenarios was developed, all under the ‘no-climate-policy’ assumption (referred to as the ‘SRES’ scenarios for ‘Special Report on Emissions Scenarios’; Nakicenovic and Swart, 2000). In total there are 35 complete scenarios spanning a range of assumptions about future population growth, economic growth, technological change, and so on – and each set of assumptions leads to a different set of emissions. In order to predict future climate one must take account of the attendant uncertainties in emissions, since it is these that drive changes in the composition of the atmosphere, which in turn drive changes in the climate system. At each step, in going from emissions to atmospheric composition changes, and from composition changes to climate, there are other uncertainties that must be taken into account. Most of these uncertainties were accounted for in the TAR, where the estimated changes in global-mean temperature over 1990 to 2100 were given as 1.4oC to 5.8oC. A more formal probabilistic analysis was given by Wigley and Raper (2001). Here, to illustrate the procedure, I will use a single emissions scenario, the A1B scenario, which is roughly in the middle of the range covered by the SRES set. I will then account for uncertainties in aerosol forcing and climate sensitivity as in Figure 1 (recognizing that this does not span the full range of uncertainties in these parameters). The projected future changes in global-mean temperature, compared with past changes, are shown in Figure 3. Figure 3: Projected global-mean warming. Over 2000 to 2100 the warming range is 2.0oC to 3.6oC, which corresponds to warming rates of roughly three to five times the rate of warming over the 20th century – and temperatures are still increasing at the end of the century. A wider uncertainty range is obtained when other uncertainties are accounted for, as in the TAR analysis (shown by the bar on the right side of the Figure). Even at the low end of the range of possibilities, the warming rate over 2000 to 2100 is double the 20th century warming rate, while at the top end the future rate is seven times the past rate. Major changes in all aspects of climate will occur in parallel with these unprecedented global-mean temperature increases. Many of these will be beyond our present adaptive capabilities (particularly in lesser developed countries), and will undoubtedly lead to damages to natural ecosystems and managed systems such as agriculture and water resources, and to possibly serious consequences for health and the spread of pests and disease. While the changes and their impacts cannot be predicted in detail, and while some of the consequences of future climate and atmospheric change may be positive, it would be prudent to insure against adverse changes either through improving our adaptive capabilities and/or, through emissions mitigation, reducing the magnitude of future climate change. In the absence of climate policies, as time goes by we will be moving further and further into unknown climate territory and committing ourselves to even larger future changes. Because of the inertia in both socioeconomic systems and the climate system, it is likely that quite aggressive actions may be required to avoid (quoting Article 2 of the Framework Convention on Climate Change) ‘dangerous interference with the climate system’, and ensure that we are able to stabilize the composition of the atmosphere and the climate at acceptable levels. 6. References: Barnett, T.P., D.W. Pierce, and R. Schnur, 2001: Detection of anthropogenic climate change in the world’s ocean. Science, 292, 270-274. Christy, J.R., R.W. Spencer, W.B. Norris, and W.D. Braswell, 2003: Error estimates of version 5.0 of MSU-AMSU bulk atmospheric temperatures. Journal of Atmospheric and Oceanic Technology, 20, 613-629. Foukal, P., 2002: A comparison of total variable solar and total ultraviolet irradiance outputs in the 20th century. Geophysical Research Letters, 29, 10.1029/2002GL015474. Gibson, J.K., P. Kållberg, S. Uppala, A. Hernandez, A. Nomura, and E. Serrano, 1997: ECMWF Re-Analysis Project Report Series. 1. ERA Description. 66 pp. Gillett, N.P., F.W. Zwiers, A.J. Weaver, and P.A. Stott, 2003: Detection of human influence on sea-level pressure. Nature, 422, 292-294. Groisman, P.Ya., et al., 1999: Changes in the probability of heavy precipitation: Important indicators of climate change. Climatic Change, 42, 243-283. Houghton, J.T., Y. Ding, D.J. Griggs, M. Noguer, P.J. van der Linden, X. Dai, K. Maskell, and C.A. Johnson, Eds, 2001: Climate Change 2001: The Scientific Basis. Cambridge University Press, 881 pp. Hoyt, D.V., and K.H. Schatten, 1993: A discussion of plausible solar irradiance variations, 1700-1992. J. Geophys. Res., 98, 18895-18906. Jones, P.D., and A. Moberg, 2003: Hemispheric and large-scale surface air temperature variations: An extensive revision and an update to 2001. Journal of Climate, 16, 206-223. Jones, P.D., M. New, D.E. Parker, S. Martin, and I.G. Rigor, 1999: Surface air temperature and its changes over the past 150 years. Reviews of Geophysics, 37, 173-199. Karl, T.R., and R.W. Knight, 1998: Secular trends in precipitation amount, frequency, and intensity in the United States. Bull. Amer. Met. Soc., 79, 231-241. Mann, M.E., and P.D. Jones, 2003: Global surface temperatures over the past two millennia. Geophysical Research Letters, 30, 10.1029/2003GL017814. Mears, C.A., M.C. Schabel, and F.W. Wentz, 2003: A reanalysis of the MSU channel 2 tropospheric temperature record. Journal of Climate (in press). Nakicenovic, N., and R. Swart, Eds, 2000: Special Report on Emissions Scenarios. Cambridge University Press, 570 pp. National Academy of Sciences (NAS), 2001: Climate Change Science. An Analysis of Some Key Questions. National Academy Press, Washington D.C., 29 pp. Raper, S.C.B, J.M. Gregory, and