***Army Corps***

1AC
1ACStatus Quo
Contention one is the status quo---
By 2020, 80% of lock systems will fail
Heint et al! " James Heintz Associate Research Professor & Associate Director Robert Pollin Professor of Economics & Co-Director
Heidi Garrett-Peltier Research Assistant Political Economy Research Institute Ho! Infrastructure In"estments #u$$ort the %&#& Economy'
Em$loyment( Producti"ity and Gro!th() htt$'**americanmanufacturin+&or+*files*$eri,aam,final-an./,ne!&$df
A$$ro0imately 1&/ billion short tons of commodities are trans$orted on %&#& na"i+able !ater!ays each year2an
e0tremely cost-efficient trans$ortation system 3Army Cor$s of En+ineers( 14456& 7he Army Cor$s of En+ineers
maintains and o$erates the inland !ater!ay system !hich includes 158 loc9 systems nation!ide( the a"era+e a+e of
!hich is 55 years& Accordin+ to the American #ociety of Ci"il En+ineers( #y 2020 80 percent of the lock
systems will #e functionally o#solete without new infrastructure in$estments 3A#CE( 14456& 7he estimated cost
of u$datin+ all the loc9 systems is :.15 billion&
1ACPlan
%lan& 'he (nite) *tates fe)eral +o$ernment shoul) su#stantially increase its
in$estment in Army Corps waterway )e$elopment pro,ects!
1ACCompetitiveness
The United States inland waterway infrastructure is eroding that
threatens competitiveness all current investments fail and our loc
systems are functionally o!solete
Scott" 1#$
(ASCE New Source, ASCE Tells Congress More Must Be Invested in Inland Waterways,
tt!"##www$asce$org#ascenews#sortta%es$as!&'id()*+,-./.,0-1
Testi2ying on A!ril 0. 3e2ore te 4$S$ 5ouse Trans!ortation and In2rastructure Co66ittee7s Su3co66ittee on Water 8esources and
Environ6ent, 9a6es A$ 8oss3erg, :$E$, M$ASCE, te Society7s 6anaging director o2 engineering !rogra6s, said tat efforts !y
the administration and Congress to address the growing investment deficit in waterways
infrastructure have largely !een ineffectual !ecause of political considerations tat give
!recedence to de2icit reduction and ta% cuts over the !adly needed restoration of critical
infrastructure& We can su6 u! te !resent situation concisely, 8oss3erg said 3e2ore te su3co66ittee cair, Bo3 ;i33s
(8<=io1, and te ran%ing 6inority 6e63er, Ti6 Biso! (>?New @or%'& (These policy failures at the )hite
*ouse and in Congress threaten the nation+s economic competitiveness in a glo!al
economy& ASC,+s #--. /eport Card for America+s 0nfrastructure gave the nation+s inland
waterways a grade of 1" an indication that the system is near failure& 2either 3the4
president nor Congress has done anything in the years since to improve upon that
e%tremely dismal assessment 3y ado!ting a long<ter6, syste6atic a!!roac to i6!rove te !er2or6ance and condition
o2 our national waterways$ Te Su3co66ittee on Water 8esources and Environ6ent deals wit water resources develo!6ent,
water !ollution control, water in2rastructure, conservation and 6anage6ent, and aAardous waste cleanu!$ It eld te A!ril 0.
earing to receive e&!ert testi6ony on ow te relia3ility o2 inland waterways syste6s will a22ect te country7s econo6ic
co6!etitiveness$ 8oss3erg 3egan 3y citing te 4$S$ Ar6y Cor!s o2 Engineers7 ;reat Ba%es and =io 8iver Navigation Syste6s
Co66erce 8e!ort, )//. in telling te su3co66ittee tat te 4nited States as 6ore tan )*,/// 6i o2 inland, intracoastal, and
coastal waterways$ The federal government improves and maintains almost 11"--- mi" or a!out
56 percent" of the total channel length$ This includes dredging and the installation and
maintenance of such navigation structures as locs" dams" dies" revetments" and
groins$ Te 2ederal and state govern6ents, along wit !ort autorities and carriers, e said, sare res!onsi3ility 2or te nation7s
waterway trans!ortation syste6$ Te inland waterway trans!ortation industry, e e&!lained, is caracteriAed 3y e&tensive
coo!eration and coordination on te !art o2 te !u3lic and !rivate sectors, and te waterway navigation !roCects tat 2acilitate sa2e
!assage 2or vessels are 6aintained 3y te Cor!s o2 Engineers$ Because o2 teir a3ility to 6ove large a6ounts o2 cargo, the
nation+s inland waterways are a strategic economic and military resource, stressed 8oss3erg$
An analysis 3y te 4$S$ Ar6y War College concluded tat Dte strategic contri3utions o2 tese inland waterways are not well
understood& The lac of ade7uate understanding impacts decisions contri!uting to efficient
management" ade7uate funding" and effective integration with other modes of
transportation at the national level$ 8eco66endations de6onstrate tat leveraging te strategic value o2 4$S$
inland waterways will contri3ute to 3uilding an e22ective and relia3le national trans!ortation networ% 2or te )0st century$7 Te
ad6inistration7s 3udget !ro!osal 2or 2iscal year (E@1 )/0F 2or te Cor!s o2 Engineers would !rovide GH$+ 3illion, a decrease o2 6ore
tan * !ercent 2ro6 te G* 3illion a!!roved 2or te current 2iscal year$ 8oss3erg said tat ASCE 3elieves tis level o2 s!ending is
insu22icient to 6eet te country7s national security, econo6ic, and environ6ental needs in te )0st century$ The president+s
!udget for 89 #-1: is inade7uate to meet the needs of an aging waterways infrastructure
and must !e increased"; said 8oss3erg$ Congress 6ust increase 2unding 2or te Cor!s in te co6ing 2iscal year in
order to !rotect an essential econo6ic asset and ensure A6erican co6!etitiveness in te )0st century$ Te ad6inistration7s
!ro!osal 2or E@ )/0F would reduce construction 2unding 2ro6 G0$,-H 3illion to G0$H+0 3illion, a reduction o2 0F !ercent$ =!erations
and 6aintenance 2unding would 3e down sligtly, 2ro6 G)$H0) 3illion to G)$F-. 3illion$ Te Mississi!!i 8iver and tri3utaries account
would decline 2ro6 G)*) 6illion to G)FH 6illion, or seven !ercent$ InvestigationsIte 6oney used to co6!lete !roCect 2easi3ility
studiesIwould go 2ro6 G0)* 6illion to G0/) 6illion, a decline o2 0. !ercent$ In all, te JCor!s o2 EngineersK civil wor%s !rogra6
3udget 2or E@ )/0F would 3e cut 2ro6 G*$//) 3illion in E@ )/0) to GH$+F0 3illion in E@ )/0F, an overall reduction o2 *$H !ercent$
8oss3erg told te su3co66ittee tat ASCE reco66ends G*$) 3illion in new 3udget autority 2or te Cor!s o2 Engineers in E@ )/0F
to account 2or in2lation and to alt te continuing decline in 2unding 2or te Cor!s7s wor%$ This level of funding is
necessary to ensure safe infrastructure and a sound economy& Pu!ic investment in
inland waterways" he said" is needed throughout the country to reverse the present
course of declining infrastructure$ (8orty$seven percent of all locs maintained !y the
U&S& Army Corps of ,ngineers were classified as functionally o!solete in #--<, e told te
su3co66ittee$ Assu6ing tat no new loc%s are 3uilt witin te ne&t )/ years, !y #-#- another .: e%isting locs
will !e o!solete" rendering more than = out of every 1- locs now in service outdated$ Most
loc%s now are anywere 2ro6 */ to +/ years old$ Te current syste6 o2 inland waterways lac%s resilience$ Waterway usage is
increasing, 3ut 2acilities are aging and 6any are well !ast teir design li2e o2 */ years$ /ecovery from any event of
significance would !e negatively impacted !y the age and deteriorating condition of the
system" posing a direct threat to the American economy &;
The current system maes US products uncompetitive lac of investment
is putting the US !ehind
>i!!s" 5?1=$
(Bo3, Cair6an o2 ouse co66ittee on trans!ortation and in2rastructure, su3co66ittee on water resources and environ6ent,
Co66ittee 5earing, Be&is1
In tis Co66ittee earing, we@re dealing with how /elia!ility of 0nland )aterway Systems 0mpacts
,conomic Competitiveness& And ILll start ere wit 6y o!ening state6ent and weLll turn it over to our 8an%ing Me63er
o22icial$ Again, welco6e$ Transportation savings are ey factor in economic growth$ As 2uel !rices
continue to escalate, waterway transportation !ecomes an even more via!le alternative for
shippers$ Aut an unrelia!le transportation system will inBect uncertainty in the decisions
made !y U&S& farmers and manufacturers" maing U&S& products more uncompetitive in
world marets& )hile the 2ation@s ports are rightfully called the 2ation@s gateways" the
inland navigation system provides access to foreign e%port marets for manufacturers
and commodity producers$ Water trans!ortation is 6ost 2uel e22icient, least !olluting, sa2est, and least e&!ensive
6eans o2 6oving cargo$ In addition, waterways !rovide 2reigt 6o3ility 2or !roducts tat are too large to 6ove 3y any oter 6eans$
Tere are also so6e industries located on te river tat are co6!letely de!endent on te inland waterway syste6 to 3ring in raw
6aterials to teir 2acilities$ Trade" especially glo!al trade" is increasing$ Tat 6eans te need 2or trans!ortation
services will continue to grow and grow ra!idly$ Te Muestion is not weter it will 3e 3y te rail or truc% or 3oats tat will 3e o2 6ost
3ene2it$ Te Muestion is weter or not we can !roduce an e22icient and integrated networ% o2 air!orts, railroads, igways,
waterways, and !orts tat can res!ond to a canging world econo6y$ )e are trying to run this !ill for a
2ationally integrated transportation system with an infrastructure that was largely !uilt
!efore the )orld )ar 00& We donLt do tat 2or roads, railroad, or aviation wile tere is roo6 2or i6!rove6ent in tose
sectors as well$ In general, we ave 6oderniAed in 6ost areas and our econo6y as 3ene2itted 2ro6 tose invest6ents$ Aut
when it comes to inland waterway system" we have !een investing too slowly for too
long & Ei2ty seven !ercent o2 our inland syste6 is 6ore tan */ yearsL old and F+ !ercent o2 tat syste6 is 6ore tan +/ years old$
0t is literally falling apart and we@re falling !ehind$ Navigation outages along te syste6 are increasing$ Eor
instance, te =io 8iver outages ave increased 2ro6 )*,/// ours in )/// to ./,/// ours today$ Tis trend o2 increasing outages
is e&!ected to continue$ )hile it affects the relia!ility of the system" it also foretells the lielihood
of a maBor physical failure at one of the structures& )ithout some reha!ilitation and
re!uilding" we can e%pect to pay more each year for increasingly unrelia!le system& Te
cor!s engineers are carged wit 6aintaining and i6!roving inland waterway syste6 wit te autorities and te 2unding !rovided
3y Congress eac year$ Eor decades, te Cor!s as 6ade to do wit constraint 2unding, leaving te co66anders wit no coice 3ut
to de2er so6e 6aintenance !roCects and reduce o!erations at so6e o2 te loc%s (!1$ IL6 concerned tat te Cor!s reduces te
e22iciency o2 so6e !arts o2 te syste6$ =ur sailors (!1 are adversely a22ected$ 0f this cycle is not !roen" we are
going to lose water transport as a via!le part of our inland water transportation system"
completely diverting cargo from water to rail tat would reMuire undreds o2 tousands or additional railroad cars
and additional )*,/// loco6otives$ I2 a cargo tat is currently 6oved 3y te waterway ave to 6ove 3y truc%, it would reMuire an
additional *. 6illion truc%s, 6oving in already on congested igways annually$ A2ter 5urricane Natrina, it 3eca6e o3vious tat te
warning signs were tere all along tat 6any e&!erts ad 3een telling us 2or years tat conditions were ri!e in te New =rleans area
2or a disaster$ Today, we are getting a similar warning on the 2ation@s inland waterway system
of transportation& 8inding alternative ways to move cargo will !e e%pensive if not
impossi!le$ And if transportation costs go up" the competitiveness of American products
in the world maret goes down& So addressing, and I Cust would add, I tin% so6e o2 our competitors in
the world marets are maing those investments and that puts us in a disadvantage and
uncompetitiveness that will cost us in the long run& So addressing te in2rastructure needs o2 te inland
waterway syste6 is not a3out econo6ic 3ene2its to a 2ew 3arge co6!anies$ 0t@s a!out eeping American farms
and manufacturers and !usinesses competitive and growing American Bo!s & Betting te inland
waterway syste6 decline 2urter would 3e an econo6ic disaster to add to te NationLs already signi2icant 2iscal !ro3le6s$ *aving
an inland waterways system that is a via!le alternative will eep costs down among all
modes of transportation$ I2 you ta%e inland waterways out o2 te 6i& in ter6s o2 trans!ortation o!tions, costs would go
u!, American products !ecome less competitive in the glo!al maretplace" and that
means lost Bo!s& TatLs wy I can say I a6 a 2iscal conservative, and I su!!ort investing in A6erica were tose
e&!enditures sto%e te 2ires o2 our econo6ic engines and create Co3s trougout our econo6y$ Eor a tiny !ercentage o2 te G0
trillion 2ailed sti6ulus !rogra6 in )//- or te GH*/ 3illion Co3s !rogra6 recently suggested 3y te Ad6inistration, we could s!end
te G. 3illion necessary to reca!italiAe te inland waterway syste6 << tat is to 2inis te !roCects under construction and 3egin and
2inis te slate o2 autoriAed !roCects$ ;iven our econo6ic conditions, I %now tat co6ing wit additional !u3lic 6oney is going to 3e
a uge callenge$ So I tin% it 6a%es sense to e&!lore 2inancing o!tions$ Te Ad6inistration as suggested a new loc%age 2ee and
Inland Waterways 4ser Board as develo!ed a co6!reensive !lan o2 increased user 2ees and canges to te current cost<saring
arrange6ent$ Ay these ideas to deserve more consideration" 0 thin it is time to thin further
outside of the !o% and consider enhanced pu!lic$private partnerships& A significant part
of proBect delays has come from proBect funds !eing partialed out to Corps engineers in
small amounts that drag the proBect out over many years than necessary$ :era!s a !rivate
investor can su!!ly oter 2unds needed u!2ront and !aid 3ac% over te e&tended !eriod o2 ti6e$ I tin% tis is a !ossi3le !aradig6
wort e&!loring$ I welco6e our witnesses today and I loo% 2orward to earing 2ro6 you, and at tis ti6e, I will yield to 6y 8an%ing
Me63er, Mr$ Biso!, 2or any co66ents you 6ay ave$
Maintaining te waterway syste6s is necessary to reverse tis and increase 4S
co6!etitiveness
Cica" 11$
(9on B$, Cair6an o2 te Trans!ortation and In2rastructure Co66ittee, Se!te63er 0-, 5EA8IN; T= E=C4S =N INBAN>
WATE8WA@S T8ANS:=8TATI=N S@STEM, tt!"##trans!ortation$ouse$gov#news#:8Article$as!&'NewsI>(0F-,1
Wasington, >C ? A Congressional hearing on )ednesday will focus on the importance of the
nation+s system of inland waterways" and the challenges in maintaining this aging !ut
economically important transportation system&
Te 4$S$ 0nland )aterways Transportation System is the nation+s most cost$effective and
energy efficient means for transporting commercial goods" especially maBor !ul
commodities lie grain" coal" and petroleum products& This transportation system is also
a ey component of state and local economies and Bo! creation efforts and is essential in
maintaining economic competitiveness and national security&
Bene2its o2 te syste6 are nu6erous$ Barges 6oving on waterways are sa2er, 6ore 2uel e22icient, and less !olluting tan oter
6eans o2 trans!ortation$ =ne 0*<3arge tow on a river can carry as 6uc cargo as )0, rail cars or 0,/*/ large truc%s$ Tirty<eigt
states are directly served 3y te Inland Waterways Trans!ortation Syste6, constituting ,F/ 6illion tons o2 cargo valued at 6ore
tan G0./ 3illion annually, at an average annual savings o2 G-$) 3illion$
Cany of the facilities on the system are 6- years old or more" and delays and congestion
on the aging system can cause transportation cost increases& Deeping these costs low
!enefits U&S& consumers and maes U&S& products more competitive on the world maret&
Caintaining an e%port$!ased economy is necessary for competitiveness
and economic growth
Detels" 1-$
(Cristian, 5arvard Business Scool 2aculty at :ro2essor Micael E$ :orterLs Institute 2or Strategy and Co6!etitiveness, E&!ort
Co6!etitiveness" 8eversing te Bogic, tt!"##www$isc$3s$edu#!d2#WBOE&!ortOCo6!etitivenessOMarc)/0/$!d21
In :orter7s co6!etitiveness 2ra6ewor% (:orter, 0--/P :orter, 0--.1, competitiveness essentially means
productivity& Productivity is at the heart of the framewor" !ecause it is seen as the
critical driver of longEterm sustaina!le prosperity" te outco6e tat is seen as te relevant ulti6ate o3Cective
o2 econo6ic !olicy$ Tis is an i6!ortant !oint 3ecause many e%portEled policies were motivated more !y
intermediate o!Bectives lie generating Bo!s or creating e%port revenues to cover import
costs or serve foreign de!t o!ligations$ Tere is noting wrong wit tese o3Cectives 3ut tey are neiter
necessary nor su22icient 2or !ros!erity growt$ More s!eci2ically, competitiveness means the level of
productivity that companies can achieve in a location given the full !readth of conditions
tat a22ect teir activities tere$ It is te structured a!!roac towards organiFing these conditions and the
systemic relationships !etween them that is at the heart of the competitiveness
framewor (:orter et al$, )//.1$ E6!irical wor% as con2ir6ed te ig correlation 3etween strong !er2or6ance on tese
conditions and !ros!erity levels across countries (:orter et al$, )//.1$ ,%ports have a dual role in this
frameworG they (and a nu63er o2 oters wit te sa6e Muality, including i6!orts, E>I, and invest6ent1 are
intermediate indicators and ena!lers of competitiveness& They are signs of underlying
competitiveness the more productive you are" the more you will !e a!le to sell" all else
eMual$ But they are also contri!utors to competitiveness the more you e%port" the more
you are e%posed to foreign competition and ideas which in turn will improve your
capa!ilities and push you to mae !etter use of the capa!ilities you already have$ Te
o3servation tat e&!orts contri3ute to co6!etitiveness even toug tey are not a 2unda6ental driver !rovides a rational e&!lanation
2or wy e&!ortQ oriented !olicies ave still 2ared 6uc 3etter tan oter !olicies, 2or e&a6!le i6!ort su3stitution, even i2 tey ave
not 3een an unMuali2ied success$
,%port !ased economies are critical to foreign$direct investments that
sustain the US economy
Hhang" 6$
(Nevin, >e!art6ent o2 Econo6ics, Illinois State 4niversity, 5ow >oes E>I A22ect a 5ost Country7s E&!ort :er2or6ance' Te Case
o2 Cina, tt!"##2aculty$wasington$edu#%aryiu#con2er#&ian/*#!a!ers#Aang$!d21
An empirical assessment of the role of foreign direct investment I810' in a host country+s
e%port performance is important" since e%ports have !een for a long time viewed as an
engine of
economic growth & There is a widely shared view that 810 promotes e%ports of host
countries !y
Ia' augmenting domestic capital for e%ports" I!' helping transfer of technology and new
products
for e%ports" Ic' facilitating access to new and large foreign marets" and Id' providing
training
for the local worforce and upgrading technical and management sills$
8oreign direct investments stop conflict among states outweighs trade
Polache et& Al" =$
(00<)., Solo6on, ;lo3aliAation and International Con2lict" Can E>I Increase :eace',
tt!"##www$city$acade6ic$gr#s!ecial#events#econo6icsOandOsecurity/-#)//,#0/<!olace%$!d21
The main mechanism through which 810 influences international relations is similar to
the way trade influences international relations$ 810 !enefits !oth home and host
countries& 0f the home country of the C2C or the host country+s government initiate
conflict and as a result direct investment decreases" then many of the gains are lost& )e
argue that in order to protect these gains" !oth governments will reduce conflict and
promote cooperation" much lie why the governments of trading partners try to maintain
a peaceful relationship with each other$ Te advantage o2 E>I 2or te o6e country co6es 2ro6 6ultinationals,
te E>I agents$ In 6ost econo6ies, te scale o2 !roduction o2 6ultinationals leads to teir using te 6ost advanced tecnology and
6anage6ent tecniMues, along wit large 8R> invest6ents$ This can result in high payoffs for the national
economy and as a result it can lead to multinationals potentially having a high degree of
influence on the policies adopted !y the government of the home country& The
advantages of 810 to the host country are more o!vious& 1irect investment in the host
country !rings new technologies" management techni7ues and human capital& So6e o2 tese
6ay 3e non<rival goods and tere2ore can 3e sared 3y local 2ir6s$ S!eci2ically" 810 can generate productivity
spillovers which might !e captured !y local firms$ Troug tese s!illovers, te ost country can acieve
wat it could not troug do6estic invest6ents or trade in goods and services$ 8urthermore" multinationals
provide training to their worers and the increase in worer productivity could !e
!eneficial to local firms if these worers switch employers later on& 0n addition to tese
spillovers" multinationals may provide intermediate inputs at a lower cost to the host
country and demand inputs from local firms$ Tey also contri3ute to ost countries7 2iscal revenues troug
cor!orate ta&es$ 0n contrast to short term capital inflows which could desta!iliFe the host
country economy" the long$term nature of 810 maes it more sta!le and therefore is less
disruptive to the national economy& H 0n fact" empirical evidence suggests that 810 has a
positive and significant effect on the growth of real per capita income of the host country
(see 2or e&a6!le, BorensAtein, et$al 0--., Nawar, )//*1$ 0f the home country of the C2C or the host
country+s government initiate conflict and as a result direct investment decreases" then
many of the gains are lost& )e argue that in order to protect these gains" !oth
governments will reduce conflict and promote cooperation, 6uc li%e wy te govern6ents o2 trading
!artners try to 6aintain a !eace2ul relationsi! wit eac oter 5owever, a careful e%amination of the
comparative advantage of 810 may yield stronger reasons why it may reduce interstate
conflict more than trade$ 1irect investment has certain attri!utes that trade does not
possess$ Eor e&a6!le, its long term nature differentiates it from trade& 0n the case of trade"
one country can change its partners more fre7uently and easily when an adverse
situation is encountered$ Eor e&a6!le, if war !reas out !etween two countries" the traded
goods can !e held or delayed" or even transferred to another destination$ Te loss resulting 2ro6
te ter6ination o2 trade 3etween tese two countries can 3e 6ini6iAed$ 9et this is not the case for 81I& Jnce
investments are made" multinationals cannot withdraw investments ar!itrarily$ Te loss
resulting 2ro6 interstate con2lict can continue 2or a long ti6e wit te cost not 3eing recovered$ Based on tis, multinationals
may use their power to push !oth governments" or at the very least the home
government to adopt cooperative policies rather than conflictual ones $ In addition, te ost
govern6ent 6ay 3e induced to ado!t coo!erative !olicies in order to de6onstrate a 2riendly i6age towards E>I in order to attract
2urter invest6ents 2ro6 oter countries$ Therefore" the resulting conse7uence is liely to !e
cooperative relationships !etween countries and less conflict$
Canufacturing competitiveness is also necessary to sustaining the
economy
0gnite" 11$
(>ece63er, 4S Manu2acturing Co6!etitiveness Initiative, Soice o2 A6erican Ba3or Beaders on Manu2acturing Co6!etitiveness,1
:ers!ectives on A6erica7s Econo6ic Euture Bi%e tose wo !artici!ated in te !revious Ignite re!orts, the state of the
U&S& economy and the potential fallout of other glo!al economic crises were also of
significant concern 2or te la3or leaders !artici!ating in tis re!ort$ Wile 6ost !artici!ants e&!ressed concern a3out te
s!eed o2 te current econo6ic recovery, so6e were o!ti6istic and 2elt te u!co6ing )/0) elections and te current so2tening o2 te
4$S$ dollar would result in increased econo6ic activity and so6e 6anu2acturing Co3s returning to te 4nited States$ Still, a 6aCority
o2 te !artici!ants 2elt tere was a reasona3le cance te 4$S$ econo6y would 2all 3ac% into anoter recession witin te ne&t 0)
6onts$ Participants consistently e%pressed concern that factors necessary to drive the
economy toward a sustained and ro!ust recovery today or in the near term are not
present& Cany noted the a!sence of net e%ports, li6ited e6!loy6ent o!!ortunities and te lac% o2 su3stantial
3usiness invest6ent, as well as e&!iring trade agree6ents, as clear signals tat the U&S& economy could get worse
!efore it gets !etter and" therefore" liely result in continued high unemployment$ Wile
!artici!ants a!!lauded recent iring activity in te 4$S$ 6anu2acturing sector, tey 2elt 6ore could 3e done (e$g$ incentives 2or iring
4$S$ wor%ers1 to accelerate te rate and volu6e o2 new ires$ :artici< !ants also e&!ressed concern a3out te long<ter6
sustaina3ility o2 recent ires, noting 2ears tat suc Co3s 6igt 3e lost again in te near 2uture i2 te econo6y stalls$ Cany also
felt the Bo!s crisis was the most important issue impacting the economy today"
descri!ing the U&S& de!t situation as a (fae de!ate; centered on an issue that is not as
urgent as other challenges impacting the U&S& economy& Participants descri!ed U&S& de!t
as an important long$term issue that will need to !e addressed to ensure a healthy"
growing U&S& economy for generations to come& In addressing !u3lic !olicy centered on Co3 creation in te
4nited States, a 6aCority o2 te la3or leaders 2elt legislation li%e te A6erican 9o3s Act would not e&acer3ate te 4$S$ de2icit, and
welco6ed wat a!!ears to 3e increased dialogue and e22orts 3y !olicy6a%ers to Cu6!start te 4$S$ econo6y troug Co3 creation$
Concern, owever, was e&!ressed a3out te !ending retire6ent o2 te A6erican 8ecovery and 8einvest6ent Act (A88A1 and ow
te econo6y would react to te a3sence o2 govern6ent<led e22orts$ Cany of the participants felt that getting the
U&S& economy !ac on trac will re7uire the development and adoption of a !road and
long$term U&S& manu$ facturing strategy$ >oing so, according to te la3or leaders, would eli6inate 6any
uncertainties a3out te 2uture o2 6anu2acturing in A6erica, and result in ins!irational goals and o3Cectives tat incentiviAe
6anu2acturers to increase invest6ents in 8R> and create Co3s in te 4nited States$
The plan is also necessary to generating Bo!s
Toohey" <?1=$
!resident and cie2 e&ecutive o2 Waterways Council Inc$ (Micale, 9=C TENS" 4$S$ National
:olicy Sould Include Ca!ital Invest6ent 2or Inland Waterways In2rastructure,
tt!"##www$Coc$co6#Coc<tens#Coc<tens<us<national<!olicy<sould<include<ca!ital<invest6ent<
inland<waterways<in2rastructu1
Te 4nited States needs a national !olicy tat includes te waterways and its in2rastructure,
and el!s !ut A6ericans 3ac% to wor% at te sa6e ti6e$ 5ere are 0/ ways wy" 0$ 9o3sT 9o3sT 9o3sT Te
6ost i6!ortant advantage our waterways can 3ring to A6erica is 2a6ily wage Co3s$ Tere are
currently 6ore tan )/ navigation !roCects autoriAed 3y Congress that could !egin putting
U&S& worers !ac on the Bo!& Ket us invest in our nation+s loc and dam system today for
a more prosperous tomorrow& )$ E&!orts 2or 4$S$ !roducts" :resident =3a6a as called 2or te dou3ling
o2 our nation7s e&!orts over te ne&t 2ive years$ A no3le goal tat will increase our country7s
!ros!erity, yes, 3ut witout an e22icient waterways in2rastructure to 6ove increased volu6es o2
grain, 2or e&a6!le, tis will not 3e an acieva3le goal$ F$ Traffic congestion reliefL Jne 16$
!arge tow of dry !ul cargo eeps 1"-6- trucs off our nation+s already overly congested
highways" or another #1< railcars rolling through our communities$ H$ Ereser air" Te inland
waterways trans!ortation sector as a lower car3on 2oot!rint 3ecause it generates 2ewer car3on dio&ide e6issions tan rail or truc%
2or eac ton o2 cargo co6!ared to trans!orting tat sa6e cargo 3y tese oter 6odes$ *$ Energy e22iciency" Barges on
our inland syste6 can 6ove one ton o2 cargo *+, 6iles on one gallon o2 2uel I 6ore te 0//
6iles 6ore tan rail trans!ort and H// 6iles 6ore tan truc% trans!ort$ This matters now more
than ever as we see ways to !e less dependent on foreign oil& ,$ Bolstering our econo6y L
<#5 million tons of cargo moves annually on the inland waterways" e7ualing around MN-
!illion that goes !ac into the U&S& economy& And more than M. is returned to the nation
in transportation cost savings for every M1 that is invested in a navigation proBect& +$
Multi3ene2iciaries" Te inland waterways syste6 3ene2its 6any A6ericans, including tose wo use
it 2or recreation, 6unici!al and industrial water su!!ly, ydro!ower and 2lood control$ Cany
communities along our inland waterways !enefit from economic development
opportunities" and private property owners enBoy higher property values !ecause of the
steady pools of water created !y locs and dams on our inland waterways& .$ Sa2est 6ode" =ur
2unda6ental goal is to return our wor%ers sa2ely o6e to teir 2a6ilies$ Tus, inland waterways trans!ortation 3oasts te lowest
inCury and 2atality rates co6!ared to rail or truc%$ Sa2ety<related statistics 2or all 6odes o2 2reigt trans!ortation sow one inCury in te
inland 6arine sector 2or every 0)*$) in te rail sector and ),0+0$* in te igway sector, and one 2atality in te inland 6arine sector
2or every ))$+ in rail and 0** in igway$ -$ Connecting te country" =ur inland waterways syste6 includes 0),/// 6iles o2
co66ercially naviga3le cannels and around )H/ loc% sites$ Tese inland 6arine igways trans!ort co66odities to and 2ro6 F.
states trougout te nation7s eartland and te :aci2ic NortwestP tey serve industrial and agricultural centers, and 2acilitate
i6!orts and e&!orts at gateway !orts along te ;ul2 Coast$ 9ust li%e Bewis and Clar%7s discovery e&!edition to 2ind new trade routes
2or a young A6erica, our waterways %ee! A6erica 6oving today and will do so to6orrow as well$ 0/$ Ca!acity to 2eed te world"
=ur ca!ital develo!6ent !lan 2or te 4nited States7 naviga3le waterways syste6 is 3uilding 2or
te 2uture$ 4nli%e te truc% or rail industries, we can acco66odate te :ana6a Canal
e&!ansion, containers on 3arge, and te increased e&!orts tat will el! 2eed te world7s
ina3itants, e&!ected to grow to - 3illion 3y )/*/$
The plan necessitates Agriculture Competitiveness
ASA" 11$
(9une )+, A6erican Soy3ean Association, ASA" 6ore 2unds 2or inland waterways, tt!"##6$delta2ar6!ress$co6#soy3eans#asa<
6ore<2unds<inland<waterways<6aintenance
6aintenance
Te A6erican Soy3ean Association (ASA1 as Coined wit te National ;rain and Eeed Association, oter !roducer grou!s,
!rocessors, and input suppliers" alerting the Congressional Appropriations Committees a!out
the urgent need for additional resources to dredge and repair inland waterways that have
!een damaged 3y istoric ig water levels$ UAgricultural producers, !rocessors and e&!orters rely on te entire
Mississi!!i 8iver syste6 and share concern a!out the impact recent floods in te Midwest will ave on te
river syste6,U said Steve Well6an, ASA Eirst Sice :resident and a soy3ean !roducer 2ro6 Syracuse, Ne3$ UCore than <-
percent of U&S& soy!ean e%ports moved to world marets through the Port of South
Kouisiana via the Cississippi /iver and its tri!utaries&O A modern and efficient inland
waterways transportation system is vital to maintaining U&S& agricultural competitiveness
in the world maret$ As the U&S& system continues to face delays and closures
attri!uta!le to low drafts and crum!ling locs and dams" competitors are increasing
e%penditures on their own transport infarstructures" tere3y eroding te co6!etitive advantage long
enCoyed 3y te 4nited States
Ag trade encourages growth
,dmondson$ US1A$ P=
;illiam( %&#& A+ricultural 7rade <oosts ="erall Economy( >A%-.1? Economic Research #er"ice*%#DA
U&S& agricultural trade has a positive effect on most sectors of the economy$ Te 2ar6 sector7s
GH*$. 3illion o2 out!ut associated wit agricultural e&!orts 6ore tan o22set te GF/$* 3illion o2 2ar6 out!ut i6!licitly lost 3ecause o2
agricultural i6!orts$ Te non2ar6 sectors, including 2ood !rocessing, gained G0/$. 3illion in total
out!ut, creating a3out HF,,// Co3s and generating GH$+ 3illion in inco6e$ The U&S& economy
gained a net M#< !illion in output (a2ter te teoretical loss to agricultural i6!orts is considered1$ =utside o2 2ar6ing
and 2ood !rocessing, te 4nited States teoretically lost a net G)$, 3illion 2ro6 direct agricultural trade, tat is, e&!orts 6inus
i6!orts o2 agricultural goods tat are neiter 2ar6 nor !rocessed goods, 3ut gained G0H$F 3illion in total out!ut 3ecause te direct
!lus indirect value o2 tese e&!orts was greater tan tat o2 te i6!orts$ Altoug tere were i6!orts o2 non2ar6,
non2ood!rocessing o2 greater value tan e&!orts in )//,, te 4$S$ e&!orts o2 tis category generated 6ore total out!ut tan i6!orts
did in te econo6y$
This results in great power conflicteconomic growth is vital to prevent
the collapse of U&S& hegemony&
DhalilFad 11 I Val6ay NalilAad, Counselor at te Center 2or Strategic and International
Studies, served as te 4nited States a63assador to A2ganistan, IraM, and te 4nited Nations
during te !residency o2 ;eorge W$ Bus, served as te director o2 !olicy !lanning at te
>e2ense >e!art6ent during te :residency o2 ;eorge 5$W$ Bus, olds a :$>$ 2ro6 te
4niversity o2 Cicago, )/00 (Te Econo6y and National Security, National Review, Ee3ruary
.
