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Mr. Chairman and Members of the Subcommittee, thank you for the opportunity to appear before you today to discuss “Climate Change and Vulnerable Societies: A Post-Bali Overview.”

I would specifically like to address the United Nations (UN) Climate Change Conference held in Bali in December 2007; how the United States promotes international cooperation on climate change; its engagement with the Alliance of Small Island States (AOSIS); and ways in which the United States and the UN can work together to protect vulnerable societies.

1. December 2007 Bali UN Climate Change Conference

The UN Climate Change Conference held December 3-15, 2007, in Bali, Indonesia, was the largest such conference held to date. There were over 10,800 participants, including over 3,500 delegates from 188 Parties and 3 Observer States, more than 5,800 individuals from observer organizations, and nearly 1,500 media representatives.

The United States’ three negotiating objectives for Bali were: (1) to reach consensus on launching negotiations on a post-2012 climate change arrangement; (2) to ensure that we had a comprehensive negotiating roadmap that would include the prospect of meaningful actions by both developed and developing countries to tackle the climate change challenge; and (3) to agree to complete negotiations by 2009 in order to prepare for implementation, which would start in 2013. All three of those objectives were met with the successful adoption of the Bali Action Plan[1].

The Bali Action Plan launches a two-year negotiation process to strengthen the international response to climate through “full, effective and sustained implementation of the Convention through long-term cooperative action, now, up to and beyond 2012, in order to reach an agreed outcome and adopt a decision” at the fifteenth session of the Conference of the Parties to the UNFCCC (COP 15) in 2009. The Plan’s consists of four fundamental building blocks:

(1) Enhanced national/international action on mitigation of climate change, including:

• “Measurable, reportable and verifiable nationally appropriate mitigation commitments or actions, including quantified emission limitation and reduction objectives by all developed country Parties, while ensuring the comparability of efforts among them, taking into account differences in their national circumstances;” and
• “Nationally appropriate mitigation actions by developing country Parties in the context of sustainable development, supported and enabled by technology, financing and capacity building, in a measurable, reportable and verifiable manner.”

(2) “Enhanced action on adaptation” that takes into account “the urgent and immediate needs of developing countries that are particularly vulnerable to the adverse effects of climate change, especially the least developed countries and small island developing States, and further taking into account the needs of countries in Africa affected by drought, desertification and floods”;

(3) “Enhanced action on technology development and transfer to support action on mitigation and adaptation”; and

(4) “Enhanced action on the provision of financial resources and investment to support action on mitigation and adaptation and technology cooperation”.

In addition, the negotiations are to address “a shared vision for long-term cooperative action, including a long-term global goal for emission reductions,” and are to be conducted under a subsidiary body under the Convention known as the “Ad Hoc Working Group on Long-term Cooperation under the Convention” (AWG-LCA).

As we move forward with the negotiations under the AWG-LCA, which begin in Bangkok March 31-April 4, the United States is committed to working with other countries to reach an agreed outcome that is both environmentally effective and economically sustainable. Only an arrangement meeting both of these objectives can win public support.

To be environmentally effective, a new approach must be truly global and involve measurable, reportable, and verifiable actions by the world’s largest producers of greenhouse gas emissions¾both developed and developing countries alike. Without substantial participation by developing economies, global greenhouse gas emissions will continue to rise over the next 50 years, even if the United States and other developed countries cut their emissions to zero.

To be economically sustainable, our actions must uphold the hopes of people everywhere for economic growth, energy security, and improved quality of life. Lowering the cost of emissions reductions requires speeding up the development and deployment of technologies that will fundamentally improve the way we produce and consume energy—such as the capture and storage of carbon dioxide emitted from coal-fired power plants; more affordable nuclear and gigawatt-scale renewable power; biofuels, electric, natural gas, hydrogen, and other clean alternatives to petroleum; and greater energy efficiency. In the absence of technology and cost advances in these areas, reducing global emissions on the necessary scale will be impossible without significantly sacrificing economic growth globally.

