Hearings - Statement
Statement of George V. Voinovich
Hearing: Full Committee hearing entitled, “Legislative Hearing on America’s Climate Security Act of 2007, S. 2191.”
Thursday, November 15, 2007

Madam Chairman,

On what is the final hearing scheduled for S.2191 before mark-up, I again want to express my concern with the lack of time to respond to the legislative text, or receive an EIA or EPA analysis, of what may be the most significant legislation ever to appear before this committee - rivaling the Clean Air Act, Clean Water Act and other environmental statutes combined.    

This bill contemplates a massive bureaucratic intrusion into Americans lives that will have a profound impact on businesses, communities and families.  Madam Chairman, you seemed ready to disregard the modeling data presented by Charles River Associates during last week’s hearing – preferring analyses conducted by environmental organizations instead.  But this is the only comprehensive analysis of the proposal we have.  And while we may not like the story that emerges from the data, there is no credible reason to disregard its results. 

The analysis presented by Anne Smith, who is a highly regarded economist, presented a devastating critique of this policy proposal, estimating that by 2020 the policy would result in the loss of as many as 3.4 million American jobs; an annual decrease in disposable income by as much as $2500; and annual losses in GDP of $1 trillion.  Naturally, the prices of electricity, natural gas, gasoline and other necessities skyrocket under this proposal.

It is important to note that these projections are national averages.  In reality, the impacts will be far greater for states in the Midwest, Great Plains and Southeast who depend on coal for much of their electricity.  In fact, today Duke Energy, a major electricity provider in Ohio and a U.S. Cap company I might add, released data indicating that customers in their service area could suffer a 53 percent increase in electricity bills when this policy becomes effective in 2012.   

I have seen nothing that would dispute the modeling results presented by Ms. Smith.  In fact, they are consistent with what many expected from this proposal.  Senator Lieberman confirmed in last week’s hearing that this was a more aggressive and costly policy than S280, and the numbers bear this out this prediction. 

I urge my colleagues to take a hard look at Ms. Smith’s analysis.  Indeed we are staring down the barrel of a gun, as many of our environmental friends like to point out.  But the gun has two barrels – one may be climate change, but the other is our competitive position in the world market place.  And while there is little question that this policy will hurt our economy, it is far from clear that the bill will do anything to avert climate change.  In fact, if we look to EPA’s analyses of previous bills – some even more stringent than this proposal - the evidence suggests that it will not. 

I agree with the Chairman’s statement of Tuesday that we shouldn’t let the perfect be the enemy of the good.  But this problem is not so simple: the evidence suggests that this bill is neither perfect, nor good. 

Proponents of this legislation like to point to the economic impacts of previous environmental initiatives as evidence that compliance costs won’t be as dire as predicted.  And maybe the impacts won’t be as hard hitting in states that use little or no coal for electricity or that have no manufacturing base.  But in states like Ohio, we’re all too familiar with the results: natural gas prices are up 300 percent, and we’ve seen an exodus of manufacturing jobs to overseas markets, stemming largely from poorly calibrated environmental policies. 

Moreover, Carbon dioxide is more ubiquitous and more difficult to control than the criteria air pollutants subject to caps under current Clean Air Act programs.  Solving this problem is not as simple as forcing companies to install end of pipe technologies because the technologies don’t exist.  Solving this problem will require technological revolution and a wholesale transformation of our economy, centered on the way we use and produce energy.   

I will be the first to agree that there has been a void in the debate concerning the appropriate policy address climate change, leaving many to believe that cap and trade is the only policy option to address this problem.  But there are alternative policies now under consideration that are less intrusive, less costly and that will achieve greater reductions in emissions faster than what we now consider.  Policy approaches that: better stimulate actual innovation in transformative technologies; better avoid administrative complications, better address the challenge of the newly industrializing world; and that better address avoidance behavior and that limit opportunities to “game the system.”  

I urge my colleagues to slow this process down so that a reasonable policy to address climate change can be developed.  It makes no sense for us to empower a giant bureaucracy with control of nearly every aspect of the American economy, and indeed our lives, for little or no environmental benefit.  There are alternatives that should and must be considered before moving forward with this proposal.

Thank you.

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