t
, Availa3le =nline at tt!"##www$nationalreview$co6#articles#!rint#)*-/)H, Accessed /)</.<
)/001
Today, economic and fiscal trends pose the most severe long$term threat to the U nited States7
position as glo!al leader& )hile the United States suffers from fiscal im!alances and low
economic growth" the economies of rival powers are developing rapidly& The
continuation of these two trends could lead to a shift from American primacy toward a
multi$polar glo!al system" leading in turn to increased geopolitical rivalry and even war
among the great powers$
Te current recession is te result o2 a dee! 2inancial crisis, not a 6ere 2luctuation in te 3usiness cycle$ 8ecovery is li%ely to 3e
!rotracted$ Te crisis was !receded 3y te 3uildu! over two decades o2 enor6ous a6ounts o2 de3t trougout te 4$S$ econo6y I
ulti6ately totaling al6ost F*/ !ercent o2 ;>: I and te develo!6ent o2 credit<2ueled asset 3u33les, !articularly in te ousing
sector$ Wen te 3u33les 3urst, uge a6ounts o2 wealt were destroyed, and une6!loy6ent rose to over 0/ !ercent$ Te decline
o2 ta& revenues and 6assive countercyclical s!ending !ut te 4$S$ govern6ent on an unsustaina3le 2iscal !at$ :u3licly eld
national de3t rose 2ro6 F. to over ,/ !ercent o2 ;>: in tree years$
)ithout faster economic growth and actions to reduce deficits" pu!licly held national
de!t is proBected to reach dangerous proportions& 0f interest rates were to rise
significantly" annual interest payments I wic already are larger tan te de2ense 3udget I would
crowd out other spending or re7uire su!stantial ta% increases that would undercut
economic growth$ Even worse, if unanticipated events trigger wat econo6ists call a (sudden stop;
in credit marets for U&S& de!t" the United States would !e una!le to roll over its outstanding
o!ligations" precipitating a sovereign$de!t crisis that would almost certainly compel a
radical retrenchment o2 te 4nited States internationally$
Such scenarios would reshape the international order $ It was te econo6ic devastation o2 Britain and
Erance during World War II, as well as te rise o2 oter !owers, tat led 3ot countries to relinMuis teir e6!ires$ In te late 0-,/s,
Britis leaders concluded tat tey lac%ed te econo6ic ca!acity to 6aintain a !resence east o2 SueA$ Soviet econo6ic wea%ness,
wic crystalliAed under ;or3acev, contri3uted to teir decisions to witdraw 2ro6 A2ganistan, a3andon Co66unist regi6es in
Eastern Euro!e, and allow te Soviet 4nion to 2rag6ent$ 0f the U&S& de!t pro!lem goes critical" the United
States would !e compelled to retrench " reducing its military spending and shedding
international commitments$
We 2ace tis do6estic callenge wile other maBor powers are e%periencing rapid economic growth$
Even toug countries such as China" 0ndia" and AraFil ave !ro2ound !olitical, social, de6ogra!ic, and
econo6ic !ro3le6s, teir econo6ies are growing faster tan ours, and tis could alter the glo!al
distri!ution of power & These trends could in the long term produce a multi$polar world & 0f
U&S& policymaers fail to act and other powers continue to grow" it is not a 7uestion of
whether !ut when a new international order will emerge & The closing of the gap !etween
the United States and its rivals could intensify geopolitical competition among maBor
powers " increase incentives for local powers to play maBor powers against one another"
and undercut our will to preclude or respond to international crises !ecause of the
higher ris of escalation$
The staes are high & 0n modern history" the longest period of peace among the great
powers has !een the era of U&S& leadership$ By contrast, multi$polar systems have !een
unsta!le " with their competitive dynamics resulting in fre7uent crises and maBor wars
among the great powers & 8ailures of multi$polar international systems produced !oth
world wars$
American retrenchment could have devastating conse7uences & )ithout an American
security !lanet" regional powers could rearm in an attempt to !alance against emerging
threats& Under this scenario" there would !e a heightened possi!ility of arms races"
miscalculation" or other crises spiraling into all$out conflict$ Alternatively, in see%ing to acco66odate
te stronger !owers, wea%er !owers 6ay si2t teir geo!olitical !osture away 2ro6 te 4nited States$ Eiter way, hostile
states would !e em!oldened to mae aggressive moves in their regions$
As rival powers rise" Asia in !articular is liely to emerge as a Fone of great$power
competition$ BeiCing7s econo6ic rise as ena3led a dra6atic 6ilitary 3uildu! 2ocused on acMuisitions o2 naval, cruise, and
3allistic 6issiles, long<range stealt aircra2t, and anti<satellite ca!a3ilities$ Cina7s strategic 6oderniAation is ai6ed, ulti6ately, at
denying te 4nited States access to te seas around Cina$ Even as coo!erative econo6ic ties in te region ave grown, Cina7s
e&!ansive territorial clai6s I and !rovocative state6ents and actions 2ollowing crises in Norea and incidents at sea I ave roiled
its relations wit Sout Norea, 9a!an, India, and Souteast Asian states$ Still, te 4nited States is te 6ost signi2icant 3arrier 2acing
Cinese ege6ony and aggression$
>iven the riss" the United States must focus on restoring its economic and fiscal condition
while checing and managing the rise of potential adversarial regional powers such as
China$ Wile we 2ace signi2icant callenges, te 4$S$ econo6y still accounts 2or over )/ !ercent o2 te world7s ;>:$ A6erican
institutions I !articularly tose !roviding en2orcea3le rule o2 law I set it a!art 2ro6 all te rising !owers$ Social coesion
underwrites !olitical sta3ility$ 4$S$ de6ogra!ic trends are ealtier tan tose o2 any oter develo!ed country$ A culture o2
innovation, e&cellent institutions o2 iger education, and a vital sector o2 s6all and 6ediu6<siAed enter!rises !ro!el te 4$S$
econo6y in ways di22icult to Muanti2y$ 5istorically, A6ericans ave res!onded !rag6atically, and so6eti6es troug trial and error,
to wor% our way troug te %ind o2 crisis tat we 2ace today$
Te !olicy Muestion is ow to enance econo6ic growt and e6!loy6ent wile cutting discretionary s!ending in te near ter6 and
cur3ing te growt o2 entitle6ent s!ending in te out years$ 8e!u3lican 6e63ers o2 Congress ave outlined a !lan$ Several tin%
tan%s and co66issions, including :resident =3a6a7s de3t co66ission, ave done so as well$ So6e consensus e&ists on 6easures
to !are 3ac% te recent increases in do6estic s!ending, restrain 2uture growt in de2ense s!ending, and re2or6 te ta& code (3y
reducing ta& e&!enditures wile lowering individual and cor!orate rates1$ Tese are !ro6ising o!tions$
Te %ey re6aining Muestion is weter te !resident and leaders o2 3ot !arties on Ca!itol 5ill ave te will to act and te s%ill to
2asion 3i!artisan solutions$ Weter we ta%e te needed actions is a coice, owever di22icult it 6igt 3e$ It is clearly witin our
ca!acity to !ut our econo6y on a 3etter traCectory$ In garnering !olitical su!!ort 2or cut3ac%s, te !resident and 6e63ers o2
Congress sould !oint not only to te do6estic conseMuences o2 inaction I 3ut also to te geo!olitical i6!lications$
As te 4nited States gets its econo6ic and 2iscal ouse in order, it sould ta%e ste!s to !revent a 2lare<u! in Asia$ Te 4nited States
can do so 3y signaling tat its do6estic callenges will not i6!ede its intentions to cec% Cinese e&!ansionis6$ Tis can 3e done
in cost<e22icient ways$
Wile Cina7s econo6ic rise ena3les its 6ilitary 6oderniAation and international assertiveness, it also 2rigtens rival !owers$ Te
=3a6a ad6inistration as wisely 6oved to strengten relations wit allies and !otential !artners in te region 3ut 6ore can 3e
done$
So6e Cinese !olicies encourage oter !arties to Coin wit te 4nited States, and te 4$S$ sould not let tese o!!ortunities !ass$
Cina7s 6ilitary assertiveness sould ena3le security coo!eration wit countries on Cina7s !eri!ery I !articularly 9a!an, India,
and Sietna6 I in ways tat co6!licate BeiCing7s strategic calculus$ Cina7s 6ercantilist !olicies and currency 6ani!ulation I wic
ar6 develo!ing states 3ot in East Asia and elsewere I sould 3e used to 2asion a coalition in 2avor o2 a 6ore 3alanced trade
syste6$ Since BeiCing7s over<te<to! reaction to te awarding o2 te No3el :eace :riAe to a Cinese de6ocracy activist alienated
Euro!ean leaders, igligting u6an<rigts Muestions would not only draw su!!orters 2ro6 near3y countries 3ut also e63olden
re2or6ers witin Cina$
Since the end of the Cold )ar" a sta!le economic and financial condition at home has
ena!led America to have an e%pansive role in the world& Today we can no longer tae
this for granted& Unless we get our economic house in order" there is a ris that domestic
stagnation in com!ination with the rise of rival powers will undermine our a!ility to deal
with growing international pro!lems& /egional hegemons in Asia could seiFe the
moment" leading the world toward a new" dangerous era of multi$polarity $
1AC8ood Prices
8ailing agriculture transportation infrastructure causes high food prices
(- Committee on 'ransport 8 %nited @ations Economic and #ocial Council( EC=@=AIC A@D #=CIAB C=AAI##I=@
>=R A#IA A@D 7HE PACI>IC() 7RA@#P=R7 A@D P=CER7D' >R=A >ARA 7= AAREE72EF7E@DI@G 7HE REACH =>
B=GI#7IC#( htt$'**!!!&unesca$&or+*ttd!*ct144G*ctr,1e&$df
#%AAARD Recent increases in the $rice of food and concerns o"er its a"ailability and access to it ha"e focused
attention on o"ercomin+ $roblems related to the trans$ort of a+ricultural food $roducts& .isin+ transport costs can
account for up to two thir)s of foo) prices& In addition( s$oila+e bet!een farm and mar9et as a result of inadeHuate trans$ort(
stora+e and $rocessin+ render a lar+e share of $erishable food unusable( !hich is ha"in+ a ma-or im$act on the $oorer se+ment of
communities in the re+ion& ;hile food trades are increasin+ly com$le0 and some countries ha"e $ut in $lace ad"anced lo+istics solutions( the
ma-ority of the countries in Asia and the Pacific ha"e yet to establish the infrastructure and institutional frame!or9s needed to ensure the
efficient( seamless trans$ort of foods from farm to mar9et& 7his document contains a $reliminary in"esti+ation of the !ay trans$ort and
lo+istics im$act the sustainable de"elo$ment of the food industry and identifies issues that need to be further addressed at the national and
re+ional le"els& Dele+ations may !ish to share their e0$eriences and $ro+ress and discuss challen+es concernin+ food trans$ort and lo+istics&
7he Committee may also !ish to $ro$ose further research that could be $resented to the >orum of Asian Ainisters of 7rans$ort in 144I as
the basis of a re+ional e0chan+e of e0$eriences to enhance the a"ailability of and access to food throu+h im$ro"ed trans$ort and lo+istics&
I@7R=D%C7I=@ .& Recent soarin+ food $rices ha"e brou+ht the a+ricultural food industry into the international
s$otli+ht& 7able . sho!s the dramatic increase in the cereal e0$ort $rices of the main su$$liers to the Asian re+ion& ;hile $rices in ma-or
+rain trades increased by some 54-84 $er cent bet!een mid-1448 and mid-144G( those for rice( the main sta$le food in Asia( nearly tri$led
o"er the same $eriod of time& Althou+h the food mar9et situation differs from country to country and future de"elo$ment remains hi+hly
uncertain( a re$ort by the >ood and A+riculture =r+anization of the %nited @ations su++ests that food $rices are li9ely to remain hi+h in the
years to come& 1& 'ransport an) lo+istics account for a lar+e part of final foo) prices an) increasin+ oil an)
ener+y costs ha$e ma)e this topic e$en more rele$ant& Des$ite the hi+h share of trans$ort costs and the increased incidence
of food s$oila+e in the $rocess of trans$ort and stora+e( Huestions of food trans$ort and lo+istics ha"e not been addressed in
a com$rehensi"e and coherent manner at the international le"el& A re$ort by the %nited #tates Go"ernment Accountability =ffice in
A$ril 1448 sho!ed that trans$ort and other o"erhead costs consumed /5 $er cent of %nited #tates food aid dollars( mainly due to risin+ fuel
$rices& 1 J& InadeHuate lo+istics systems not only increase costs but also im$act the a"ailability of food to
consumers& Accordin+ to a re$ort by the Pacific Economic Coo$eration Council( ChinaKs cold stora+e ca$acity is estimated to co"er only
14-J4 $er cent of demand& A lac9 of controlled atmos$here and refri+eration eHui$ment leads to s$oila+e losses of u$ to JJ $er cent of
$erishable food& J In India( "arious research studies by the Economic 7imes Intelli+ence Grou$ and the In"estment Information and Credit
Ratin+ A+ency re"eal that lar+e Huantities of +rain are !asted due to im$ro$er handlin+ and stora+e( $est infestation( $oor lo+istics(
inadeHuate stora+e and a lac9 of trans$ort infrastructure& ? ?& >urthermore( a)equate infrastructure an) access to transport
ser$ices are prerequisites for the )e$elopment of sustaina#le foo) tra)e ( and reHuirements are becomin+
increasin+ly com$le0 in im$ortin+ countries and re+ions as more countries mo"e into so$histicated tradin+ in fresh
fruit and "e+etables( meat or fish at the domestic or international le"els&
8ood prices will raise now due to oil volatility$$$reducing transportation
costs can offset
Richard Hein#er+ // is a !riter for the Post Carbon InstituteKs Ener+y <ulletin( #oarin+ =il and >ood Prices 7hreaten Affordable >ood
#u$$ly() Dec .? htt$'**!!!&ener+ybulletin&net*stories*14..-.1-.?*soarin+-oil-and-food-$rices-threaten-affordable-food-su$$ly
7he current +lobal food system is hi+hly fuel- and trans$ort-de$endent& >uels !ill almost certainly become less
affordable in the near and medium term( ma9in+ the current( hi+hly fuel-de$endent a+ricultural $roduction system less secure and food
less affordable& It is therefore necessary to $romote food self-sufficiency and reduce the need for fuel in$uts to the food
system at all le"els& 7he connection bet!een food and oil is systemic( and the $rices of both food and fuel ha"e risen
and fallen more or less in tandem in recent years 3fi+ure .6& Aodern a+riculture uses oil $roducts to fuel farm
machinery( to trans$ort other in$uts to the farm( and to trans$ort farm out$ut to the ultimate consumer& =il is often also
used as in$ut in a+ricultural chemicals& =il $rice increases therefore $ut $ressure on all these as$ects of commercial food
systems& 7hus there is concern that hi+h an) $olatile prices of cru)e oil may cause foo) prices to continue to
increase 3<loomber+( 14..6& Aoreo"er( as oil $rices rise( so does demand for biofuels( !hich are the only non-fossil liHuid fuels able to
re$lace $etroleum $roducts in e0istin+ combustion en+ines and motor "ehicles& <ut biofuels are often made from corn and other a+ricultural
$roducts& As demand for these alternati"e fuels increases( cro$ $rices are forced u$!ards( ma9in+ food e"en less
affordable& E0$ort-led a+ricultural strate+ies also increase the !orldKs "ulnerability to hi+h oil $rices& Aost donor
a+encies ha"e encoura+ed the less industrialized countries to focus on the $roduction of cash cro$s at the e0$ense of sta$les for local
consum$tion& As a result( $eo$le in these countries are forced to rely increasin+ly on im$orts of often subsidized cereals or those funded by
food aid $ro+rammes& Ho!e"er( risin+ transport costs contri#ute to risin+ prices of foo) imports, makin+ them
e$er less affor)a#le& >uel costs re$resent as much as 54 to /4 $er cent of total shi$ o$eratin+ costs&L.M >rom early 1448
to mid-144G( as fuel $rices soared( the cost of shi$$in+ food aid climbed by about :54 $er ton N a nearly J4 $er
cent increase( accordin+ to the %nited #tates A+ency for International De"elo$ment 3Garber( 144G6&
And" the plan is ey to resiliency and reversing the upward trend of food
prices
01*% " ;orld Economic #ituation and Pros$ects 144I( %@
htt$'**!!!&un&or+*en*de"elo$ment*desa*$olicy*!es$*!es$,archi"e*144I!es$&$df
@e0t to this storm of short-term factors $ushin+ u$ food $rices !ere lon+standin+ $olicy failures that
!ea9ened the a+ricultural sector in many de"elo$in+ countries( ma9in+ it harder for them to cope with
market shocks an) a$oi) a ma,or-scale crisis& 7han9s to the Green Re"olution and de"elo$ment $olicies that s$anned
from the si0ties throu+h the ei+hties( !orld food $rices decreased $ersistently from the late .IG4s until 1441(
$ro"idin+ self-sufficiency to many de"elo$in+ countries and hel$in+ to reduce $o"erty& Ho!e"er( the $olicy shift to!ards
more confidence in $rice si+nals to stimulate $roduction and less attention to +o"ernment su$$ort for infrastructure
in"estment and research and de"elo$ment for a+ricultural technolo+y( to+ether !ith lo!er official de"elo$ment assistance 3=DA6( has
been most detrimental to a+ricultural $roducti"ity +ro!th& In $articular( sub-#aharan Africa has suffered the most from the
$resent food crisis because of $oorer social and $hysical infrastructure( ma9in+ it harder to assimilate ne! technolo+ies tri++ered by the
Green Re"olution& In 144J( African Go"ernments committed themsel"es to raisin+ their share of s$endin+ on a+riculture to .4 $er cent
by 144G in su$$ort of the Com$rehensi"e Africa A+riculture De"elo$ment Pro+ramme 3the Aa$uto Declaration +oal6& In reality(
ho!e"er( such s$endin+ has dro$$ed dramatically in recent decades and the tar+et is far from bein+ met 3see fi+ure <6& Donors ha"e also
ne+lected a+riculture& 7he share of total =DA for a+riculture declined from .J $er cent in the early .IG4s to 1&I $er cent in 1445-144/&
In addition( =DA allocated to other $roducti"e acti"ities and economic infrastructure( !hich can ha"e $ositi"e e0ternalities for
a+riculture( also suffered from a si+nificant dro$ in international su$$ort durin+ the same $eriod& 7he do!nside of !ea9enin+
in"estment and a+ricultural su$$ort measures in de"elo$in+ countries is that $roducti"ity +ro!th for ma-or food cro$s
has stalled( and there has been no si+nificant increase in the use of culti"ated land & 7hus( $roduction has
fallen !oefully short of +ro!th in food demand& (nless the pro#lem of un)erin$estment in a+riculture is
a))resse) ( beyond the short-term s!in+s( foo) prices may remain on a lon+er-term upwar) tren) &

And" there+s a low threshold for our impact claims$$$food prices are high
now$$$now is uni7uely ey
James Bal)win 234 is a contributin+ !riter to Aoney Aornin+( >ood Prices' HereOs the Real #tory() 14.1
htt$'**moneymornin+&com*14.1*45*4?*food-$rices-heres-the-real-story*
Bon+-7erm Issues for >ood Prices 7he truth is( food $rices remain dan+erously susce$tible to on+oin+ credit( currency(
!eather( and ener+y concerns around the +lobe& Hi+her oil prices alone woul) ha$e a profoun) impact across all
areas of any foo)-commo)ity supply chain& 7hou+h difficult to $in$oint e0act fi+ures( itOs estimated that the $rice of ener+y
accounts for u$ to J4P of the underlyin+ costs in certain commodities& Ener+y costs are e0$ected to continue increasin+ this summer in the
!a9e of the Iran embar+o& ;ith risin+ oil and +asoline costs in the +lobal su$$ly chain and increased constriction in con"entional
su$$lies( food $rices !ill continue to a$$reciate as !ell& 5n 2008, we witnesse) firsthan) how )an+erous these
factors can #e! 6oo) prices e7plo)e) si+nificantly! 'he increase spurre) $iolent protests in 8e7ico,
5n)onesia, 1+ypt, Cameroon an) Haiti! 'his time aroun), howe$er, it9s +oin+ to #e much )ifferent & <i++er
challen+es in ener+y( the en"ironment and a+riculture !ill ma9e thin+s far more uncertain than in 2008 ! And
lon+-term( se"en billion $eo$le 3and +ro!in+6 on the $lanet !ith finite amounts of arable land !ill create e"en +reater
uncertainty&

0aterways are key
;itsanu Atta$anich et! al // Atta"anichQ Ph&D& Candidate <ruce A& AcCarl Distin+uished and Re+ents Professor #te$hen ;& >uller
Re+ents Professor Dmitry C& Cedeno" Associate Professor Rafarbe9 Ahmedo" Ph&D& Candidate De$artment of A+ricultural Economics( 7e0as
A&A %ni"ersity( Colle+e #tation #elected Pa$er $re$ared for $resentation at the A+ricultural & A$$lied Economics AssociationKs 14.. AAEA
& @AREA Joint Annual Aeetin+
July 1?-1/( 7he Effect of Climate Chan+e on 7rans$ortation >lo!s and Inland ;ater!ays Due to Climate-Induced #hifts in Cro$ Production
Patterns) htt$'**a+econsearch&umn&edu*bitstream*.4I1?.*1*AAEA#electedPa$er,7heP14EffectP14ofP14ClimateP14Chan+eP14on
P147rans$ortationP14>lo!s,.J1?8&$df
:rain pro)uction plays a crucial role in response to the worl);s +rowin+ )eman) for foo) , fee), an)
#iofuels& Corn( soybeans( and !heat are ma-or +rains cro$s that are most !idely $lanted in the !orld and also in the %#& >rom the $ast to
the $resent( the %# is a ma-or country that $lays a dominant role as a !orld +rain $roducer and e0$orter & In cro$ year
144I*14.4( total %# su$$ly of corn( soybean and !heat accounted for about JI( J.( and I $ercent of the !orld su$$ly of
corn( soybean and !heat( res$ecti"ely& >or the as$ect of international trade( the %# mar9et shares for e0$ort of corn(
soybean and !heat to the !orldKs total e0$ort !ere about 51( ??( and .G $ercent( res$ecti"ely 3%#DA ;orld A+ricultural
=utloo9 <oard 14..6& A hi+hly efficient, low-cost system of transportation is one of the ma,or factors
)eterminin+ the competiti$eness of (* +rains ( !hich are lo!-"alued bul9y $roducts( in the !orld mar9et&
Grains $roduced in the %# mo"e to domestic and forei+n mar9ets throu+h a !ell-de"elo$ed trans$ortation system &
<ar+es( railroads( and truc9s facilitate a hi+hly com$etiti"e mar9et that brid+es the +a$ bet!een %# +rain $roducers(
domestic and forei+n consumers& @ot only is a+riculture the lar+est user of the trans$ortation system accountin+ for 11
$ercent of all tons and J. $ercent of all ton-miles trans$orted "ia all modes in 1448( but +rains also are the lar+est
users of frei+ht trans$ortation in a+riculture 3Denicoff et al& 14.46& >rom .I8G to 1448 total %# +rain shi$ments
si+nificantly increased I1 $ercent from about 1?1 million tonnes to ?/? million tonnes !ith corn mo"ements accounted for /J
$ercent of all +rain mo"ements follo!ed by mo"ements of soybeans and !heat( !hich !ere eHual to .I $ercent and .? $ercent( res$ecti"ely
in 1448& Durin+ 1441-1448( inland +rain trans$ortation "ia truc9 and rail is the $rinci$al channel for o"erall +rain mo"ements accountin+ for
about G5 $ercent( !hile inland !ater trans$ortation "ia bar+e re$resents only about .5 $ercent of all +rain tonna+es&
Althou+h inlan) water transportation has a small share for o$erall tonna+e mo$ements, it plays a
si+nificant role as a ma,or route to e7port market accountin+ for a#out 48 percent of all +rain tonna+es for
e7port o"er the same $eriod 3Aarathon and Denicoff 14..6& Aississi$$i Ri"er and its tributaries on the Aississi$$i ri"er basin are
the lar+est inland !ater !ay system shi$$in+ +rains es$ecially corn and soybeans from the %# inland to the
Bo!er Aississi$$i $orts for e0$ort mar9et accountin+ for on a"era+e 55 and ?8 $ercent of all %# corn and soybean e0$ort( res$ecti"ely
durin+ 1445-144I 3%&#& Army Cor$s of En+ineers 14.46&
6oo) price spikes in)epen)ently cause collapse the +lo#al economy an) cause +lo#al
insta#ility---the #rink is now
Bester R& Brown // $resident of the Earth Policy Institute( author of ;orld on the Ed+e' Ho! to Pre"ent En"ironmental and Economic
Colla$se( 7he @e! Geo$olitics of >ood() htt$'**!!!&forei+n$olicy&com*articles*14..*4?*15*the,ne!,+eo$olitics,of,food
In the %nited #tates( !hen !orld !heat $rices rise by 85 $ercent( as they ha"e o"er the last year( it means the difference bet!een a :1
loaf of bread and a loaf costin+ maybe :1&.4& If( ho!e"er( you li"e in @e! Delhi( those s9yroc9etin+ costs really matter'
A doublin+ in the !orld $rice of !heat actually means that the !heat you carry home from the mar9et to hand-+rind into flour for
cha$atis costs t!ice as much& And the same is true !ith rice& If the !orld $rice of rice doubles( so does the $rice of rice in
your nei+hborhood mar9et in Ja9arta& And so does the cost of the bo!l of boiled rice on an Indonesian familyOs dinner table&
;elcome to the ne! food economics of 14..' Prices are climbin+( but the im$act is not at all bein+ felt eHually& >or
Americans( !ho s$end less than one-tenth of their income in the su$ermar9et( the soarin+ food $rices !eO"e seen so far this year are an
annoyance( not a calamity& <ut for the $lanetOs $oorest 1 billion $eo$le( !ho s$end 54 to 84 $ercent of their income on food( these
soarin+ $rices may mean +oin+ from t!o meals a day to one& 7hose !ho are barely han+in+ on to the lo!er run+s of the
+lobal economic ladder ris9 losin+ their +ri$ entirely& 'his can contri#ute -- an) it has -- to re$olutions an)
uphea$al& Already in 14..( the %&@& >ood Price Inde0 has ecli$sed its $re"ious all-time +lobal hi+hS as of Aarch it had climbed for
ei+ht consecuti"e months& ;ith this yearOs har"est $redicted to fall short( !ith +o$ernments in the 8i))le 1ast an)
Africa teeterin+ as a result of the price spikes ( and !ith an0ious mar9ets sustainin+ one shoc9 after
another( food has Huic9ly become the hidden dri"er of !orld $olitics& And crises li9e these are +oin+ to become
increasin+ly common& 7he ne! +eo$olitics of food loo9s a !hole lot more "olatile -- and a !hole lot more
contentious -- than it used to& #carcity is the ne! norm& %ntil recently( sudden $rice sur+es -ust didnOt matter as much( as
they !ere Huic9ly follo!ed by a return to the relati"ely lo! food $rices that hel$ed sha$e the $olitical stability of the late 14th century
across much of the +lobe& <ut no! both the causes and conseHuences are ominously different& In many !ays( this is a resum$tion of the
1448-144G food crisis( !hich subsided not because the !orld someho! came to+ether to sol"e its +rain crunch once and for all( but
because the Great Recession tem$ered +ro!th in demand e"en as fa"orable !eather hel$ed farmers $roduce the lar+est +rain har"est on
record& Historically( $rice s$i9es tended to be almost e0clusi"ely dri"en by unusual !eather -- a monsoon failure in India( a drou+ht in
the former #o"iet %nion( a heat !a"e in the %&#& Aid!est& #uch e"ents !ere al!ays disru$ti"e( but than9fully infreHuent& %nfortunately(
todayOs $rice hi9es are dri"en by trends that are both ele"atin+ demand and ma9in+ it more difficult to increase $roduction' amon+ them(
a ra$idly e0$andin+ $o$ulation( cro$-!itherin+ tem$erature increases( and irri+ation !ells runnin+ dry& Each ni+ht( there are 1.I(444
additional $eo$le to feed at the +lobal dinner table& Aore alarmin+ still( the !orld is losin+ its ability to soften the effect of
shorta+es& In res$onse to $re"ious $rice sur+es( the %nited #tates( the !orldOs lar+est +rain $roducer( !as effecti"ely
able to steer the !orld a!ay from $otential catastro$he& >rom the mid-14th century until .II5( the %nited #tates had either
+rain sur$luses or idle cro$land that could be $lanted to rescue countries in trouble& ;hen the Indian monsoon failed in .I/5(
for e0am$le( President Byndon JohnsonOs administration shi$$ed one-fifth of the %&#& !heat cro$ to India(
successfully sta"in+ off famine& 0e can9t )o that anymore< the safety cushion is +one! 7hatOs !hy the food
crisis of 14.. is for real( and !hy it may brin+ !ith it yet more bread riots cum $olitical re"olutions& ;hat if
the u$hea"als that +reeted dictators Rine el-Abidine <en Ali in 7unisia( Hosni Aubara9 in E+y$t( and
Auammar al-Taddafi in Bibya 3a country that im$orts I4 $ercent of its +rain6 are not the end of the story( but the
be+innin+ of itU Get ready( farmers and forei+n ministers ali9e( for a new era in which worl) foo) scarcity
increasin+ly shapes +lo#al politics& 7HE D=%<BI@G => ;=RBD +rain $rices since early 1448 has been dri"en $rimarily by
t!o factors' acceleratin+ +ro!th in demand and the increasin+ difficulty of ra$idly e0$andin+ $roduction& 7he result is a !orld that
loo9s stri9in+ly different from the bountiful +lobal +rain economy of the last century& ;hat !ill the +eo$olitics of food loo9 li9e in a
ne! era dominated by scarcityU E"en at this early sta+e( !e can see at least the broad outlines of the emer+in+ food economy& =n the
demand side( farmers no! face clear sources of increasin+ $ressure& 7he first is $o$ulation +ro!th& Each year the !orldOs
farmers must feed G4 million additional $eo$le( nearly all of them in de"elo$in+ countries& 7he !orldOs $o$ulation has nearly
doubled since .I84 and is headed to!ard I billion by midcentury& #ome J billion $eo$le( mean!hile( are also tryin+ to
mo"e u$ the food chain( consumin+ more meat( mil9( and e++s& As more families in China and else!here enter the middle class( they
e0$ect to eat better& <ut as +lobal consum$tion of +rain-intensi"e li"estoc9 $roducts climbs( so does the demand for the e0tra corn and
soybeans needed to feed all that li"estoc9& 3Grain consum$tion $er $erson in the %nited #tates( for e0am$le( is four times that in India(
!here little +rain is con"erted into animal $rotein& >or no!&6 At the same time( the %nited #tates( !hich once !as able to act as a +lobal
buffer of sorts a+ainst $oor har"ests else!here( is no! con"ertin+ massi"e Huantities of +rain into fuel for cars( e"en as !orld +rain
consum$tion( !hich is already u$ to rou+hly 1&1 billion metric tons $er year( is +ro!in+ at an acceleratin+ rate& A decade a+o( the
+ro!th in consum$tion !as 14 million tons $er year& Aore recently it has risen by ?4 million tons e"ery year& <ut the rate at !hich the
%nited #tates is con"ertin+ +rain into ethanol has +ro!n e"en faster& In 14.4( the %nited #tates har"ested nearly ?44 million tons of
+rain( of !hich .1/ million tons !ent to ethanol fuel distilleries 3u$ from ./ million tons in 14446& 7his massi"e ca$acity to con"ert
+rain into fuel means that the $rice of +rain is no! tied to the $rice of oil& #o if oil +oes to :.54 $er barrel or more( the $rice of +rain !ill
follo! it u$!ard as it becomes e"er more $rofitable to con"ert +rain into oil substitutes& And itOs not -ust a %&#& $henomenon' <razil(
!hich distills ethanol from su+ar cane( ran9s second in $roduction after the %nited #tates( !hile the Euro$ean %nionOs +oal of +ettin+ .4
$ercent of its trans$ort ener+y from rene!ables( mostly biofuels( by 1414 is also di"ertin+ land from food cro$s& 7his is not merely a
story about the boomin+ demand for food& E"erythin+ from fallin+ !ater tables to erodin+ soils and the conseHuences of +lobal !armin+
means that the !orldOs food su$$ly is unli9ely to 9ee$ u$ !ith our collecti"ely +ro!in+ a$$etites& 7a9e climate
chan+e' 7he rule of thumb amon+ cro$ ecolo+ists is that for e"ery . de+ree Celsius rise in tem$erature abo"e the +ro!in+
season o$timum( farmers can e0$ect a .4 $ercent decline in +rain yields& 7his relationshi$ !as borne out all too
dramatically durin+ the 14.4 heat !a"e in Russia( !hich reduced the countryOs +rain har"est by nearly ?4
$ercent& ;hile tem$eratures are risin+( !ater tables are fallin+ as farmers o"er$um$ for irri+ation& 7his artificially inflates food
$roduction in the short run( creatin+ a food bubble that bursts !hen aHuifers are de$leted and $um$in+ is necessarily reduced to the rate
of rechar+e& In arid #audi Arabia( irri+ation had sur$risin+ly enabled the country to be self-sufficient in !heat for more than 14
yearsS no!( !heat $roduction is colla$sin+ because the non-re$lenishable aHuifer the country uses for irri+ation
is lar+ely de$leted& 7he #audis soon !ill be im$ortin+ all their +rain& #audi Arabia is only one of some .G countries
!ith !ater-based food bubbles& All to+ether( more than half the !orldOs $eo$le li"e in countries !here !ater tables are fallin+& 7he
$olitically troubled Arab Aiddle East is the first +eo+ra$hic re+ion !here +rain $roduction has $ea9ed and
be+un to decline because of !ater shorta+es( e"en as $o$ulations continue to +ro!& Grain $roduction is
already +oin+ do!n in #yria and IraH and may soon decline in Demen& <ut the lar+est food bubbles are in
India and China& In India( !here farmers ha"e drilled some 14 million irri+ation !ells( !ater tables are fallin+ and the !ells are
startin+ to +o dry& 7he ;orld <an9 re$orts that .85 million Indians are bein+ fed !ith +rain $roduced by o"er$um$in+& In China(
o"er$um$in+ is concentrated in the @orth China Plain( !hich $roduces half of ChinaOs !heat and a third of
its corn& An estimated .J4 million Chinese are currently fed by o"er$um$in+& Ho! !ill these countries ma9e
u$ for the ine"itable shortfalls !hen the aHuifers are de$letedU E"en as !e are runnin+ our !ells dry( !e are
also mismana+in+ our soils( creatin+ ne! deserts& #oil erosion as a result of o"er$lo!in+ and land
mismana+ement is underminin+ the $roducti"ity of one-third of the !orldOs cro$land& Ho! se"ere is itU Boo9 at
satellite ima+es sho!in+ t!o hu+e ne! dust bo!ls' one stretchin+ across northern and !estern China and !estern
Aon+oliaS the other across central Africa& ;an+ 7ao( a leadin+ Chinese desert scholar( re$orts that each year some .(?44 sHuare
miles of land in northern China turn to desert& In Aon+olia and Besotho( +rain har"ests ha"e shrun9 by half or more o"er the
last fe! decades& @orth Eorea and Haiti are also sufferin+ from hea"y soil lossesS both countries face famine if they lose
international food aid& Ci"ilization can sur"i"e the loss of its oil reser"es( but it cannot sur"i"e the loss of its soil reser"es& <eyond the
chan+es in the en"ironment that ma9e it e"er harder to meet human demand( thereOs an im$ortant intan+ible factor to consider' ="er the
last half-century or so( !e ha"e come to ta9e a+ricultural $ro+ress for +ranted& Decade after decade( ad"ancin+ technolo+y under$inned
steady +ains in raisin+ land $roducti"ity& Indeed( !orld +rain yield $er acre has tri$led since .I54& <ut no! that era is comin+ to an end
in some of the more a+riculturally ad"anced countries( !here farmers are already usin+ all a"ailable technolo+ies to raise yields& In
effect( the farmers ha"e cau+ht u$ !ith the scientists& After climbin+ for a century( rice yield $er acre in Ja$an has not risen at
all for ./ years& In China( yields may le"el off soon& Just those t!o countries alone account for one-third of the !orldOs rice har"est&
Aean!hile( !heat yields ha"e $lateaued in <ritain( >rance( and Germany -- ;estern Euro$eOs three lar+est
!heat $roducers& I@ 7HI# ERA => 7IGH7E@I@G !orld food su$$lies( the ability to +ro! food is fast becomin+ a ne!