T.J. Osborn, 2001: Use of an upwelling-diffusion energy-balance model to simulate and diagnose A/OGCM results. Climate Dynamics, 17, 601-613. Robock, A., 2000: Volcanic eruptions and climate. Reviews of Geophysics, 38, 191– 219. Santer, B.D., T.M.L. Wigley, G.A. Meehl, M.F. Wehner, C. Mears, M. Schabel, F.J. Wentz, C. Ammann, J. Arblaster, T. Bettge, W.M. Washington, K.E. Taylor, J.S. Boyle, W. Brüggemann, and C. Doutriaux, 2003a: Influence of satellite data uncertainties on the detection of externally-forced climate change. Science, 300, 1280-1284. Santer, B.D., M.F. Wehner, T.M.L. Wigley, R. Sausen, G.A. Meehl, K.E. Taylor, C. Ammann, J. Arblaster, W.M. Washington, J.S. Boyle, and W. Brüggemann, 2003b: Contributions of anthropogenic and natural forcing to recent tropopause height changes. Science, 301, 479-483. Trenberth, K.E., A. Dai, R.M. Rasmussen, and D.B. Parsons, 2003: The changing character of precipitation. Bull. Amer. Met. Soc., 84, 1205-1212. Vinnikov, K.Y., A. Robock, R.J. Stouffer, J.E. Walsh, C.L. Parkinson, D.J. Cavalieri, J.F.B. Mitchell, D. Garrett, and V.F. Zakharov, 1999: Global warming and Northern Hemisphere sea ice extent. Science, 286, 1934-1937. Wilby, R.L., and T.M.L. Wigley, 2002: Future changes in the distribution of daily precipitation totals across Nth America. Geophysical Research Letters, 29, 10.1029/2001GL013048. Wigley, T.M.L., and S.C.B. Raper, 2001: Interpretation of high projections for global-mean warming. Science, 293, 451-454. Wigley, T.M.L., and S.C.B. Raper, 2002: Reasons for larger warming projections in the IPCC Third Assessment Report. Journal of Climate, 15, 2945-2952.
Dr. Antonio BusalacchiProfessor and Director, Earth System Science Interdisciplinary CenterUniversity of Maryland
Good morning. Thank you very much for this opportunity to testify. I am Dr. Tony Busalacchi, a professor at the University of Maryland and I serve as the chair of The National Academies’ Climate Research Committee. I will use my time this morning to summarize what most scientists agree to be true about change in the Earth’s climate. Understanding climate and whether it is changing, and why, is one of the most crucial questions facing humankind in the twenty-first century. This question is the subject of much scientific research and, of course, policy debate, since the economic and environmental implications could be large. The National Academies have produced a number of reports focused on understanding climate in recent years and my testimony draws heavily from two of these: a February 2003 report that gives input to the Administration’s draft US Climate Change Science Program Strategic Plan (NRC 2003) and a 2001 report called “Climate Change Science” that was done at the request of the White House (NRC 2001). The latter report answered a series of specific questions designed to identify areas in climate change science where there are the greatest certainties and uncertainties. If you haven’t read this report, it is an excellent summary (only 25 pages long) written in very accessible language. As is explained in “Climate Change Science,” there is wide scientific consensus that climate is indeed changing. Greenhouse gases are accumulating in Earth’s atmosphere as a result of human activities, causing surface air temperatures and subsurface ocean temperatures to rise. Our confidence in this conclusion is higher today than it was ten, or even five years ago, but uncertainty remains because there is a level of natural variability inherent in the climate system on time scales of decades to centuries that can be difficult to interpret with precision because we gather this evidence from sparse observations, numerical models, and proxy records such as ice cores and tree rings. Despite the uncertainties, however, there is widespread agreement that the observed warming is real and particularly strong within the past twenty years. As the report further explains, human-induced warming and associated sea level rises are expected to continue through the 21st century. Computer model simulations and basic physical reasoning show that there will be secondary effects from these changes. These include increases in rainfall rates and increased susceptibility of semi-arid regions to drought. The impacts of these changes will depend on the magnitude of the warming and the rate with which it occurs. A diverse array of evidence supports the view that global air temperatures are warming. Instrumental records from land stations and ships indicate that global mean surface air temperature warmed about 0.4-0.8 degrees C (0.7-1.5 degrees F) during the 20th century. The warming trend is spatially widespread and is consistent with the global retreat of mountain glaciers, reductions in snow-cover extent, the earlier spring melting of ice on rivers and lakes, the accelerated rate of rise of sea level during the 20th century relative to the past few thousands years and the increase in upper-air water vapor and rainfall rates over many regions. A lengthening of the growing season also has been documented in many areas, along with an earlier plant flowering season and earlier arrival and breeding of migratory birds. Some species of plants, insects, birds and fish have shifted toward higher latitudes or higher elevations, often together with associated changes in disease vectors. The ocean, which represents the largest reservoir of heat in the climate system, has warmed by about 0.05 degrees C (0.09 degrees F) averaged over the layer extending from the surface down to 10,000 feet, since the 1950s. It has been said that the Arctic will be the “canary in the coal mine” where the effects of global warming will be felt first and with the greatest magnitude. Analysis of recently declassified data from US and Russian submarines indicates that sea ice in the central Arctic has thinned