2. Promoting International Cooperation on Climate Change

President Bush has repeatedly highlighted the importance of international cooperation in developing an effective and efficient global response to the serous, complex and long-term challenge of climate change.[2]

Under President Bush’s leadership, the U.S. has brought together nations to tackle jointly clean energy technology and climate change challenges. As shown in Attachment 2, 102 nations and the European Union are participating in these bilateral and multilateral collaborations.

Since 2001, the United States has initiated a broad array of bilateral and multilateral collaborations focused on achieving practical results that can accelerate development and commercialization of new technologies, advance climate change science, and address deforestation and adaptation to climate change. These include 15 bilateral climate partnerships[3] with key countries and regional organizations , as well as multilateral technology partnerships, such as the Asia-Pacific Partnership on Clean Development and Climate (APP), Carbon Sequestration Leadership Forum (CSLF), Group on Earth Observations (GEO), Generation IV International Forum (GIF), Global Nuclear Energy Partnership (GNEP), International Partnership for a Hydrogen Economy (IPHE), and Methane to Markets Partnership (M2M).[4]

Recent U.S. advances in promoting international cooperation on climate change and the environment are discussed below and include:

· Accelerated phase-out of ozone-depleting hydrochlorofluorocarbons (HCFCs);

· The Major Economies Process on Energy Security and Climate Change;

· The Asia-Pacific Partnership on Clean Development and Climate;

· Innovative financing mechanism;

· Proposed elimination of tariff and non-tariff barriers for clean energy goods and services;

· Washington International Renewable Energy Conference 2008 (WIREC 2008); and

· Domestic investment in cleaner, more efficient technologies and international assistance to address climate change mitigation and adaptation and deforestation and other domestic action.

Cooperation with Alliance of Small Island States (AOSIS) Members States is also highlighted where relevant.

Accelerated Phase-Out of Ozone-Depleting Hydrochlorofluorocarbons (HCFCs) [5]: Following a proposal and strong endorsement by the United States, the 191 Parties to the Montreal Protocol—including all AOSIS Member States—reached an historic agreement to accelerate efforts to ensure recovery of the stratospheric ozone layer at a September 2007 meeting in Montreal. The Parties agreed to speed up by a decade the phase-out of hydrochlorofluorocarbons (HCFCs), which were originally considered transition chemicals used as substitutes for chlorofluorocarbons (CFCs) because they deplete the ozone layer less. The agreement will also have substantial benefits for the climate system as it will spur development of new alternatives to HCFCs that have low or no global warming affect and will reduce greenhouse gases by at least 3 billion metric tons over the coming decades.

Major Economies Process on Energy Security and Climate Change[6]: In May of last year, President Bush announced the United States would work closely with other major economies to develop a detailed contribution to a new global arrangement under the UNFCCC.[7] This “Major Economies” initiative has received broad international support, including from G8 and Asia-Pacific Economic Cooperation (APEC) leaders and UN Secretary General Ban Ki-moon. The United States hosted the first meeting in late September 2007, bringing together 17 major economies accounting for nearly two-thirds of the world’s population, more than 80 percent of the world’s economic output, 80 percent of global energy use, and nearly three-fourths of global greenhouse gas emissions.

Guided by the consensus in Bali, the Major Economies met again in Honolulu, Hawaii on January 30-31, 2008, to discuss a work program that can contribute to key elements of the Bali Action Plan. Among the topics discussed were: (1) a long-term, global emissions reduction goal; (2) national plans that include mid-term goals, backed by a nationally-appropriate mix of regulations, incentives, and public-private partnerships; (3) cooperative technology strategies and other actions in key sectors, especially fossil power generation, personal transportation, and sustainable forest management; (4) innovative financing mechanisms and the elimination of tariff and non-tariff barriers for clean energy goods and services; (5) improved emissions accounting systems to verify progress; (6) ways to help countries adapt to climate change and gain access to technology, especially for developing countries; and (7) ways of structuring a post-2012 arrangement that would encourage, rather than deter, actions by major developing and developed countries, and incorporate positive, not punitive, ways to ensure accountability.