form of +eo$olitical le"era+e( and countries are scramblin+ to secure their o!n $arochial interests at the
e0$ense of the common +ood& 7he first si+ns of trouble came in 1448( !hen farmers be+an ha"in+ difficulty 9ee$in+ u$ !ith the
+ro!th in +lobal demand for +rain& Grain and soybean $rices started to climb( tri$lin+ by mid-144G& In res$onse( many e0$ortin+
countries tried to control the rise of domestic food $rices by restrictin+ e0$orts& Amon+ them !ere Russia and Ar+entina( t!o leadin+
!heat e0$orters& Cietnam( the @o& 1 rice e0$orter( banned e0$orts entirely for se"eral months in early 144G& #o did se"eral other smaller
e0$orters of +rain& ;ith e0$ortin+ countries restrictin+ e0$orts in 1448 and 144G( im$ortin+ countries $anic9ed& @o lon+er able to rely
on the mar9et to su$$ly the +rain they needed( se"eral countries too9 the no"el ste$ of tryin+ to ne+otiate lon+-term +rain-su$$ly
a+reements !ith e0$ortin+ countries& 7he Phili$$ines( for instance( ne+otiated a three-year a+reement !ith Cietnam for .&5 million tons
of rice $er year& A dele+ation of Demenis tra"eled to Australia !ith a similar +oal in mind( but had no luc9& In a sellerOs mar9et(
e0$orters !ere reluctant to ma9e lon+-term commitments& >earin+ they mi+ht not be able to buy needed +rain from the mar9et( some of
the more affluent countries( led by #audi Arabia( #outh Eorea( and China( too9 the unusual ste$ in 144G of buyin+ or leasin+ land in
other countries on !hich to +ro! +rain for themsel"es& Aost of these land acHuisitions are in Africa( !here some +o"ernments lease
cro$land for less than :. $er acre $er year& Amon+ the $rinci$al destinations !ere Ethio$ia and #udan( countries !here millions of
$eo$le are bein+ sustained !ith food from the %&@& ;orld >ood Pro+ram& 7hat the +o"ernments of these t!o countries are !illin+ to sell
land to forei+n interests !hen their o!n $eo$le are hun+ry is a sad commentary on their leadershi$& <y the end of 144I( hundreds of
land acHuisition deals had been ne+otiated( some of them e0ceedin+ a million acres& A 14.4 ;orld <an9 analysis of these Vland +rabsV
re$orted that a total of nearly .?4 million acres !ere in"ol"ed -- an area that e0ceeds the cro$land de"oted to corn and !heat combined
in the %nited #tates& #uch acHuisitions also ty$ically in"ol"e !ater ri+hts( meanin+ that land +rabs $otentially affect all do!nstream
countries as !ell& Any !ater e0tracted from the u$$er @ile Ri"er basin to irri+ate cro$s in Ethio$ia or #udan( for instance( !ill no! not
reach E+y$t( u$endin+ the delicate !ater $olitics of the @ile by addin+ ne! countries !ith !hich E+y$t must ne+otiate& 'he
potential for conflict -- and not -ust o"er !ater -- is hi+h! Aany of the land deals ha"e been made in secret( and in most cases(
the land in"ol"ed !as already in use by "illa+ers !hen it !as sold or leased& =ften those already farmin+ the land !ere neither consulted
about nor e"en informed of the ne! arran+ements& And because there ty$ically are no formal land titles in many de"elo$in+-country
"illa+es( the farmers !ho lost their land ha"e had little bac9in+ to brin+ their cases to court& Re$orter John Cidal( !ritin+ in <ritainOs
=bser"er( Huotes @yi9a! =challa from Ethio$iaOs Gambella re+ion' V7he forei+n com$anies are arri"in+ in lar+e numbers( de$ri"in+
$eo$le of land they ha"e used for centuries& 7here is no consultation !ith the indi+enous $o$ulation& 7he deals are done secretly& 7he
only thin+ the local $eo$le see is $eo$le comin+ !ith lots of tractors to in"ade their lands&V Bocal hostility to!ard such land +rabs is the
rule( not the e0ce$tion& In 1448( as food $rices !ere startin+ to rise( China si+ned an a+reement !ith the Phili$$ines to lease 1&5 million
acres of land slated for food cro$s that !ould be shi$$ed home& =nce !ord lea9ed( the $ublic outcry -- much of it from >ili$ino farmers
-- forced Aanila to sus$end the a+reement& A similar u$roar roc9ed Aada+ascar( !here a #outh Eorean firm( Dae!oo Bo+istics( had
$ursued ri+hts to more than J million acres of land& ;ord of the deal hel$ed sto9e a $olitical furor that to$$led the +o"ernment and
forced cancellation of the a+reement& Indeed( fe! thin+s are more li9ely to fuel insur+encies than ta9in+ land from $eo$le& A+ricultural
eHui$ment is easily sabota+ed& If ri$e fields of +rain are torched( they burn Huic9ly& @ot only are these deals ris9y( but forei+n in"estors
$roducin+ food in a country full of hun+ry $eo$le face another $olitical Huestion of ho! to +et the +rain out& ;ill "illa+ers $ermit truc9s
laden !ith +rain headed for $ort cities to $roceed !hen they themsel"es may be on the "er+e of star"ationU 7he $otential for $olitical
instability in countries !here "illa+ers ha"e lost their land and their li"elihoods is hi+h& Conflicts could easily de"elo$ bet!een in"estor
and host countries& 7hese acHuisitions re$resent a $otential in"estment in a+riculture in de"elo$in+ countries of an estimated :54 billion&
<ut it could ta9e many years to realize any substantial $roduction +ains& 7he $ublic infrastructure for modern mar9et-oriented
a+riculture does not yet e0ist in most of Africa& In some countries it !ill ta9e years -ust to build the roads and $orts needed to brin+ in
a+ricultural in$uts such as fertilizer and to e0$ort farm $roducts& <eyond that( modern a+riculture reHuires its o!n infrastructure'
machine sheds( +rain-dryin+ eHui$ment( silos( fertilizer stora+e sheds( fuel stora+e facilities( eHui$ment re$air and maintenance ser"ices(
!ell-drillin+ eHui$ment( irri+ation $um$s( and ener+y to $o!er the $um$s& ="erall( de"elo$ment of the land acHuired to date a$$ears to
be mo"in+ "ery slo!ly& #o ho! much !ill all this e0$and !orld food out$utU ;e donOt 9no!( but the ;orld <an9 analysis indicates that
only J8 $ercent of the $ro-ects !ill be de"oted to food cro$s& Aost of the land bou+ht u$ so far !ill be used to $roduce biofuels and
other industrial cro$s& E"en if some of these $ro-ects do e"entually boost land $roducti"ity( !ho !ill benefitU If "irtually all the in$uts --
the farm eHui$ment( the fertilizer( the $esticides( the seeds -- are brou+ht in from abroad and if all the out$ut is shi$$ed out of the
country( it !ill contribute little to the host countryOs economy& At best( locals may find !or9 as farm laborers( but in hi+hly mechanized
o$erations( the -obs !ill be fe!& At !orst( im$o"erished countries li9e AozambiHue and #udan !ill be left !ith less land and !ater !ith
!hich to feed their already hun+ry $o$ulations& 7hus far the land +rabs ha"e contributed more to stirrin+ unrest than to e0$andin+ food
$roduction& And this rich country-$oor country di"ide could +ro! e"en more $ronounced -- and soon& 7his January( a ne! sta+e in the
scramble amon+ im$ortin+ countries to secure food be+an to unfold !hen #outh Eorea( !hich im$orts 84 $ercent of its +rain(
announced that it !as creatin+ a ne! $ublic-$ri"ate entity that !ill be res$onsible for acHuirin+ $art of this +rain& ;ith an initial office
in Chica+o( the $lan is to by$ass the lar+e international tradin+ firms by buyin+ +rain directly from %&#& farmers& As the Eoreans acHuire
their o!n +rain ele"ators( they may !ell si+n multiyear deli"ery contracts !ith farmers( a+reein+ to buy s$ecified Huantities of !heat(
corn( or soybeans at a fi0ed $rice& =ther im$orters !ill not stand idly by as #outh Eorea tries to tie u$ a $ortion of the %&#& +rain har"est
e"en before it +ets to mar9et& 7he enter$risin+ Eoreans may soon be -oined by China( Ja$an( #audi Arabia( and other leadin+ im$orters&
Althou+h #outh EoreaOs initial focus is the %nited #tates( far and a!ay the !orldOs lar+est +rain e0$orter( it may later consider bro9erin+
deals !ith Canada( Australia( Ar+entina( and other ma-or e0$orters& 7his is ha$$enin+ -ust as China may be on the "er+e of enterin+ the
%&#& mar9et as a $otentially massi"e im$orter of +rain& ;ith ChinaOs .&? billion increasin+ly affluent consumers startin+ to com$ete !ith
%&#& consumers for the %&#& +rain har"est( chea$ food( seen by many as an American birthri+ht( may be comin+ to an end& @o one
9no!s !here this intensifyin+ com$etition for food su$$lies !ill +o( but the !orld seems to be mo"in+ a!ay from the international
coo$eration that e"ol"ed o"er se"eral decades follo!in+ ;orld ;ar II to an e"ery-country-for-itself $hiloso$hy& >ood nationalism may
hel$ secure food su$$lies for indi"idual affluent countries( but it does little to enhance !orld food security& Indeed( the lo!-income
countries that host land +rabs or im$ort +rain !ill li9ely see their food situation deteriorate& A>7ER 7HE CAR@AGE of t!o !orld !ars
and the economic misste$s that led to the Great De$ression( countries -oined to+ether in .I?5 to create the %nited @ations( finally
realizin+ that in the modern !orld !e cannot li"e in isolation( tem$tin+ thou+h that mi+ht be& 7he International Aonetary >und !as
created to hel$ mana+e the monetary system and $romote economic stability and $ro+ress& ;ithin the %&@& system( s$ecialized a+encies
from the ;orld Health =r+anization to the >ood and A+riculture =r+anization 3>A=6 $lay ma-or roles in the !orld today& All this has
fostered international coo$eration& <ut !hile the >A= collects and analyzes +lobal a+ricultural data and $ro"ides technical assistance(
there is no or+anized effort to ensure the adeHuacy of !orld food su$$lies& Indeed( most international ne+otiations on a+ricultural trade
until recently focused on access to mar9ets( !ith the %nited #tates( Canada( Australia( and Ar+entina $ersistently $ressin+ Euro$e and
Ja$an to o$en their hi+hly $rotected a+ricultural mar9ets& <ut in the first decade of this century( access to su$$lies has emer+ed as the
o"erridin+ issue as the !orld transitions from an era of food sur$luses to a ne! $olitics of food scarcity& At the same time( the %&#& food
aid $ro+ram that once !or9ed to fend off famine !here"er it threatened has lar+ely been re$laced by the %&@& ;orld >ood Pro+ram
3;>P6( !here the %nited #tates is the leadin+ donor& 7he ;>P no! has food-assistance o$erations in some 84 countries and an annual
bud+et of :? billion& 7here is little international coordination other!ise& >rench President @icolas #ar9ozy -- the rei+nin+ $resident of
the G-14 -- is $ro$osin+ to deal !ith risin+ food $rices by curbin+ s$eculation in commodity mar9ets& %seful thou+h this may be( it
treats the sym$toms of +ro!in+ food insecurity( not the causes( such as $o$ulation +ro!th and climate chan+e& 7he !orld no! needs to
focus not only on a+ricultural $olicy( but on a structure that inte+rates it !ith ener+y( $o$ulation( and !ater $olicies( each of !hich
directly affects food security& <ut that is not ha$$enin+& Instead( as land and !ater become scarcer( as the EarthOs tem$erature rises( and
as !orld food security deteriorates( a dan+erous +eo$olitics of food scarcity is emer+in+& Band +rabbin+( !ater
+rabbin+( and buyin+ +rain directly from farmers in e0$ortin+ countries are no! inte+ral $arts of a +lobal
$o!er stru++le for food security& ;ith +rain stoc9s lo! and climate "olatility increasin+( the risks are also increasin+!
0e are now so close to the e)+e that a #reak)own in the foo) system coul) come at any time& Consider(
for e0am$le( !hat !ould ha"e ha$$ened if the 14.4 heat !a"e that !as centered in Aosco! had instead been
centered in Chica+o& In round numbers( the ?4 $ercent dro$ in RussiaOs ho$ed-for har"est of rou+hly .44 million tons cost the !orld
?4 million tons of +rain( but a ?4 $ercent dro$ in the far lar+er %&#& +rain har"est of ?44 million tons !ould ha"e
cost ./4 million tons& 7he !orldOs carryo"er stoc9s of +rain 3the amount in the bin !hen the ne! har"est be+ins6 !ould
ha"e dro$$ed to -ust 51 days of consum$tion& 7his le"el !ould ha"e been not only the lo!est on record( but
also !ell belo! the /1-day carryo"er that set the sta+e for the 1448-144G tri$lin+ of !orld +rain $rices& 7hen
!hatU 7here !ould ha"e been chaos in !orld +rain mar9ets& Grain $rices !ould ha"e climbed off the charts& #ome
+rain-e0$ortin+ countries( tryin+ to hold do!n domestic food $rices( woul) ha$e restricte) or e$en #anne) e7ports(
as they did in 1448 and 144G& 7he 7C ne!s !ould ha"e been dominated not by the hundreds of fires in the Russian
countryside( but by foota+e of food riots in lo!-income +rain-im$ortin+ countries and re$orts of +o"ernments
fallin+ as hun+er s$read out of control& =il-e0$ortin+ countries that im$ort +rain !ould ha"e been tryin+ to
barter oil for +rain( and lo!-income +rain im$orters !ould ha"e lost out& ;ith +o"ernments to$$lin+ and
confidence in the !orld +rain mar9et shattered( the +lo#al economy coul) ha$e starte) to unra$el!
Scenario one0ran
0ran is !ecoming more dependent upon food imports$$$price spies cause
insta!ility
'uttle = 0e))in+ /2 Johanna @esseth 7uttle is a senior "ice $resident for strate+ic $lannin+ at C#I# and Eristin ;eddin+ is
director and fello! at C#I# +lobal food security $ro-ect( ;ill >ood Prices Dri"e InstabilityU) Global >orecast 14.1
htt$'**csis&or+*files*$ublication*.14?.8,+f,nesseth,!eddin+&$df
IRA@ Iran is another country that could face increase) ci$il unrest as a result of foo) price insta#ility & About
one-fifth of IranKs $o$ulation de$ends on a+riculture for its li"elihood( but the country is #ecomin+ increasin+ly
reliant on foo) imports& In the $ast .4 years( a+ricultural im$orts ha"e Huadru$led& Prices for sta$le foods ha"e
risen by ?4 $ercent in Iran and may continue to increase( es$ecially if the "alue of the rial continues to dro$& Recent sanctions
im$osed by the %nited #tates on financial institutions that !or9 !ith IranKs central ban9 could ma9e it more difficult for Iran to
im$ort food& >ood $roducers may be !ary about sellin+ to Iran out of fear that the country !ill not be able to afford to buy im$orts
because of reduced oil re"enues and currency de"aluation& Recently there ha"e been re$orts that Iran has defaulted on $ayments for sta$le
im$orts li9e rice& >urthermore( in res$onse to these sanctions many Iranian households are e0chan+in+ their sa"in+s from rial to dollars(
s$urrin+ further currency deflation and deterioratin+ $urchasin+ $o!er for basic food commodities& Gi"en the turmoil surroundin+
Iran( and the tremendous chan+e in +o"ernments and social mo"ement in the re+ion( there !ill li9ely be
increasin+ $ressure on the +o"ernment to combat increasin+ food $rices to $romote stability& 7his may $ro"e
difficult in li+ht of efforts o"er the $ast fe! years by the Iranian +o"ernment to reduce domestic food subsidies to
consumers&
8ood prices cause 0ranian and Dorean insta!ility
'aylor = Bosley // Paul 7aylor and Catherine) <osley are !riters for Reuters( =tta!a Citizen( Amid uncertainty( CE=s loo9in+ to
emer+in+ !orldS ;orld Economic >orumS Inflation( $olitical ris9s could s$oil $arty() Jan 18( le0is
Global business leaders $inned their ho$es on roarin+ +ro!th in emer+in+ mar9ets at the start of the annual Da"os forum on ;ednesday( but
risin+ inflation and $olitical ris9s cast a lon+ shado!& E0ecuti"es and $olitical leaders at the ;orld Economic >orum
3;E>6 said sur+in+ foo) prices coul) spark fresh social unrest an) pointe) to +eopolitical tensions on the
>orean %eninsula an) o$er 5ran9s nuclear pro+ramme ( as !ell as unrest in E+y$t& V7he +a$ bet!een rich and
$oor is +ro!in+ ceaselessly(V #!iss President Aicheline Calmy-Rey said in an o$enin+ address( lamentin+ that $oor countries !ere
not benefitin+ enou+h from +lobalization& 7he ca$tains of industry and money mostly sounded u$beat after t!o years in !hich +lobal
financial and economic turmoil curbed their s!a++er and made the annual tal9fest of the rich and $o!erful almost contrite in tone&

0ranian insta!ility causes middle eastern war
<ri- >hin)aria /0 =bama and Iran' the $eril is risin+ by the day() 7he Aoderate Coice( Jan J( le0is
>or ;est Asia( 14.4 has not be+un !ell& 'he mess in 5ran is increasin+ #y the )ay an) hol)s peril unprece)ente) for
the entire re+ion& If the +o"ernment( ho!e"er re$rehensible( falls into disarray the real $ossibility arises of a hu+e arc
of "iolent $olitical and ci"il instability stretchin+ throu+h %akistan, Af+hanistan, 5ran, 5raq an) %alestine to
5srael& 7he $ossibility of a ne! American !ar is small but that holds little comfort&

*cenario two?*omalia
Somlia is reliant on food imports$$$high food prices cause refugee flows to
Denya$$$causes insta!ility
'uttle = 0e))in+ /2 Johanna @esseth 7uttle is a senior "ice $resident for strate+ic $lannin+ at C#I# and Eristin ;eddin+ is
director and fello! at C#I# +lobal food security $ro-ect( ;ill >ood Prices Dri"e InstabilityU) Global >orecast 14.1
htt$'**csis&or+*files*$ublication*.14?.8,+f,nesseth,!eddin+&$df
#=AABIA >or much of the $ast t!o years( se"ere drou+ht and $ersistent famine ha"e $la+ued #omalia & 'he country is
now lar+ely reliant on foo) aid and imports( des$ite ha"in+ the ca$acity to be a+riculturally $roducti"e& Aany farmers ha"e been
dri"en off their lands& Almost / million *omali refu+ees ha$e fle) to nei+hborin+ Eenya and Ethio$ia & 7he cam$s in
Dadaab( Eenya( are host to a$$ro0imately half of the refu+ees& 7hese con)itions are e7acer#ate) #y increase) conflict
bet!een al-#habaab and the African %nion Aission in #omalia 3AAI#=A6( as !ell as !ith Eenyan and Ethio$ian forces&
>urther com$licatin+ the situation( al-#habbab is denyin+ access to many humanitarian +rou$s offerin+ food assistance(
and the %nited #tates is limitin+ food aid and not allo!in+ %&#& ban9s to transmit remittances from #omalis in the %nited #tates to
#omalia( for fear that the assistance could be di"erted to su$$ort al-#habaab insur+ents& 7he unstable refu+ee situation is !orsened
by concerns that al#habaab is usin+ the e0odus of #omalis as a co"er to infiltrate Eenya & Eenyan authorities are tryin+
to identify the al#habaab members( !hich has escalated "iolence in the cam$s& 7he result is that refu+ees are cau+ht in the
middle and abused by both sides( and threats by al-#habaab ha$e contri#ute) to a new le$el of insecurity in
>enya& In these countries( as !ell as many others around the !orld( emer+ency assistance !ill li9ely be reHuired for much of 14.J& It is
im$ossible to $redict !here food $rice and su$$ly "olatility !ill lead to insecurity& Ho!e"er( it is clear that in many countries underlyin+
conditions e0ist !here a food shorta+e or $rice s$i9e could easily s$ar9 si+nificant unrest&
1ACSolvency
Kast is solvency$$$the Army Corps are ey
Dr& ;illiam G& Howlan) 4 is the <asin Pro+ram Aana+er of Ba9e Cham$lain( Grand Isle( C7( %&#& ARAD C=RP# => E@GI@EER#
R=BE I@ 7HE @A7I=@O# ;A7ER RE#=%RCE @EED# I@ 7HE 1.#7 CE@7%RD( Ca$ital Hill 7estimony( Aarch J.( le0is
=ur $artnershi$ in"ol"es the states of Cermont and @e! Dor9( the Pro"ince of Tuebec( and numerous federal a+encies( includin+ the
%#EPA( the %#DA( %#DI( and the %#ACE& 7his $artnershi$ is hi+hly effecti"e and throu+h our !or9 to restore the la9e ecosystem( !e also
are ensurin+ an economic future for citizens in our re+ion& 7his !or9 is of "ital im$ortance to the re+ional economy( includin+ the tourism
and recreation economy for !hich !e are !ell 9no!n( and !hich de$ends so fundamentally u$on this +reat and !onderful la9e& =ne of the
+reat disco"eries in my !or9 !ith the Ba9e Cham$lain <asin Pro+ramOs federal a+ency $artners is the +ood faith and dedication that they
brin+ to the tas9 of cleanin+ u$ and restorin+ AmericaOs !ater!ays& I ha"e +reat admiration and a$$reciation for all of our federal $artners&
7oday( my testimony !ill focus on the essential !or9 of the %&#& Army Cor$s of En+ineers( and $articularly their role in
En"ironmental Restoration $ro-ects& Cleanin+ u$ $ollution in a la9e is e0ceedin+ly difficult and costly& And it al!ays includes interru$tin+
the flo! of $ollutants into the draina+e system to $re"ent further contamination& Pollution $re"ention reHuires chan+in+ the !ay thin+s !or9
in the landsca$e that drains into the la9e& In Ba9e Cham$lain( as in the Great Ba9es and other $arts of the nation( ecosystem
restoration efforts often reHuire ad"anced en+ineerin+ desi+n e0$ertise and leadershi$ that communities and
states sim$ly can not $ro"ide& 'he competence an) en+ineerin+ e7pertise of the (!*! Army Corps of
1n+ineers is a $ital resource for plannin+, )esi+nin+ an) e7ecutin+ restoration plans! 7he stature of the
Cor$s( its trac9 record !ith lar+e $ro-ects and its Huality control $rotocols $ro"ide the leadershi$ that is essential
to maintain and im$ro"e the !ater Huality of our ri"ers and la9es& 7he %&#& Army Cor$s is currently facilitatin+ se"eral
restoration $ro-ects in the Ba9e Cham$lain !atershed& ;ith the Cor$Os su$$ort( an infestation of !ater chestnut( an in"asi"e aHuatic $lant
that has dominated the entire southern $art of the la9e for years is no! nearly under control& 7his $ro+ram( run in $artnershi$ !ith the states
of Cermont and @e! Dor9( has lead us out of an almost ho$eless situation and !e are seein+ a return to $ublic en-oyment of shoreline areas
in the southern $art of Ba9e Cham$lain& 7his summer !e e0$ect to be+in !or9 on $ro-ects to interce$t storm !ater runoff into Ba9e Geor+e(
$art of the Ba9e Cham$lain ecosystem( and to stabilize erodin+ streamban9s in the AissisHuoi !atershed( !ith e0$ertise( o"ersi+ht
and fundin+ by the %&#& Army Cor$s& ;ithout their leadershi$ and su$$ort( this "ital !or9 could not ha$$en& 7he
role of the %&#& Army Cor$Os En"ironmental Restoration authority is a "ital nation!ide assetS +ettin+ $ro-ects
done - and done $rofessionally - all across America& Dam remo"al $ro-ects( !etland restoration( fish $assa+es
and streamban9 stabilization $ro-ects restore de+raded ecosystems( im$ro"e American li"es( stren+then our
nationOs economy and ensure that !e !ill be able to $ro"ide clean drin9in+ !ater to oursel"es( our children and their
children& Ba9e #t& Clair( and the #t& Clair Ri"er( located bet!een Ba9e Huron and Ba9e Erie( faces massi"e $roblems of nutrient loadin+(
in"asi"e s$ecies and the challen+es of a busy !ater!ay& It is in des$erate need of $ollution $re"ention and ecosystem restoration action& 7he
%&#& Army Cor$s of En+ineers has ta9en the lead role in dra!in+ to+ether federal a+encies and communities in
the %&#& and Canada to address this international challen+e& 7he stature an) e7pertise of the Corps ( and its
mandate to de"elo$ a mana+ement $lan( under #ection 1?/ of ;RDA .III( place) it in the lo+ical lea) in this
important effort& =ne of the +reatest restoration $ro+rams in the history of our nation is under!ay in the E"er+lades and #outh >lorida
Ecosystem( !ith %&#& Army Cor$s leadershi$& 7he Com$rehensi"e E"er+lades Restoration Plan a$$ro"ed by Con+ress in ;RDA 1444 is the
9ey to the future of the hu+e e"er+lades ecosystem and the "itality of a si+nificant sector of the >lorida economy& Coor)ination of the
work of ei+ht fe)eral a+encies an) more than a hun)re) local stakehol)er +o$ernments, re+ional councils
an) state a+encies, coul) only #e mana+e) #y an a+ency with the en+ineerin+ capacity, tra)itions an)
commitment of the (!*! Army Corps& >rom 7e0as to Aississi$$i in the Bouisiana Coastal Area Ecosystem( !etlands are
disa$$earin+ at the rate of nearly 11(444 acres $er year& 7he %&#& Army Cor$s is a $artner !ith the #tate of Bouisiana on a feasibility study
that !ill enable us to better understand this $roblem( and ho! to miti+ate and minimize losses( to restore a future for this re+ion& #imilar case
histories( of $ro-ects lar+e and small( could be cited from across the nation( !ith the accolades and +ratitude of millions of American citizens&
America today faces un$recedented challen+es of ecosystem dama+e and resultant declines in !ater Huality( contaminated and !eed- infested
!ater!ays( and $olluted la9es and estuaries across the nation& 7hese $roblems ha"e com$romised drin9in+ !ater su$$lies for millions of
Americans( caused des$erate stru++les for sur"i"al in the tourism and recreation industries( and created an alarmin+ trend to!ards more and
+reater $roblems in the near future& 7he (!*! Army Corps of 1n+ineers is a $ital part of our military ser$ice that
works )irectly in the homelan) to meet these challen+es with the worl)9s #est professional e7pertise& Its
stature and traditions of ser"ice to America ha"e turned to en"ironmental restoration $ro-ects that reHuire
en+ineerin+ solutions& 'he Corps #rin+s the #est tools in the nation to +uide the en+ineerin+ $roblem-sol"in+
that these s$ecial ecosystems reHuire& I !ould li9e to direct your attention to the challen+es !e face re+ardin+ the Cor$Os Continuin+
Authorities $ro+rams and #ections 14/ and ..J5& 7he e0istin+ $ro+ram limits of :15 million for each ha"e sim$ly not 9e$t $ace !ith current
needs( and are no! a fraction of !hat America needs them to be& In the Ba9e Cham$lain !atershed( this means that se"eral on+oin+ $ro-ects
are bein+ sus$ended due to a national shortfall& #us$endin+ +ood $ro-ects $art!ay throu+h their im$lementation( !hether in Ba9e Cham$lain
or else!here across the nation( neither sa"es money nor a"oids e0$ense& 7he $roblems in each case !ill +et far more costly( not less costly&
7he o$$ortunities to $re"ent or contain $ollution !ill be lost if a shortfall li9e this $ersists& 7he most cost-effecti"e solution to lar+e
ecosystem $roblems is to in"est adeHuately in their restoration at the earliest $ossible date& Any alternati"e is li9ely to be a false economy in
the short term and result a bur+eonin+ burden of additional accrued contamination and shar$ly increased costs of restoration in the lon+ term&
>inally( the !or9 of the %&#& Army Cor$s on en"ironmental restoration is not only about conser"ation $hiloso$hy or en"ironmental ethics& It
is also about our nationOs economic en+ines& As !e 9no! so !ell in the northeast( it is about the "itality of the tourism economy and the
Huality of life that 9ee$s the recreation businesses in business& It is about truc9s on the hi+h!ay( the $ulse of commerce and trade& It is about
reducin+ ban9ru$tcies and maintainin+ -obs& It is about smell of the ta$ !ater in the cities and to!ns across the nationS it is about the health of
our o!n human habitat throu+hout this nation that is our future& In the final analysis( ecosystem restoration and !ater Huality is about
insurin+ the Huality of life for citizens across America( and the health of our children and their children for +enerations to come& I ho$e the
members of this Committee !ill continue to reco+nize( a$$reciate and su$$ort the $ital role of the (!*! Army Corps of
1n+ineers in ser$ice to the American homelan) and( in $articular( !ill fully su$$ort their En"ironmental Restoration
$ro+rams& 7han9 you for the in"itation to testify before you today& I loo9 for!ard to ans!erin+ your Huestions&
-ew fun)in+ is key to pre$ent collapse of inlan) waterways
American *ociety of Ci$il 1n+ineers 8 Q144G is the most recent citation( Infrastructure Re$ort Card Inland ;ater!ays)
htt$'**!!!&infrastructurere$ortcard&or+*fact-sheet*inland-!ater!ays
>orty-se"en $ercent of all loc9s maintained by the %&#& Army Cor$s of En+ineers !ere classified as functionally
obsolete in 144/& Assumin+ that no ne! loc9s are built !ithin the ne0t 14 years( by 1414( another IJ e0istin+
loc9s !ill be obsolete2renderin+ more than 8 out of e$ery /0 locks now in ser$ice out)ate) & 1 Currently( the
Cor$s has :.G4 million $er year a"ailable for loc9 re$airs2half comes from the I;7> re"enues and half comes from
con+ressional a$$ro$riations& ;ith an a"era+e rehabilitation cost of :54 million $er loc9( the current le"el allo!s the
Cor$s to fully fund only t!o or three loc9 $ro-ects each year&
***5nherency***
2020 *pecific
By 2020, 80% of lock systems will fail
Heint et al! " James Heintz Associate Research Professor & Associate Director Robert Pollin Professor of Economics & Co-Director
Heidi Garrett-Peltier Research Assistant Political Economy Research Institute Ho! Infrastructure In"estments #u$$ort the %&#& Economy'
Em$loyment( Producti"ity and Gro!th() htt$'**americanmanufacturin+&or+*files*$eri,aam,final-an./,ne!&$df
A$$ro0imately 1&/ billion short tons of commodities are trans$orted on %&#& na"i+able !ater!ays each year2an
e0tremely cost-efficient trans$ortation system 3Army Cor$s of En+ineers( 14456& 7he Army Cor$s of En+ineers
maintains and o$erates the inland !ater!ay system !hich includes 158 loc9 systems nation!ide( the a"era+e a+e of
!hich is 55 years& Accordin+ to the American #ociety of Ci"il En+ineers( #y 2020 80 percent of the lock
systems will #e functionally o#solete without new infrastructure in$estments 3A#CE( 14456& 7he estimated cost
of u$datin+ all the loc9 systems is :.15 billion&
-ew fun)in+ is key to pre$ent collapse of inlan) waterways
American *ociety of Ci$il 1n+ineers 8 Q144G is the most recent citation( Infrastructure Re$ort Card Inland ;ater!ays)
htt$'**!!!&infrastructurere$ortcard&or+*fact-sheet*inland-!ater!ays
>orty-se"en $ercent of all loc9s maintained by the %&#& Army Cor$s of En+ineers !ere classified as functionally
obsolete in 144/& Assumin+ that no ne! loc9s are built !ithin the ne0t 14 years( by 1414( another IJ e0istin+
loc9s !ill be obsolete2renderin+ more than 8 out of e$ery /0 locks now in ser$ice out)ate) & 1 Currently( the
Cor$s has :.G4 million $er year a"ailable for loc9 re$airs2half comes from the I;7> re"enues and half comes from
con+ressional a$$ro$riations& ;ith an a"era+e rehabilitation cost of :54 million $er loc9( the current le"el allo!s the
Cor$s to fully fund only t!o or three loc9 $ro-ects each year&
'hey will fail #y 2020
5.C, 23@/-
3Infrastructure Re$ort Card( Inland ;ater!ays() htt$'**!!!&infrastructurere$ortcard&or+*fact-sheet*inland-!ater!ays6
<ecause of their ability to mo"e lar+e amounts of car+o( the nation;s inlan) waterways are a strate+ic economic an)
military resource& A recent analysis by the %&#& Army ;ar Colle+e concluded that Vthe strate+ic contri#utions of these
inlan) waterways are not well un)erstoo) ! 'he lack of a)equate un)erstan)in+ impacts )ecisions
contri#utin+ to efficient mana+ement, a)equate fun)in+, an) effecti$e inte+ration with other mo)es
of transportation at the national le$el& Recommendations demonstrate that le$era+in+ the strate+ic $alue of (!*!
inlan) waterways will contri#ute to #uil)in+ an effecti$e an) relia#le national transportation
network for the 2/st century&V . >orty-one states( includin+ all states east of the Aississi$$i Ri"er and ./ state ca$itals( are ser"ed
by commercially na"i+able !ater!ays& 7he %&#& inland !ater!ay system consists of .1(444 miles of na"i+able !ater!ays in four systems2the
Aississi$$i Ri"er( the =hio Ri"er <asin( the Gulf Intercoastal ;ater!ay( and the Pacific Coast systems2that connect !ith most states in the
%&#& 7he system com$rises 158 loc9s( !hich raise and lo!er ri"er traffic bet!een stretches of !ater of different le"els& 7hree-Huarters of the
nationOs inland !ater!ays( or a$$ro0imately I(444 miles( are !ithin the Aississi$$i Ri"er system& 7he ne0t lar+est se+ment is the =hio Ri"er
system !ith 1(G44 miles& 7he Gulf Coast Intercoastal ;ater!ay system com$rises .(.4I miles and the Columbia Ri"er system( the shortest of the
four ma-or systems( is only 5I/ miles lon+& 7he nation!ide net!or9 includes nearly ..(444 miles of federal user fees throu+h an e0cise ta0 on
fuel& Commercial !ater!ay o$erators on these desi+nated !ater!ays $ay a fuel ta0 of 14 cents $er +allon( !hich is de$osited in the Inland
;ater!ays 7rust >und 3I;7>6& 7he I;7>( !hich !as created in .I8G( funds half the cost of ne! construction and ma-or rehabilitation of the
inland !ater!ay infrastructure& 6orty-se$en percent of all locks maintaine) #y the (!*! Army Corps of
1n+ineers were classifie) as functionally o#solete in 144/& Assumin+ that no new locks are #uilt within
the ne7t 20 years, #y 2020, another "@ e7istin+ locks will #e o#solete 2renderin+ more than G out of e"ery .4 loc9s
no! in ser"ice outdated& 1 Currently( the Cor$s has :.G4 million $er year a"ailable for loc9 re$airs2half comes from the I;7> re"enues and
half comes from con+ressional a$$ro$riations& ;ith an a"era+e rehabilitation cost of :54 million $er loc9( the current le$el allows
the Corps to fully fun) only two or three lock pro,ects each year!
-ew infrastructure in$estments key
Han, /2-
Global Infrastructure Asset Aana+ement 3;hy In"est In InfrastructureU()
htt$'**!!!&+lobalinfrastructurellc&com*$dfs*;hy,In"est,in,Infrastructure-@ecessities,and,<enefits,of,Infrastructure,In"estments&$df6
A$$ro0imately 1&/ billion short tons of commodities are trans$orted on %&#& na"i+able !ater!ays each
year2an e0tremely cost-efficient trans$ortation system 3Army Cor$s of En+ineers( 14456& 7he Army Cor$s of En+ineers maintains and
o$erates the inland !ater!ay system !hich includes 158 loc9 systems nation!ide( the a"era+e a+e of !hich is 55 years& Accor)in+ to the
American *ociety of Ci$il 1n+ineers, #y 2020, 80 percent of the lock systems will #e functionally
o#solete without new infrastructure in$estments 3A#CE( 14456& 'he estimate) cost of up)atin+ all the
lock systems is A/22 #illion! In addition( the Army Cor$s of En+ineers assess the state of the nationWs le"ees and flood control
systems( amountin+ to 1(444 le"ees totalin+ .J(444 miles( !hich include $ro-ects built and maintained by the Cor$s of En+ineersS $ro-ects built
by the Cor$s of En+ineers and subseHuently transferred to a local o!ner to maintainS and $ro-ects built by local communities& In 1448( the Cor$s
identified .11 le"ees( across the country( !hich are in need of additional maintenance and re$air& 1 'he in$estment nee)e) to
up)ate the lock system com#ine) with an a))itional A@0 #illion to impro$e the nationBs le$ees
woul) total A/22 #illion, or a#out AC!2 #illion annually o$er the ne7t 22 years
:eneric Dacks 5n$estment
An), there;s a lack of fun)in+ now---the plan spurs #roa)er in$estment---that;s key
to competiti$eness
*teenhoek 43/8 Ai9e #teenhoe9( E0ecuti"e Director of the #oy 7rans$ortation Coalition House 7rans$ortation and Infrastructure
#ubcommittee on ;ater Resources and En"ironment Hearin+S VHo! Reliability of the Inland ;ater!ay #ystem Im$acts Economic
Com$etiti"eness&VS 7estimony by Ai9e #teenhoe9( E0ecuti"e Director( #oy 7rans$ortation Coalition( Con+ressional Documents and
Publications( 14.1( le0is
=ne of the $rimary deli"erables of this analysis !as to e"aluate the im$act of these li9ely loc9 failures on a local le"el( rather than sim$ly the
national le"el& <oth our elected leaders and constituent +rou$s re$eatedly demonstrate ho! issues ha"e more resonance !hen understandin+
the local im$act rather than the a++re+ate im$act& 7he micro ar+ument is more $ersuasi"e than the macro ar+ument& 7he analysis documents
ho! many Con+ressional districts in this nation ha"e ne+ati"e e0$osure to a $otential loc9 and dam failure& America9s economic
competiti$eness is not simply impacte) #y our increasin+ly unrelia#le inlan) waterway system ( the
economic health of our local communities !ill be im$acted as !ell&
=ur dila$idated loc9 and dam in"entory is increasin+ly $la+ued by unscheduled maintenance and mechanical
brea9do!ns& Accordin+ to the Army Cor$s of En+ineers( na$i+ation outa+es on the =hio Ri"er alone ha$e
increase) more than three-fol) since 1444 ( increasin+ from 15(444 hours to G4(444 hours& 'his unfortunately results in
)iscoura+in+ further in$estment by those !ho utilize the inland !ater!ay system to!ard modernization of
ri"er terminals( to!in+ eHui$ment( or bar+e fleets& =ur nation has the lofty and laudable +oal of doublin+ e0$orts
by 14.5& Ho!e"er( our nation - #y not sufficiently maintainin+ our lock an) )am in$entory - is perpetuatin+
a ma,or impe)iment to this worthwhile +oal bein+ ultimately achie"ed&
Com$oundin+ the frustration due to ha"in+ to de$end on an increasin+ly unreliable inland !ater!ay system is
!ides$read discoura+ement due to our inability as a nation to adeHuately address this challen+e& 7hose !ho
utilize our inland !ater!ay system ha"e lon+ reco+nized and articulated the alarmin+ condition of our loc9s and
dams& (nfortunately, this reco+nition an) communication ha$e not #een met with tan+i#le solutions!