since the 1970s, and satellite data indicate a 10-15 percent decrease in summer sea ice concentration over the Arctic as a whole. Satellite measurements also indicate that the time between the onset of sea-ice melting and freeze-up has increased significantly from 1978 through 1996, and the number of ice-free days have increased over much of the Arctic Ocean. A decline of about 10 percent in spring and summer continental snow cover extent over the past few decades also has been observed. Looked at in total, the evidence paints a reasonably coherent picture of change, but the conclusion that the cause is greenhouse warning is still open to debate; many of the records are either short, of uncertain quality, or provide limited special coverage. As you may have seen in the press, a large ice shelf recently broke up along the coast of northeast Canada’s Ellesmere Island, followed by the drainage of an ice-dammed lake that had built up behind it (Disraeli Fiord). The Ward Hunt Ice Shelf was the largest remaining piece of an ice shelf that once, a century ago, rimmed the entire northern coast of Ellesmere Island. I have not studied this particular incident, nor has the Academy, but researchers working at the site had documented reductions in the freshwater volume of the lake accompanied by a rise in mean annual air temperature and have stated that they believe this change can be attributed to global warming. Other scientists have been more cautious, noting that many of the changes being seen in the Arctic could have more to do with long-term world climate patterns than with the release of carbon dioxide and other greenhouse gases. Still, atmospheric chemist and National Academy of Sciences member Ralph J. Cicerone of the University of California at Irvine was quoted in the Washington Post article on the ice-shelf breakup as saying: “But even though this ice melt and permafrost thawing [probably happened] too fast to be due to global warming, this is [a] prototype of what we should expect after the next few decades. … This is a good dress rehearsal for the kinds of things we could see later.” Some of the changes being experienced at high latitudes are believed to be reflections of changes in wintertime wind patterns rather than a direct consequence of global warming per se. It is important to note that the rate of warming has not been uniform over the 20th century. Much of the warming occurred prior to 1940 and during the past few decades. The Northern Hemisphere as a whole experienced a slight cooling from 1946-1975, and the cooling during that period was quite marked over the eastern United States. The cause of this hiatus in the warming is still under debate. One possible cause might be the buildup of sulfate aerosols due to the widespread burning of high sulfur coal during the middle of the century followed by a decline; it is also possible that at least part of the rapid warming of the Northern Hemisphere during the first part of the 20th century and the subsequent cooling were of natural origin – a remote response to changes in the oceanic circulation, or variations in the frequency of major volcanic emissions or in solar luminosity. The role that human activities have played in causing these climate changes has been a subject of debate and research for more than a decade. There is no doubt that humans have modified the abundances of key greenhouse gases in the atmosphere, in particular carbon dioxide, methane, nitrous oxide, and tropospheric ozone. These gases are at their highest recorded levels. In fact, the ice-core records of carbon dioxide and methane show their twentieth century atmospheric abundances to be significantly larger than at any period over the past 400,000 years. The increase in these greenhouse gases is primarily due to fossil fuel combustion, agriculture, and land-use changes. Recent research advances have led to widespread acceptance that the human-induced increase in greenhouse gas abundances is responsible for a significant portion of the observed climate changes. The precise size of that portion is difficult to quantify against the backdrop of natural variability and climate forcing uncertainties. Because the Earth system responds so slowly to changes in greenhouse gas levels, and because altering established energy-use practices is difficult, changes and impacts attributable to these factors will continue during the twenty-first century and beyond. Current models indicate a large potential range for future climates, with global mean surface temperature warming by 1.4 to 5.8ºC (2.5 to 10.4 oF) by 2100 (IPCC, 2001). Given increasing evidence of how humans have modified the Earth’s climate over the last century, it is imperative for the nation to continue directing resources toward better observing, modeling, and understanding of what form future changes in climate and climate variability may take, the potential positive and negative impacts of these changes on humans and ecosystems, and how society can best mitigate or adapt to these changes. Thank you for this opportunity to talk about climate change. This is a problem that affects us all, and a problem the scientific community does not shy away from in terms of its responsibility to provide objective scientific assessment in support of sound policy decisions. I’d be happy to take any questions. REFERENCES IPCC, 2001. Climate Change 2001: The Scientific Basis. Contribution of Working Group I to the Third Assessment Report of the Intergovernmental Panel on Climate Change, eds. J.T. Hought, Y. Ding, D.J. Griggs, M. Noguer, P.J. van der Linden, X. Dai, K. Maskell, and C.A. Johnson. Cambridge, U.K.: Cambridge University Press. National Research Council, 2003. Planning Climate and Global Change Research: A Review of the Draft US Climate Change Science Program Strategic Plan. The National Academies Press. National Research Council, 2001. Climate Change Science: An Analysis of Some Key Questions. The National Academies Press.
