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EU Experts Testify in Senate on Energy Bill

WASHINGTON (CN) - As energy legislation wends its way through Congress, experts from the European Union came to testify in the Senate on how to implement cap and trade regulations system while translating the pessism of nearly all climate scientists over the ability of mankind to sufficiently control its voracious appetite for energy.

"We need to learn from our friends in Europe what is working, what is not and why," said New Hampshire Democrat Jeanne Shaheen said during hearings last week.

Since 2005 the clean energy budget of the European Union has climbed from 17.7 to 49.7 billion. U.S. investments have climbed more moderately, from 10.3 to 30.1 billion.

The investment discrepancy matched the standpoints of those testifying before the Senate European Affairs Subcommittee. The three Europeans acknowledged the need for carbons emissions, including a Shell Oil economist. The lone American vehemently opposed a cap-and-trade system, arguing that it would weaken the nation's economy, something California Democratic Senator Barbara Boxer nearly chastised him for.

The Senate is currently considering a climate change bill that was recently passed by the House. If passed, it would cut the nation's greenhouse gas emissions 17 percent of 2005 levels by 2020, and by 83 percent before 2050.

"I would ask you not to do the same in the United States," advised Energy and Climate Policy Head Wolfgang Weber of the BASF Group, a chemical company. He said the European Union established "quick and dirty" regulations.

One of its mistakes was a failure to reanalyze companies every few years. Weber said the current system in Europe can punish companies that become more efficient but that expand, and it can reward shrinking companies that fail to adapt. By analyzing companies every few years, a cap-and-trade system could keep emissions expectations tied to the size of the company.

Weber, who is German, did mention that union was right in establishing a cap on emissions without the goal of earning revenue from companies. He said it is essential that companies are left with enough money to invest in greenhouse gas reduction.

Shaheen voiced her concern that climate policy could harm cement, steel, and petroleum industries, and bring about job losses to China.

"We can't see any significant relocation of investment," said German Felix Matthes from the Institute of Applied Ecology. On the whole, only a few sectors- steel, iron, and some chemicals- were negatively affected, he added.

Matthes made the case that emissions regulations costs in Europe are not over burdensome, calculating off-hand that it costs EU households no more than 90 euro a year, or "nine to eighteen good German beers a year," he said.

Shaheen said she likes when things are put into perspective.

But Royal Dutch Shell Chief Economist Steven Fries appeared at odds with Matthes, and said "higher costs could ultimately drive investments and production capacity to countries with no climate policies," and that global competition will be uneven until all major economies restrict greenhouse gas emissions.

He expressed hope that all industrial nations adopt carbon reduction regulations.

Ben Lieberman from the Heritage Foundation, a conservative think tank, was the only American who testified. He ripped the EU cap-and-trade process as plagued by fraud and unfairness. He said Europe should not discourage coal use in light of Russia's recent gap pipe shut-off.

He also attacked the system from an economic standpoint. "Strong economies innovate better than weaker ones," he added, and said that cap-and-trade weaken economies. He mentioned Spain's 18 percent unemployment rate, and said the cap-and-trade program had contributed to Europe's weak economy.

As the conservative American analyst testified, the Europeans continued to look stiffly straight ahead.

It should be noted that the European Union has recently recorded lower unemployment rates as a whole than the United States. Just in May, for example, the United States reported 9.4 percent unemployment, while the EU recorded 8.9 percent.

Boxer walked in as the hearing was closing, but she squeezed in some final pointed questions. "Clearly you're ahead of us on all of this," she said to the Europeans, then asked if they believed a properly implemented clean energy programs can boost the economy and create jobs.

"I'm a designated no," Lieberman stated.

"That's fine. That's fine," Boxer said in a tone that indicated it was not. "I totally disagree," she quipped.

"The true cost of carbon has not been reflected," she argued, referring to the devastation carbon is causing by means of global warming. A cap-and-trade program would likely increase the cost of emitting carbon.

Before leaving, Boxer posed one final question. "How many parts go into a windmill?" she asked.

Shaheen asked if the question was a joke.

But Boxer, full of glee, said she thought there is enormous job potential in clean energy and called the clean energy industry a "bright spot" in the economy.

Nonetheless, Chief Economist of Royal Dutch Shell Steven Fries outlined the dim future of human ability to turn climate change.

"Much more energy will be needed to support rising living standards, particularly in emerging markets and developing countries," he said. "At the same time, carbon dioxide emissions from energy will have to fall substantially to mitigate climate change."

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