An), %anama canal means in$estment isn;t enou+h
8ica, /2-
3Chairman of the 7rans$ortation and Infrastructure Committee( John( Aarch 18( 14.1( #%<C=AAI77EE RECIE;# <%DGE7 PRI=RI7IE#
>=R ARAD C=RP# => E@GI@EER#() htt$'**trans$ortation&house&+o"*ne!s*PRArticle&as$0U@e!sIDX.5G.6
'he Corps of 1n+ineers pro$i)es water resources )e$elopment pro,ects for the nation, usually
throu+h cost-sharin+ partnerships with nonfe)eral sponsors& 7he a$$ro$riation reHuest in the AdministrationKs >D
14.J bud+et submittal for the Cor$s of En+ineers is :?&8J. billion& >or too lon+( this Administration has short-chan+ed and mis-$rioritized the
$ro-ects and $ro+rams of this a+ency() said Chairman Gibbs& I belie"e !e must be su$$orti"e of $ro+rams that ha"e a $ro"en record of
$ro"idin+ economic benefits& Gibbs continued( In 14..( !e had some of the !orst floodin+ on record in this country! 5n 20/4, it is likely
an e7pan)e) %anama Canal will #ecome operational& Det( the %resi)ent proposes to cut
appro7imately A20 million from floo) )ama+e re)uction acti$ities an) once a+ain short-chan+es the
na$i+ation #u)+et! 'he %resi)ent is once a+ain proposin+ to spen) only half of money #ein+
collecte) for har#or maintenance! Enly if our ports an) waterways are at their authorie) )epths
an) wi)ths will pro)ucts #e a#le to mo$e to their o$erseas )estinations in an efficient an)
economical manner() Gibbs added& =nce a+ain( only 1 of the nationKs .4 lar+est $orts are at their authorized de$ths and !idths& 'he
%resi)ent;s #u)+et )oes nothin+ to ensure the competiti$eness of American pro)ucts in worl)
markets! 'hat hurts #usinesses an) costs us ,o#s! :i$en the fact that the na$i+ation pro,ects an)
the floo) )ama+e re)uction pro,ects pro$i)e economic #enefits to the nation, 5 woul) like to see the
A)ministration place a hi+her priority on these types of water resources in$estment () said Gibbs& #a"in+s
could be found by slo!in+ do!n !or9 on some en"ironmental restoration $ro-ects until the economy turns around& In some cases( the Cor$s of
En+ineers $laces unnecessary hurdles in its o!n !ay to com$lete studies and $ro-ects& ;e ha"e heard the Cor$s sometimes a+rees to conduct
additional studies on a $ro-ect for information they donKt really need -ust to a"oid a len+thy la!suit& In many other cases( out-dated la!s !ritten
by Con+ress or one-size-fits-all re+ulations from other federal a+encies !ill delay or e"en 9ill a $ro-ect& I donKt necessarily !ant to re$eal any
en"ironmental or coordination reHuirement( but all of us ha"e to ma9e the !hole $rocess more efficient& In todayKs economy( delayin+ a $ro-ect is
synonymous !ith 9illin+ it& And 9illin+ a $ro-ect in this !ay means lost economic o$$ortunity and lost -obs() Gibbs concluded&
*tern, /2-
3Analyst in @atural Resources Policy( Inland ;ater!ays' Recent Pro$osals and Issues for Con+ress()
htt$'**!!!&fas&or+*s+$*crs*misc*R?.?J4&$df6 **JC
A+in+ 5nfrastructure an) (r+ency of -ew 5n$estments 'he con)ition of Cor$s inlan) waterway
facilities has #een a primary )ri$er #ehin) the call for increase) in$estment on inlan) waterways&
7he Institute for ;ater Resources 3$art of the Cor$s of En+ineers6 notes that the ma-ority of loc9s in the %nited #tates are no! $ast their intended
desi+n a+e of 54 years& 54 'he Corps has connecte) this a+in+ infrastructure to an o$erall )ecline in the
efficiency of its assets on inlan) waterways, notin+ that o$erall lock una$aila#ility 3both scheduled and
unscheduled6 has increase) in recent years& 5. In some cases( the user industry fa"ors ne! loc9 construction and e0$anded ca$acity
o"er on+oin+ maintenance for a number of reasons& 51 =ther +rou$s ar+ue a+ainst si+nificant ne! in"estments for inland !ater!ay $ro-ects& In
ar+uin+ a+ainst ne! loc9s on the %$$er Aississi$$i Ri"er( a coalition of en"ironmental +rou$s noted that !hile the desi+n life of ne!
in"estments is usually only 54 years( re+ular maintenance can e0tend the life of e0istin+ loc9s for an additional 54 years at a considerably lesser
cost than that for ne! construction& 5J 7hese +rou$s +enerally ar+ue that the costs of ne! loc9 construction +reatly e0ceed the benefits of
re)uce) waitin+ time an) lock una$aila#ility, an) point out that issues associate) with most a+in+
inlan) waterways infrastructure can #e o$ercome #y impro$e) smallscale an) nonstructural
impro$ements& 5?
Docks Are 6ailin+
Docks are failin+ now
Fa$i)son, 2320-
3%#A 7oday Re$orter( %#AOs crea9in+ infrastructure holds bac9 economy() htt$'**!!!&usatoday&com*money*economy*story*14.1-45-
14*crea9in+-infrastructure*554I/JI/*.6
Docks an) )ams raise or lower #ar+es from one water le$el to the ne7t, #ut #reak)owns are
frequent! >or e0am$le( the main chamber at a loc9 on the =hio Ri"er near ;arsa!( Ey&( is bein+ fi0ed& Aaneu"erin+ .5-bar+e to!s into a
much smaller bac9u$ chamber has increased the a"era+e delay at the loc9 from ?4 minutes to 14 hours( includin+ !aitin+ time& 7he outa+e(
!hich be+an last July and is e0$ected to end in Au+ust( !ill cost American Electric Po!er and its customers :5&5 million as the utility ferries coal
and other su$$lies alon+ the ri"er for itself and other businesses( says AEP senior mana+er Aarty Hettel& As the economy $ic9s u$( the
nation9s creakin+ infrastructure will increasin+ly stru++le to han)le the loa)! 'hat will make
pro)ucts more e7pensi$e as #usinesses pay more for shippin+ or maneu$er aroun) roa)#locks, an)
it will cause the nation to lose e7ports to other countries 2 #oth of which are e7pecte) to hamper the
reco$ery! V7he +ood ne!s is( the economy is turnin+(V says Dan Aurray( "ice $resident of the American 7rans$ortation Research Institute&
G'he #a) news is, we e7pect con+estion to skyrocket!G 'he ancient lock-an)-)am system is perhaps
the most e+re+ious e7ample of a+in+ or con+este) transportation systems that are #ein+ outstrippe)
#y )eman) ! 6ourteen locks are e7pecte) to fail #y 2020, costin+ the economy #illions of )ollars!
Aean!hile( seaports can9t accommo)ate lar+er container ships, slowin+ e7ports an) imports! Hi+h!ays are
too narro!& <rid+es are o"erta0ed&
-o *quo 6un)in+
Dow chance of any more fun)in+
Fa$i)son, 2320-
3%#A 7oday Re$orter( %#AOs crea9in+ infrastructure holds bac9 economy() htt$'**!!!&usatoday&com*money*economy*story*14.1-45-
14*crea9in+-infrastructure*554I/JI/*.6
Det( there9s little prospect for more infrastructure in$estment as a )i$i)e) Con+ress #attles a#out
how to cut the A/!@ trillion fe)eral )eficit, an) state an) local +o$ernments face their own #u)+et
shortfalls! Go"ernment in"estment in hi+h!ays( brid+es( !ater systems( schools and other $ro-ects has fallen each year since 144G& IH#
Global Insi+ht e0$ects such outlays to dro$ ?&?P this year and JP in 14.J&
****ol$ency 8echanisms***
6un)in+ 8echanism H/
6un)in+ mechanism
Felta 6arm %ress /2 Bac9 of !ater!ay maintenance harmin+ commerce( farmers() 1*1 le0is
=n efficiencies and sa"in+sY %sin+ !ater!ays( !e can mo"e a ton of material 58/ miles on a +allon of diesel& 7hatKs efficiency !e
canKt +et any!here else& =ne .5 to! bar+e is the eHui"alent of .(454 truc9s or more than 1/4 railcars& ;hat !eKre sayin+ is Wta9e the
money bein+ collected N the sufficient money N from users of the shi$s and $ay for the maintenance of
harbors and dred+in+& Y ;eKll ha"e more than enou+h money( as !as $romised in the ori+inal Harbor
Aaintenance and 7rust >und( to $ay for all necessary $ro-ects and then some&) ;hy !onKt they use the trust
fund monies to dred+eU ;hatKs the hold u$U 7hat money is bein+ used else!here in the +o"ernment& 7his bill says
the dollars collected must be used for the dedicated $ur$oses for !hich it !as collected&) Any $ushbac9 at
the hearin+U 7he only $ushbac9 re+arded a $ortion of the ta0& <asically( if you ha"e a shi$ that offloads and reloads on
another shi$ to +o on inland !ater!ays( you ha"e to $ay the ta0 t!ice& 7hatKs a :1 million ineHuity but it can be corrected "ery
sim$ly& Another issue is some $orts $ay into the fund but donKt recei"e any money& 7hatKs because they
donKt ha"e to dred+e because they ha"e a stone base& =ther areas recei"e more 3from the fund6 than they $ay
in& Ho!e"er( that has to be loo9ed at in terms of the entire nationKs economy& All shi$s rise to+ether&
Collecti"ely( this is still the %nited #tate of America N one country N and the money should be utilized here
needed& If !e use this money $ro$erly( thereKs enou+h for all $ro-ects&) >or more( see here&
6un)in+ 8echanism H2
6un)in+ mech3C%I
*teenhoek 43/8 Ai9e #teenhoe9( E0ecuti"e Director of the #oy 7rans$ortation Coalition House 7rans$ortation and Infrastructure
#ubcommittee on ;ater Resources and En"ironment Hearin+S VHo! Reliability of the Inland ;ater!ay #ystem Im$acts Economic
Com$etiti"eness&VS 7estimony by Ai9e #teenhoe9( E0ecuti"e Director( #oy 7rans$ortation Coalition( Con+ressional Documents and
Publications( 14.1( le0is
Aa-or in"estments of any nature - $articularly infrastructure in"estments - reHuire a system of fundin+ that $ro"ides the
money u$ front in a lum$ sum( or at least $ro"ides certainty that the incremental installments !ill be allocated&
=ur current system $ro"ides neither& In fact( if I !ere to desi+n a fundin+ system for infrastructure $ro-ects that
!ould +uarantee re$eated cost o"erruns and $ro-ect delays( I !ould desi+n the system !e currently ha"e& It is our
ho$e that !e can ha"e a $roducti"e discussion !ith other sta9eholders that !ill result in better ste!ardshi$ of the
scarce resources !e ha"e to allocate to these inland !ater!ay $ro-ects&
7he other ar+ument in our on+oin+ analysts is Va $redictably +ood inland !ater!ay system is better than a
hy$othetically +reat one&V Durin+ this $eriod of fiscal scarcity( !e are concerned that our nation is failin+ not only in
$ro"idin+ ne! and e0$anded loc9s and dams( but also in maintainin+ and $reser"in+ our current in"entory& Each
loc9 and dam is a lin9 in a lar+er lo+istics chain& If one fails( our ability to deli"er on customer demands is
+reatly im$aired&
Committin+ to many of these ma-or in"estment $ro-ects and failin+ to deli"er on them( !hile allo!in+ our
remainin+ loc9s and dams to fall further into disre$air is a reci$e for disaster& A $referable a$$roach may be to
first demonstrate ste!ardshi$ of current loc9s and dams by $ro"idin+ assurance to users that a loc9 and dam( in
the e"ent of a ma-or failure( !ill be o$erational !ithin ?G or 81 hours( for e0am$le& If !e allocate our resources
that !ay and can $ro"ide this de+ree of $redictability to those !ho utilize our inland !ater!ay system( !e !ill $ro"ide a
su$erior messa+e to the one !e are currently sendin+& 7he #oy 7rans$ortation Coalition loo9s for!ard to !or9in+ !ith other
sta9eholders in e0aminin+ this $otential a$$roach&
6e)eral350'6
6un)in+ throu+h the 50'6
American 0aterways Eperators ;// 3Inland ;ater!ays and Infrastructure >undin+)( Aarch 1(
14..
htt$'**!!!&american!ater!ays&com*$ress,room*issue,briefs*Industry,Issues*I;7>&$df6
America;s inlan) waterways are a precious resource an) the en$y of the worl) #ecause of the
natural Jwater hi+hwayK the system pro$i)es for commerce& 8o)ern lock an) )am infrastructure
is critical to (!*! competiti$eness in the worl) market, to en$ironmental protection, to ener+y
efficiency, to the sustainment of well-payin+ American ,o#s an) to con+estion relief& 7he inland
!ater!ays system includes .1(444 miles of commercially na"i+able channels and some 1?4 loc9 sites&
'hese ri$ers mo$e commerce to an) from @8 states, ser$e in)ustrial an) a+ricultural centers an)
facilitate imports an) e7ports at +ateway ports! 1$ery year, rou+hly C24 million tons of water#orne
car+o transit the inlan) waterways( a "olume eHual to about .?P of all intercity frei+ht and "alued at
nearly :84 billion& 7oday( more than half of the 1?4 o$erational %&#& Army Cor$s of En+ineers-funded
loc9 chambers in the %nited #tates are o"er 54 years old and ha"e e0ceeded their economic desi+n li"es&
Fue to inefficiencies in infrastructure impro$ement pro,ects, the current process to construct locks
an) )ams is takin+ years lon+er than planne) at costs that are sky-rocketin+ compare) to pro,ects
complete) only )eca)es a+o! 7he Con+ressionally-authorized Inland ;ater!ays %sers <oard 3I;%<6(
com$rised of 9ey Cor$s $ersonnel and !ater!ays sta9eholders( !or9ed to+ether to de"elo$ a
com$rehensi"e( consensus $ac9a+e of recommendations to ensure the continued "itality of this critical
system& Ado$tion of Consensus Plan !ill Ensure the #ystemKs >uture Ciability 7he chan+es
recommended by the I;%<*Cor$s re$ort are intended to ensure the timely and efficient deli"ery of
needed im$ro"ement to !ater!ays infrastructure for the ne0t 14 years& 'hese chan+es inclu)e&
8easures to impro$e the efficiency of Corps )esi+n an) construction processes< 'he use of
wei+hte) criteria to prioritie which pro,ects +et fun)in+< L An emphasis on finishin+ pro,ects in
their or)er of commencement< A cost-share mo)el that inclu)es continuation of the 20%320% split
#etween in)ustry an) +o$ernment for new lock construction an) ma,or lock reha#ilitation pro,ects
that cost more than A/00 million, an) /00% fe)eral fun)in+ for )ams an) lock reha#ilitation
pro,ects un)er A/00 million< A cost-share ca$ on industry contributions for ne! loc9 construction to
$re"ent a+ainst escalatin+ costsS and( An increase in the Inland ;ater!ays >uel 7a0 of si0 to nine cents
$er +allon& Ado$tion of this com$rehensi"e solution !ill allo! sta9eholders of the inland !ater!ays to
en-oy the benefits of infrastructure im$ro"ements for the ne0t +eneration! 5t will also #enefit the pu#lic
at lar+e #y ensurin+ an) enhancin+ the en$ironmental an) economic a)$anta+es of water#orne
commerce&
20320 #asis throu+h 50'6
Han( .1 M :lo#al 5nfrastructure Asset 8ana+ement 3;hy In"est In
InfrastructureU() htt$'**!!!&+lobalinfrastructurellc&com*$dfs*;hy,In"est,in,Infrastructure-
@ecessities,and,<enefits,of,Infrastructure,In"estments&$df6 **JC

Inland !ater!ays are a si+nificant $art of the nationKs trans$ortation system& <ecause of the national economic
benefits of maritime trans$ort( the federal +o"ernment has in"ested in na"i+ation infrastructure for t!o centuries& As
a result( bar+e shi$$in+ has recei"ed si+nificant su$$ort throu+h federal fundin+ for o$erational costs( ca$ital
e0$enditures( and ma-or rehabilitation on inland !ater!ays& #ince the ;ater Resources De"elo$ment Act of .IG/(
e0$enditures for construction and ma-or rehabilitation $ro-ects on inland !ater!ays ha"e been cost-shared on a
54*54 basis #etween the fe)eral +o$ernment an) users throu+h the 5nlan) 0aterways 'rust 6un) N50'6O!
=$erations and maintenance costs for inland !ater!ays ty$ically e0ceed these construction costs( and are a .44P
federal res$onsibility $ursuant to ;RDA .IG/& >uture financin+ for the inland !ater!ay system is uncertain& 7he
I;7> is currently su$$orted by a :4&14 $er +allon ta0 on bar+e fuel( #ut its #alance has )ecline) si+nificantly )ue
to a com#ination of increase) appropriations, cost o$erruns, an) )ecrease) re$enues in pre$ious years!
;ithout chan+es to the financin+ system, 50'6 spen)in+ is likely to #e e7tremely limite)!
Han, /2 M :lo#al 5nfrastructure Asset 8ana+ement 3;hy In"est In InfrastructureU()
htt$'**!!!&+lobalinfrastructurellc&com*$dfs*;hy,In"est,in,Infrastructure-@ecessities,and,<enefits,of,Infrastructure,In"estments&$df6 **JC
Inland !ater!ays are a si+nificant $art of the nationKs trans$ortation system& <ecause of the
national economic benefits of maritime trans$ort( the federal +o"ernment has in"ested in
na"i+ation infrastructure for t!o centuries& As a result( bar+e shi$$in+ has recei"ed si+nificant
su$$ort throu+h federal fundin+ for o$erational costs( ca$ital e0$enditures( and ma-or
rehabilitation on inland !ater!ays& #ince the ;ater Resources De"elo$ment Act of .IG/(
e0$enditures for construction and ma-or rehabilitation $ro-ects on inland !ater!ays ha"e been
cost-shared on a 54*54 basis #etween the fe)eral +o$ernment an) users throu+h the 5nlan)
0aterways 'rust 6un) N50'6O! =$erations and maintenance costs for inland !ater!ays ty$ically
e0ceed these construction costs( and are a .44P federal res$onsibility $ursuant to ;RDA .IG/&
>uture financin+ for the inland !ater!ay system is uncertain& 7he I;7> is currently su$$orted
by a :4&14 $er +allon ta0 on bar+e fuel( #ut its #alance has )ecline) si+nificantly )ue to a
com#ination of increase) appropriations, cost o$erruns, an) )ecrease) re$enues in pre$ious years!
;ithout chan+es to the financin+ system, 50'6 spen)in+ is likely to #e e7tremely limite)!
0)UA # (Inland Waterways 4sers Board, INBAN> WATE8WA@S 4SE8S B=A8> 0H T5
ANN4AB 8E:=8T T= T5E SEC8ETA8@ =E T5E A8M@ AN> T5E 4NITE> STATES
C=N;8ESS, August )///, tt!"##www$waterwaysusers$us#IW4BAnnualr!t<//$!d21
Te Board continues to note tat te 6onies de!osited in te Inland Waterways Trust
Eund ave not 3een 2ully utiliAed 2or te intended !ur!ose o2 navigation in2rastructure
i6!rove6ents$ Eurter, there continues to !e a lac of general federal apportionment to
match
the dollars generated for the 0nland )aterways Trust 8und for navigation infrastructure
improvements& Te co66ercial users o2 te inland waterways ave !aid a considera3le
a6ount
in 2uel ta&es since its enact6ent and te Board 2eels te 2unds generated 3y co66ercial users
ave 3een greatly under<utiliAed$ The 8ederal >overnment has a corresponding o!ligation
to
match the fuel ta% revenues !y providing 6-Q of the cost of loc and dam proBects$ The
United
StatesR a!ility to compete and grow in the glo!al economy is contingent upon our a!ility
to
efficiently transport raw goods" commodities" and finished products throughout the U&S&
and for
e%port& )e have the !est" most efficient waterways system in the worldP one tat is
studied and
e6ulated around te glo3e$ )e cannot maintain our world$class system without
immediate
attention to much$needed reha!ilitation proBects" small$ scale improvements" scheduled
construction of replacement proBects" and effective use of realistic tools and models to
study
proBects for future funding& This will re7uire proper allocation and e%penditure of 0nland
)aterways Trust 8und monies currently availa!le& Te Board strongly 3elieves tat 2unds
s!ent to 6aintain and i6!rove our waterway in2rastructure yield an overwel6ing 3ene2it<to<cost
ratio tat will ave a !ositive i6!act u!on tis Nation(s econo6y 2or decades and generations
to co6e$ )hile the Congress supports the inland navigation system" at this time ade7uate
federal funding is not !eing made availa!le to start new proBects or to complete
continuing construction proBects in a cost efficient manner" let alone on time or on
!udget$ Tis is a continuing callenge$ The 0nland )aterways Trust 8und has ade7uate
dollars to meet the proBected construction and reha!ilitation re7uirements of the system
over te ne&t several years& 4sing trust 2unds to 3alance te 3udget is an e&traordinarily
e&!ensive sort<ter6 solution tat creates in2rastructure !ro3le6s o2 6uc greater 6agnitude,
i6!ortance and cost$ Te Board 2ir6ly 3elieves tat 2uture 3alanced 3udgets and our 2uture
econo6ic co6!etitiveness will 3e 3uilt u!on a solid national in2rastructure, o2 wic te inland
waterways are a signi2icant, %ey co6!onent, and tus te Board strongly endorses an allocation
and a!!ro!riation !rocess tat will allow o!ti6u6 use o2 te Inland Waterways Trust Eund and
allow construction !roCects to !roceed at W2ull ca!a3ility 2unding levels$
0nland waterway fund is normal means for funding federal proBects
9on E Tro%ell and Colonel >onald E Sacson +-N (:ro2essor o2 Strategic Military Bogistics
=!erations and :lanning, Center 2or Strategic Beadersi!, 4$S$ Ar6y War College,
BESE8A;IN; T5E ST8ATE;IC SAB4E =E T5E 4$S$ INBAN> WATE8WA@ S@STEM
Marc F/, )//+, tt!"##www$dtic$6il#cgi<3in#;etT8>oc'A>(A>AH,-*.F1
0n order to !e an effective and relia!le lin in the transportation networ" the inland
waterway system re7uires ade7uate and consistent funding to remain a relia!le mode of
transport$ 4nli%e road and rail, owever, 2unding 2or new construction, o!erations, and 6aintenance (=RM1 is sared 3y te
2ederal govern6ent and co66ercial inland waterway users$ Te 2ederal govern6ent continues to invest in navigation 3ecause o2 its
3ene2it to te national econo6y$ Te distri3ution o2 cost 3etween te 2ederal govern6ent and te local !roCect s!onsor 2or
waterways was esta3lised in te Water 8esources >evelo!6ent Act (W8>A1 o2 0-., (:u3lic Baw --<,,)1$ Te Act esta3lised
cost<sare reMuire6ents 2or inland waterway !roCects tat result in greater 2inancial and decision<6a%ing role 2or non<2ederal
sta%eolders$ Te 2ederal govern6ent ty!ically !ays 0//X o2 costs associated wit 2easi3ility studies and =RM e&!enses$ The
0nland )aterway Trust 8und I0)T8'" created in 1.N=" pays half the cost of the
construction and maBor reha!ilitation costs for specified federal inland waterways
proBects& 0t receives money from a ta% on fuel (currently set at )/ cents !er gallon1 on vessels
engaged in commercial transportation on inland waterways& <5 Typically" Congress
appropriates funds from the federal general revenue fund I>/' as part of the annual
process in the ,nergy and )ater 1evelopment Appropriations !ill to pay the other 6-Q
of construction costs& ,*
0)T8 lacs funding to complete moderniFation proBects
0CTS +1- (Inland Marine trans!ortation syste6s ca!ital invest6ent strategy tea6, Inland
Marine Trans!ortation Syste6s (IMTS1 Ca!ital :roCects Business Model, A!ril 0F, )/0/,
tt!"##www$waterwayscouncil$org#WCIE&tras#IMTSOIW4BO8e!ort$!d21
Wile te a6ount o2 2uel ta& revenue canges 2ro6 year to year 3ased on a nu63er o2 2actors, average ta% revenues
into the 0)T8 over the past five years have !een a!out M=6 million per year, declining to only
G+, 6illion in te recession year o2 )//-$ As a result, under current law and witout 2urter relie2, wit te 0)T8 !alance
almost drawn down" future annual 0)T8 e%penditures will !e limited to the amount of
annual fuel ta% revenues collected for that particular year& )ithout a change in revenues"
cost$sharing policy" or !oth" some ongoing moderniFation proBects as well as newly
authoriFed proBects will continue to !e delayed&
'a7
A ta7 coul) fun) it
Charles *tern ;/2 3Analyst in @atural Resource Policy( Con+ress Research #er"ice( A$ril .1(14.1
htt$'**!!!&fas&or+*s+$*crs*misc*R?.?J4&$df6
6uture financin+ for the inlan) waterway system is uncertain& 7he 50'6 is currently supporte) #y
a A0!20 per +allon ta7 on #ar+e fuel, #ut its #alance has )ecline) si+nificantly )ue to a com#ination
of increase) appropriations, cost o$erruns, an) )ecrease) re$enues in pre$ious years& ;ithout
chan+es to the financin+ system( 50'6 spen)in+ is likely to #e e7tremely limite)& Pre"iously the <ush
and =bama administrations ha"e recommended re$lacin+ the fuel ta0 !ith one or more user fees that
!ould increase re"enues beyond their current baseline& Ho!e"er( Con+ress and industry interests ha"e
re-ected these $ro$osals& In 14.4( the Inland ;ater!ays %sers <oard 3I;%<6( a federal ad"isory
committee ad"isin+ the %&#& Army Cor$s of En+ineers on inland !ater!ays( endorsed an alternati"e
$ro$osal that is su$$orted by many bar+e industry interests& 'he proposal woul) increase the fuel ta7
#y A0!0C-A0!08 per +allon, #ut woul) also require that the fe)eral +o$ernment han)le the full cost
for some pro,ects that are currently costshare)! 7he =bama Administration +enerally o$$oses
thInland !ater!ays are a si+nificant com$onent of the nationKs marine trans$ortation system&
6e)eral 6un)in+
8ore fun)in+ is nee)e)
Paul Puinlan ;/2 3Ener+y ne!s !ire re$orter( E&E $ublishin+( =bamaOs bud+et touts na"i+ation( but
!ater!ay interests arenOt ha$$y)( >ebruary .5(
14.1(htt$'**!!!&eene!s&net*$ublic*Green!ire*14.1*41*.5*?6
Fespite #oostin+ waterways pro,ects, in)ustry officials say, the #u)+et proposal fails to pro$i)e
enou+h for na$i+ation an) le$ees to ensure (!*! water infrastructure can a)equately pro$i)e floo)
protection an) help meet E#ama9s +oal of )ou#lin+ the nation9s e7ports #y 20/2& 7he cor$s is under
un$recedented $ressure to do more !ith less! *pen)in+ caps impose) last year )urin+ the 0hite
House9s )e#t-limit show)own with Con+ress ha$e ren)ere) the Army Corps9 #u)+et a ero-sum
+ame for competin+ interests of na$i+ation, floo) control an) ecosystem restoration& Addin+ to the
$ressure !ere e$ic floods last year alon+ the Aississi$$i and Aissouri ri"ers( !hich forced the a+ency to
raid other accounts for its res$onse& Con+ress $ro"ided :.&8 billion for the estimated :1 billion disaster&
;ith so many needs and so little cash( fe! +rou$s are thrilled by their $ros$ects in the cor$sO bud+et
s!ee$sta9es& And !ater!ays interests are $ressin+ la!ma9ers to s$end more on loc9s( le"ees and harbors
and less on en"ironmental restoration& A #i+ competitor for cash is the massi$e 1$er+la)es
restoration! Dast year, a#out /0 percent of the Army Corps9 construction #u)+et went to the
1$er+la)es effort! 'he J4-year( :.J&5 billion $ro-ect !as a$$ro"ed o"er!helmin+ly by Con+ress and the
>lorida Be+islature in 1444 as bein+ essential to securin+ !ater su$$lies for 8 million $eo$le and
$rotectin+ E"er+lades @ational Par9 and other federal $ar9s and !ildlife refu+es& <ut Darson is tellin+
lawmakers that some of that cash coul) pack more of an economic punch if spent on waterways! G5t
woul) seem to me,G she sai), Gthat the nation woul) #e #etter ser$e) with a portion of that money
focuse) on other pro,ects which contri#ute more to the creation of ,o#s an) our place in the +lo#al
economy!G Inland !ater!ays face an :G billion re$air bac9lo+( said Ai9e 7oohey( $resident of the
;ater!ays Council( a coalition of inland na"i+ation interests& V7he fundin+ doesnOt +et any!here near
!hat the need is(V 7oohey said&
8ore in$estments are key
(* Cham#er ;/0 3#tatement on Aarine trans$ortation htt$'**!!!&uscha
mber&com*sites*default*files*lra*docs*uscc!atertrans$ortation$olicystatementfinal&$df6

5ncrease) in$estments in port infrastructure are nee)e) to #oost connecti$ity to other mo)es an)
impro$e the flow of imports an) e7ports& 6e)eral in$estments shoul) not supplant state, local, an)
pri$ate sector resources, #ut #e le$era+e) to )raw a))itional resources! 7he fe)eral +o$ernment
shoul)& Continue to pro$i)e incenti$es to attract pri$ate in$estment in coastal an) inlan) ports;
lan)si)e infrastructure! 8ake more use of fe)eral cre)it mo)els such as state re$ol$in+ fun)s
3#R>s6( state infrastructure ban9s 3#I<s6( the 'ransportation 5nfrastructure 6inance an) 5nno$ation
Act pro+ram N'565AO( and $ri"ate acti"ity bonds 3PA<s6& o Pro"ide incenti"es for state and local
+o"ernments to secure the non-federal cost share of harbor and channel maintenance and dred+in+& o
#u$$ort the use of short sea shi$$in+ !here feasible& o #u$$ort $ilot $ro-ects that $ro"ide $ri"ate
in"estment for inland !ater!ays !here feasible&
6ull fun)in+ is nee)e)
Charles *tern ;/2 3Analyst in @atural Resource Policy( Con+ress Research #er"ice( A$ril .1(14.1
htt$'**!!!&fas&or+*s+$*crs*misc*R?.?J4&$df6
Increase ="erall #$endin+ on Inland ;ater!ays 'he 50(B report proposes an o$erall increase in
fun)in+ for inlan) waterways, inclu)in+ increases in fun)in+ #oth from the 50'6 an) the :eneral
.e$enue fun)! As $ro$osed in the I;%< re$ort( full fun)in+ for this suite of in$estments requires
that annual e7pen)itures Nfrom the :. fun) an) the 50'6O a$era+e appro7imately A@80 million, a
si+nificant increase o"er historical a"era+es& ?. 7his !ould necessitate an increase abo"e a"era+e total
e0$enditures since .II?( !hich ha"e been a$$ro0imately :1J? million annually( and a si+nificant
increase o$er 6Q20// e7pen)itures, which were estimate) to #e appro7imately A/R0 million un)er
the aforementione) Jstop+apK measures& In the immediate future( most of the increase needed to fund
the $ro$osed $ortfolio of :JG4 million $er year !ould be deri"ed from the GR fund 3in order to allo! the
trust fund balance to rebuild6& >or instance( to meet the I;%< $ro$osalKs reHuirements o"er the first fi"e
years( fe)eral fun)in+ woul) nee) to #e A/!@@ #illion, or R4% of the total fun)in+ require) for the
report;s propose) pro,ects o$er this time perio)!
'heres a shortfall now
Charles *tern ;/2 3Analyst in @atural Resource Policy( Con+ress Research #er"ice( A$ril .1(14.1
htt$'**!!!&fas&or+*s+$*crs*misc*R?.?J4&$df6
Con+ress is faced !ith com$etin+ $ro$osals relatin+ to future financin+ for inland !ater!ay system
in"estments( includin+ who will finance what in$estments, an) at what le$el& 7he current re"enue
source( a set ta0 on fuel a+reed to in the mid-.IG4s( is insufficient to co"er the nonfederal costs of ma-or
ca$ital e0$enditures on inland !ater!ays& 7his has in some years resulted in federal ta0$ayers co"erin+
more than half of these costs& 'he on+oin+ shortfall is currently limitin+ the num#er of new an)
on+oin+ inlan) waterway construction pro,ects, an) is e7pecte) to continue to )o so unless chan+es
to the financin+ system are enacte) #y Con+ress& Recent $ro$osals hi+hli+ht a number of issues
associated !ith inland !ater!ays& =n multi$le $rior occasions( the e0ecuti"e branch has $ro$osed to
$hase out the fuel ta0 in fa"or of a loc9 usa+e fee( but these efforts ha"e been re-ected by Con+ress! 8ore
recently, the user in)ustry propose) an) continues to fa$or a com#ination of increases to the
e7istin+ fuel ta7 an) an increase in the fe)eral share of inlan) waterway costs!

6un)in+ nee)e)
Charles *tern ;/2 3Analyst in @atural Resource Policy( Con+ress Research #er"ice( A$ril .1(14.1
htt$'**!!!&fas&or+*s+$*crs*misc*R?.?J4&$df6
An o$erarchin+ question for Con+ress is what le$el of new an) on+oin+ in$estment is warrante)
Nor )esire)O for the inlan) waterway system! Ence such an in$estment le$el is )efine), Con+ress
may also nee) to )eci)e whether chan+es to the current user fee 3either chan+in+ the le"el of the
fuel ta0 or incor$oratin+ a ne! fee6 and cost-share arran+ement are !arranted to achie"e this
in"estment le"el& -ew le+islation woul) #e require) to a))ress these an) other relate) issues!
8ore in$estment necessary
Charles *tern ;/2 3Analyst in @atural Resource Policy( Con+ress Research #er"ice( A$ril .1(14.1
htt$'**!!!&fas&or+*s+$*crs*misc*R?.?J4&$df6
A central issue for Con+ress is the le$el an) ur+ency of infrastructure in$estments on fe)eral
waterways! Commercial users, inclu)in+ shippers an) some a+ricultural interests, ha$e ar+ue)
that a))itional in$estment is ,ustifie) #ecause of a+in+ infrastructure, the nee) for e7pan)e)
capacity, an) positi$e en$ironmental e7ternalities associate) with inlan) waterway shippin+
compare) to other forms of shippin+! 7hese users ar+ue that the benefits of inland !ater!ays are
!ides$read& 7heir claims are countered by a number of other +rou$s( includin+ ta0$ayer and
en"ironmental ad"ocacy +rou$s( !ho ar+ue a+ainst increased federal fundin+ for inland
!ater!ays& 7hese +rou$s contend that the shi$$in+ industry often misre$resents or o"erstates the
benefits of these in"estments and that ma-or fundin+ increases for inland !ater!ay $ro-ects are
not !arranted&
?G

89 #-1: Audget
USAC, +1# (4S Ar6y Cor!s o2 Engineers, Eiscal @ear )/0F Civil Wor%s Budget 2or te 4$S$
Ar6y Cor!s o2 Engineers, Ee3ruary )/0), tt!"##www$usace$ar6y$6il#:ortals#)#docs#civi
lwor%s#!ressO3oo%#3udget)/0F$!d21
Construction$ Te Audget provides M1&5N1 !illion for the Construction account and gives !riority to te
!roCects wit te greatest net econo6ic and environ6ental returns !er dollar invested, as well as to !roCects to address a signi2icant
ris% to u6an sa2ety$ The Audget funds capital investments in the inland waterways !ased on
the estimated revenues to the 0nland )aterways Trust 8und" while proposing a new user
fee to in the future& The Audget provides M516 million for dam safety" seepage control
and static insta!ility correction construction& Jperation and Caintenance& Te Budget !rovides
G)$F-. 3illion 2or te =!eration and Maintenance account$ The Audget again gives priority to tose coastal ar3ors
and inland waterways with the most commercial traffic, including increasing te a6ount to 3e s!ent 2ro6
te 5ar3or Maintenance Trust Eund to a level signi2icantly iger tan in !revious 3udgets$ Te Budget also 2unds ar3ors tat
su!!ort signi2icant co66ercial 2ising, su3sistence, or !u3lic trans!ortation 3ene2its, altoug at a lower total level tan in 6ost !rior
years$ The Audget provides operation and maintenance funding for safety improvements at
8ederal dams and levees !ased on the ris and conse7uence of a failure&
P/ 2ewswire +1# (:residentLs Eiscal )/0F Budget 2or 4$S$ Ar6y Cor!s o2 EngineersL Civil
Wor%s 8eleased, Ee3ruary 0F, )/0), tt!"##www$!rnewswire$co6#news<releases#!residents<
2iscal<)/0F<3udget<2or<us<ar6y<cor!s<o2<engineers<civil<wor%s<released<0F-)F*/-.$t6l1
The 891: Audget includes M1&N5N !illion for the study" design" construction" operation
and maintenance of inland and coastal navigation proBects& 0t funds capital investments
on the inland waterways !ased on the estimated revenues to the 0nland )aterways Trust
8und" while proposing a new user fee to increase revenue to this trust fund to ena!le a
significant increase in funding for such investments in the future&
1mer+ency .esponse 53D
.5'A B//3 Research and Inno"ati"e 7echnolo+y Administration( emer+ency res$onse "ia Inland
;ater!ays)( Au+ust 14..htt$'**utc&dot&+o"*$ublications*s$otli+ht*14..,4G*html*s$otli+ht,..4G&html6
A catastrophic )isaster can )isa#le or )estroy the $ery same $ehicles, roa)s, an) #ri)+es that are
nee)e) to pro$i)e emer+ency response& <ut for many communities( inlan) waterways may pro$i)e
access to equipment an) emer+ency ser$ices when other means of transportation are una$aila#le& A
+oal of the Aac9-<lac9!ell Rural 7rans$ortation Center 38B'CO is to enhance community emer+ency
prepare)ness an) )isaster relief efforts #y )e$elopin+ an in)e7 to help emer+ency planners e$aluate
the feasi#ility of incorporatin+ inlan) waterways into their emer+ency response plannin+& 5nlan)
waterways may #e especially useful for rural emer+ency planners who must co$er a lar+e
+eo+raphical area with limite) resources& Inland waterways are a tremen)ous asset to the (nite)
*tates, pro$i)in+ an economical an) en$ironmentally soun) mo)e for mo$in+ car+o& 7he %&#& Army
Cor$s of En+ineers is res$onsible for nearly .1(444 miles of commercial( na"i+able %&#& inland and
intracoastal !ater!aysNthe Aississi$$i*=hio Ri"er #ystem( the Gulf Intracoastal ;ater!ay( the
Intracoastal ;ater!ay alon+ the Atlantic Coast( and the Columbia-#na9e Ri"er #ystem in the Pacific
@orth!est& Inland and intracoastal !ater!ays ser"e JG #tates !ith .I1 commercially acti"e loc9 sites&.