Mr. Ethan J. Podell
Mr. Chairman and distinguished Members of the Senate, I am grateful for the invitation to address the Committee and to share my perspective as a businessman who has tried to get corporate America to take voluntary action on climate change. My name is Ethan Podell. I’m the President of Orbis Energy Advisors, a finance and consulting firm focused on the business of climate change and renewable energy. I am also here today as a representative of E2—Environmental Entrepreneurs--- a national group of professionals and business people who believe in protecting the environment while building economic prosperity. E2 has over 400 members in 16 states who have been involved in financing and founding more than 800 companies, which created over 400,000 jobs. E2 members currently represent more than $20 billion in private equity capital available for investment into new companies. After a 20 year career as a media entrepreneur, I’ve spent the better part of the past two years trying to get corporate America to understand---and more importantly to take some meaningful action to address-----this enormous problem looming before us…..global climate change. My conclusion from this experience is that it is essential to enact mandatory limits on greenhouse gas emissions as provided for by S. 139. I consulted on strategy and business development for Cantor Fitzgerald’s greenhouse gas trading unit. From March through August of this year, I was the senior vice president for sales and marketing for the Chicago Climate Exchange. As you may know, the Chicago Climate Exchange is the first voluntary, greenhouse gas cap and trade program in the U.S. My principal role at the Exchange was to recruit corporate clients willing to commit to a modest, pilot program requiring minimal reductions in their greenhouse gas emissions. I’m here to tell you today that there is very little evidence that corporate America has any real interest in participating in a voluntary greenhouse gas reduction trading program. The Chicago Climate Exchange is a terrific idea and an innovative institution of the first order. It seeks to prove the concept that a voluntary, greenhouse gas emissions reduction program using a cap-and-trade system can be effective with the American business community. The Exchange is designed as a 4-year pilot program, running from now through 2006, so that companies which join the program are making a limited time commitment. And Exchange members are also making a very limited commitment to reduce their greenhouse gas emissions, as the reduction targets set by the Exchange are extremely modest. Those reductions are 1% below baseline in 2003, rising to 4% below baseline in 2006. The Chicago Climate Exchange was designed over a number of years with the active participation of leading companies from many sectors of American business. Notwithstanding the modest reduction targets and other incentives embedded in the rules of the Exchange, which are designed to make for a very slow and non-threatening game of softball, there are—so far at least-----very few takers in the corporate world. As of last week, only about 20 companies in the U.S. had agreed to participate in the Chicago Climate Exchange. These companies are responsible for about 3 or 4% of the total U.S. greenhouse gas emissions. If you do the math and apply the 1% per year emissions reduction required of members of the Chicago Climate Exchange against the 4% of total U.S. emissions which these companies represent, what we end up with is a very small drop removed from a very large bucket. This bucket has 10,000 drops; the current members of the Chicago Climate Exchange will remove 4 of these 10,000 drops this year and 16 in the year 2006. As we have seen with the acid rain program, cap-and-trade can accomplish real environmental goals at modest cost when coupled with a mandatory set of targets. However, without regulation and governmentally-imposed sanctions, the early evidence, at least, is that the American business community is not very interested in a voluntary, greenhouse gas cap and trade program. Over the past six months, I’ve spoken or met with more than 250 companies, mostly in the Fortune 500, but smaller private businesses as well, about why they should join the Chicago Climate Exchange. I’ve also marketed the Exchange to municipalities, universities and state governments. For a cap and trade system to work, you really need only three things: 1). a target or cap representing some reduced level of emissions when measured against the past; 2). a group of participants that will reduce their emissions below the target and have excess reduction credits to sell; and 3). a group who will miss the target and need to buy credits to be in compliance with the rules of the game. What I’ve seen in marketing the Chicago Climate Exchange is that there are very few companies in this country willing to commit to buy emission credits to be in compliance with a voluntary greenhouse gas reduction program. The companies which are willing to participate in a voluntary can-and-trade program are those that see carbon trading as a way to make some money by selling excess credits, and a way to make a statement---really a gesture--- about their environmental awareness. For these companies, the ones which will be sellers of emission reduction credits, participating in a program such as the Chicago Climate Exchange is largely a risk-free, money-making opportunity. The companies we really need to join a carbon cap-and-trade program, the large emitters of greenhouse gases, those who will end up as buyers of emission reduction credits---- the utilities, the oil/gas/petrochemical companies, the cement makers, the truckers and railroads ---these companies are not yet prepared to join a voluntary cap-and-trade program. The large carbon emitters listen attentively to all the arguments: that regulation will happen sooner or later so they should get in early and learn ahead of their competitors; that Wall Street and other stakeholders are increasingly concerned about the link between the company’s carbon liabilities and its balance sheet; that the company’s overseas operations are as a practical matter subject to greenhouse gas reductions under the Kyoto Protocol or other emerging international regulations whether or not the U.S. government participates along with the international community.