We hope these discussions, which will continue at the Third Major Economies Meeting to be hosted by France in April, will produce tangible outcomes that can be endorsed at a Major Economies Leaders’ Meeting later this year. This would fulfill last year’s G8 pledge for the Major Economies to make a “detailed contribution” to the UN negotiations.[8]

Asia-Pacific Partnership on Clean Development and Climate (APP)[9]: The Asia-Pacific Partnership for Clean Development and Climate (APP), launched in January 2006 by ministers from Australia, China, India, Japan, Republic of Korea, and the United States, is addressing increased energy needs and the associated issues of air pollution, energy security, and climate change. The APP provides a unique opportunity to engage China and India in constructively moving their energy economies toward a more climate-friendly direction. At last October’s New Delhi APP Ministerial Meeting, Canada became the seventh member of the Partnership. This innovative public-private sector effort is accelerating the development and deployment of cleaner, more efficient technologies through more than 110 individual projects in major sectors such as power generation, cement, steel, aluminum, and buildings. For example, a majority of the world’s major aluminum producers have committed to 2010 reduction goals from 1990 tailored to their capabilities, including an 80 percent reduction from perfluorocarbon (a very potent greenhouse gas) emissions per ton of aluminum produced for the industry as a whole; at least a 33-percent reduction of fluoride emissions per ton of aluminum produced; and a 10-percent reduction in average smelting energy usage per ton of aluminum produced.[10] The President’s fiscal year (FY) 2009 Budget request includes $52 million to support APP.

Innovative financing mechanism: In his September 28, 2007 address to the first Major Economies Meeting, President Bush proposed that Major Economies “join together to create a new international clean technology fund . . .supported by contributions from governments from around the world . . . [to] help finance clean energy projects in the developing world.” The President asked Treasury Secretary Hank Paulson to coordinate this effort and to begin exploratory discussions.[11]

In his State of the Union address last month, President Bush announced he is committing $2 billion over the next three years to create a new international clean technology fund[12] and his FY 2009 Budget request for the Department of the Treasury includes $400 million for the first payment. The proposed clean technology fund has three major objectives: first, to reduce emissions growth in major developing countries through accelerated deployment of clean technologies; second, to stimulate and leverage private sector investment in existing clean technologies; and third, to encourage developing countries to pursue environmentally sound policies to reduce greenhouse gas emissions. The United States believes countries seeking access to the fund should be undertaking credible national plans to limit greenhouse gases and have those plans reflected in a post-2012 international climate change arrangement. The United States also believes beneficiaries of the fund should be prepared to work in good faith to eliminate trade, regulatory and other investment barriers for clean energy and other environmental goods and services. The fund will address the growing problem of accelerating greenhouse gas emissions growth in major developing countries like China and India, and will help ensure that the developing country demand for energy will be met with clean energy projects by supporting the additional cost of clean technology investments over their dirtier alternatives. The Administration is working with major donor and developing countries to create a multilateral fund that will catalyze resources of the multilateral development banks and the private sector to create innovative financing instruments to spur clean technology investments in the major developing country economies.[13]

Proposed Elimination of Tariff and Non-Tariff Barriers for Clean Energy Goods and Services: Another avenue to help accelerate use of cleaner, lower-carbon technologies and infrastructure is through elimination of tariff and non-tariff barriers for clean energy goods and services. Last November, the United States and EU jointly proposed in the World Trade Organization to rapidly eliminate the tariff and non-tariff trade barriers that impede investment in clean technologies and services. The World Bank has estimated that removing such barriers from about 40 climate-friendly technologies whose global trade totaled $130 billion in 2006 would lower the cost of cutting emissions and could increase clean technology trade by an additional 7-14 percent.[14]

Washington International Renewable Energy Conference 2008 (WIREC 2008)[15]: Next week, the United States will host the Washington International Renewable Energy Conference 2008 (WIREC 2008) in Washington, DC, March 4-6. WIREC 2008, the third international ministerial-level event on renewable energy, will be a key opportunity for government, industry and civil society leaders to advance the integration of renewable energy and advanced shared goals for climate, sustainable development and energy security. It will focus on rural development, finance, commercialization/market adoption, research and development, as well as other cross-cutting issues, and includes a ministerial-level meeting for governments (federal and local), the private sector and civil society, and co-located, but separately-managed trade show and exhibition. We are aware that renewable energy is of particular interest to AOSIS and its Member States and pleased that we expect attendees to include officials of ministerial rank or higher from 12 AOSIS Member States[16].