Aa$ courtesy of %&#& Army Cor$s of En+ineers %&#& Inland and Intracoastal ;ater!ay #ystem Domestic
water#orne tra)e o$er inlan) waterways amounte) to 222!2 million short tons in 200" alone!2 'he
-ation9s waterways are use) to transport appro7imately 20% of America9s coal, 22% of (!*!
petroleum an) C0% of the -ation9s farm e7ports&J Historically( tu+s and bar+es ha"e been used to
$ro"ide emer+ency res$onse ser"ices& As part of reco$ery efforts in the wake of the Sanuary 20/0
Haiti earthquake, tu+s an) #ar+es participate) in the $ast international relief operation, carryin+
lar+e $olumes of foo) an) supplies as well as ai) to help ease shorta+es& A<7C has de"elo$ed a
;ater!ay Emer+ency #er"ice 3;E#6 inde0 to measure the $otential of indi"idual counties to benefit
from inland !ater!ay emer+ency res$onse& 7he ;E# inde0 consists of se"en factors'
***1conomy ***
1con
An), squo inlan) waterways lack resilience---)eterioration kills the econ
American *ociety of Ci$il 1n+ineers 8 Q144G is the most recent citation( Infrastructure Re$ort Card Inland ;ater!ays)
htt$'**!!!&infrastructurere$ortcard&or+*fact-sheet*inland-!ater!ays
Conditions
<ecause of their ability to mo"e lar+e amounts of car+o( the nation;s inlan) waterways are a strate+ic
economic an) military resource& A recent analysis by the %&#& Army ;ar Colle+e concluded that Vthe strate+ic
contributions of these inland !ater!ays are not !ell understood& 7he lac9 of adeHuate understandin+ im$acts
decisions contributin+ to efficient mana+ement( adeHuate fundin+( and effecti"e inte+ration !ith other modes of
trans$ortation at the national le$el ! Recommendations demonstrate that le"era+in+ the strate+ic "alue of %&#& inland !ater!ays
!ill contribute to buildin+ an effecti"e and reliable national trans$ortation net!or9 for the 1.st century&V .
>orty-one states( includin+ all states east of the Aississi$$i Ri"er and ./ state ca$itals( are ser"ed by commercially na"i+able
!ater!ays& 7he %&#& inland !ater!ay system consists of .1(444 miles of na"i+able !ater!ays in four systems2the
Aississi$$i Ri"er( the =hio Ri"er <asin( the Gulf Intercoastal ;ater!ay( and the Pacific Coast systems2that connect !ith most
states in the %&#& 7he system com$rises 158 loc9s( !hich raise and lo!er ri"er traffic bet!een stretches of
!ater of different le"els&
7hree-Huarters of the nationOs inland !ater!ays( or a$$ro0imately I(444 miles( are !ithin the Aississi$$i Ri"er system& 7he ne0t lar+est
se+ment is the =hio Ri"er system !ith 1(G44 miles& 7he Gulf Coast Intercoastal ;ater!ay system com$rises .(.4I miles and the Columbia
Ri"er system( the shortest of the four ma-or systems( is only 5I/ miles lon+&
7he nation!ide net!or9 includes nearly ..(444 miles of federal user fees throu+h an e0cise ta0 on fuel& Commercial !ater!ay o$erators on
these desi+nated !ater!ays $ay a fuel ta0 of 14 cents $er +allon( !hich is de$osited in the Inland ;ater!ays 7rust >und 3I;7>6& 7he I;7>(
!hich !as created in .I8G( funds half the cost of ne! construction and ma-or rehabilitation of the inland !ater!ay infrastructure&
>orty-se"en $ercent of all loc9s maintained by the %&#& Army Cor$s of En+ineers !ere classified as functionally obsolete in 144/& Assumin+
that no ne! loc9s are built !ithin the ne0t 14 years( by 1414( another IJ e0istin+ loc9s !ill be obsolete2renderin+ more than G out of e"ery
.4 loc9s no! in ser"ice outdated& 1 Currently( the Cor$s has :.G4 million $er year a"ailable for loc9 re$airs2half comes from the I;7>
re"enues and half comes from con+ressional a$$ro$riations& ;ith an a"era+e rehabilitation cost of :54 million $er loc9( the current le"el
allo!s the Cor$s to fully fund only t!o or three loc9 $ro-ects each year&
Due to a lac9 of adeHuate data( A#CE !as unable to assess the condition of( or assi+n a +rade to( the infrastructure of the nationKs more than
J44 $orts and harbors& Ports( !hich are o!ned and o$erated lar+ely by state( local( and $ri"ate entities( are not reHuired to re$ort on the
condition of their infrastructure to the federal +o"ernment& @e"ertheless( %&#& $orts connect to .(444 federally maintained harbor channels
and .1(444 miles of ta0$ayer-funded inland !ater!ays( and their landside $ort infrastructure facilities include terminals( !har"es( rail yards(
and road!ays !ithin the harbor districts& / In 1448( the American Association of Port Authorities 3AAPA6( !hich re$resents $orts in the
%&#&( Canada and Ae0ico( re$orted that $ublic $orts in the %&#& must in"est :.&8 billion annually to u$date and modernize their facilities& 7he
AAPA re$ort contained no assessment of the $hysical condition of indi"idual $orts or of $ort infrastructure +enerally& ? Resilience 'he
current system of inlan) waterways lacks resilience& ;ater!ay usa+e is increasin+( but facilities are a+in+ and
many are !ell $ast their desi+n life of 54 years& Reco"ery from any e"ent of si+nificance !ould be ne+ati"ely
im$acted by the a+e and deterioratin+ condition of the system( posin+ a )irect threat to the American
economy &
A large scale 0nland waterway proBect will funnel !illions into the economy
>eSol et al, 0/ (8oss, cie2 researc o22icer at te Mil%en Institute, a non<!artisan, inde!endent econo6ic tin% tan%$ 5e is
also autor o2 9o3s 2or A6erica" Invest6ents and :olicies 2or Econo6ic ;rowt and Co6!etitiveness$, 9anuary )/0/, 9o3s 2or
A6erica, tt!"##www$na6$org#Y#6edia#*.E.0FB/>0E,HF>C-0E*,HEEHCFBFC)E$as&1
Certain in2rastructure !roCects, suc as 3uilding a s6art grid or constructing inland waterways,
reMuire an e&tensive !roduction in2rastructure and a large !ro!ortion o2 igly s%illed
and s!ecialiAed la3or$ Wit tis need co6es de6and 2or su!!ly<related goods and
services$ Te cu6ulative e6!loy6ent and earnings generated 3y all tis tigtly
interconnected activity ri!!les trougout te econo6y$ S!ending 3y engineers, contractors, and
researcers 3oosts te inco6e o2 3usiness !ro2essionals, restaurant wor%ers, retail cler%s, and real estate agents, wo ten !low
tat e&tra inco6e 3ac% into te local econo6y$ Troug tese greater !urcases o2
goods and services, wealt is created and sustained$
Jver <N"--- total Bo!s would !e created !y a large scale waterway
construction via the Army Corps of engineers
>eSol et al, 0/ (8oss, cie2 researc o22icer at te Mil%en Institute, a non<!artisan, inde!endent econo6ic tin% tan%$ 5e is
also autor o2 9o3s 2or A6erica" Invest6ents and :olicies 2or Econo6ic ;rowt and Co6!etitiveness$, 9anuary )/0/, 9o3s 2or
A6erica, tt!"##www$na6$org#Y#6edia#*.E.0FB/>0E,HF>C-0E*,HEEHCFBFC)E$as&1
Inland waterways are !art o2 te nation7s in2rastructure 2or 6oving goods, and tey reMuire 2ederal assistance
2or 6aintainance and i6!rove6ents$ Tey enco6!ass over .,)// 6iles o2 6aCor river syste6s00- tat connect
te ;ul2 o2 Me&ico wit te agriculturally ric Midwest and 6anu2acturing u3s in te Souteast and te ;reat Ba%es$ Current
!roCects include develo!6ent in te :aci2ic NortwestP owever, te Mississi!!i 8iver syste6 and its
tri3utaries are te 3usiest and 6ost e&!ansive networ% o2 loc%<and<da6
in2rastructure$0)/ Inland waterway !roCects under construction or al6ost ready to 3egin
construction will reMuire a!!ro&i6ately G+ 3illion to co6!lete$0)0 Te 4$S$ Ar6y Cor!s o2
Engineers is res!onsi3le 2or constructing, 6oderniAing, and 6aintaining tese
waterways$ Construction and 6aintenance o2 da6s and waterways 2or 2reigt
trans!ortation ave istorically 3een neglected and under2unded$ Te Cor!s o2 Engineers as a G,/
3illion !roCect 3ac%log$0)) In addition to a6!ering trade 3y li6iting cargo siAe and 2reigt !assage,0)F underinvest6ent in !u3lic
wor%s as ad 6aCor !u3lic sa2ety ra6i2ications, o2ten negatively a6!li2ying natural disasters, as was te case wit te levees tat
2ailed during 5urricane Natrina in )//*$ Te direct i6!acts o2 a G)$, 3illion invest6ent would consist
o2 nearly )H,/// construction< and 8R><related Co3s and G0$0 3illion in earnings$ 8i!!le
e22ects increase te total i6!acts to 6ore tan ,+,/// Co3s, G)$+ 3illion in earnings, and
G.$0 3illion in out!ut$ In oter words, every G0 3illion invested in inland waterways
creates 6ore tan )*,.// Co3s across all sectors$ Assu6ing tat te i6!acts o2 te total
!ro!osed invest6ent occur over tree years, te average annual increase would 3e
a3out )),F// Co3s$
TTCompetitivenessTT
TTUni7uenessTT
#AC Kocs Dill Competitiveness
Current loc structures threaten US competitiveness
2AC" 6?:1$
(National Association o2 Manu2actures, )/<@ear Ca!ital :lan 2or Nation7s Inland Waterways,
tt!"##www$na6$org#Y#6edia#CAABA/+E0BH+H,BAA+>A0CFEBAE0EFE+#Manu2acturersO8elyOonOteOWaterwaysO2orOCo6!etitiv
eness$!d2'
The nation+s manufacturers are a!le to ship goods efficiently throughout the United
States and e%port overseas to support our nation+s competitiveness 3ecause we ave a diversi2ied
trans!ortation networ% tat o22ers a range o2 o!tions 3y land, water and air$ Te trans!ortation cost savings attri3uta3le to te
e22iciency o2 te inland waterways is esti6ated to e&ceed G+ 3illion annually co6!ared to te cost o2 si!!ing tis tonnage 3y oter
6eans$ 0ncreasing planned and unplanned closures at the aging locs either due to
mechanical failure or regularly scheduled maintenance on the inland navigation system
create costly delays and threaten to erode these efficiencies& Te National Association o2
Manu2acturers (NAM1 and oter grou!s o!!osed a !ro!osal 3y te Bus Ad6inistration to !ase out te inland waterway 3arge 2uel
ta& and re!lace it wit a loc% 2ee si6ilar to a toll$ Te =3a6a Ad6inistration !resented si6ilar loc% 2ee !ro!osals in a recent 3udget
su36ission to Congress$ Te NAM a!!reciates Congress reCecting these loc% 2ee !ro!osals due to concerns tat a new 2ee will
lessen the competitiveness of the waterway option and disproportionately affect maBor
industrial and agricultural waterway shippers wo rely on te 4!!er Mississi!!i, =io, Illinois and oter river
syste6s
TT0nternal KinsTT
#AC So!s
0nland waterway repairs are crucial to the nations economy
2C>A" 5?#$
(National Corn ;rowers Association, I6!roving inland waterways syste6 re6ains crucial,
tt!"##www$ag!ro2essional$co6#news#I6!rove6ents<to<inland<waterways<syste6<re6ain<crucial<0H*0,)/F*$t6l'
Wit a wide variety o2 !ressing issues 2acing te 2ederal govern6ent over te co6ing 6onts, funding for desperately
needed loc and dam improvements remains a high priority 2or te nationLs corn 2ar6ers, according to
te National Corn ;rowers Association$ Wit te countryLs inland navigation syste6 6oving 6ore tan a 3illion 3usels o2 grain !er
year, a3out ,/ !ercent o2 all grain e&!orts, 2ar6ers understand te i6!ortance o2 a 2unctional waterways syste6$ UJur inland
waterway system plays a crucial role in the nation@s economy" and we must act now to
help our leaders understand that funding improvements is critical to maintaining our
industry@s via!ility,U said NC;A :resident ;arry Nie6eyer$ Acieving our goal is not only i6!ortant 2or 2ar6ers and
si!!ers, our nation as a whole will !enefit from the Bo! creation and shipping efficiencies
this proBect would generate$U The country@s inland navigation system plays an even more
visi!le role in the economy also" moving more than a !illion tons of domestic commerce
valued at more than M:-- !illion per year$ @et, invest6ent in te 4!!er Mississi!!i and Illinois Waterways as
not %e!t !ace wit te needs o2 te trans!ortation sector$ >esigned to last only */ years, much of the loc system is
approaching =- years old and signs of deterioration are readily apparent&
Inland waterways creates Co3s
1evol and )ong" 1-$
(>evol is Cie2 8esearc and te Mili%en Institute, Wong is te director o2 8esearc at te Mili%en Institute, 9anuary, 9o3s 2or
A6erica Invest6ents and !olicies 2or econo6ic growt and co6!etitiveness,
tt!"##www$na6$org#Y#6edia#*.E.0FB/>0E,HF>C-0E*,HEEHCFBFC)E$as&'
0nland )aterways 0nland waterways are part of the nation+s infrastructure for moving
goods" and they re7uire federal assistance for maintainance and improvements & Tey
enco6!ass over .,)// 6iles o2 6aCor river syste6s 00- tat connect te ;ul2 o2 Me&ico wit te agriculturally ric Midwest and
6anu2acturing u3s in te Souteast and te ;reat Ba%es$ Current !roCects include develo!6ent in te :aci2ic NortwestP owever,
te Mississi!!i 8iver syste6 and its tri3utaries are te 3usiest and 6ost e&!ansive networ% o2 loc%<and<da6 in2rastructure$ 0)/
Inland waterway !roCects under construction or al6ost ready to 3egin construction will reMuire a!!ro&i6ately G+ 3illion to co6!lete$
0)0 The U&S& Army Corps of ,ngineers is responsi!le for constructing" moderniFing" and
maintaining these waterways$ Construction and maintenance of dams and waterways for
freight transportation have historically !een neglected and underfunded $ Te Cor!s o2 Engineers
as a G,/ 3illion !roCect 3ac%log$ 0)) In addition to a6!ering trade 3y li6iting cargo siAe and 2reigt !assage, 0)F
underinvest6ent in !u3lic wor%s as ad 6aCor !u3lic sa2ety ra6i2ications, o2ten negatively a6!li2ying natural disasters, as was te
case wit te levees tat 2ailed during 5urricane Natrina in )//*$ The direct impacts of a G)$, 3illion investment
would consist o2 nearly )H,/// construction< and 8R><related Co3s and G0$0 3illion in earnings$ /ipple effects increase
the total impacts to more than <N"--- Bo!s" M#&N !illion in earnings, and G.$0 3illion in out!ut$ 0n
other words" every M1 !illion invested in inland waterways creates more than #6"=-- Bo!s
across all sectors$ Assu6ing tat te i6!acts o2 te total !ro!osed invest6ent occur over tree years" the average
annual increase would !e a!out ##":-- Bo!s&
Inland waterways creates Co3s and a multiplier effect
1evol and )ong" 1-$
(>evol is Cie2 8esearc and te Mili%en Institute, Wong is te director o2 8esearc at te Mili%en Institute, 9anuary, 9o3s 2or
A6erica Invest6ents and !olicies 2or econo6ic growt and co6!etitiveness,
tt!"##www$na6$org#Y#6edia#*.E.0FB/>0E,HF>C-0E*,HEEHCFBFC)E$as&'
Certain infrastructure proBects" such as 3uilding a s6art grid or constructing inland waterways"
re7uire an e%tensive production infrastructure and a large proportion of highly silled
and specialiFed la!or$ )ith this need comes demand for supply$related goods and
services$ The cumulative employment and earnings generated !y all this tightly
interconnected activity ripples throughout the economy & Spending !y engineers"
contractors" and researchers !oosts the income of !usiness professionals" restaurant
worers" retail clers" and real estate agents" who then plow that e%tra income !ac into
the local economy& Troug tese greater !urcases o2 goods and services, wealth is created and
sustained&
#AC ,%ports
,%ports are the engine running the economy
Netels, 0/<
IChristian" *arvard Ausiness School faculty at Professor Cichael ,& Porter@s 0nstitute for Strategy and Competitiveness"
(,%port CompetitivenessL /eversing the Kogic"; tt!"##www$isc$3s$edu#!d2#WBOE&!ortOCo6!etitivenessOMarc)/0/$!d2'
Competitiveness strategies are !roadly !ased" recogniFing the need to upgrade
performance across the entire economy" not Cust te e&!ortQoriented sectors$ ,%portEoriented sectors
are lie the engine of an economy& Tey are critical 3ut witout an e22icient trans6ission syste6 o2 local industries,
teir value generation does not translate into a ig standard o2 living 2or te 3roader !o!ulation$ Wile 3ot !arts o2 te econo6y
are i6!ortant, tey do 2ace di22erent dyna6ics$ 0n e%portEoriented sectors companies compete directly
with foreign peers" implicitly pitting different !usiness environments against each other,
not Bust firms$ In te local sectors, te co6!etition is only 3etween 2ir6s tat are all e&!osed to te sa6e 3usiness
environ6ent conditions$ Eor !olicy 6a%ers, tis i6!lies tat a co6!etitiveness strategy needs to cover 3ot e&!ortQoriented and
local industries$ And it needs to ta%e into account tat in te e&!ortQ oriented sector !olicy coices ave to 3e 6ade wit a 6uc
stronger view on !olicies in !laces in oter locations$ Competitiveness strategies are s7uarely oriented
towards reaching higher productivity& Attracting 810" generating Bo!s" and growing
e%ports are positive implications of higher productivity$ But te ulti6ate test o2 weter !olicies are
e22ective is teir i6!act on !ros!erity$ And ere !roductivity is a 6uc 3etter longQter6 target ten inter6ediate outco6es li%e
e&!orts tat can also 3e driven u! 3y !olicies tat do not raise !roductivity or longQter6 !ros!erity$
,%port !ased economy is ey to Bo!s and competitiveness
1ewan" 1#$
(9anuary 00, Sa3ina, >irector o2 ;lo3aliAation and International ,mployment at American Progress"
(Caing U&S& ,%ports )or for So! Creation";
tt!"##www$a6erican!rogress$org#issues#)/0)#/0#e&!ortsOCo3Ocreation$t6l'
The ongoing national de!ate over how to create enough Bo!s for 15 million unemployed
Americans has largely left out the important role of e%ports in cur!ing our nation+s
unemployment crisis& Aut the goods and services we sell to other nations account for
1#&6 percent of our economy and directly support .&# million" or N percent" of American
Bo!s$ Policymaers would do well to recogniFe Bust how important U&S& e%ports are to
restoring our nation+s glo!al economic competitiveness and a prosperous middle class&
,%ports" in short" must !e part of the solution to create enough Bo!s and put millions of
hardworing" middle$class Americans !ac to wor& :resident Barac% =3a6a7s National E&!ort Initiative to
dou3le A6erican e&!orts 2ro6 G0$*+ trillion in )//- to GF$0H trillion 3y )/0* is a ste! in te rigt direction$ But tree co6!le6entary
ste!s would el! leverage e&!orts 2or Co3 creation 6ore e22ectivelyInot Cust 2or te ne&t tree years 3ut 2or years to co6e" Eirst, an
e%port strategy must connect to an economic plan to promote U&S& competitiveness"
especially in manufacturing& Second, we must systematically collect information on the full
range of activities that other countries are undertaing to promote their e%ports and !e
more creative in how we promote our e%ports overseas& Tird, we must cultivate more
demand a!road&
,%ports are ey to products in the American maret
Detels" 1-$
(Cristian, 5arvard Business Scool 2aculty at :ro2essor Micael E$ :orterLs Institute 2or Strategy and Co6!etitiveness, E&!ort
Co6!etitiveness" 8eversing te Bogic, tt!"##www$isc$3s$edu#!d2#WBOE&!ortOCo6!etitivenessOMarc)/0/$!d2'
)hile the competitivenessEoriented approach provides a fundamental different
perspective on how a growth strategy should !e designed" it does not ignore the
important role that e%ports play in the growth process& And there is also a significant
overlap in terms of the individual policies that are suggested& ,%ports are an important
diagnostic tool that can help signal whether more fundamental conditions in the
economy are right & Te overall success on glo3al e&!ort 6ar%ets as well as te !articular !attern o2 industries tat
success2ully e&!ort !rovides valua3le revealed in2or6ation on underlying co6!etitiveness conditions$ Kow levels of
e%ports are an indication that there are weanesses that either limit the productivity of
companies or negatively affect their a!ility to proBect their capa!ilities on glo!al marets $
,%ports in particular sectors give an indication that the location has a particular set of
strengths in its competitiveness fundamentals that are conducive to their succe ss $ Togeter
wit additional in2or6ation on tese co6!etitiveness 2unda6entals and ulti6ate econo6ic outco6es in ter6s o2 !roductivity and
!ros!erity e&!orts are tus and i6!ortant ele6ent to identi2y te %ey !olicy !riorities 2or a !articular country or region$ ,%portE
oriented policies also have their place in an overall competitivenessEoriented growth
agenda$ Cany o2 te !olicies discussed earlier as instruments to improve the effectiveness of e%port
competitiveness !olicies re6ove 3arriers to e&!orts in ways that directly improve the productivity of
companies& They do so either !y enhancing companies+ capa!ilities directly or !y
removing !arriers that limit their a!ilities to translate these capa!ilities into valua!le
products or services for consumers on e%port marets $ But tere are oter !olices li%e currency
undervaluation or e&!ort su3sidies tat do not ave tis !ro!erty$ Suc !olicies can only 3e Custi2ied, i2 te rise in e&!orts enances
te e22ect o2 oter !olicies tat ulti6ately increase co6!etitiveness$ I2 tat a!!ens te initial e&!ort su3sidies can 3e eli6inated
over ti6e$ Tese !olicies are tus li%e !er2or6ance enancing drugsP !otentially use2ul in te sort run 3ut dangerous i2 tey
3eco6e an addiction$ The competitiveness framewor can help to !etter distinguish e%portE
oriented policies that mae a contri!ution to longEterm sustaina!le growth from those
that do not&
#AC Canufacturing
Canufacturing competitiveness is declining
0gnite" 11$
(>ece63er, 4S Manu2acturing Co6!etitiveness Initiative, Soice o2 A6erican Ba3or Beaders on Manu2acturing Co6!etitiveness,1

Through the glo!aliFation of manufacturing during the past several decades" however"
opportunities for American worers to contri!ute to U&S& manufac$ turing
competitiveness have declined$ Since )//) alone, the United States has lost more than five
million manufacturing Bo!s&1 Canufacturing+s per$ centage of >1P has also declined"
from contri!uting 1. percent to U&S& >1P in 1..1 to only 1:&5 per$ cent in #--=&# This
trend has had a significant negative impact on the domestic worforce" !oth
in terms of the sills worers have to contri!ute to manufacturing competitiveness and
the economic prosperity o2 te A6erican 6iddle class$
0ncreasing e%ports are the accelerator for economic growth
Hhang" 6$
(Nevin, >e!art6ent o2 Econo6ics, Illinois State 4niversity, 5ow >oes E>I A22ect a 5ost Country7s E&!ort :er2or6ance' Te Case
o2 Cina, tt!"##2aculty$wasington$edu#%aryiu#con2er#&ian/*#!a!ers#Aang$!d2'
810 has !een viewed as an accelerator of host countries+ economic growth$ Jne of its
maBor potential growth$contri!ution is to promote host countries+ e%ports & This study
attempts to empirically investigate the issue !y using the Chinese industrial data$ The
estimates indicate that 810 indeed has a positive impact on China+s e%port !oom" its
effects are much larger than those of domestic capital" and its effects are larger in la!or$
intensive industries" as one might anticipate& China+s success in promoting e%ports
through 810 reported here might !e somewhat special due to its uni7ue advantage over
other developing countries in !argaining with multinational corporations& Wile E>I as
!otentials in el!ing ost countries7 e&!orts, te 3ene2its do not accrue auto6atically or evenly across countries$ National !olicies
and ost govern6ent 3argaining !ower relative to 6ultinational cor!orations 6atter 2or attracting e&!ortoriented E>I and 2or rea!ing
its 2ull 3ene2its 2or e&!orts& China+s uni7ue advantages in large country$siFe" strong centraliFed
government" large amount of rich overseas Chinese who set up most of the e%port$
oriented affiliates" and well$designed 810 strategy, ave !rovided it wit negotiating !ower to 6ini6iAe te
adverse e22ects and realiAe !ositive e22ects o2 E>I
TT0mpactsTT
#AC Protectionism
>ecline in co6!etitiveness cause A6erican !rotectionis6 and isolationis6
)illiam" .<$
(deB Mills, A6erican !olitical scientist s!ecialiAing in te 2uture o2 te glo3al !olitical syste6, tt!s"##www$google$co6#searc'
suge&!(cro6e,6od(.Rsourceid(cro6eRie(4TE<.RM(X))6illsZwillia6ZdeB1
The OU&S& 1eclineO Scenario Continued voter and cor!orate de6ands 2or andouts !lus lower ta&es increase te
2ederal de2icit, undermining government financial sta!ility 0ndividuals consume heavily at the
e%pense of savings" which leaves them e7ually e%posed& In a sel2<centered society were everyone 2eels
a3used, re2or6 6ove6ents ave no cance$ :ersonal incentive to e&cel dissi!atse as scolarsi!s, grades, Co3s, and !ro6otions
increasingly are given 2or !olitically correct reasons rater tan 6erit$ Eewer wor%ers su!!ort 6ore de!endents on salaries tat are
3eing di6inised 3y declining international competitiveness& America turns to protectionism
and isolationism fueled !y the cry of am!itious politicians to Oprotect American
sovereignty$U 8oreign investors flee to more hospita!le marets" and allies drift away$ Wit
govern6ent,cor!orate, and !ersonal 2inancial reserves used u!, isolated A6erica slowly declinesL 0nfrastructure decays"
educational levels drop" cities go !anrupt" more and more people !ecome alienated"
and the population ages$ ;radually, East Asia and West Euro!e inerit leadersi! o2 a ra!idly advancing glo3al society
!eace2ully enricing itsel2 troug te e&!anding 6ar%et o!!ortunities 3orn o2 6ultilateralis6$
#AC ,conomy
Inde!endently, tis treatens to 6a%e every glo3al !ro3le6 worseIecono6ic
growt is vital to generate te resources needed to 6eet e6erging
callenges$
Sil .: I Beonard Sil%, >istinguised :ro2essor o2 Econo6ics at :ace 4niversity, Senior
8esearc Eellow at te 8al! Bunce Institute on te 4nited Nations at te ;raduate Center o2
te City 4niversity o2 New @or%, and 2or6er Econo6ics Colu6nist wit te New York Times,
0--F (>angers o2 Slow ;rowt, Foreign Affairs, Availa3le =nline to Su3scri3ing Institutions via
Be&is<Ne&is1
Bi%e te ;reat >e!ression, the current economic slump has fanned the firs of nationalist" ethnic
and religious hatred around the world& ,conomic hardship is not the only cause of these
social and political pathologies" !ut it aggravates all of them " and in turn they feed !ac
on economic development& They also undermine efforts to deal with such glo!al pro!lems
as environmental pollution " the production and trafficing of drugs " crime " sicness "
famine " A01S and other plagues $
>rowth will not solve all those pro!lems !y itself& Aut economic growth and growth
alone creates the additional resources that mae it possi!le to achieve such
fundamental goals as higher living standards " national and collective security " a healthier
environment " and more li!eral and open economies and societies $
And, econo6ic decline increases te ris% o2 warIstrong statistical su!!ort$
/oyal 1- I 9edidia 8oyal, >irector o2 Coo!erative Treat 8eduction at te 4$S$ >e!art6ent
o2 >e2ense, M$:il$ Candidate at te 4niversity o2 New Sout Wales, )/0/ (Econo6ic
Integration, Econo6ic Signalling and te :ro3le6 o2 Econo6ic Crises, Economics of War and
Peace: Economic, Legal and Political Perspectives, Edited 3y Ben ;olds6it and 9urgen
Brauer, :u3lised 3y E6erald ;rou! :u3lising, ISBN /.*+)H//H., !$ )0F<)0*1
Bess intuitive is ow periods of economic decline 6ay increase the lielihood of e%ternal conflict$
:olitical science literature as contri3uted a 6oderate degree o2 attention to te i6!act o2 econo6ic decline and te security and
de2ence 3eaviour o2 interde!endent states$ 8esearc in tis vein as 3een considered at syste6ic, dyadic and national levels$
Several nota3le contri3utions 2ollow$
Eirst, on te syste6ic level, :ollins ()//.1 advances Models%i and To6!sonLs (0--,1 wor% on leadersi! cycle teory, 2inding tat
rhythms in the glo!al economy are associated with the rise and fall of a pre$eminent
power and the o2ten !loody transition from one !re<e6inent leader to the ne%t$ As suc, e&ogenous soc%s
suc as economic crises could usher in a redistri!ution of relative power (see also ;il!in$ 0-.01 that
leads to uncertainty a3out !ower 3alances, increasing the ris of miscalculation (Eeaver, 0--*1$
Alternatively, even a relatively certain redistri3ution o2 !ower could lead to a !er6issive environ6ent 2or con2lict as a rising !ower
6ay see% to callenge a declining !ower (Werner$ 0---1$ Se!arately, :ollins (0--,1 also sows tat glo3al econo6ic cycles
co63ined wit !arallel leadersi! cycles i6!act te li%eliood o2 con2lict a6ong 6aCor, 6ediu6 and s6all !owers, altoug e
suggests tat te causes and connections 3etween glo3al econo6ic conditions and security conditions re6ain un%nown$
Second, on a dyadic level, Co!elandLs (0--,, )///1 teory o2 trade e&!ectations suggests tat L2uture e&!ectation o2 tradeL is a
signi2icant varia3le in understanding econo6ic conditions and security 3eaviour o2 states$ 5e argues tat interde!endent states are
li%ely to gain !aci2ic 3ene2its 2ro6 trade so long as tey ave an o!ti6istic view o2 2uture trade relations$ 5owever, if te
e%pectations of future trade decline, !articularly 2or di22icult Jend !age )0FK to re!lace ite6s suc as energy
resources, the lielihood for conflict increases " as states will !e inclined to use force to gain
access to tose resources& Crises could !otentially 3e te trigger 2or decreased trade e%pectations
eiter on its own or 3ecause it triggers !rotectionist 6oves 3y interde!endent states$H
Tird, oters ave considered te lin% 3etween econo6ic decline and e&ternal ar6ed con2lict at a national level$ Blo63erg and 5ess
()//)1 2ind a strong correlation 3etween internal con2lict and e&ternal con2lict, !articularly during !eriods o2 econo6ic downturn$
Tey write,
Te linages !etween internal and e%ternal conflict and prosperity are strong and mutually
reinforcing & ,conomic conflict tends to spawn internal conflict" which in turn returns the
favour$ Moreover, the presence of a recession tends to amplify the e%tent to which
international and e%ternal conflicts self$reinforce each other $ (Blo63erg R 5ess, )//)$ !$ .-1
,conomic decline has also !een lined with an increase in te li%eliood o2 terrorism (Blo63erg,
5ess, R Weera!ana, )//H1, which has the capacity to spill across !orders and lead to e%ternal
tensions$
Eurter6ore, crises generally reduce the popularity of a sitting government$ >iversionary teoryU suggests
tat, when facing unpopularity arising from economic decline" sitting governments have
increased incentives to fa!ricate e%ternal military conflicts to create a @rally around the
flag@ effect$ Wang (0--,1, >e8ouen (0--*1$ and Blo63erg, 5ess, and Tac%er ()//,1 2ind su!!orting evidence sowing tat
econo6ic decline and use o2 2orce are at least indirectly correlated$ ;el!i (0--+1, Miller (0---1, and Nisangani and :ic%ering ()//-1
suggest tat te tendency towards diversionary tactics are greater 2or de6ocratic states tan autocratic states, due to te 2act tat
de6ocratic leaders are generally 6ore susce!ti3le to 3eing re6oved 2ro6 o22ice due to lac% o2 do6estic su!!ort$ >e8ouen ()///1
as !rovided evidence sowing tat periods of wea economic performance in the United States, and tus
wea% :residential !o!ularity, are statistically lined to an increase in the use of force $
In su66ary, recent econo6ic scolarsi! !ositively correlates econo6ic integration wit an increase in te 2reMuency o2 econo6ic
crises, wereas political science scholarship lins economic decline with e%ternal conflict at
systemic" dyadic and national levels$* Tis i6!lied connection 3etween integration, crises and ar6ed con2lict as
not 2eatured !ro6inently in te econo6ic<security de3ate and deserves 6ore attention$
This o3servation is not contradictory to oter perspectives that lin economic interdependence
with a decrease in te li%eliood o2 e&ternal conflict, suc as tose 6entioned in te 2irst !aragra! o2 tis ca!ter$ Jend
!age )0HK Those studies tend to 2ocus on dyadic interde!endence instead o2 glo3al interde!endence and do not
specifically consider te occurrence o2 and conditions created 3y economic crises$ As suc, te view !resented
ere sould 3e considered ancillary to tose views$

***A+riculture***
(niqueness
An), the num#er of #ar+es will only increase---)am an) lock failure is ine$ita#le a#sent the
plan
*teenhoek 43/8 Ai9e #teenhoe9( E0ecuti"e Director of the #oy 7rans$ortation Coalition House 7rans$ortation and Infrastructure
#ubcommittee on ;ater Resources and En"ironment Hearin+S VHo! Reliability of the Inland ;ater!ay #ystem Im$acts Economic
Com$etiti"eness&VS 7estimony by Ai9e #teenhoe9( E0ecuti"e Director( #oy 7rans$ortation Coalition( Con+ressional Documents and
Publications( 14.1( le0is
7he %&#& De$artment of A+riculture re$orts that 5G $ercent of %&#& soybean e0$orts in 14.. de$arted from the Aississi$$i
Gulf $ort re+ion& A$$ro0imately I4 $ercent of that "olume arri"ed at the $ort re+ion "ia bar+e& 7he !idely ad"ertised
e0$ansion of the Panama Canal has the $otential to increase the commercial "iability of the %&#& inland !ater!ay system - $ro"ided that !e
ma9e $rudent in"estments in our $orts and loc9 and dam in"entory& Accordin+ to our recent soybean chec9 off-funded research( the +reater
efficiencies of maritime trans$ortation resultin+ from the e0$anded Panama Canal !ill ha"e a $ositi"e ri$$le effect on those !ho utilize the
inland !ater!ay system& =ur research $redicts that +rain and oilseeds transitin+ the Panama Canal !ill increase J4 $ercent
by 1414 *141. & After the canal e0$ansion in 14.?( ocean "essels !ill be able to accommodate u$ to .J(J44
additional metric tons of soybeans 3a$$ro0imately 544(444 bushels6 $er "oya+e( !hich amounts to an additional :/ million in car+o
"alue& Customers !ill realize u$ to a J5 cent $er bushel sa"in+s due to this +reater efficiency of maritime trans$ortation& >i+ure 1 belo!
hi+hli+hts ho! sizable areas of the country !ill e0$erience +reater access to the efficiencies of bar+e trans$ortation subseHuent to the Panama
Canal e0$ansion& Accordin+ to the soybean chec9 off-funded research( the dra! area to our ma-or na"i+able !ater!ays could e0$and from
84 miles to ./. miles& As a result( there !ill be increased areas of the country that !ill be able to a"ail themsel"es of
the safe( en"ironmentally friendly( and economically com$etiti"e inland !ater!ay system& >rom a shi$$er $ers$ecti"e(
this !ill most li9ely ha"e a fa"orable im$act on area rail rates since there is !ide e"idence that trans$ortation costs +o do!n - and economic
com$etiti"eness +oes u$ - !hen there is more than one shi$$in+ o$tion in a $articular re+ion& Ho!e"er( these $otential efficiency +ains
from the Panama Canal e0$ansion !ill only occur if the %&#& sufficiently in$ests in our links in the lo+istics
chain that connects with the %anama Canal & If !e fail to do so( !e !ill sim$ly shift the bottlenec9 from
Panama to the %nited #tates& >i+ure 1' Increased dra! area for inland !ater!ays trans$ortation follo!in+ the Panama Canal
e0$ansion #ource' VPanama Canal E0$ansion' Im$act on %&#& A+riculture&V >unded by the soybean chec9 off 7he soybean chec9 off recently
com$leted a study( VAmericaOs Boc9s and Dams' A 7ic9in+ 7ime <omb for A+ricultureUV& 7he research( conducted by the 7e0as
7rans$ortation Institute at 7e0as AandA %ni"ersity( $ro-ected the im$act of $otential loc9 and dam failures on the
com$etiti"eness of our industry& %nfortunately( there is an esta#lishe) an) +rowin+ consensus that such failures
are not a matter of if they occur, they are a matter of when ! >i+ure J hi+hli+hts the cost to %&#& a+ricultural $roducers of
"arious loc9 closures of "arious durations alon+ the inland !ater!ay system& American farmers are demonstratin+ the ability to increase
su$$ly and customers are e0$ressin+ a +ro!in+ a$$etite for this $roduction& Ho!e"er( the belo! fi+ure illustrates that failin+ to connect
supply an) )eman) can ha$e a pernicious impact on our economic competiti$eness ! >i+ure J' Cost to A+ricultural
Producers of Boc9 Closures 3: millions6' Boc9 1 ;ee9s . Aonth J Aonths . Dear BaG ran+e :1&8 :?&G :1.&1 :J4&? Boc9 14 :1&G :?&I :.5&?