….Yes, they listen, some even agree to gather data on their historic levels of emission, but very few companies are prepared to reduce these emissions if it will cost them any money. Yes, it’s true that there is nothing to prevent a voluntary system from working here….other than the absence of volunteers. And that is precisely what we have----the absence of volunteers. And, why after all, should any one American company agree to take the lead on voluntary greenhouse gas reductions? Where are their competitors on this issue? Why be a pioneer when it will just cost them money, threaten their market share, and worst of all, even if they agree to join a voluntary reduction program, where’s the assurance that Washington will recognize their early participation in a voluntary program, and not later create legislation which raises the bar and penalizes the early movers? The image here is that pioneers were the ones who ended up with arrows in their backs. Long-term thinking about the environment being in short supply in corporate America, our business leaders generally ignore, or forget, the fact that many pioneers ended up, not with arrows in their backs, but as the owners of very valuable real estate. In the absence of rules and clear guidelines, the field evidence I have is that most American businesses would prefer to sit this one out from the sidelines. Washington needs to provide firm rules and regulations if you expect corporate America to respond. When it comes to climate change, voluntary action in the real world means hardly any action at all. As S. 139 recognizes, a cap-and-trade system is likely to be cost-effective in reducing greenhouse gas emissions, provided it is a mandatory system. A mandatory carbon cap-and-trade program, such as S. 139, will cause some disruption, some adjustments in everyone’s business-as-usual behavior, and it is not--- at least not in the short term---without some costs. However, the costs are regularly exaggerated, and the benefits often ignored by the business community. A recent MIT study on S 139 showed that its enactment would affect household purchasing power by less than 1/10th of 1 %. The gains in energy efficiency and in technological innovation which will follow once we start to constrain carbon emissions in this country will far outweigh any of the short term burdens which will be imposed upon the business community. And over time, the cost of compliance will turn into real and large levels of cost savings. A recent analysis of S 139 by the Tellus Institute shows that as this legislation is implemented over time, it will ultimately yield net cost savings to American consumers of some $50 billion per year. Real, meaningful action on climate change is not an academic or theoretical issue anymore. A March, 2003 Gallup poll found that 75% of Americans support “mandatory controls on carbon dioxide and other greenhouse gas emissions.” In a recent University of Oregon poll, some 80% of Americans said that climate change is a real problem and one for which the business community should take direct responsibility. Many in the business community understand the magnitude of global warming. They are waiting for our political leadership to devise the necessary rules and policies. Without regulation, the business community will stay in its comfort zone, and continue to wait and delay action on this critical world issue. Scientific understanding today of climate change is clear and certain enough to point public policy in one direction and one direction only. We do not really need more research on the relationship between clouds and climate change before we take action. We do not need to wait a decade for energy research to magically deliver a silver bullet, which will never arrive unless the private sector has a clear incentive to invest in innovative solutions. No, what we need is to take action now to reduce our greenhouse gas emissions. We are kidding ourselves if we think that a plea for voluntary action to reduce greenhouse gas emissions in the U.S. will accomplish anything. Climate change is, as the World Business Council said not too long ago, the single biggest issue facing the world business community. The American business community has a special responsibility here to participate fully and actively in finding the right solution. We emit 25% of the world’s greenhouse gases. S. 139 is a path-breaking, innovative step, a bold effort to take America in the right direction on a critical issue for the future of our world. Only with a mandatory set of greenhouse gas emission targets will we make any meaningful progress in winning this crucial war with carbon. Thank you. Ethan J. Podell Trained as a lawyer, Ethan Podell spent over twenty years as an entrepreneur in television programming and distribution. He co-founded and built two private media enterprises, active in both the U.S. and European markets. Both companies—Orbis Communications and Orbis Entertainment---were eventually sold to publicly-traded entertainment companies. Podell has served as chief financial officer (Orbis Communications Inc.) and chief executive officer of