Domestic Investment in Cleaner, More Efficient Technologies and International Assistance to Address Climate Change Mitigation and Adaptation and Deforestation and Other Domestic Action: The United States will continue its massive domestic investment to develop and deploy cleaner, more efficient technologies, to address adaptation to climate change and deforestation— both domestically and internationally. From FY 2001-2008, the United States will have invested nearly $45 billion for climate change — $22 billion for technology research and development, $15 billion for science, $6 billion for tax incentives, and $2 billion for international assistance — and the President’s FY 2009 Budget requests nearly $8.6 billion for climate-related activities. In addition, $38.5 billon in loan guarantees for clean technology is available through FY 2009 and an additional $4 billion in loan guarantees is available until used.[17]. The U.S. and Japan account for most global spending in this area and we encourage other countries to step up their efforts.

The U.S. will also continue its strong support of the Global Environment Facility (GEF) [18], the financial mechanism under the UNFCCC, and the Tropical Forest Conservation Act (TFCA) [19] to address climate change mitigation and adaptation and deforestation, which accounts for roughly 20 percent of global greenhouse gas emissions. For FY 2009, the Administration is requesting $80.0 million for the GEF for the third of four payments toward a total U.S. contribution of $320 million pledged during the fourth replenishment (GEF-4), and a total of $20 million for TFCA. We are also combating illegal logging and the export of illegally harvested forest products in Africa, Asia, and Latin America through the President's Initiative Against Illegal Logging[20], including in the Congo Basin Forest Partnership to better manage 80 million hectares — an area the size of Texas — in the world’s second largest tropical forest.

The United States collaborates with developing country partners—including a number of AOSIS Member States—in a broad range of activities designed to better understand climate and its implications for development and to build resilience to climate variability and change. These activities include analyzing data from Earth observations, developing decision support tools, and integrating climate information into development programs and projects. All of these activities assist these countries in developing stronger institutional capacity and more flexible and resilient economies that have the ability to address both the challenges and the opportunities presented by changing climatic conditions.

The ultimate goal of adaptation is to develop flexible and resilient societies and economies. A diverse, robust, and open economy can better withstand many types of disruptions, including those related to climate events. The greatest progress will be assured through strategies that together improve energy security, alleviate poverty, reduce harmful air pollution, and reduce greenhouse gases.

Good governance, sustainable economic growth, environmental protection, and poverty alleviation go hand in hand. Well-governed societies are inherently more resilient and adaptable to changing economic, social or environmental conditions of all kinds. The Millennium Challenge Corporation (MCC), whose mission is to reduce global poverty through the promotion of sustainable economic growth, is particularly relevant.[21] MCC is based on the principle that aid is most effective when it reinforces good governance, economic freedom and investments in people. Focused MCC effort has produced a portfolio of 16 compacts with countries in Africa, Central America, Eurasia, and the Pacific — including with AOSIS Member States Cape Verde and Vanuatu—totaling $5.5 billion. In addition, 15 threshold agreements have been signed — including with AOSIS Member States Guyana and São Tomé and Príncipe — totaling nearly $325 million. The President’s FY 2009 Budget request for the MCC is $2.225 billion.[22]

The United States is also collaborating internationally on monitoring and adaptation tools, such as the Global Earth Observation System of Systems (GEOSS) being developed by the Group on Earth Observations (GEO)[23]. GEOSS will help give communities early warning of natural disasters, and improve decision-making for agriculture, coastal development and other economic sectors that are affected by climate variability and change. A key U.S. contribution to GEOSS is SERVIR, supported by NASA and U.S. Agency for International Development (USAID). “Servir” is the Spanish word for “to serve,” and SERVIR is a system that enables researchers and decision makers in Central America to use U.S. satellite data for environmental monitoring and management. Over the past two years, USAID and NASA have been working to extend the SERVIR model globally. A new hub is being established in East Africa, with funding in the President’s FY 2009 Budget request for two more regional hubs in Africa and one in Asia (which would support AOSIS member states).