:?? Boc9 15 :1&G :?&I :.5&? :??&. Aar9land :4&GI :.&41 :J&G :?&I Boc9 51 :1&I :J&. :..&I :.J&I #ourceS VAmericaOs Boc9s and Dams' A
7ic9in+ 7ime <omb for A+ricultureUV >unded by the soybean chec9 off
-ew in$estments are key---squo fun)in+ is peacemeal which is ineffecti$e
0estern 6arm %ress 43@ Inland !ater!ay im$ro"ements crucial to %# a+riculture) 14.1 le0is
;ith a !ide "ariety of $ressin+ issues facin+ the federal +o"ernment o"er the comin+ months( fundin+ for des$erately needed
loc9 and dam im$ro"ements remains a hi+h $riority for the nationOs corn farmers accordin+ to the @ational Corn
Gro!ers Association& ;ith the countryOs inland na"i+ation system mo"in+ more than a billion bushels of +rain
$er year( about /4 $ercent of all +rain e0$orts( farmers understand the im$ortance of a functional !ater!ays system& 3>or
more( see' %# inland !ater!ay system a national embarrassment6 V=ur inland !ater!ay system $lays a crucial role in the
nationOs economy( and !e must act no! to hel$ our leaders understand that fundin+ im$ro"ements is critical to
maintainin+ our industryOs "iability(V said @CGA President Garry @iemeyer& Achie"in+ our +oal is not only im$ortant for
farmers and shi$$ers( our nation as a !hole !ill benefit from the -ob creation and shi$$in+ efficiencies this
$ro-ect !ould +enerate&V 7he countryOs inland na"i+ation system $lays an e"en more "isible role in the
economy also( mo"in+ more than a billion tons of domestic commerce "alued at more than :J44 billion $er year& Qet,
in$estment in the %$$er Aississi$$i and Illinois 0aterways has not kept pace with the nee)s of the
transportation sector & Desi+ned to last only 54 years( much of the loc9 system is a$$roachin+ G4 years old
and si+ns of deterioration are readily a$$arent& @ot only has this crucial infrastructure far-e0ceeded its
lifes$an( it cannot accommodate modern bar+in+ $ractices that use .(.44 foot bar+e-to!s& Aany of the loc9s
are only /44 feet lon+( forcin+ bar+es to use the time-consumin+ and dan+erous double-loc9in+ $rocedure&
Go"ernment and industry officials a+ree that the $recarious state of the !ater!ay system stems from a
fla!ed method of maintainin+ and re$lacin+ a+in+ loc9s and dams& Des$ite authorizin+ a bill that !ould create :G
billion in $ro-ects that !ould re$lace or rehabilitate a+in+ ri"er infrastructure( it did not fully fund these $ro-ects at that time& Instead( the
$ro-ects are funded in a $iecemeal fashion( slappin+ Ban)-Ai)s on the +ushin+ woun) & 7his a$$roach has
led to si+nificant cost o"erruns and construction delays counted in decades( not months or years& Corn +ro!ers
ha"e been lon+-time ad"ocates for im$ro"ements to the inland !ater!ay system& >ollo!in+ the $assa+e of the ;ater Resources
De"elo$ment Act of 1448( !hich $ro"ides authorization for construction of se"en loc9s on the %$$er Aississi$$i and Illinois ri"ers as
!ell as immediate im$lementation of small-scale measures and the creation of a ma-or ecosystem restoration $ro+ram( @CGA has
remained focused on obtainin+ construction dollars throu+h the annual a$$ro$riations $rocess& Earlier this !ee9( $ro+ress !as made as
Re$& 7im <isho$( ran9in+ member on the House of Re$resentati"es ;ater Resources and En"ironment #ubcommittee( submitted a letter
to the committeeOs Chairman Re$& <ob Gibbs reHuestin+ $ro$osin+ the bi$artisan or+anization of a sta9eholder roundtable to discuss the
deterioratin+ inland !ater!ays system& >or a full co$y of this letter( clic9 here& 7his $roblem is +ainin+ attention outside of the
a+ricultural community& Bast !ee9( thePittsbur+h Post-Gazette $ublished a four-$art series of articles on the condition of the Pittsbur+h
re+ionOs 1J loc9s and dams( titled VBoc9ed and Dammed&V 7o read these articles in their entirety( $lease clic9 here 3$art .( $art 1( $art J(
$art ?6& >or additional information on @CGAOs acti"ities throu+h the ;ater!ays Council Inc&( and to "ie! a "ideo hi+hli+htin+ the
immediate necessity of im$ro"ements( $lease clic9 here&

A+ Competiti$eness 5nternal Dink
5nlan) waterways are key to a+ competiti$eness---sol$es econ an) hun+er---lack of fun)in+
now ensures ine$ita#le collapse
*teenhoek 43/8 Ai9e #teenhoe9( E0ecuti"e Director of the #oy 7rans$ortation Coalition House 7rans$ortation and Infrastructure
#ubcommittee on ;ater Resources and En"ironment Hearin+S VHo! Reliability of the Inland ;ater!ay #ystem Im$acts Economic
Com$etiti"eness&VS 7estimony by Ai9e #teenhoe9( E0ecuti"e Director( #oy 7rans$ortation Coalition( Con+ressional Documents and
Publications( 14.1( le0is
="er the $ast fe! years( much of %&#& a+riculture ( in +eneral( and the soybean industry( in $articular( has #een a sil$er
linin+ in an o$erall clou)y economy& American farmers are increasin+ly $roducti"e in +ro!in+ Huality( abundant food&
Customers( both domestic and( increasin+ly( o"erseas( are demandin+ this $roduction& >or the soybean industry(
o$er half of what American farmers pro)uce is )estine) to the international marketplace - one Huarter of
total $roduction !ill be deli"ered to China alone& @ot only do these transactions enhance the (!*! economy -
$articularly in rural America - it also ser"es the hi+her $ur$ose of feedin+ millions of people !ho( for the first time in
their familyOs history( are able to incor$orate more $rotein into their diets& 7his $astoral( traditional industry has truly become one of the
!orldOs most dynamic and com$ellin+& =ne of the $rimary reasons %&#& a+riculture is so "iable and com$etiti"e is our
e0$ansi"e and efficient trans$ortation net!or9 of roads( brid+es( railroads( inland !ater!ays( and $orts& >i+ure . belo! $ro"ides
an efficient sna$shot of the role of trans$ortation - $articularly inland !ater!ays-in ensurin+ the com$etiti"eness of the %&#& soybean
industry& 7he chart $ro"ides a cost com$arison of $roducin+ and deli"erin+ a metric ton of soybeans from both the %&#& and <razil - our
$rimary com$etitor - to a customer in #han+hai& <oth of the ori+ination $oints - Da"en$ort( Io!a( and @orth Aato Grosso( <razil - are
a$$ro0imately I54 miles from their res$ecti"e $ort re+ions& ;hile the mo"ement from @orth Aato Grosso to the $ort relies on truc9in+( the
mo"ement from Da"en$ort to the e0$ort terminals in #outhern Bouisiana en-oys the efficiency AmericaOs inland !ater!ay system $ro"ides&
As the chart "alidates( the main reason the (!*! soy#ean in)ustry an) many other a+ricultural pro)ucts are the
most economical choice for our customers on the international marketplace is )ue to our superior
transportation system& =ther countries can $roduce Huality $roducts at a lo!er $rice & Ho!e"er( it has been and
continues to be our ability to deli"er those $roducts to our customers in a cost-effecti"e manner that allows our
in)ustry to #e so competiti$e & 7rans$ortation - particularly the inlan) waterway system - is not simply a
contri#utin+ factor of a+riculture9s success, it is a pre)ominant one ! >i+ure .' Costs of trans$ortin+ soybeans' %&#& "s&
<razil 3$er metric tonS ?th Huarter( 14..6 Da"en$ort( Io!a to #han+hai @orth Aato Grosso( <razil to #han+hai 7ruc9-:.4&11 7ruc9-:..5&45
<ar+e-:1G&I. =cean - :55&JJ =cean-:?I&/5 7otal 7rans$ortation - :I?&?/ 7otal 7rans$ortation - :./?&84 >arm Calue - :?15&44 >arm Calue
- :J5G&1? Cost to Customer - :5.I&?/ Cost to Customer - :511&I? 7rans$ortation as P of Customer Cost .G&.GP 7rans$ortation as P of
Customer Cost - J.&54P #ource' %#DA %nfortunately( !hile <razil and other countries are a++ressi"ely in"estin+ in
their infrastructure( we remain anemic in in$estin+ in ours & It can be accurately stated that the %&#& is more a s$endin+
nation( not an in"estin+ nation& A hi+h $ercenta+e of ta0$ayer dollars are used to meet immediate !ants and needs( rather than $ro"idin+
di"idends to future +enerations& Accordin+ to our recent analysis funded by the soybean chec9 off( the %$$er Aississi$$i( =hio( and Illinois
Ri"ers accommodated the follo!in+ "olumes of +rain and oilseeds in 14.4' Q %$$er Aississi$$i Ri"er' 1J/ million tons Q =hio Ri"er' ?I
million tons Q Illinois Ri"er' 1? million tons
Ag Competitiveness 0mpacts
A+ricultural competiti$eness key to pre$entin+ economic collapse
1)mon)son 8 ;illiam( %&#& A+ricultural 7rade <oosts ="erall Economy( %#DA( >A%-.1? Economic Research
#er"ice*%#DA
As the !orld becomes more inte+rated( +lobal trade and the economic lin9s bet!een countries +ro! e"er stron+er& (!*! a+ricultural
tra)e is a si+nificant contri#utor to the o$erall (!*! economy an) to the rest of the worl) ;s economies! 7he
% nited # tates continues to be a net e0$orter of a+ricultural $roducts( the sur$lus hel$in+ to offset some of the
%&#& nonfarm trade deficit& 7rade a+reements ha"e e0$anded a+ricultural trade and( in turn( ha"e o$ened the %&#&
mar9et to e0$ortin+ o$$ortunities for both de"elo$ed and de"elo$in+ countries! *uch tra)e #enefi ts )e$elopin+
countries that in the past ha$e ha) little market access! A+ricultural e0$orts by the % nited # tates are no!
en-oyin+ a resur+ence due to risin+ food demand in emer+in+ mar9ets( reduced com$etition in feed-+rain
mar9ets( and a !ea9ened dollar& At the same time the "alue of a+ricultural im$orts is risin+( a"era+in+ .4-$ercent
+ro!th $er year since 144.& 7he %&#& farm and rural economies ha"e al!ays been affected by international and domestic macroeconomic
trade infl uences& >rom early colonial days( !hen tobacco and cotton !ere the most im$ortant e0$ort commodities( to todayKs +rain(
oilseed( and $rocessed foods( a+ricultural trade has been an important part of the (!*! economic en+ine ! 7he
@orth American >ree 7rade A+reement 3@A>7A6 and other bilateral and multilateral trade a+reements lo!ered trade barriers and
created additional consumer demand for %&#& a+ricultural commodities in forei+n nations& In turn( that demand is
satisfi ed !ith $urchasin+ $o!er acHuired !hen their $roducts are sold in the %nited #tates and else!here& 7he !ea9enin+ %&#&
dollar( !hich has no! fallen to a J4-year lo! com$ared !ith the !orldKs other ma-or currencies( ma9es the $rice of %&#& +oods
increasin+ly com$etiti"e abroad& Canada and Ae0ico are the leadin+ %&#& tradin+ $artners2to+ether( those
nations buy o"er J5 $ercent of %&#& e0$orts& Aean!hile( %&#& im$orts of a+ricultural +oods ha"e not slo!ed des$ite the !ea9ened
buyin+ $o!er of the %&#& dollar& %&#& consumers continue to demand a lar+e "ariety of im$orted +oods and are !illin+ to $ay a $remium for
them& A+ricultural tra)e is most importantly a +enerator of output, employment, an) income in the (!*!
economy! >or e"ery dollar s$ent on e0$orts in 144/( another :.&/5 !as created in the economy to su$$ort the
e0$ortin+ acti"ity 3see table .( $& .56& ER# model results sho! that e"ery :. billion of a+ricultural e0$orts in 144/
reHuires ..(G44 American -obs 3see bo0( Data #ources() $& /6&
5t;s key to the econ
Hoeni+ // 7homas Hoeni+ is the President of the >ederal Reser"e <an9 of Eansas City( #enate A+riculture( @utrition and >orestry
Committee Hearin+S
VA+riculture' Gro!in+ AmericaOs EconomyVS le0is
A+ riculture - broadly defined as farm $roduction and out$ut from related industries - accounts for almost one-si7th of (!*! ,o#s
an) economic acti$ity& ;hile the farm share of economic out$ut has declined as other $arts of our economy ha"e +ro!n( increased
acti"ity in broader a+ricultural industries - manufacturin+( trans$ortation( distribution and food retailin+ - has o$ened ne! -ob
o$$ortunities in both rural and metro communities& A ro#ust a+ricultural sector cushione) the rural economy in our
an) other re+ions across the nation )urin+ the recent recession ( and the industryOs stren+th is su$$ortin+
further im$ro"ement in the rural economy today & In 14.4( stron+ demand and ti+ht su$$lies for most farm
commodities contributed to a shar$ rebound in farm $rofits( !hich then su$$orted sales in farm eHui$ment and
other farm-based industries& #tron+ $rofits from a+riculture also +irded im$ortant elements of our rural financial
system& Commercial ban9s !ith lar+e a+ricultural loan $ortfolios $osted stron+er returns than their $eers o"er the $ast three
years& ;hile more than J44 commercial ban9s failed durin+ this time( only 11 !ere a+ricultural ban9s&
'hat causes protectionism an) warfare
.oyal /0 Jedediah Royal( Director of Coo$erati"e 7hreat Reduction at the %&#& De$artment of Defense( 14.4( Economic Inte+ration(
Economic #i+nalin+ and the Problem of Economic Crises() in Economics of ;ar and Peace' Economic( Be+al and Political Pers$ecti"es( ed&
Goldsmith and <rauer( $& 1.J-1.5
Bess intuiti"e is ho! $eriods of economic decline may increase the likelihoo) of e0ternal conflict & Political science
literature has contributed a moderate de+ree of attention to the im$act of economic decline and the security and defense beha"ior of
interde$endent states& Research in this "ein has been considered at systemic( dyadic and national le"els& #e"eral notable contributions follo!&
>irst( on the systemic le"el( Pollins 3144G6 ad"ances Aodels9i and 7hom$sonKs 3.II/6 !or9 on leadershi$ cycle theory( findin+
that rhythms in the +lobal economy are associated !ith the rise and fall of a $re-eminent $o!er and the often bloody
transition from one $re-eminent leader to the ne0t& As such( e0o+enous shoc9s such as economic crisis could usher in a
re)istri#ution of relati"e $o!er 3see also Gil$in( .IG.6 that leads to uncertainty about $o!er balances( increasin+ the
ris9 of miscalculation 3>earon( .II56& Alternati"ely( e"en a relati"ely certain redistribution of $o!er could lead to a $ermissi"e
en"ironment for conflict as a risin+ $o!er may see9 to challen+e a declinin+ $o!er 3;erner( .III6& #e$erately( Pollins 3.II/6 also sho!s
that +lobal economic cycles combined !ith $arallel leadershi$ cycles im$act the li9elihood of conflict amon+ ma-or( medium and
small $o!ers( althou+h he su++ests that the causes and connections bet!een +lobal economic conditions and security conditions remain
un9no!n& #econd( on a dyadic le"el( Co$elandKs 3.II/( 14446 theory of trade e0$ectations su++ests that Wfuture e0$ectation
of tradeK is a si+nificant "ariable in understandin+ economic conditions and security beha"ious of states& He ar+ues
that interde$endent states are li9ely to +ain $acific benefits from trade so lon+ as they ha"e an o$timistic "ie! of
future trade relations( Ho!e"er( if the e0$ectations of future trade decline( $articularly for difficult to re$lace items such as
ener+y resources( the li9elihood for conflict increases( as states !ill be inclined to use force to +ain access to those resources& Crisis
could $otentially be the tri++er for decreased trade e0$ectations either on its o!n or because it tri++ers $rotectionist mo"es by
interde$endent states& 7hird( others ha"e considered the lin9 bet!een economic decline and e0ternal armed conflict at a
national le"el& <lomber+ and Hess 314416 find a stron+ correlation bet!een internal conflict and e0ternal conflict (
$articularly durin+ $eriods of economic do!nturn& 7hey !rite( 7he lin9a+es bet!een internal and e0ternal conflict and $ros$erity are
stron+ and mutually reinforcin+& Economic conflict tends to s$a!n internal conflict( !hich in turn returns the fa"or& Aoreo"er( the $resence
of a recession tends to am$lify the e0tent to !hich international and e0ternal conflict self-reinforce each other& 3<lomber+ & Hess( 1441& P&
GI6 Economic decline has been lin9ed !ith an increase in the li9elihood of terrorism 3<lomber+( Hess( & ;eera$ana( 144?6( !hich has the
ca$acity to s$ill across borders and lead to e0ternal tensions& >urthermore( crises +enerally reduce the $o$ularity of a sittin+ +o"ernment&
WFi$ersionary theory; su++ests that( !hen facin+ un$o$ularity arisin+ from economic decline( sittin+
+o"ernments ha"e increase incenti"es to fa#ricate e0ternal military conflicts to create a Wrally around the fla+K
effect & ;an+ 3.II/6( DeRouen 3.II56( and <lomber+( Hess( and 7hac9er 3144/6 find su$$ortin+ e"idence sho!in+ that economic decline
and use of force are at least indirectly correlated& Gel$i 3.II86( Ailler 3.III6( and Eisan+ani and Pic9erin+ 3144I6 su++est that the
tendency to!ards di"ersionary tactics are +reater for democratic states than autocratic states ( due to the fact that
democratic leaders are +enerally more susce$tible to bein+ remo"ed from office due to lac9 of domestic su$$ort& DeRouen 314446 has
$ro"ided e"idence sho!in+ that $eriods of !ea9 economic $erformance in the %nited #tates( and thus !ea9 Presidential $o$ularity( are
statistically lin9ed to an increase in the use of force& In summary( recent economic scholarshi$ $ositi"ely correlated economic inte+ration
!ith an increase in the freHuency of economic crises( !hereas $olitical science scholarshi$ lin9s economic decline !ith e0ternal conflict at
systemic( dyadic and national le"els& 7his im$lied connection bet!een inte+ration( crisis and armed conflict has not featured $rominently in
the economic-security debate and deser"es more attention&
*oy#ean 5n)ustry 5nternal Dink
5nfrastructure up+ra)e is necessary---key to soy#ean in)ustry
*outheast 6arm %ress /2 Crumblin+ inland !ater!ay system $uts +ro!ers at ris9() Jan 18 le0is
Feterioratin+ con)ition of the (!*! lock an) )am system puts the competi$eness of (!*! soy#ean farmers at
risk accordin+ to a study funded by the %nited #oybean <oardKs 3%#<Ks6 and the soybean chec9offKs Global =$$ortunities
3G=6 $ro+ram& Entitled AmericaKs Boc9s & Dams' A 7ic9in+ 7ime <omb for A+riculture() the in-de$th e0amination coordinated
by the #oy 7rans$ortation Coalition 3#7C6 found American farmers and consumers Y!ill suffer se"ere
economic distress) if catastro$hic %&#& loc9 or dam failures ta9e $lace& Aore than half of the structures that are
$art of the %&#& inland !ater!ay system for ri"er bar+e shi$$in+ e0ceed their 54-year usable lifes$an( accordin+ to
the soybean chec9off-funded re$ort& Aore than one-third sur$ass 84 years of a+e( a concern because ma,or reha#ilitation is
usually necessary to e7pan) the typical lifespan from 20 to R2 years, accor)in+ to the stu)y! 7he G=
committee in"ested in this study to calculate the im$act of the !orsenin+ condition of the loc9 and dam system and !hat the im$act !ould be
on the rail and hi+h!ay system if those loc9s failed() says Baura >oell( soybean farmer from #challer( Io!a( and chair of the G= committee&
It is im$ortant for all in the industry and in the $ublic sector to ha"e the information necessary to ma9e informed decisions !hen it comes to
in"estin+ in our loc9s and dams&) Just on the =hio Ri"er alone( the accumulated shi$$in+ delays at bro9en-do!n loc9s has
more than tri$led since 1444( risin+ from 15(444 hours to G4(444 annually& And that +ets e0$ensi"e& 7his study sho!s that a
three-month loc9 closure !ould increase the cost of trans$ortin+ 5&5 million tons of oilseeds and +rain( the
a"era+e shi$$ed by bar+e durin+ that $eriod( by :8.&/ million& A failure at any of the locks e7amine) #y the
stu)y coul) cost (!*! farmers up to A42 million in lost re"enue& 7he %&#& inlan) waterways represent key
infrastructure for transportin+ (!*! soy#eans& %$ to GI $ercent of soybeans e0$orted throu+h the lo!er
Aississi$$i $orts( such as the Port of @e! =rleans( arri"e at those $orts in bar+es that must transit multi$le loc9s for the
tri$ do!nstream& 7he study( conducted by the 7e0as 7rans$ortation Institute at 7e0as A&A %ni"ersity( e0amined the condition of loc9s on
the %$$er Aississi$$i Ri"er( Illinois Ri"er and =hio Ri"er& 7he study also calculated the economic im$act of s$ecific loc9
failures on districts !ithin states( sho!in+ the effect on a+ricultural commodity $rices 2 and on fertilizer and
coal $rices( !hich also de$end on u$stream ri"er bar+e shi$$in+& It is im$ortant that !e ha"e a robust
trans$ortation system() adds >oell& =nly by usin+ a combination of the loc9 and dam system( rail system and truc9
system can !e continue to mo"e our $roducts in a manner that !ill hel$ us feed the !orld&) 7he %#< G= $ro+ram and
#7C( !hich is made u$ of %#<( the American #oybean Association and .. state soybean chec9off boards( $lan to e0amine ne! and different
!ays to fund loc9 and dam and other rural trans$ortation infrastructure im$ro"ements& %#< made $ublic and $ri"ate in"estment in
trans$ortation infrastructure one of its to$ t!o $riority issues& %#< is made u$ of /I farmer-directors !ho o"ersee the in"estments of the
soybean chec9off on behalf of all %&#& soybean farmers& Chec9off funds are in"ested in the areas of animal utilization( human utilization(
industrial utilization( industry relations( mar9et access and su$$ly& As sti$ulated in the #oybean Promotion( Research and Consumer
Information Act( %#DAKs A+ricultural Aar9etin+ #er"ice has o"ersi+ht res$onsibilities for %#< and the soybean chec9off& >or more
information on the %nited #oybean <oard( "isit !!!&unitedsoybean&or+&
0aterways >ey
0aterways are uniquely key
;itsanu Atta$anich et! al // Atta"anichQ Ph&D& Candidate <ruce A& AcCarl Distin+uished and Re+ents Professor #te$hen ;& >uller
Re+ents Professor Dmitry C& Cedeno" Associate Professor Rafarbe9 Ahmedo" Ph&D& Candidate De$artment of A+ricultural Economics( 7e0as
A&A %ni"ersity( Colle+e #tation #elected Pa$er $re$ared for $resentation at the A+ricultural & A$$lied Economics AssociationKs 14.. AAEA
& @AREA Joint Annual Aeetin+
July 1?-1/( 7he Effect of Climate Chan+e on 7rans$ortation >lo!s and Inland ;ater!ays Due to Climate-Induced #hifts in Cro$ Production
Patterns) htt$'**a+econsearch&umn&edu*bitstream*.4I1?.*1*AAEA#electedPa$er,7heP14EffectP14ofP14ClimateP14Chan+eP14on
P147rans$ortationP14>lo!s,.J1?8&$df
:rain pro)uction plays a crucial role in response to the worl);s +rowin+ )eman) for foo) , fee), an)
#iofuels& Corn( soybeans( and !heat are ma-or +rains cro$s that are most !idely $lanted in the !orld and also in the %#& >rom the $ast to
the $resent( the %# is a ma-or country that $lays a dominant role as a !orld +rain $roducer and e0$orter & In cro$ year
144I*14.4( total %# su$$ly of corn( soybean and !heat accounted for about JI( J.( and I $ercent of the !orld su$$ly of
corn( soybean and !heat( res$ecti"ely& >or the as$ect of international trade( the %# mar9et shares for e0$ort of corn(
soybean and !heat to the !orldKs total e0$ort !ere about 51( ??( and .G $ercent( res$ecti"ely 3%#DA ;orld A+ricultural
=utloo9 <oard 14..6& A hi+hly efficient, low-cost system of transportation is one of the ma,or factors
)eterminin+ the competiti$eness of (* +rains ( !hich are lo!-"alued bul9y $roducts( in the !orld mar9et&
Grains $roduced in the %# mo"e to domestic and forei+n mar9ets throu+h a !ell-de"elo$ed trans$ortation system &
<ar+es( railroads( and truc9s facilitate a hi+hly com$etiti"e mar9et that brid+es the +a$ bet!een %# +rain $roducers(
domestic and forei+n consumers& @ot only is a+riculture the lar+est user of the trans$ortation system accountin+ for 11
$ercent of all tons and J. $ercent of all ton-miles trans$orted "ia all modes in 1448( but +rains also are the lar+est
users of frei+ht trans$ortation in a+riculture 3Denicoff et al& 14.46& >rom .I8G to 1448 total %# +rain shi$ments
si+nificantly increased I1 $ercent from about 1?1 million tonnes to ?/? million tonnes !ith corn mo"ements accounted for /J
$ercent of all +rain mo"ements follo!ed by mo"ements of soybeans and !heat( !hich !ere eHual to .I $ercent and .? $ercent( res$ecti"ely
in 1448& Durin+ 1441-1448( inland +rain trans$ortation "ia truc9 and rail is the $rinci$al channel for o"erall +rain mo"ements accountin+ for
about G5 $ercent( !hile inland !ater trans$ortation "ia bar+e re$resents only about .5 $ercent of all +rain tonna+es&
Althou+h inlan) water transportation has a small share for o$erall tonna+e mo$ements, it plays a
si+nificant role as a ma,or route to e7port market accountin+ for a#out 48 percent of all +rain tonna+es for
e7port o"er the same $eriod 3Aarathon and Denicoff 14..6& Aississi$$i Ri"er and its tributaries on the Aississi$$i ri"er basin are
the lar+est inland !ater !ay system shi$$in+ +rains es$ecially corn and soybeans from the %# inland to the
Bo!er Aississi$$i $orts for e0$ort mar9et accountin+ for on a"era+e 55 and ?8 $ercent of all %# corn and soybean e0$ort( res$ecti"ely
durin+ 1445-144I 3%&#& Army Cor$s of En+ineers 14.46&
Climate Chan+e --T 8ore 6rei+ht 6lows
Climate chan+e will increase crop frei+ht flows
;itsanu Atta$anich et! al // Atta"anichQ Ph&D& Candidate <ruce A& AcCarl Distin+uished and Re+ents Professor #te$hen ;& >uller
Re+ents Professor Dmitry C& Cedeno" Associate Professor Rafarbe9 Ahmedo" Ph&D& Candidate De$artment of A+ricultural Economics( 7e0as
A&A %ni"ersity( Colle+e #tation #elected Pa$er $re$ared for $resentation at the A+ricultural & A$$lied Economics AssociationKs 14.. AAEA
& @AREA Joint Annual Aeetin+
July 1?-1/( 7he Effect of Climate Chan+e on 7rans$ortation >lo!s and Inland ;ater!ays Due to Climate-Induced #hifts in Cro$ Production
Patterns) htt$'**a+econsearch&umn&edu*bitstream*.4I1?.*1*AAEA#electedPa$er,7heP14EffectP14ofP14ClimateP14Chan+eP14on
P147rans$ortationP14>lo!s,.J1?8&$df
1&1 Chan+e in %# cro$ $roduction $attern as an ada$tation res$onse to climate chan+e A 9ey com$onent of the study of the effect
of climate chan+e on trans$ortation flo!s and inland !ater!ays for our study is the effect of climate chan+e on
the mi+ration of cro$ $roduction $atterns as an ada$tation res$onse of farmers to chan+es in climate conditions&
Climate chan+e is e7pecte) to su#stantially impact a+riculture & >or the ne0t t!o decades( a !armin+ of about
4&1ZC $er decade is $ro-ected for a ran+e of emission scenarios 3IPCC 1448a6& Increases in the amount of $reci$itation
are li9ely in the hi+h latitudes( !hile decreases are li9ely in most subtro$ical land re+ions $lus an increased ris9 of
drou+hts in those re+ions& 7he abo"e outcomes are li9ely lead to the north!ard shift in cro$ $roduction $attern as already
obser"ed in @orth Da9ota !here the southern sections of !heat-$roducin+ re+ions become northern $arts of the corn-$roducin+ areas 3%$$er
Great Plains 7rans$ortation Institute 14..6& Eoetse and Riet"eld 3144I6 re"ie!ed $re"ious studies and found that countries at hi+her
lon+itudes !ill I become more suited for food $roduction& 7he climate in countries at lo!er lon+itudes( amon+
!hich the lar+est $art is de"elo$in+ countries( !ill become substantially less suited& 'his likely results in an
increase in frei+ht flows from )e$elope) to )e$elopin+ countries!
:rain Competiti$eness
An), locks an) )ams are key to increasin+ e7port rates---key to +rain
competiti$eness
;itsanu Atta$anich et! al // Atta"anichQ Ph&D& Candidate <ruce A& AcCarl Distin+uished and Re+ents Professor #te$hen ;& >uller
Re+ents Professor Dmitry C& Cedeno" Associate Professor Rafarbe9 Ahmedo" Ph&D& Candidate De$artment of A+ricultural Economics( 7e0as
A&A %ni"ersity( Colle+e #tation #elected Pa$er $re$ared for $resentation at the A+ricultural & A$$lied Economics AssociationKs 14.. AAEA
& @AREA Joint Annual Aeetin+
July 1?-1/( 7he Effect of Climate Chan+e on 7rans$ortation >lo!s and Inland ;ater!ays Due to Climate-Induced #hifts in Cro$ Production
Patterns) htt$'**a+econsearch&umn&edu*bitstream*.4I1?.*1*AAEA#electedPa$er,7heP14EffectP14ofP14ClimateP14Chan+eP14on
P147rans$ortationP14>lo!s,.J1?8&$df
Althou+h o"erall the future demand for bar+e mode is li9ely to dro$( some loc9s and dams 3Boc9 and Dam @o& . N
@o&G6 in the %$$er Aississi$$i Ri"er are li9ely to recei"e hi+her +rain trans$ortation shi$ments due to the
$redicted increase in the +rain su$$ly from the middle to northern $arts of Ainnesota and @orth Da9ota under climate chan+e&
7herefore( enlar+in+ or im$ro"in+ conditions of these loc9s and dams mi+ht be a$$ro$riated to s$eed u$
$assa+e of bar+e to!s and increase the bar+e efficiency( !hich coul) increase the competiti$eness of (*
+rain for e7port .5&
:eneric A+
A failure in lock infrastructure will spell )isaster for the a+ricultural economy
Eruse et al( .. 3James( Director of the center for $orts and !ater!ays( AAERICAK# B=CE# & DAA#' A 7ICEI@G 7IAE <=A<
>=R AGRIC%B7%REU)( htt$'**!!!&unitedsoybean&or+*!$-content*u$loads*Americas,Boc9s,And,Dams&$df6
A+riculture accounted for 11P of all trans$orted tonna+e and J.P of all ton-miles in the %nited #tates in 1448&. 7he surface
trans$ortation system in the %&#& is central to a+ricultureKs ability to com$ete in domestic and !orld
mar9ets& 7he ra$idly deterioratin+ condition of the nationKs loc9 and dam infrastructure im$erils the
ability of the !aterborne trans$ortation system to $ro"ide a ser"ice that !ill enable %&#& a+ricultural
$roducers to continue to com$ete& #hould a catastro$hic failure of loc9 and dam infrastructure occur(
a+ricultural $roducers2and conseHuently the American consumer2!ill suffer se"ere economic distress&
7his research analyzed and e"aluated data and information that !ill illustrate this "ulnerability at a micro le"el rather than the traditional macro
le"el& 7he tas9 of trans$ortin+ a+ricultural commodities from the farm to first handlers and $rocessors and
ultimately to domestic and international retail mar9ets and $orts reHuires a hi+hly de"elo$ed( inte+rated
trans$ortation net!or9( of !hich marine trans$ortation is a "ital com$onent& A hi+h $ercenta+e of these commodities
$ass throu+h one or more loc9s on their !ay to mar9et& #hould a !ater!ay be closed due to one or more loc9 failures( the
resultant increase in costs that !ould be incurred in utilizin+ truc9 or rail trans$ortation !ould decrease or
e"en eliminate the cost ad"anta+e of %&#& Aid!estern $roducers& 7his !ould be es$ecially detrimental to e0$ort shi$ments&
>rom 1445 throu+h 144I( G8NI.P of corn e0$orted throu+h lo!er Aississi$$i $orts arri"ed at the $orts "ia bar+eS for soybeans( the $ercenta+e
!as G8NGIP
Ag Dey To ,con
Agriculture ey to us economy$ highly productive sector
(*FA "8 A+ricultural Producti"ity in the %nited #tates( Economic Research #er"ice( %&#& De$artment of A+riculture(
A+riculture Information <ulletin @o& 8?4
Increased $roducti"ity is a key to a healthy and thri"in+ economy& ConseHuently( the trend in pro)ucti$ity (
economy!ide( is one of the most closely !atched of our common economic performance in)icators &
A+riculture( in $articular( has #een a $ery successful sector of the (!*! economy in terms of pro)ucti$ity
+rowth & 7he %&#& farm sector has $ro"ided an abundance of out$ut !hile usin+ in$uts efficiently& Increased
$roducti"ity im$ro"es societyKs +eneral standard of li"in+ because $roducti"ity +ains are $assed on to the
consumer in the form of lo!er $roduct $rices& If $roducti"ity le"els in a sector of the economy rise( resources
!ill be released for use by other sectors of the economy& In the case of a+riculture( the hi+h le"els of $roducti"ity
ha"e freed u$ resources that !ould other!ise ha"e been used to meet basic food needs of the $o$ulation& In
addition( lo!er real $rices for a+ricultural $roducts ha"e contributed to the fa"orable %&#& trade $osition in
international a+ricultural mar9ets& 7his re$ort e0amines the trends in a+ricultural $roducti"ity( out$ut( and in$ut use durin+ .I?G-I?
and describes the factors that contribute to a+ricultural $roducti"ity +ro!th&
Ag ey to the economy$ trade surplus
(*FA "8 A+ricultural Producti"ity in the %nited #tates( Economic Research #er"ice( %&#& De$artment of A+riculture(
A+riculture Information <ulletin @o& 8?4
As increased $roducti"ity lo!ers real a+ricultural out$ut $rices( the international com$etiti"e $osition of %&#&
a+riculture im$ro"es& 'he (nite) *tates is the lea)in+ a+ricultural e7porter& Gi"en the $ersistent %&#& trade
deficit o"erall , the tra)e surplus in a+ricultural pro)ucts is critical to the health of the (!*! economy & 7he
share of %&#& a+ricultural $roduction e0$orted is more than double that of other ma-or %&#& industries &
Ag ey to economy
*hames F5.1C'E., :AE BR
Bisa( Go"ernment Accountability =ffice( #A>E7D => >==D #%PPBD CT Con+ressional 7estimony A$ril 1?( le0is
Ensurin+ the safety of the nationOs food su$$ly is e"en more ur+ent since the terrorist attac9s of #e$tember ..( 144. hei+htened a!areness of
a+ricultureOs "ulnerabilities to terrorism( such as the deliberate contamination of food or the introduction of disease to li"estoc9( $oultry( and
cro$s& A+riculture, as the lar+est in)ustry an) employer in the (nite) *tates, +enerates more than A/
trillion in economic acti$ity annually, or a#out /@ percent of the +ross )omestic pro)uct! An introduction of
a hi+hly infectious forei+n animal )isease( such as a"ian influenza or foot-and-mouth disease( woul) cause
se$ere economic )isruption, inclu)in+ su#stantial losses from halte) a+ricultural e7ports, which e7cee)e)
AC8 #illion in fiscal year 200C!