Orbis Entertainment Company (later All American Orbis), where he was responsible for client relationships, program creation and sales. Podell began his career in 1978 as a lawyer for O’Melveny & Myers in Los Angeles, and then worked in legal and business affairs for CBS and HBO, before starting his first company Several years ago Ethan Podell began an entirely new career focused on environmental issues, in particular business opportunities connected with climate change and greenhouse gas trading. As a consultant, Podell developed a marketing strategy for greenhouse gas trading in the U.S. (for a unit of Cantor Fitzgerald), and recruited clients for the first voluntary greenhouse gas trading program in the U.S. (Chicago Climate Exchange), where he was senior vice president for sales and marketing. Podell recently founded Orbis Energy Advisors Inc., a finance and consulting company focused on the business of climate change and renewable energy. Podell is active in E2, a national community of professionals and business people promoting environmental protection while building economic prosperity. He has also done pro bono work as a lawyer and business adviser for the Rainforest Alliance and The Nature Conservancy. Ethan Podell earned his undergraduate degree at Brown University (B.A. 1974) where he was elected to Phi Beta Kappa. He holds a Masters from the University of Chicago (Committee on Social Thought, 1975) and a law degree from Northwestern University (1978), where he was on the editorial board of the Law Review. Podell is a member of the State Bar of California, and currently resides in New York. Ethan J. Podell President Orbis Energy Advisors Inc.
Dr. Stephen Schneider
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Witness Panel 3
Mr. John B. Stephenson
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Mr. Christopher Walker, Esq.
Introduction Good morning. My name is Chris Walker and I am the Managing Director of the Greenhouse Gas Risk Solutions team for Swiss Re in North America. Thank you for giving us this opportunity to discuss greenhouse gas emissions (GHG) and its effect on climate change. Founded in 1863, Swiss Re is North America’s leading reinsurer and the world’s second largest reinsurer and largest life and health reinsurer. The company is global, operating from 70 offices in 30 countries. Swiss Re has three business groups: Property & Casualty reinsurance, Life & Health reinsurance and Financial Services. We have 2300 employees in the US and 9000 worldwide. Natural catastrophes have always been of critical concern to the reinsurance industry. Swiss Re has paid claims on every major US catastrophe since the 1906 California earthquake. No other single factor affects the bottom line of our industry or the livelihood of our clients more than natural catastrophes. We believe that climate change has the potential to affect the number and severity of these natural catastrophes and result in very significant impact on our business. In 1994, Swiss Re published its first publication on climate change, “Global Warming, Element of Risk”. At the time, there was still uncertainly as to whether global climate change could be influenced by human intervention. Today, we recognize that global warming is a fact. The climate has changed, visibly, tangibly and measurably. One only has to look at the extreme summer heat in Europe or severe draughts in the Western United States to understand that something has changed. The question is no longer whether the climate is changing, but how the occurring climate change will affect our existence, what conclusions can be drawn from it and what can be done to mitigate the impact. Swiss Re supports strategies that serve to protect the global climate system. The need to contain potential consequences of climate change calls for a precautionary global climate protection policy. Swiss Re congratulates Chairman McCain and his entire committee for dedicating a significant portion of your busy agenda to this critical issue. Assessing the risks Climate change-driven natural disasters are forecasted to cost the world's financial centers as much as $150 billion per year within the next 10 years, according the UN Environment Program's (UNEP) finance initiative report. Our analysis indicates that climate change will impact various insurance lines of such as: • Property and casualty insurance due to potential increases in severity and frequency of storms, floods, droughts, etc., and • Life and health insurance may experience changes in mortality rates and disease vectors. To enhance our understanding of this potential problem, Swiss Re is funding a study of the health impact of climate change, undertaken by the Harvard Medical School’s Center for Health and the Global Environment and the United Nations Development Program. Offering financial solutions Swiss Re supports measures to reduce GHG emissions. At present, we see business at a crossroads for how to conduct operations in a carbon-constrained future. Responsible businesses are taking action, but do so blindly without government leadership on this issue. As a global reinsurer, we work to understand global trends. This may give us an advantage in considering the impact of long-term issues such as climate change and sustainability. Because we operate throughout the world, we are in a unique position to witness what many may not see - the consequences of changing climate on property, life and health in the developing world. The financial services industry, of which Swiss Re is a leading player, has an opportunity and an obligation to assist in solving this problem through its investment and business expertise. After all, dealing with climate change and commensurate emissions reductions are ultimately financial issues. Reinsurance can play a crucial role in grappling with