USAID is a leader among development agencies in the area of adaptation to climate change. USAID’s Global Climate Change team released an Adaptation Guidance Manual in 2007. The Adaptation Guidance Manual is designed to assist USAID missions and other development partners to understand, analyze, and respond to the potential impacts of climate change on development challenges, and to develop effective approaches to solving those challenges. The Manual has been well received, has been widely and independently distributed by many climate change and development list serves, and is already being applied or adapted by development and climate change stakeholders in the field.

USAID is also developing guidance on best practices for coastal resilience to current and expected future risks to supplement the Adaptation Guidance Manual. The Coastal Resilience Guide will feature best practices, policy needs for an enabling environment, and guidance on finding and using data. The Guide will draw from lessons learned in post-tsunami projects, coastal resilience projects, and climate change adaptation projects in coastal areas. USAID and its partners at the University of Rhode Island are holding a workshop on the new coastal guidance at the 4th Global Conference on Oceans, Coasts, and Islands in April in Hanoi, Vietnam. Funds have been set aside to fund the participation of AOSIS participants. Furthermore, a pilot project will be implemented this year in a community in the Pacific.

Other examples of U.S. international cooperation on adaptation are the National Oceanic and Atmospheric Administration Pacific Islands Regional Integrated Science and Assessment (Pacific RISA) program, the Coral Triangle Initiative (CTI), and USAID ongoing marine/coastal management programs in the CTI area. Pacific RISA emphasizes reducing Pacific Island vulnerability to climate-related extreme events such as drought, floods and tropical cyclones and effective engagement of Pacific Island communities, governments and businesses in developing effective policies to build resilience in key sectors such as water resource management, coastal resources, agriculture, tourism, disaster management and public health.[24] The CTI, which involves Indonesia (Central and Eastern), Timor-Leste, the Philippines, Malaysia (Sabah), Papua New Guinea, and the Solomon Islands, is focusing on three primary areas: (1) protecting coral reefs from man-made and natural disturbances, (2) developing sustainable fisheries, and (3) ensuring food security for the region’s inhabitants.[25] And the U.S. Agency for International Development (USAID) is providing funding for ongoing marine/coastal management programs in the CTI area.[26]

Here at home, the Energy Independence and Security Act of 2007 (Public Law 110-140) enacted in December mandates substantial, mid-term requirements for vehicle fuel efficiency (40 percent improvement), renewable fuels (36 billion gallons annually), and efficiency of appliances, lighting systems, and government operations. The changes brought about by this law will prevent U.S. emissions of billions of metric tons of greenhouse gases into the atmosphere. Other countries are looking very closely at what we did to see how they might apply similar approaches in their countries.

3. Concluding Remarks

The United States believes it is important to engage with AOSIS and its Member States and other UNFCCC Parties, and, as noted above, has in place a wide variety of ongoing multilateral and bilateral programs to address their climate change mitigation and adaptation needs. We also engage regularly with AOSIS and its Member States during sessions of the UNFCCC Conference of the Parties and its subsidiary bodies, as well as in other UN venues, such as the Intergovernmental Panel on Climate Change (IPCC) and the Commission on Sustainable Development (CSD). We look forward to continuing our ongoing dialogue as we all work together to reach a successful climate change arrangement in 2009 that will attract broad international support.

Mr. Chairman and Members of the Subcommittee, I thank you for this opportunity to testify before the Subcommittee. I would be pleased to answer any questions you may have.

Attachment 1: Bali Action Plan

Attachment 2: U.S.-Initiated Multilateral and

Bilateral/Regional Partnerships—1 of 3

Attachment 2: U.S.-Initiated Multilateral and

Bilateral/Regional Partnerships—2of 3

Attachment 2: U.S.-Initiated Multilateral and

Bilateral/Regional Partnerships—3 of 3

*Member of the Alliance of Small Island States (AOSIS)

APP: Asia-Pacific Partnership Clean Development and Climate

CSLF: Carbon Sequestration Leadership Forum

GEO: Group on Earth Observations

GIF: Generation IV International Forum

GNEP: Global Nuclear Energy Partnership

IPHE: International Partnership for a Hydrogen Economy

MCC: Millennium Challenge Corporation—Compact and Threshold Countries

MEM: Major Economies Meeting Process

M2M: Methane to Markets Partnership