>enerates economic activity in non$farm sectors
1)mon)son- (*FA- B8 ;illiam( %&#& A+ricultural 7rade <oosts ="erall Economy( >A%-.1? Economic Research
#er"ice*%#DA
In calendar year 144/( the :8.&4 billion of a+ricultural e0$orts $roduced an additional :..8&1 billion in economic
acti"ity for a total of :.GG&1 billion of economic out$ut& #u$$ortin+ acti"ity continued to climb after sur$assin+
the :.44 billion mar9 for the fi rst time in 1445& A+ricultural e7ports also +enerate) 84/,000 full-time ci$ilian
,o#s, inclu)in+ 482,000 ,o#s in the nonfarm sector! 6armers; purchases of fuel, fertilier, an) other inputs
to pro)uce commo)ities for e7port spurre) economic acti$ity in the manufacturin+, tra)e, an)
transportation sectors& 7he $roduction eHui"alent from almost one-fourth of %&#& cro$land mo"ed into e0$ort channels in 144/& =f
ra! cro$s( the %nited #tates e0$orted ?I $ercent of food +rain $roduction( ./ $ercent of feed +rains( and more than JG $ercent of oilseeds&
;hile the $ercenta+e of $roduction of food-+rain e0$orts held steady and that of feed-+rain e0$orts decreased( oilseed e0$orts increased
si+nifi cantly o"er 1445& <ecause e0$orts increased more than im$orts( net a+ricultural e0$orts in 144/ contributed :5&8 billion to the o"erall
%&#& economy( :1&. billion more than in 1445 3:J&/ billion6&
Ag trade encourages growth
1)mon)son- (*FA- B8
;illiam( %&#& A+ricultural 7rade <oosts ="erall Economy( >A%-.1? Economic Research #er"ice*%#DA
(!*! a+ricultural tra)e has a positi$e effect on most sectors of the economy& 7he farm sectorKs :?5&G billion of out$ut
associated !ith a+ricultural e0$orts more than offset the :J4&5 billion of farm out$ut im$licitly lost because of a+ricultural im$orts& 7he
nonfarm sectors( includin+ food $rocessin+( +ained :.4&G billion in total out$ut( creatin+ about ?J(/44 -obs and
+eneratin+ :?&8 billion in income& 'he (!*! economy +aine) a net A2C #illion in output 3after the theoretical loss to
a+ricultural im$orts is considered6& =utside of farmin+ and food $rocessin+( the %nited #tates theoretically lost a net :1&/ billion from direct
a+ricultural trade( that is( e0$orts minus im$orts of a+ricultural +oods that are neither farm nor $rocessed +oods( but +ained :.?&J billion in total
out$ut because the direct $lus indirect "alue of these e0$orts !as +reater than that of the im$orts& Althou+h there !ere im$orts of nonfarm(
nonfood$rocessin+ of +reater "alue than e0$orts in 144/( the %&#& e0$orts of this cate+ory +enerated more total out$ut than im$orts did in the
economy&
Productivity !est indicator of overall growth
(*FA- B"8
A+ricultural Producti"ity in the %nited #tates( Economic Research #er"ice( %&#& De$artment of A+riculture&
A+riculture Information <ulletin @o& 8?4
<ecause pro)ucti$ity in)icators are key in)icators of the fun)amental health of the economy,
they are trac9ed "ery closely by $ublic and $ri"ate decisionma9ers& #ome of the
ma-or uses of a+ricultural $roducti"ity indicators include'
[ monitor the health of the a+ricultural sector(
[ ma9e $erformance com$arisons across different industries of the economy(
[ ma9e $erformance com$arisons across different countries( and
[ inform $ublic $olicyma9ers re+ardin+ $olicies to enhance $roducti"ity +ro!th &
Ag ey to rural economies
:rant- BR
7im( Amber !a"es of $ain' Rural home foreclosures behind urban( suburban homes Pittsbur+h Post N Gazette( le0is
Aany rural economies often already are stretched because they are tethered to a sin+le lar+e em$loyer or to one ty$e
of business( such as coal minin+ or farmin+& 5f that sector )eclines, the whole area +oes into a tailspin& Peo$le
li"in+ in rural nei+hborhoods are more li9ely to ha"e lo!er incomes than urban d!ellers( less formal education and
less e0$erience !ith the ban9in+ system&
***6oo) %rices***
Core 8ood Prices 0mpacts
That causes glo!al insta!ility
8anila 'imes 8 BetKs attend to food security) ;ednesday( @o"ember 45( 144G
htt$'**archi"es&manilatimes&net*national*144G*no"*45*yehey*o$inion*144G..45o$i.&html
7he administration must $ay attention to the !arnin+s made by Dr& He Chan+chui( assistant director +eneral of the %@Ks >ood and
A+riculture =r+anization and the >A= Re+ional Re$resentati"e for Asia and the Pacific& He tells the !orld that the economic
meltdo!n no! afflictin+ the +lobe is +ri$$in+ man9ind !ith the t!in crises of finance and food&) 7he !orld( he
!arns( !ill be far worseK than the :reat Fepression of the .IJ4s( the <lac9 =ctober of .IG8 or the Asian
Economic Colla$se of .II8& 7hat is because the financial crisis is accom$anied by hi+h food $rices and food
shorta+es( and the steady erosion of a+riculture and rural economies&) He says& 6oo) a$aila#ility an)
affor)a#ility are the #e)rocks of any society& Durin+ the Great De$ression( <lac9 =ctober and the Asian
Economic Crisis( food $rices !ere at historic lo!s& @o matter ho! dire the situation( food !as still $lentiful and
chea$& 'o)ay, the story is )ifferent & >ood is in shorter su$$lyS $rices ha"e been steadily climbin+ since 144. and
ha"e escalated dramatically since 144/& Accordin+ to the trac9in+ of our =r+anization( food $rices rose by I $ercent in 144/( 1?
$ercent in 1448 and sur+ed 5. $ercent in the $ast .1 months& Althou+h !e sa! some $rice dro$s for certain food commodities in the $ast
months( a"era+e $rices are still much hi+her than normal and the international mar9ets remain "olatile& Durin+ normal times( that le"el of
Wstic9er shoc9K !ould s$ell hardshi$ for most !or9in+ $eo$le and the $oor& Cou$led !ith an economic crisis of the enormity ta9in+
$lace today( the impact coul) #e catastrophic!K Dr& He calls on us to +i"e due im$ortance to food security& 7he role of food
security in !ider e"ents should not be underestimated& 6oo) shorta+es and runa!ay food $rice inflation ha$e a history
of lea)in+ to social unrest an) political uphea$al & 'he current crisis has alrea)y sparke) riots an) social
tur#ulence in o$er @0 countries and contributed to the fall of at least one elected +o"ernment & 5n 200R alone,
the foo) crisis threw an a))itional R2 million people into the ranks of the malnourishe)& Hard-!on +ains by
many nations in their battles a+ainst hun+er and $o"erty may be re"ersed& 7he ability of countries to meet the Aillennium
De"elo$ment Goals !ill be e"er more doubtful& ="er /4 countries are recei"in+ su$$ort and assistance from the international community to
boost food $roduction&
The impact is nuclear war$$$diplomacy can+t solve
Uatikiotis 8 Aichael Cati9iotis is Asia re+ional director for the Gene"a-based Centre for Humanitarian Dialo+ue( A hun+ry !orld tests
s9ills of $eacema9ers() Aay( htt$'**fr&hdcentre&or+*files*AP14hun+ryP14!orldP14testsP14s9illsP14ofP14$eacema9ers&$df
;AR and hun+er are inse$arable' E0$erience has sho!n the close relationshi$ bet!een economic distress
and the outbrea9 of conflict& <ut the solutions the international community tends to a$$ly are mostly $olitical and rarely address
material needs& #o !hat ha$$ens !hen $eo$le are dri"en to 9ill one another for foodU ItKs a critical Huestion to
as9 as the !orld faces a sudden and une0$ected food $rice crisis that is threatenin+ to $lun+e millions #ack
into po$erty& 7he s$i9e in food $rices this year has already led to "iolence& >ood riots in $arts of Africa and
the Caribbean ha"e created social and $olitical instability& In rice-+ro!in+ countries such as India( Cietnam and
7hailand( hoardin+ has be+un( !ith e0$ort bans creatin+ inter-state friction& AyanmarKs rice-+ro!in+ ca$acity has -ust
been de"astated by Cyclone @ar+is( !hich !ill add to $rice $ressures soon& 7his is a crisis born of inflation and other
mar9et factors rather than fundamental shorta+es& Prices for the benchmar9 7hai "ariety of rice( a sta$le across much of Asia( ha"e risen
threefold !ithin a year& Aeat $rices ha"e risen by /4 $er cent in <an+ladesh( ?5 $er cent in Cambodia and J4 $er cent in the Phili$$ines&
7he ;orld >ood Pro+ramme calls the crisis a Wsilent tsunamiK& 'he threat of conflict is real, #oth within
an) #etween states& as the trend to!ards liberalisation is suddenly re"ersed and re$laced by subsidies( $rice-fi0in+ cartels and
e0$ort curbs& In Indonesia( a retired +eneral recently !arned' WIf students demonstrate itKs not a !orry& <ut if hun+ry $eo$le ta9e to
the streets - no! thatKs dan+erous&K Hun+er causes conflict !hen $eo$le feel they ha"e nothin+ to lose and are
!illin+ to 9ill their nei+hbours o"er scarce resources& 7he $easant !ars of the late 14th century in Central and
#outh America and the !ars that s$ran+ from famine in @i+eria( Ethio$ia and #udan are reminders of manKs
most basic instinct( !hich is to fi+ht to sur"i"e& 7he trouble is that in terms of resol"in+ conflict( !e ha"e come
to rely less on material remedies and more on $olitical artifice& Aany internal conflicts that ha"e been
$eacefully resol"ed in recent years only su$erficially addressed the material seeds of conflict& Peace deals ha"e
been elite affairs !here leaders of armed +rou$s reached an understandin+ on ho! to share $o!er& 7his a$$roach is a sensible first ste$
to!ards conflict resolution& <y con"incin+ $eo$le to lay do!n their arms( it becomes $ossible to start desi+nin+ a !ider ran+e of $olicies
to address socio- economic issues& J <ut the benefits of economic de"elo$ment the $ublic e0$ects tric9le do!n slo!ly( if at all& Aceh in
Indonesia( for e0am$le( remains $oor( as does Aindanao in the Phili$$ines - t!o areas of #outh-east Asia !here $eace !as recently
ne+otiated& ;hen hun+er dri"es $eo$le into conflict( !e mi+ht $resume that $eacema9in+ !ill be a Huestion of $ro"idin+ food& ;e
!ould be !ron+& 7he e0$erience of aid a+encies in the .I84s and .IG4s in Africa !as that food aid tends to fuel conflict as the
combatants see9 to harness the su$$ly of nutrition to the +oals of !ar& E0$erts say farmers !ill e"entually ad-ust the su$$ly of food to
co$e !ith hi+her demand so that $rices stabilise& And there are si+ns that decades of im$ro"in+ coo$eration bet!een states is stimulatin+
a collecti"e ur+e to resol"e the crisis& 7he sharin+ of technolo+y is 9ey( says former %nited @ations chief Eofi Annan& He belie"es that
farmers in Africa could double their food out$ut in fi"e to .4 years if rich countries $artner them in a WGreen Re"olutionK& <ut trade
a+reements and technolo+ical ad"ances are slo!-mo"in+ transformations& In the meantime( officials in India
!arn that risin+ food $rices could $lun+e millions into $o"erty in a country that is already battlin+ an internal
Aar0ist insur+ency& #o the immediate challen+e is to $re"ent and resol"e conflict arisin+ from the food crisis&
7his $laces a si+nificant burden on the international community to s!iftly res$ond to outbrea9s of "iolence& 5f
people )ri$en to war #y hun+er are less incline) to compromise, this woul) make the task of
peacemakin+ more challen+in+& If conflict fuelled by hun+er becomes more !ides$read( this !ill e0ert strain
on international a+encies in"ol"ed in $eace9ee$in+ and humanitarian !or9& Peacema9ers need to be more a!are of
the socio-economic roots of conflict& 7hey should incor$orate in $eace a+reements remedies for these +rie"ances and enlist the
international communityKs su$$ort for their im$lementation& #uch remedies should include addressin+ in a meanin+ful !ay issues such
as land distribution( -ob creation as !ell as racial and ethnic discrimination& 7he ethnic and reli+ious !ars of the 14th
century ha"e $erha$s lulled us into a false sense of security& ;e ha"e +ro!n accustomed to resol"in+ conflict by for+in+
$olitical com$romises in situations !here $rota+onists had much to lose materially if they 9e$t on fi+htin+& <ut in a !orld !here
the $rices of sta$les can tri$le !ithin months( it is har)er to fin) +roun)s for compromise & ? 7his calls for
more effecti"e ne+otiatin+ s9ills both domestically and internationally( bilaterally as !ell as multilaterally& Aar9ets must be 9e$t o$en to
assist !ith the flo! of +oods to crisis countries( and solutions must be found that address both elite and $o$ular +rie"ances&
Causes wars around the glo!e
Dope "8 <ernando( !riter for <usiness;orld( I*.4( le0is
;hat !ould it be li9e if +lobal recession becomes full bloomU 7he results !ill be catastro$hic& Certainly( +lobal recession !ill
s$a!n !ars of all 9inds& Ethnic !ars can easily escalate in the +ra$$le for d!indlin+ food stoc9s as in India-
Pa9istan-Af+hanistan( Du+osla"ia( Ethio$ia-Eritrea( Indonesia& Re+ional conflicts in 9ey flash$oints can
easily eru$t such as in the Aiddle East( Eorea( and 7ai!an& In the Phili$$ines( as in some Batin American
countries( s$lintered insur+ency forces may ta9e ad"anta+e of the economic drou+ht to re+rou$ and reemer+e
in the countryside& %nem$loyment !orld!ide !ill be in the billions& >amine can be tri++ered in 9ey 7hird
;orld nations !ith India( @orth Eorea( Ethio$ia and other African countries as first candidates& >ood riots
and the brea9do!n of la! and order are $ossibilities&
***.esources***
:eneric
>ey to resource transport
8artin, /0-
3;ater!ays CouncilKs ne! President and CE=& Prior to bein+ named to this $osition he !as Chairman and CE= of Direct ;or9force( Inc&( a
contract labor com$any ser"in+ the shi$buildin+( shi$ re$air( and oil and +as industries based in Houma( Bouisiana( President and CE= of the
Canadian American 7rans$ortation #ystem& Cice President - Cor$orate Affairs of American Classic Coya+es Com$any( $arent of the Delta
Tueen #teamboat Com$any 3and other cruise line subsidiaries Cice President N #outhern Re+ion( for the American ;ater!ays =$erators& enior
$rofessional staff of the House of Re$resentati"esK Coast Guard and @a"i+ation #ubcommittee and Be+islati"e Assistant for Aaritime Affairs for
Con+ressman ;&J& <illy) 7auzin of Bouisiana& Cornel( Aarch 1J( 14.4( htt$'**!!!&!ater!ayscouncil&or+*AediaP14Center*articles*Pa+e,
P14from,Cornel,=PED,Aare0&$df6
Eur inlan) waterways system transports a#out 20 percent of our nation;s coal to +enerate
electricity in utility plants an) aroun) 22 percent of our )omestic petroleum pro)ucts! 'his system
is the primary artery for more than half our +rain an) oilsee) e7ports& All told( more than /15 million tons of
frei+ht commodities "alued at more than :84 billion mo"e on AmericaKs inland na"i+ation system annually& An) with worl)wi)e
tra)e e7pecte) to )ou#le o$er the ne7t )eca)e an) with our hi+hways an) railways facin+ serious
capacity issues, our inlan) ri$ers may #e e$en more critical tomorrow than they are to)ay for
transportin+ pro)ucts efficiently! 7here are other considerations as !ell& A ne! study by the @ational ;ater!ays >oundation
underscores the +reen) "alue of this trans$ort mode& Inland !ater!ays relie"e con+estion on our already o"er-cro!ded hi+h!ays and rail!ays&
=ne -umbo bar+e has the same ca$acity as 84 truc9s or ./ rail cars& A ty$ical .5-bar+e to! on our nationKs ri"ers is eHual to .(454 truc9s N in
other !ords( -ust one bar+e mo"ement eHuals .(454 truc9 mo"ements\ 'o sustain these many #enefits an) stimulate
economic reco$ery for our nation, in$estment in our inlan) na$i+ation system of locks an) )ams is
critical& 8any of our locks an) )ams are more than 20 years #eyon) their economic )esi+n life an)
are )eterioratin+ rapi)ly, impactin+ efficiency, safety, an) our worl) competiti$eness! 0e must
mo)ernie our lock-an)-)am system so that our farmers, coal miners, oil pro)ucers an)
stone3a++re+ate suppliers can transport their pro)ucts cost-effecti$ely an) efficiently( allowin+ them
to remain competiti$e in worl) markets!
Coal Costs
A short time closure of locks will increase coal costs an) make them non
competeti$e
Eruse et al( .. 3James( Director of the center for $orts and !ater!ays( AAERICAK# B=CE# & DAA#' A 7ICEI@G 7IAE <=A<
>=R AGRIC%B7%REU)( htt$'**!!!&unitedsoybean&or+*!$-content*u$loads*Americas,Boc9s,And,Dams&$df6
7he re"ie! of $re"ious studies of loc9 closures and coal $rice $ercenta+e chan+es indicated that
short-term closure of the =hio Ri"er increases costs for coal shi$ments( but not dramatically& 7he ener+y sector
has the ability to !ithstand short-term closures& Althou+h there are +eneral o$tions for res$onses that are s$ecific to
each utility com$any and electricity +eneratin+ $lant( any combination of these res$onses !ill
increase costs to the utility $lants& ="er a si0-month closure( $otential increases in !holesale costs
!ere modeled to be a total of :.1I&I million for @e! Jersey( Pennsyl"ania( and Aassachusetts&
1$en a planne) closure cost 4/ million )ollars, 'he impact of a lar+e scale failure is
unthinka#le
Eruse et al( .. 3James( Director of the center for $orts and !ater!ays( AAERICAK# B=CE# & DAA#' A 7ICEI@G 7IAE <=A<
>=R AGRIC%B7%REU)( htt$'**!!!&unitedsoybean&or+*!$-content*u$loads*Americas,Boc9s,And,Dams&$df6
;e ne0t estimated the im$act of loc9 closure on ener+y $rices& #ince the trans$ortation of coal on the inland !ater!ay
system differs from that of a+ricultural $roducts( !e used different models and a$$roaches to assess the impacts of lock
closures on ener+y prices! 'he Corps sur$eye) shipper an) carrier responses to planne) closures of the Greenu$ Boc9 in 144J
and the AcAl$ine Boc9 in 144?&J4(J. Gi"en the information is based on only those res$ondin+ in these sur"eys( cost estimates are
conser"ati"e& >urther( the closures were at least partially planne) closures that were announce) months
in a)$ance of the closure, potentially allo!in+ firms to $re$are for the closures & Cost estimates are not bro9en u$
by industry ty$e& 7he Greenu$ Boc9( located at mile J?.&4 on the =hio Ri"er( !as a $lanned closure( scheduled to be closed for
.G days( but the closure stretched to 51 days because of the disco"ery of seriescrac9in+ in the loc9 +ates and the need for
emer+ency re$airs& 7he au0iliary loc9 remained o$erational durin+ the closure( !hich !as noted as miti+atin+ some of the
ad"erse im$acts& Coal( by tonna+e( re$resents a$$ro0imately 5GP of the total tonna+e $assin+ throu+h the loc9& <oth u$bound and
do!nbound traffic of coal e0ists( but G1P of the coal mo"es do!nbound& 7otal costs of the closure !ere estimated to be :?.
million 3144? dollars6& Res$onses from a utility firm indicated e"ery closure is uniHue and actual res$onse to a closure de$ends on coal and
trans$ortation mar9ets conditions at the time of the closure( strate+ies !ill be on a $lant-by-$lant basis& 7he com$anyKs $otential res$onses to a
closure !ere noted as' a6 use of stoc9$ile coal 3increase stoc9$ile if the closure is $lanned6S b6 di"ert coal traffic to other modesS c6 shift coal
sources to a"oid the closed facilityS or d6 close $lants that cannot recei"e coal and either re-dis$atch the remainin+ $lants or $urchase $o!er off
the +rid& Another o$tion not mentioned by this utility but a"ailable to some $lants is the use of a fuel other than coal 3dual fuel $lants6& Price
of coal deli"ered to a utility $lant before the closure !as :J4-54*ton and durin+ the closure !as :54-
/4*ton2$rice increases of 14N//P based on 544N/44(444 tons& <ased on 54N.44(444 tons( a coal sales
com$any noted deli"ered $rices $rior to closure of :J4NJ5*ton but :54N/4*ton durin+ closure& 7he study notes
7he traffic effects of the closure at Greenu$ "ary de$endin+ on the commodity and indi"idual com$any decisionsYLAM sizable amount of coal
traffic as !ell as some a++re+ates traffic di"erted to other modes*sources durin+ the closure& Additionally( some critical commodity mo"ements
!ere +i"en $riority by the to!in+ com$aniesY) 7he ability of the au0iliary loc9 to handle traffic lo!ered the costs of the closureS tonna+e
throu+h the au0iliary loc9 durin+ closure !as a$$ro0imately the same as tonna+e throu+h the main loc9 before closure&
A )ama+e) infrastructure will make pro)ucts more costly an) e$entually lea) to a
loss of e7ports
Da"idson .1( 3Paul( #enior ;riter for the %#A today( 5*1.*.1( %#AKs crea9in+ infrastructure holds bac9 economy)(
htt$'**therynoshorn&com*14.1*45*1.*usas-crea9in+-infrastructure-holds-bac9-economy*6
Inland !ater!ays Huietly 9ee$ the nationKs economy flo!in+ as they trans$ort :.G4 billion of coal(
steel( chemicals and other +oods each year 2 a si0th of %&#& frei+ht 2 across JG states& Det( an antiHuated
system of loc9s and dams threatens the timely deli"ery of those +oods daily& Boc9s and dams raise or
lo!er bar+es from one !ater le"el to the ne0t( but brea9do!ns are freHuent& >or e0am$le( the main chamber at a loc9 on the =hio
Ri"ernear ;arsa!( Ey&( is bein+ fi0ed& Aaneu"erin+ .5-bar+e to!s into a much smaller bac9u$ chamber has increased the a"era+e delay at the
loc9 from ?4 minutes to 14 hours( includin+ !aitin+ time& 7he outa+e( !hich be+an last July and is e0$ected to end in Au+ust( !ill cost American
Electric Po!er and its customers :5&5 million as the utility ferries coal and other su$$lies alon+ the ri"er for itself and other businesses( says AEP
senior mana+er Aarty Hettel& As the economy $ic9s u$( the nationKs crea9in+ infrastructure !ill
increasin+ly stru++le to handle the load& 7hat !ill ma9e $roducts more e0$ensi"e as businesses
$ay more for shi$$in+ or maneu"er around roadbloc9s( and it !ill cause the nation to lose
e0$orts to other countries 2 both of !hich are e0$ected to ham$er the reco"ery& 7he +ood ne!s is( the
economy is turnin+() says Dan Aurray( "ice $resident of the American 7rans$ortation Research Institute& 7he bad ne!s is( !e e0$ect
con+estion to s9yroc9et&) 7he ancient loc9-and-dam system is $erha$s the most e+re+ious
e0am$le of a+in+ or con+ested trans$ortation systems that are bein+ outstri$$ed by demand&
>ourteen loc9s are e0$ected to fail by 1414( costin+ the economy billions of dollars& Aean!hile(
sea$orts canKt accommodate lar+er container shi$s( slo!in+ e0$orts and im$orts& Hi+h!ays are too narro!& <rid+es are o"erta0ed&
Coal 0mpacts
1utch 1isease Keads to economic collapse and a loss of democracy
Sla!ento%, , (Sladi6ir :> in econo6ics at Soviet Acade6y o2 Sciences, !ro2essor o2 sociology at MS4 Nove63er ,, )/
/, Into&icated 3y ig oil !rices" :olitical >utc disease a22licting te Nre6lin, =il R ;as 9ournal1
>utc disease As suggested 3y 6any econo6ists, >utc disease <<a countryLs e&cessive de!endence on te
e&!ort o2 raw 6aterials<can ave serious econo6ic conseMuences as a country 3eco6es
increasingly de!endent on tat raw 6aterials sector$ =ter3rances o2 te econo6y, suc as
6anu2acturing, o2ten decline 3ecause o2 te concentration o2 suc resources as oil or gold ,
asa!!ened in 0,t century S!ain$ A sudden 2all in te !rice o2 te raw 6aterials could 3ring an
econo6ic colla!se $ See6ingly, te8ussian leaders , li%e teir colleagues in SeneAuela and Iran, see te world troug te
!ris6 o2 oil revenues$ It goes witoutsaying tat one o2 te 2irst victi6s o2 te !olitical >utc disease is
de6ocracy $ 5owever, an even 6ore dangerous conseMuenceo2 te !olitical >utc disease is
te leaderLs loss o2 a so3er assess6ent o2 reality$ 4nder te i6!act o2 teir tecnologicalacieve6ents, 3ot
Stalin and Nruscev, wit teir s%ewed visions o2 reality, 6oved te country closer to a 6aCor war$ :utinLseu!oria over oil !rices
6ay not 3e as great as is !redecessorsL entusias6, 3ut is aggressiveness in 2oreign !olicy ingeneral, and toward te 4S and
8ussiaLs neig3ors in !articular, as clearly increased since )//* $ Te si2t occurred in late )//* wen Moscow 3randisedits gas
wea!on against 4%raine and indirectly against Euro!e$ 8ussiaLs 2oreign !olicy as ardened (des!ite so6e coo!erative gestures
toward te West1 and in2luenced several international con2licts, including issues surrounding Nort Norea, Iran, and te Middle
East$Te cons!icuous de6onstrations in 9uly o2 2riendsi! wit SeneAuelaLs CaveA, anoter !olitical leader ine3riated 3y oil
revenues, and te readiness to sell i6 wea!ons des!ite A6erican !rotests were clear signals o2 un2riendliness toward te 4S$
8ussian 6ediatreated MoscowLs attitudes toward CaveA as an o3vious de6onstration o2 disregard toward A6erican concerns$
>6itry MedvedevLs !ro!osal to 6a%e te ru3le 2ully converti3le in anatte6!t to renew te currencyLs international status was
anoter result o2 te countryLs oil 2ever $ Medvedev tal%ed conte6!tuously a3out Ute 2inancialirres!onsi3ility o2 te 4nited States,U
citing te countryLs growing national de2icit$ 5e also denounced te International Monetary EundLs atte6!t to !ro6ote 6ar%et
re2or6s, 2orgetting tat only a 2ew years ago 8ussia ad scrounged 2or credits 2ro6 tis 3an%$ =il 2ever as not in2ected all
8ussians$ Te level o2 entusias6 a6ong te general !u3lic and !articularly a6ong e&!erts does not 6atc te levels o3served
a2ter S!utni% and cos6onaut ;agarin were launced into s!ace, to say noting o2 te e&cite6ent a2ter te 0-H* war victory$ A6ong
te 6ost !ersistent critics o2 te oil 2renAy is Egor ;aidar wo suggested tat te leadersi!Ls oil deliriu6 and its disregard 2or te
insta3ility o2 oil !rices were dangerous to te country$ Several inde!endent !oliticians and Cournalists ave seconded;aidarLs
critiMue o2 te Nre6linLs Uydrocar3on doctrine,U de6onstrating concern 2or te Uti6e 3o63 in our !olitical syste6$U Concerned a3out
te Nre6linLs U6uddled vision o2 te world,U so6e inde!endent 6inds in 8ussia, suc as >6itry Muratov, te editor o2 Novaya
;aAeta, insisted" UTe intellect o2 te govern6ent canges inversely wit te !rice o2 oil$U n, Beonid 8adAi%ovs%y, a 2a6ous li3eral
Cournalist, wrote a3out te inverse correlation 3etween te level o2 de6ocracy and te !rice o2 oil$ Wat is 6ore, evenSladislav
Sur%ov, until now te Nre6linLs leading ideologue callenging Medvedev, in a struggle 2or in2luence over :utin, suggested tat, wit
gas as its only 3asis , te 8ussian econo6y would inevita3ly reveal its2a%e !ros!erity in te U!ost<ydrocar3on era $U 8ussia is not
te only country in te world tat is o3sessed wit oil$ Every country, in one way or anoter, is !reoccu!ied wit oil$ Wile te 4S,
Euro!e, Cina, andIndia are concerned a3out 2uel su!!ly and te adverse in2luence o2 ig oil !rices on te econo6y and standard
o2 living, several countries, including 8ussia, ave turned teir oil resources into wea!ons 2or acieving teir do6estic and 2oreign
goals$ As te e&!erienceso2 Stalin and Nruscev sowed, 8ussian leaders so6eti6es overstretc te !otential o2 teir
advantages and lose a so3er !ers!ective o2 reality$ Mes6eriAed 3y is clout, :utin 6ay acce!t Ute invitationU o2 te 8ussians to
stay in !ower a2ter )//.$ Today, *0X o2 te8ussians would vote 2or i6 i2 e decided to try 2or a tird ter6, wic e !ro6ised not
to do$ In te 2oreign arena, :utin as already sown less willingness to coo!erate wit te West and te 4S in !articular$ 5is 2oreign
!olicy 6ay arden even 6ore$ 5owever, it isunli%ely tat Moscow will de6onstrate direct ostility toward te West in te near 2uture$
Te !ost<Soviet s!ace is anoter story, owever $ Te idea tat oil will allow 8ussia to ta%e control over4%raine, ;eorgia, and
Belorussia is dee!ly engrained in te 6inds o2 Nre6lin !oliticians$ We can e&!ect an e&acer3ation o2 te !olitical develo!6ents in
te !ost<Soviet s!ace, wic will undou3tedly co6!licate relations wit te West $ Aside 2ro6 teda6age to 8ussiaLs international
relations, te oil deliriu6 is 6ore !ro3le6atic to te countryLs long<ter6 national interests$ Te over<con2idence in oil revenues 6ay
lead to a decline in te s!irit o2 entre!reneursi!, to a re2usal to 6oderniAe industry, or even toan acce!tance o2 deindustrialiAation$
Te o3session wit ig oil !rices e&!lains wy te Nre6lin sees 2ew o3stacles to te countryLs continued 6ove toward an
autoritative regi6e$ It also e&!lains te Nre6linLs cons!icuousdisregard 2or te growing !ro3le6 o2 corru!tion in society$ Wit te
vision o2 te 8ussian leadersi! 3lurred, it 6ay 3eco6e increasingly insensitive tovarious destructive tendencies in te country $ Te
i6!act o2 te !rice o2 oil on !olitical decision<6a%ing in 8ussia is cruciallyi6!ortant to te world and sould 3e closely
6onitored$*--
China?Australia
Chinese Coal Cining is detrimental to the environment
A>B, 0/ (Asian >evelo!6ental 3an%, Einal 8e!ort Coal Mine Sa2ety Study,
tt!"##www)$ad3$org#>ocu6ents#8e!orts#Consultant#F-,*+<:8C#F-,*+</F<:8C<TAC8$!d21
Coal 6ining in Cina is also associated wit wides!read adverse environ6ental i6!act in
addition to ig direct and indirect e6ission to te at6os!ere o2 coal industry derived
ydrocar3ons$ Coal !roduction in Cina will 6ost li%ely reac and e&ceed ),*// Mt!a witin 2ive years due to te growing
internal industrial and do6estic de6and 2or !ower and eating$ In te sort to 6ediu6 ter6 Einal 8e!ort A>B TA H.H-< :8C
Coal Mine Sa2ety Study alternative sources o2 !ower, nuclear in !articular, cannot
re!lace a signi2icant 2raction o2 underground coal !roduction and so issues o2 sa2ety and
environ6ental i6!act 6ust 3e addressed$
China is feasting on cheap US coal imports
To6!son, 00 (9onaton, Ted Scri!!s Eellow in Environ6ental 9ounalis6 at C4, As Coal 4se >eclines in 4S, Coal
Co6!anies Eocus on Cina, tt!"##eF,/$yale$edu#2eature#asOcoalOuseOdeclinesOinOusOcoalOco6!aniesO2ocusOonOcina#)H+H#1
Coal is te cigarette o2 our new age, and not Cust 3ecause 3urning it causes res!iratory !ro3le6s$ >e6and 2or one o2 te
dirtiest 2ossil 2uels is e&!ected to stagnate or di6inis ere in te 4$S$ So coal
co6!anies I !articularly tose tat 6ine te vast reserves in te :owder 8iver Basin in Wyo6ing and Montana I are
loo%ing 2or a new !lace to !eddle teir wares$ Tey7ve 2ound it in Cina$ Cina rigt now is
aving 3lac%outs 3ecause tey don7t ave enoug coal to 2uel teir electricity 2acilities,
;regory Boyce, CE= o2 te world7s largest coal co6!any, :ea3ody Energy, told CNBC tis s!ring$ Tey continue to
i6!ort 6ore and 6ore coal and tey continue to loo% 2or coal resources across te glo3e$ So we don7t see any signs o2
tat slowing down$ Te :owder 8iver Basin as su22icient coal to el! ligt Cinese cities 2or years
to co6e$ Te !ro3le6 is getting it tere$ E&isting !orts in te nortwestern 4nited States cannot
andle e&!orting suc large Muantities o2 coal, !ro6!ting te coal industry to !ro!ose 3uilding two new !orts$
Te :owder 8iver Basin as su22icient coal to el! ligt Cina 2or years I te !ro3le6 is getting it tere$ :ea3ody as !artnered
wit SSA Marine in o!es o2 3uilding a new ter6inal near Bellinga6, Was$ Arc Coal is wor%ing wit an Australian co6!any,
Millenniu6 Bul% Ter6inals, on a !ro!osal to turn an old 8eynolds Metal site into a coal ter6inal on te Colu63ia 8iver at Bongview,
Was$, Cust downstrea6 2ro6 :ortland, =re$ Te Bongview !ro!osal was !ut on old tis s!ring a2ter lea%ed internal docu6ents
sowed tat te !ro!onents !lanned on 3uilding a 3igger ter6inal tan tey ad a!!lied 2or, 3ut tey say tey will re<a!!ly
0ncreased Coal ,%ports to China will decrease greenhouse gas productions
in the US
To6!son, 00 (9onaton, Ted Scri!!s Eellow in Environ6ental 9ounalis6 at C4, As Coal 4se >eclines in 4S, Coal
Co6!anies Eocus on Cina, tt!"##eF,/$yale$edu#2eature#asOcoalOuseOdeclinesOinOusOcoalOco6!aniesO2ocusOonOcina#)H+H#1
=r not$ 8icard N$ Morse, te director o2 researc on coal and car3on 6ar%ets at Stan2ord7s
:rogra6 on Energy and Sustaina3le >evelo!6ent, !redicts a su3tly di22erent scenario, wit dra6atically di22erent
outco6es$ =!ening u! 4$S$ coal su!!lies to Cina7s uge de6and will increase coal
!rices 2or 4$S$ utilities, e says$ Tat will 2urter incentiviAe do6estic utilities to switc 2ro6
coal to natural gas, wic e6its a3out al2 te greenouse gases o2 coal$
0ncreased US coal prices will dissuade Chinese coal !uyers" resulting in
more domestically produced coal
Morse and 5e, 0/ ( 8icard and ;ang, 8icard N$ Morse leads glo3al coal 6ar%et researc at te Stan2ord :rogra6 on
Energy and Sustaina3le >evelo!6ent and ;ang 5e is a researc associate at te :rogra6 on Energy and Sustaina3le
>evelo!6ent (:ES>1, T5E W=8B>7S ;8EATEST C=AB A8BIT8A;E" C5INA7S C=AB IM:=8T BE5ASI=8 AN>
IM:BICATI=NS E=8 T5E ;B=BAB C=AB MA8NET, tt!"##iis<
d3$stan2ord$edu#!u3s#))-,,#W:O-HOMorseO5eO;reatestOCoalOAr3itrageO*Aug)/0/$!d21
Cinese coal 3uyers in Souteastern Cina can 3uy coal 2ro6 6ulti!le 6ar%ets, and !rice
discre!ancies 3etween di22erent 6ar%ets create !ro2it o!!ortunities$ Eor a !ortion o2 s!ot 6ar%et
de6and, 3uyers will co6!are te CIE, cost o2 coal landed in ;uangAou 2ro6 6ulti!le destinations and, all oter tings eMual,
will ta%e te cea!est coal$+ Te di22erentials 3etweenCIE ;uangAou coal !rices 2ro6
6ulti!le origins tere2ore create ar3itrage o!!ortunities 2or Cinese 3uyers wo can
si2t teir !urcasing !atterns to ca!ture te di22erential 3etween do6estic and
international 6ar%ets under di22erent conditions$ Te 6odel calculates tese ar3itrage relationsi!s o2
do6estic to %ey international coals$ We ten co6!are tese ar3itrage relationsi!s to istorical i6!orts, de6onstrating tat i6!ort
levels ave 3roadly trac%ed tese ar3itrage trends, increasing were !rice s!reads 2avored
international coals over do6estic coals$
Kow US coal prices are ey to prevent an increase in Chinese domestic
coal
Morse and 5e, 0/ ( 8icard and ;ang, 8icard N$ Morse leads glo3al coal 6ar%et researc at te Stan2ord :rogra6 on
Energy and Sustaina3le >evelo!6ent and ;ang 5e is a researc associate at te :rogra6 on Energy and Sustaina3le
>evelo!6ent (:ES>1, T5E W=8B>7S ;8EATEST C=AB A8BIT8A;E" C5INA7S C=AB IM:=8T BE5ASI=8 AN>
IM:BICATI=NS E=8 T5E ;B=BAB C=AB MA8NET, tt!"##iis<
d3$stan2ord$edu#!u3s#))-,,#W:O-HOMorseO5eO;reatestOCoalOAr3itrageO*Aug)/0/$!d21
=ur 2indings indicate tat Cina is a cost 6ini6iAer in te international 6ar%et tat will
i6!ort eavily wen te !rice is rigt ? as it was in )//- due to a con2luence o2 circu6stances we ave
descri3ed ere ? and largely rely on do6estic coal wen i6!orts are unattractive$
A Koss of US coal 0mports to China" will accelerate Australia+s dutch
disease
:ese%, *#0/#0) ( Willia6, Willia6 :ese% is a To%yo<3ased colu6nist 2or Bloo63erg News, !roviding o!inions and
co66entary on econo6ics, 3usiness, 6ar%ets, and !olitics trougout te region, Australians Sould Be Care2ul o2 >utc
>isease, tt!"##www$3loo63erg$co6#news#)/0)</*<0/#australians<sould<3e<care2ul<o2<dutc<disease$t6l1
Te trou3le is, te dollarLs ascent is accelerating a ollowing out o2 sorts tatLs i6!eriling
AustraliaLs 2uture$ Te 6ining industry is triving, 3ut oter industries << 6ost o2 te
nation, actually << is struggling$ Tis dyna6ic !uts !ressure on Australia to reinvent itsel2
to avoid U>utc disease,U were3y te 3ene2its o2 e&!orting natural resources lead to
te neglect and atro!y o2 oter sectors$ ;illard and er !redecessor, Nevin 8udd, tried to i6!ose resources
ta&es to sare te 3ene2its o2 te nationLs 6ining 3oo6 6ore 3roadly$ Mining co6!anies ave 3een re6ar%a3ly success2ul in
scuttling tese e22orts$ Now, te ris% is tat Australia re6ains all too a!!y to 3e a 6ining site
2or Cina and 2ails to 2ocus on a 6ore diverse and innovative econo6ic 2uture$ Australia
sould 3e investing 6ore in in2rastructure, education and training$ It also sould review its ta& syste6, one tat encourages 6any o2
te nationLs 3rigtest and 6ost !roductive !eo!le to see% Co3s a3road$ Sa2e aven status as it 3ene2its$ @et Australia 6ay
ave too 6uc o2 a good ting in its ands$
Australia is showing signs of 1utch 1isease and more demand from China
will !e disastrous for the Australian economy
Corden 00 (Ma&, Australian Econo6ist, and one o2 te early develo!ers o2 te teory o2
dutc disease, Te >utc >isease in Australia :olicy =!tions 2or a Tree<S!eed
Econo6y,
tt!"##www$craw2ord$anu$edu$au#acde#!u3lications#!u3lis#!a!ers#w!)/00#w!OeconO)/
00O0H$!d21
Ero6 )//* to)/00 te Australian 6ining industry grew a3out -/X$ Tis was 3y value 6easured in
Australian dollars$ >uring te sa6e !eriod te value o2 Australian ;>: grew a3out HFX$ E&!orts o2 te 6ining
industry7s !roducts ? !rinci!ally iron ore and coal ? grew 0H/X in value$ Tis re2lected, to a
great e&tent, increases in !rices ? in 2act a H0 X increase in Australia7s ter6s o2 trade$ Te cause was !ri6arily an
increase in de6and 2ro6 Cina$ Wit ;>: in te rest o2 te econo6y growing 3y F+X
over tis !eriod, all tis is su66ed u! 3y te !o!ular Australian ter6 te two s!eed
econo6y$ ) Te 6ining 3oo6 was te !rinci!al ? 3ut 3y no 6eans only ? cause o2 a su3stantial F0X real a!!reciation o2 te
Australian dollar over te !eriod, (as 6easured 3y an inde& o2 te trade<weigted e&cange rate1$ In turn tis real
a!!reciation ad an adverse e22ect on at least so6e (and !era!s 6any1 i6!ort<
co6!eting and non<6ining e&!ort industries$$ Tese were te losers 2ro6 te 6ining
3oo6$ It is tese losers tat te teory o2 te >utc >isease 2ocuses on$ Tus Australia is now
really not a two<s!eed 3ut a tree s!eed econo6y$ Te 2ast 6oving !art is te Boo6ing Sector, te slow 6oving or even
declining !art is te Bagging Sector, and te rest ? were tere are 6ore li%ely to 3e gains ? is te Non<trada3le Sector$
Australia is a ey player and important asset in the glo!al economy
Sanders, 00 (E6ily, Chairman and Chief Executive Officer of Sanders Financial Management, Key Player in
Global Economy ises From !o"n #nder, htt$%&&gsc$a'"ord$ress'com&()**&)+&(,&-ey.$layer.in.global.economy.