broad societal issues. As an industry, we can raise awareness and change attitudes. We saw this first hand last year when we participated in the Carbon Disclosure Project with 35 financial institutions representing over $4 trillion in investments. The project wrote to the world’s 500 largest companies by market capitalisation asking for the disclosure of investment-relevant information concerning their greenhouse gas emissions. The CDP study found that while 80 percent of respondents acknowledge the importance of climate change as a financial risk, only 35-40 percent were actually taking action to address the risks and opportunities. This is not acceptable risk mitigation. Reinsurers make a living in part by understanding and anticipating risks. As an example, Swiss Re has climatologists and atmospheric physicists on staff and last year published “Opportunities and Risks of Climate Change. Once we understand the risks, we educate our clients and the public in an effort to mitigate these risks. GHG issues are just the latest example of an insurer addressing a risk that grows more prominent with every passing year. Swiss Re’s Greenhouse Gas Risk Solutions Swiss Re is an industry pioneer in identifying and incorporating risk and capital management to assist clients in dealing with emissions constraints in the most effective and cost efficient manner. We have endeavored to raise awareness of GHG risks and opportunities by hosting well-received and broadly-cosponsored conferences in 2001, 2002 and 2003 at our Center for Global Dialogue in Ruschlikon, Switzerland and in 2002 in New York City. We are considering hosting an event in Washington, DC in 2004. In 2001,we created Greenhouse Gas Risk Solutions. This unit works to determine where, when and how Swiss Re can play a role in facilitating emissions reductions. For example, my unit focuses on several relevant activities: • Providing clearing and pooling insurance geared to removing the counter-party and delivery risks that have hampered much of early stage emissions trading potential. • Raising the credit rating of renewable/alternate energy projects through the insuring of construction, technical and operational risks in projects. This insurance has the effect of decreasing the cost of capital for greenhouse-gas-reduction projects. • Assisting GHG emission reductions with investment asset management. For example, we are developing a project financing mechanism for energy efficiency projects in Eastern Europe. • In conjunction with the Commonwealth Bank of Australia, we are developing a program for voluntary emissions reductions activities for US and European corporations. Swiss Re also focuses on risks from GHG emissions reductions to our current customers. For example, we concluded that an exposure potentially exists for Directors and Officers covers (D&O - Professional Liability insurance for senior management). Companies that are not complying with climate-change related regulations could create personal liabilities for directors and officers. Non-compliance with these GHG reduction requirements potentially represents a significant risk. We are educating companies and requiring them to address this issue to prevent losses. These actions are similar to those taken in the mid-1990s before the Y2K crisis was commonly acknowledged. As we know, non-compliance of IT systems would have caused untold losses to companies and shareholders. We consider GHG-related shareholder actions to be a distinct possibility. Swiss Re has prepared a Directors and Officers questionnaire to be completed during policy renewals for corporate clients. The companies are asked questions concerning emissions, emissions reductions plans and their climate change strategy. The information provided serves as a factor for our risk and underwriting assessment. Emissions reductions efforts Worldwide, policy measures to stimulate reductions in GHG emissions are inevitable. From the emerging GHG regulation in the EU, Japan and Canada to the multitude of proposed US federal and state policies, as well as global Non Governmental Organizations initiatives, the public and other stakeholders are exerting increasing pressure for concrete action. Some companies have taken up the challenge and are voluntarily reducing their emissions footprint. But a long and demanding learning curve awaits many companies who have not made GHG reductions a part of their daily business practice. Unfortunately, for US companies operating overseas they face certainty in being regulated for their emissions overseas but potentially a patchwork quilt of non-fungible future legislation and litigation at home. At Swiss Re we believe that environmental performance is one indicator of overall business performance. Experience has taught us that proactive steps to improve environmental performance leads to better bottom line results. In our view, environment and economics are inseparable, and, as with many things, the secret to success is finding the right balance. From Swiss Re’s perspective, US regulation of emissions has many benefits including better public health and environmental improvements. We believe the best way to lessen potential loss is through sound public policy utilizing market mechanisms which strike the right balance between environmental precaution and societal policy objectives. Conclusion The issue of climate change is real, and we believe a domestic regulatory response is both necessary and inevitable. With this perspective in mind, we believe that we are better off as a company, and industry, if we develop and implement an effective moderate response now. If we wait 5-10 years, we may discover the need for a much more drastic and difficult response Thank you for the opportunity to testify before this committee. I am happy to answer any questions you may have.
Mr. Paul Gorman
Thank you, Mr. Chairman and members of the Committee: I represent members of the National Religious Partnership for the Environment, an alliance of faith groups across a broad spectrum: the United States Conference of Catholic Bishops, the National Council of Churches of Christ (a federation of 36 mainline Protestant and Orthodox communions), the Coalition on the Environment and Jewish Life (representing 29 national bodies), and the Evangelical Environmental Network (an alliance of evangelical Christian organizations). Each has its own distinctive perspectives. But we share biblical precepts for care of God’s creation, albeit with different, often imaginative forms of expression. For example, supporting renewable and solar energy programs, The Interfaith Power and Light campaign, led by the Episcopal Church, has helped over 300 congregations in California alone conserve energy, preventing 40 million pounds of carbon dioxide from entering the atmosphere. The Catholic Bishops of the Pacific Northwest issued a pastoral letter on protecting the Columbia River. “The Redwood Rabbis” have fought to preserve old growth forests. In addition to asking “What Would Jesus Drive?”, evangelical Christians have worked for extension of the Endangered Species Act. So with bishops in rivers, rabbis in forests, evangelicals in wetlands, and Episcopalians looking to the sun, we’re at least getting out of the house and perhaps making a fresh contribution. About global climate, change we have fundamental agreements, all of which have been stated in formal declarations at the highest levels of governance, which we would like to submit for the record. We are convinced of the problem’s urgency as documented by eminent scientists world-wide. To amplify a scientific consensus, we affirm a religious and moral consensus. It seems best, in this brief time --- perhaps as an introduction to those outside the faith community --- to outline four principles of this religious consensus. These are moral precepts that should guide policy. First, in Genesis, God beholds creation as “very good” (Gen 1:31) and commands us to “till and tend the garden” (Gen 2:15). Humankind is called to stewardship. Second, we read in Psalms, “The Earth is the Lord’s and the fulness thereof” (Ps 24:1). Creation’s gifts are intended for the well-being of all. Third, we have a paramount obligation to “defend the poor and the orphan; do justice to the afflicted” (Ps 82:3) and to care first for “the least of these” (Math 25:35). Care for God’s creation requires justice for God’s children and not putting innocent lives at risk. And we call upon the Senate, in your forthcoming deliberations, to address the impact of global climate change on the poor and vulnerable peoples and nations of our planet. Finally, we have an obligation to the future well-being of all life on Earth, God’s “covenant which I make between me and you and every living creature for perpetual generations” (Gen 9:12). Protecting our planet’s climate is a religious duty because it embraces everything and everyone on Earth. Stewardship, covenant, justice, intergenerational equity: these perennial principles have never seemed more meaningful and mandatory. We are all part of God’s creation. Environmental isolationism is neither morally acceptable nor faithful to God’s Law. These are high standards, easier to proclaim than to practice. We recognize challenges still before us all: the need for further scientific research; an energy policy which reduces greenhouse gas emissions and steadily moves us beyond reliance on fossil fuels; assurance of economic security and protection of workers. Human habits of materialism and over-consumption lie deeply at the root of environmental degradation. And while we understand the drive of deeply held convictions --- we have some issues here ourselves --- partisanship and short-sightedness seem to be leading to dead ends. We have to lift our vision. This is an enterprise for the entire human species. So we share these convictions not simply as articles of our own faith but toward a universal moral resolve --- a conversion of hearts and habits ? without which it would seem difficult to meet a challenge of this scale. We are grateful for your invitation to share these core beliefs. We look forward to discussing them further, and will be communicating them to individual Senators particularly during the October recess. Perhaps you will pass them on as well. But we are here to say this: the religious community is committed to help provide new momentum, as you do here, Mr. Chairman, for what must be a universal enterprise to reduce global warming for the common good.