rises.from.do"n.under&/
Altoug s6all in !o!ulation, Australia as certainly e&erted its in2luence on te world stage and
is ra!idly 3eco6ing an econo6ic !layer$ Wen te ;reat 8ecession it te 4$S$ and
oter develo!ed countries in )//.<)//-, Australia e6erged largely unscated$ Teir
ousing 6ar%et didn7t correct during te cras and is now sowing signs o2 2rotiness$ Te la3or 6ar%et is so red ot tat te
govern6ent is tal%ing a3out i6!orting wor%ers to 2ill la3or sortages in its 6ining industry, altoug oter sectors I construction,
6anu2acturing and agriculture I are wea%ening$
***Chemicals***
5mpact
An), chemical spills are likely
Felta 6arm %ress /2 Bac9 of !ater!ay maintenance harmin+ commerce( farmers() 1*1 le0is
=n inland !ater!aysY Aany of the loc9s and dam structures -- alon+ the =hio Ri"er( the Aissouri Ri"er( the Aississi$$i and
other !ater!ays -- are reachin+( or ha$e passe), their 20-year life span! 'hey must #e maintaine)&) 7his is a basic issue
of economics( says #train& #econdarily( there are safety factors to consider& Homeland security comes into $lay !ith the
+roundin+ of "essels& And !hat !ould ha$$en if one of the "essels breached and the contents of !hich N from
$etrochemicals to all other sorts of $roducts N s$ill into our ri"ers and estuariesU =n bar+es( !eKre mo"in+ coal(
iron ore( oil( chemicals( all ty$es of a+ and forestry $roducts& <asically( the in)ustrial an) a+ricultural mi+ht
com#ine) )epen)s on the efficient use of waterways
***1n$ironment***
1missions
Koc failures cause shift to truc and rail transportation
Texas Transportation Institute 11 (AMERICAS LOCKS & DAMS: A TICKING TIME
BOMB FOR AGRICULTURE?,
http://www!"#t$%&!p"$t%t'"&"$(/&)w!$""*/L"+,!D%*!F'&%-R)p"$tp./0
Th) t%!, "/ t$%&!p"$t'&( %($'+1-t1$%- +"**".'t')! /$"* th) /%$* t" /'$!t h%&.-)$! %&. p$"+)!!"$!
%&. 1-t'*%t)-# t" ."*)!t'+ %&. '&t)$&%t'"&%- $)t%'- *%$,)t! %&. p"$t! $)21'$)! % h'(h-# .)3)-"p).,
'&t)($%t). t$%&!p"$t%t'"& &)tw"$,, "/ wh'+h *%$'&) t$%&!p"$t%t'"& '! % 3't%- +"*p"&)&t A high
percentage of these commodities pass through one or more locks on their way to market.
Should a waterway be closed due to one or more lock failures, the resultant increase in
costs that would be incurred in utilizing truck or rail transportation would decrease or
een eliminate the cost adantage of !.S. "idwestern producers. This would be especially
detrimental to export shipments F$"* 4556 th$"1(h 4557, 89:7;< "/ +"$& )=p"$t). th$"1(h
-"w)$ M'!!'!!'pp' p"$t! %$$'3). %t th) p"$t! 3'% >%$()? /"$ !"#>)%&!, th) p)$+)&t%() w%! 89: 87<
4
Updating locs prevents tradeoff
Texas Transportation Institute # (A M".%- C"*p%$'!"& "/ D"*)!t'+ F$)'(ht T$%&!p"$t%t'"&
E//)+t! "& th) G)&)$%- @1>-'+, N"3)*>)$ 4559, %*)&.). M%$+h 4557, ># th) T)=%!
T$%&!p"$t%t'"& I&!t't1t), C)&t)$ /"$ @"$t! %&. A%t)$w%#!,
http://www%*)$'+%&w%t)$w%#!+"*/TTI/tt'B!t1.#B($))&h"1!)B(%!B'&!)$tp./0
F"--"w'&( % !+')&t'/'+ $)3')w "$.)$). ># th) US S1p$)*) C"1$t, the $%A recently issued a
proposed finding that &greenhouse gases contribute to air pollution that may endanger
public health or welfare. C Th) %()&+# )!t'*%t)! th%t ''( of our nation)s annual carbon
dioxide emissions come from transport*related actiity CC +ompared to rail or truck,
inland barges offer America a more fuel efficient, safer and carbon friendly transportation
alternatie. ,ur inland waterways are a sound inestment in America)s future.
8reight transportation causes high oFone levels
-.A / (F).)$%- D'(hw%# A.*'&'!t$%t'"& (US D)p%$t*)&t "/ T$%&!p"$t%t'"&0, A!!)!!'&( th)
E//)+t! "/ F$)'(ht M"3)*)&t "& A'$ E1%-'t# %t th) N%t'"&%- %&. R)('"&%- L)3)-,
http://www/hw%."t("3/)&3'$"&*)&t/%'$B21%-'t#/p1>-'+%t'"&!/
)//)+t!B"/B/$)'(htB*"3)*)&t/+h%pt)$54+/*0
M"!t freight trucks, locomoties, and ships are powered by diesel engines, which are a
ma0or source of emissions of nitrogen oxides 12,x3 and particulate matter 1%"3. 2,x
reacts with olatile organic compounds 14,+3 to form ground*leel ozone, +"**"&-#
,&"w& %! !*"( 5round*leel ozone can trigger a ariety of health problems '&+-1.'&(
%(($%3%t). %!th*%, $).1+). -1&( +%p%+'t#, %&. '&+$)%!). !1!+)pt'>'-'t# t" $)!p'$%t"$# '--&)!!)!
-',) p&)1*"&'% %&. >$"&+h't'! @)"p-) w'th $)!p'$%t"$# p$">-)*! %$) *"!t 31-&)$%>-), >1t een
healthy people who are actie outdoors, such as construction and port workers, can be
affected when ozone leels are high. ,zone also contributes to crop damage, ecosystem
damage, and other effects. NO= +%& %-!" /"$* p%$t'+1-%t) &'t$%t), )!p)+'%--# '& w)!t)$& %$)%! "/
th) +"1&t$#
CE2
CE2 emissions
'e7as 'ransportation 5nstitute " 3A Aodal Com$arison of Domestic >rei+ht 7rans$ortation
Effects on the General Public() @o"ember 1448( amended Aarch 144I( by the 7e0as
7rans$ortation Institute( Center for Ports and ;ater!ays(
htt$'**!!!&american!ater!ays&com*77I*tti,study,+reenhouse,+as,insert&$df6
>ollo!in+ a scientific re"ie! ordered by the %&#& #u$reme Court( the 1%A recently issue) a
propose) fin)in+ that J+reenhouse +ases contri#ute to air pollution that may en)an+er
pu#lic health or welfare!) Q 7he a+ency estimates that @@% of our nation;s annual car#on
)io7i)e emissions come from transport-relate) acti$ity& QQ Compare) to rail or truck,
inlan) #ar+es offer America a more fuel efficient, safer an) car#on frien)ly transportation
alternati$e! Eur inlan) waterways are a soun) in$estment in America;s future!
8reight transportation increases CJ# levels
!nited 2ations 16 (@AFING TDE AAG FOR SUSTAINABLE FREIGDT TRANS@ORT,
http://1&+t%.='''"$(/)&/S)!!'"&D"+1*)&t/1='''+&45;4.HHBt$%&!p"$tB)&p./0
The strategic economic role of freight transport cannot be oeremphasized. .oweer, the
strong nexus between freight transport actiities, energy and enironmental sustainability
is yet to be ade7uately addressed. +urrent freight transport systems are heaily reliant on
oil for propulsion and are not yet in a position to effectiely adopt cleaner energy
alternaties and technologies. O3)$%--, t$%&!p"$t +"&!1*)! "3)$ 65 p)$ +)&t "/ (-">%- -'21'.
/"!!'- /1)-! %&. '! )=p)+t). t" %++"1&t /"$ 79 p)$ +)&t "/ th) '&+$)%!) '& th) w"$-.! p$'*%$# "'-
1!) >)tw))& 4559 %&. 45H5 I& %..'t'"& t" $)-%t). '*p-'+%t'"&! /"$ t$%&!p"$t +"!t! %&. t$%.), the
heay reliance of freight transport on oil for propulsion increases enironmental costs such
as pollution and climate change. The expected growth in demand for freight transport
serices '& t%&.)* w'th th) (-">%- )+"&"*#, t$%.) %&. th) w"$-. p"p1-%t'"& t"()th)$ w'th th)
h'(h +%$>"& '&t)&!'t# "/ "'-, place freight transport at the centre of the climate change
debate. The transport sector accounts for nearly 68 per cent of global energy*related
carbon dioxide 1+,63 emissions %&. /"$ ;H p)$ +)&t "/ %-- w"$-. ($))&h"1!) (%!)! (GDG0
U&+h)+,)., these unsustainable patterns are likely to intensify and potentially result in
global energy and enironmental crises. I& th'! +"&t)=t, % t$%&!'t'"& t" -)!! "'-I.)p)&.)&t %&.
*"$) )&)$(#I)//'+')&t /$)'(ht t$%&!p"$t !#!t)*! '! >"th %& )+"&"*'+ %&. )&3'$"&*)&t%-
'*p)$%t'3)
CJ# causes warming
Associated %ress 11 A"$-. !t'-- w%$*'&( 1p, $)!)%$+h)$! w%$&
http://www>"!t"&+"*/&)w!/&%t'"&/w%!h'&(t"&/%$t'+-)!/45;;/5J/47/(-">%-Bw%$*'&(B+"&t'&1)!
B%!B($))&h"1!)B(%!B($"w!/
The world)s climate is &"t "&-# +"&t'&1'&( t" w%$*, 't! adding heat*trapping greenhouse gases faster,
$)!)%$+h)$! !%'. #)!t)$.%# The global temperature has been warmer than the 69th century aerage
eery month for more than 68 years, th)# !%'. %t % t)-)+"&/)$)&+) Th) '&.'+%t"$! !h"w 1&)21'3"+%--# th%t the world
continues to warm , Th"*%! R K%$-, .'$)+t"$ "/ th) N%t'"&%- C-'*%t'+ D%t% C)&t)$, !%'. '& $)-)%!'&( th) %&&1%- St%t) "/ th) C-'*%t)
$)p"$t /"$ 45;5 &There is a clear and unmistakable signal from the top of the atmosphere to the
depths of the oceans , %..). @)t)$ Th"$&) "/ th) C""p)$%t'3) I&!t't1t) /"$ C-'*%t) %&. S%t)--'t)!, N"$th C%$"-'&% St%t) U&'3)$!'t#
+arbon dioxide increased by 6.:9 parts per million '& th) %t*"!ph)$) '& 45;5, wh'+h '! *"$) th%& th) %3)$%()
%&&1%- '&+$)%!) !))& /$"* ;785I45;5, K%$- %..). +arbon dioxide is the ma0or greenhouse gas accumulating
in the air that atmospheric scientists blame for warming the climate. The warmer
conditions are consistent with eents such as heat waes and extreme rainfall, K%$- !%'. %t %
t)-)+"&/)$)&+) D"w)3)$, 't '! *"$) .'//'+1-t t" *%,) % .'$)+t +"&&)+t'"& w'th )3)&t! !1+h %! t"$&%." "1t>$)%,!, h) !%'.
)arming causes ,%tinction
Tickell 9; (O-'3)$ T'+,)--, B$'t'!h K"1$&%-'!t, %1th"$ %&. +%*p%'(&)$ "& h)%-th %&. )&3'$"&*)&t
'!!1)!, %&. %1th"$ "/ th) K#"t"4 +-'*%t) '&'t'%t'3) O& % p-%&)t LC h"tt)$, %-- w) +%& p$)p%$) /"$
'! )=t'&+t'"&, Th) G1%$.'%&, 8I;;I58
http://www(1%$.'%&+"1,/+"**)&t'!/$))/4558/%1(/;;/+-'*%t)+h%&()0
A) &)). t" ()t p$)p%$). /"$ four degrees of global warming, B"> A%t!"& t"-. th) G1%$.'%& -%!t w)), At /'$!t !'(ht th'! -"",!
-',) w'!) +"1&!)- /$"* th) +-'*%t) !+')&+) %.3'!)$ t" D)/$% B1t the idea that we could adapt to a /+ rise is absurd
and dangerous. 5lobal warming "& th'! !+%-) would be a catastrophe that would mean, '& th)
'**"$t%- w"$.! th%t Ch')/ S)%tt-) p$">%>-# &)3)$ !p",), Mth) )&. "/ -'3'&( %&. th) >)('&&'&( "/ !1$3'3%-M /"$ h1*%&,'&. O$ p)$h%p! th)
>)('&&'&( "/ "1$ extinction. The collapse of the polar ice caps would become ineitable, bringing
long*term sea leel rises of <9*;9 metres A-- th) w"$-.N! coastal plains would be lost, complete
with ports, cities, transport and industrial infrastructure, and much of the world=s most
productie farmland. Th) w"$-.N! ()"($%ph# w"1-. >) t$%&!/"$*). *1+h %! 't w%! %t th) )&. "/ th) -%!t '+) %(), wh)& !)% -)3)-! $"!)
># %>"1t ;45 *)t$)! t" +$)%t) th) Ch%&&)-, th) N"$th S)% %&. C%$.'(%& B%# "1t "/ .$# -%&. >eather would become extreme
and unpredictable, with more fre7uent and seere droughts, floods and hurricanes. The
$arth=s carrying capacity would be hugely reduced. ?illions would undoubtedly die A%t!"&N!
+%-- w%! !1pp"$t). ># th) ("3)$&*)&tN! /"$*)$ +h')/ !+')&t'/'+ %.3'!)$, S'$ D%3'. K'&(, wh" w%$&). th%t Mif we get to a four*degree
rise it is 7uite possible that we would begin to see a runaway increaseM Th'! '! % $)*%$,%>-)
1&.)$!t%t)*)&t The climate system is already experiencing significant feedbacks, notably the
summer melting of the Arctic sea ice. The more the ice melts, th) *"$) !1&!h'&) '! %>!"$>). ># th) !)%, %&.
the more the Arctic warms A&. %! th) A$+t'+ w%$*!, th) $)-)%!) "/ >'--'"&! "/ t"&&)! "/ *)th%&) : % ($))&h"1!) (%! 95 t'*)!
!t$"&()$ th%& +%$>"& .'"='.) "3)$ 45 #)%$! : +%pt1$). 1&.)$ *)-t'&( p)$*%/$"!t '! %-$)%.# 1&.)$ w%# T" !)) h"w /%$ th'! p$"+)!! +"1-. (", -"",
666* #)%$! t" th) @%-%)"+)&)IE"+)&) Th)$*%- M%='*1*, wh)& % (-">%- t)*p)$%t1$) '&+$)%!) "/ JC +"'&+'.). w'th th) $)-)%!) "/ %>"1t 6,555
('(%t"&&)! "/ +%$>"& '&t" th) %t*"!ph)$), >"th %! CO4 %&. %! *)th%&) /$"* >"(! %&. !)%>). !).'*)&t! L1!h !1>t$"p'+%- /"$)!t! ($)w '& p"-%$
$)('"&!, %&. !)% -)3)-! $"!) t" ;55* h'(h)$ th%& t".%# It appears that an initial warming pulse triggered other
warming processes. "any scientists warn that this historical eent may be analogous to the
present@ the warming caused by human emissions could propel us towards a similar
hothouse $arth.
Air %ollution
air pollution an) fuel efficiency
(* Army Corps of 1n+ineers " 3Inland ;ater!ay @a"i+ation' "alue to the @ation()
htt$'**!!!&i!r&usace&army&mil*docs*C7@*C7@Inland@a"<ro,lores&$df6
Another, less $isi#le en$ironmental #enefit of the Corps na$i+ation pro,ects is that they
help limit air pollution emissions #y ena#lin+ tows with many #ar+es to mo$e car+o lon+
)istances on consi)era#ly less fuel than trains or trucks !ould need to mo"e the same
amount of car+o the same distance& 'he a#ility to mo$e much more car+o per shipment #y
water than is possi#le #y truck or train means the transport is #oth fuel-efficient an)
en$ironmentally a)$anta+eous& =n a"era+e( a +allon of fuel allo!s one ton of car+o to be
shi$$ed .55 miles by truc9( ?J/ miles by rail and 58/ miles by bar+e& America;s inlan)
waterways allow America to realie tremen)ous sa$in+s in fuel consumption an) re)uce)
air emissions from fuel com#ustion&
worth in$estin+ in- en$ironmental #enefits NairO
5.%' " 3Inland Ri"ers Ports and 7erminals( 7o In"est In 7he Inland ;ater!ays Is 7o In"est In
7his @ationOs 7rans$ortation Infrastructure()
htt$'**!!!&ir$t&net*ir$t&nsf*G1855cdGfbJ5?44cG/15/8f5448G8ab/*4d4fcJI54?dd4885G/15/d??
444a/?5.41ec&htmlU=$enDocument6
5.%' stron+ly #elie$es that the nation9s in$estment in its waterways yiel)s su#stantial an)
wi)esprea) returns to American ta7payers! 0ater#orne transportation on the inlan) an)
coastal waterways pro$i)es the most cost effecti$e an) en$ironmentally soun) mo)e of
transportin+ frei+ht! IRP7 su$$orts e"ery effort to fund the Cor$s $ro+rams to the ma0imum
e0tent $ossible( es$ecially no! that the federal bud+et is in sur$lus& E"ery dollar in"ested is
returned many times o"er in reduced trans$ortation costs and a cleaner en"ironment&
AmericaOs inland !ater!ays mo"e //4 million tons $er year( 15 $ercent of all %&#& domestic
+oods mo"in+ bet!een cities& And( these !ater!ays are( on an a"era+e( o$eratin+ at J5P of their
total ca$acity& Aany 9ey a+ricultural $roducts utilize these marine hi+h!ays as their $rimary
means of trans$ort !hen mo"in+ !ithin the heartland and in international commerce&
7he inland ri"ers( $orts( and terminals $ro"ide the least e0$ensi"e and most efficient means of
trans$ortin+ car+o on a cost-$er-ton-mile basis !hen com$ared to either road or rail
trans$ortation& 7he lo!a De$artment of 7rans$ortation recently issued statistics com$arin+ !ater
trans$ortation to rail and truc9 sho!in+ that a .5-bar+e to! carries the eHui"alent of 1-.*? unit
trains or G84 truc9s& Boo9in+ at this in terms of eHui"alent len+th( a .5-bar+e to! stretches .*?
mile( !hereas the unit train stretches 1-J*? miles and the truc9s !ould stretch an astoundin+ J?-
.*1 miles 3assumin+ .54 feet bet!een truc9s6\ 7here is little doubt that if the car+o $resently
tra"elin+ on the inland !ater!ays !ere to be accommodated on either rail or truc9( a substantial
additional in"estment in the rail and hi+h!ay infrastructure !ould be reHuired to accommodate
this traffic&
-ot only is water#orne mo$ement of car+o mo$e) more efficiently than usin+ either roa)
or rail, it is also )one with the least impact on air quality! 7he diesel e0haust associated !ith
G84 truc9s far e0ceeds the im$act on air Huality !ith a sin+le .5-bar+e to!& 7hus( in addition to
miti+atin+ con+estion on inland roads and rail lines( water#orne mo$ement of frei+ht on the
inlan) ri$er system is an en$ironmentally soun) way of mo$in+ +oo)s in an ener+y efficient
manner!
air pollution
(*FE' "4 3%# De$artment of 7rans$ortation( En"ironmental Ad"anta+es of Inland <ar+e
7rans$ortation() htt$'**!!!&u$$ermon&or+*"isions*D=7,en"iron,bar+e&htm6
@oise le"els ha"e been risin+ due to increased traffic "olumes( urban $o$ulation +ro!th(
increased mobility( and the s$read of mechanization& 7rans$ortation acti"ity is( by far( the ma-or
source of noise( !ith road traffic the chief offender( e"en more so than aircraft noise& Air
$ollution caused by trans$ortation includes both $ollutants directly emitted by en+ines and
secondary $ollutants formed by chemical reaction in the atmos$here& Air $ollution is caused by a
!ide "ariety of man-made and natural sources( !ith fuel combustion bein+ the lar+est
contributor& A+ain( road traffic is( by far( the dominant source of $ollutant emissions&
A Cor$s of En+ineersO study determined that commercial marine na"i+ation( ho!e"er( has a
relati"ely minor effect on air Huality& Air $ollution resultin+ from !ater trans$ort is far less than
truc9 and is com$arable to( or less than( rail( de$endin+ on such "ariables as terrain( route( etc&
85*C
ener+y efficiency
7oohey( /*.G-
$resident and chief e0ecuti"e of ;ater!ays Council Inc& 3Aichale( J=C 7E@#' %&#& @ational
Policy #hould Include Ca$ital In"estment for Inland ;ater!ays
Infrastructure() htt$'**!!!&-oc&com*-oc-tens*-oc-tens-us-national-$olicy-should-include-ca$ital-
in"estment-inland-!ater!ays-infrastructu6

A noble +oal that !ill increase our countryKs $ros$erity( yes( but !ithout an efficient !ater!ays
infrastructure to mo"e increased "olumes of +rain( for e0am$le( this !ill not be an achie"able
+oal& J& 'raffic con+estion relief& Ene /2-#ar+e tow of )ry #ulk car+o keeps /,020 trucks off our
nation;s alrea)y o$erly con+este) hi+hways, or another 2/C railcars rollin+ throu+h our
communities& ?& >resher air' 7he inland !ater!ays trans$ortation sector has a lo!er carbon foot$rint because it +enerates fe!er carbon
dio0ide emissions than rail or truc9 for each ton of car+o com$ared to trans$ortin+ that same car+o by these other modes& 5& Ener+y
efficiency' <ar+es on our inland system can mo"e one ton of car+o 58/ miles on one +allon of fuel 2
more the .44 miles more than rail trans$ort and ?44 miles more than truc9 trans$ort& 'his matters now
more than e$er as we seek ways to #e less )epen)ent on forei+n oil! /&
social3traffic
(*FE' "4 3%# De$artment of 7rans$ortation( En"ironmental Ad"anta+es of Inland <ar+e
7rans$ortation() htt$'**!!!&u$$ermon&or+*"isions*D=7,en"iron,bar+e&htm6
;hile truc9s and trains( to a de+ree( o$erate much closer to $o$ulated areas( bar+es Huietly ma9e
their !ay alon+ isolated !ater!ays for most of their tri$& 7he lo!-$rofile bar+e is one of the
trans$ortation industryOs best 9e$t secrets&
;ith some rail lines $assin+ throu+h ma-or urban areas( the attendant noise im$acts are
e0$erienced by nearby residents& Bi9e!ise( truc9in+ o$erations commonly occur in or near hi+h-
density $o$ulation areas that can be disturbin+ to an other!ise reasonably tranHuil en"ironment&
<y contrast( ri"er bar+es( for the most $art( ha"e little im$act on densely-$o$ulated areas& <ar+e
transits are relati"ely infreHuent because of the lar+e tonna+e mo"ed at one time& Ri"er
o$erations ta9e $lace in channels a!ay from the shore( and the en+ines of a to!boat are usually
belo! the !ater line( !hich muffles the sound& In addition( le"ees and sea!alls also shield
residents from to!boat noise in the same manner as hi+h!ay sound barriers do&
#urface traffic( both road and rail( near residential nei+hborhoods contributes to "isual( $hysical(
and $sycholo+ical barriers that can lead to the fra+mentation of those nei+hborhoods& Reduced
social interaction( reduced access to other nei+hborhoods( and increased traffic con+estion and*or
chan+es in traffic $atterns are often a result of increased surface traffic& 7raffic con+estion can
lead to serious disru$tions of $olice( fire( and medical ser"ices( as !ell as $eriodic isolation of
$arts of communities&
#ince most of the ri+ht-of-!ay for !ater trans$ort is $ro"ided by nature( na"i+ation is less li9ely
than the other trans$ort modes to be com$etin+ !ith non-trans$ortation uses for land area(
es$ecially in urban locations& Concernin+ ne! land acHuisition( commercial !ater!ay acti"ity
$reem$ts "ery little land&
TTT1redgingTTT
0nternal Kin
)aterway maintenance increases dredging$ ey to wetlands and flood
!arriers
!S Army +orps of $ngineers ' (D))p A%t)$ @"$t! %&. D%$>"$!: F%-1) t" th) N%t'"&,
http://www!p&1!%+)%$*#*'-/3%-1)Bt"Bth)B&%t'"&/D))pA%t)$@"$t!p./0
+orps personnel consistently work to identify enironmentally beneficial ways to use
dredged material from harbor maintenance pro0ects. -or instance, dredged material has
been used by the +orps to enhance wildlife habitats by creating nesting islands for
waterfowl. -isheries also hae been improed by mounding dredged material to establish
fish refuge habitats. ,ne of the key uses of dredged material, though, is to create, presere
and restore wetlands. These pro0ects are particularly important because of the crucial role
wetlands play in our enironment, proiding homes for thousands of plants, fish and
wildlife, including many species that are endangered. A)t-%&.! %-!" !)$3) %! $)!t !t"p! /"$
*'($%t"$# >'$.!, help preent flooding and control erosion. C"$p! p)$!"&&)- +%$)/1--# +"&!'.)$
th) )&3'$"&*)&t%- '*p%+t "/ )%+h +"&!t$1+t'"& "$ .$).('&( p$"K)+t th)# 1&.)$t%,) D1$'&( th)
p-%&&'&( ph%!), w) +"&.1+t +"*p1t)$ *".)-'&( t" p$"K)+t th) p"t)&t'%- '*p%+t "/ p$"p"!).
+h%&()! %&. *%,) %.K1!t*)&t! %! &)).). >)/"$) w"$, )3)& >)('&! >e also conduct dredging
operations during &enironmental windows&, which are time periods when disruption to
marine species can be minimized
Aiodiversity
)etlands ey to glo!al !iodiversity$chain reaction
Article "yriad 11 (A$t'+-) M#$'%. '! %& %1th"$'t%t'3) !"1$+) /"$ "$'('&%- %&. '&!'(ht/1- %$t'+-)!
%&. '.)%! "& % >$"%. $%&() "/ t"p'+! $)-%t). t" th) h1*%&'t')!, A& E=t)&.). D)/'&'t'"& "/
A)t-%&.! %&. th) I*p%+t "/ th) L"!! "/ A)t-%&.!, http://www%$t'+-)*#$'%.+"*/)=t)&.).I
.)/'&'t'"&I-"!!Iw)t-%&.!I'*p%+t/0
>etlands are critical to our biodiersity and the protection of wetlands is essential. B)/"$)
)=%*'&'&( th) )//)+t! "/ th) -"!! "/ w)t-%&.!, 't '! '*p"$t%&t t" ('3) % .)/'&'t'"& "/ w)t-%&.! %&. p$"3'.) %& "3)$3')w "/ wh%t th)# %$), wh)$)
w)t-%&.! )='!t, %&. wh# w)t-%&.! %$) '*p"$t%&t A'th th) )=+)pt'"& "/ A&t%$+t'+%, w)t-%&.! +%& >) /"1&. &)%$-# )3)$#wh)$) %&. %$) ()&)$%--#
/"1&. '& th) /"$* "/ >"(!, !w%*p!, *%$!h)!, %&. /)&! A-th"1(h w)t-%&.! +%& 3%$# w'.)-# %! % $)!1-t "/ ()"-"('+%-, +-'*%+t'+, %&. ()"($%ph'+%-
.'//)$)&+)!, ()&)$%--# !p)%,'&(, w)t-%&.! %$) -%&.! wh)$) !%t1$%t'"& w'th w%t)$ '! th) ."*'&%&t /%+t"$ .)t)$*'&'&( th) &%t1$) "/ !"'-
.)3)-"p*)&t %&. th) t#p)! "/ p-%&t %&. %&'*%- +"**1&'t')! -'3'&( '& th) !"'- %&. "& 't! !1$/%+) (E@A ;7760

These wetlands are home to large numbers of both terrestrial and amphibious organisms
and are often key areas during breeding seasons %! $)p$)!)&t%t'3) !p)+')! /$"* %+$"!! th) /"". +h%'& %$) +"--)+t). '&
th) !"'- %&. *%$!h# -%&. Seeral ariations of plant life exist only in wetlands and many arieties of
migratory birds breed and rest in these fertile areas. In wetlands, small shellfish, crabs, and
other a7uatic life thrie and sere as food to land*dwelling animals. In sum, wetlands sere
as a mini*ecosystem and without such areasA populations of countless species would be
threatened. The loss of wetlands poses dangers to wildlife as well as human populations
both in terms of protection of terrain and in a broader economic sense. A-th"1(h )//"$t! t" !t"p th)
$%p'. -"!! "/ w)t-%&.! h%3) >))& % $)-%t'3)-# $)+)&t .)3)-"p*)&t, 't '! 3't%- th%t )//"$t! +"&t'&1) "$ p$">-)*! %-$)%.# /%+). +"1-. >) *%.) *1+h
w"$!). In any discussion about the loss of wetlands it should be stated that there is always
going to be a chain reaction. The damage or loss of one aspect of wetlands does not 0ust
hae an impact on that particular issue, but has more far*reaching conse7uences that hae
a great and often deastating effect on human and animal populations as well as the
ecosystem as a whole.
Aiodiversity is ey to preventing e%tinction
"adgoluis #: (R'+h%$. M%$("-1'! .'$)+t"$ "/ th) A&%-#!'! %&. A.%pt'3) M%&%()*)&t %&. th)
L%t'& A*)$'+% %&. C%$'>>)%& @$"($%*! "/ th) B'".'3)$!'t# S1pp"$t @$"($%* D) h"-.! %
M%!t)$! "/ @1>-'+ D)%-th (M@D0 '& I&t)$&%t'"&%- D)%-th %&. % @hD '& Ep'.)*'"-"(#
B'".'3)$!'t# S1pp"$t @$"($%*, ;77J, http://www>!p"&-'&)"$(/p1>-'+%t'"&!/!h"wht*-phpH?;50
Bio)i$ersity not only pro$i)es )irect #enefits like foo), me)icine, an) ener+y< it also
affor)s us a Glife support system!G Bio)i$ersity is require) for the recyclin+ of essential elements(
such as car#on, o7y+en, an) nitro+en& It is also res$onsible for miti+atin+ pollution, protectin+
watershe)s, an) com#atin+ soil erosion& <ecause biodi"ersity acts as a buffer a+ainst e0cessi"e "ariations in
!eather and climate( it $rotects us from catastro$hic e"ents beyond human control& 'he importance of #io)i$ersity to
a healthy en$ironment has #ecome increasin+ly clear! 0e ha$e learne) that the future
well-#ein+ of all humanity )epen)s on our ste!ardshi$ of the 1arth! 0hen we o$ere7ploit
li$in+ resources, we threaten our own sur$i$al!
en$ironmental #enefits
(* Army Corps of 1n+ineers " 3Inland ;ater!ay @a"i+ation' "alue to the @ation()
htt$'**!!!&i!r&usace&army&mil*docs*C7@*C7@Inland@a"<ro,lores&$df6
7he Cor$s carefully e"aluates the en"ironmental im$act of each na"i+ation $ro-ect it underta9es&
;e ty$ically $erform com$uter modelin+ of $lanned chan+es to ri"er and estuary systems to
fully assess and limit the en"ironmental effects of na"i+ation $ro-ects before any !or9 be+ins&
=ther ways that the Corps works to protect the en$ironment when na$i+ation pro,ects are
un)ertaken inclu)e&
V usin+ )re)+e material as a resource for ha#itat an) wetlan) creation,
V re)ucin+ )isruption an) )ama+e to marine species #y careful timin+ of )re)+in+
acti$ities, an)
V limitin+ en$ironmental harm cause) #y )re)+in+ #y usin+ hi+h-tech instruments to
monitor )re)+e locations an) acti$ity!
corpsW)re)+in+Wsa$e species
(* Army Corps of 1n+ineers @ 3Dee$ ;ater Ports and Harbors' Calue to the @ation()
htt$'**!!!&s$n&usace&army&mil*"alue,to,the,nation*Dee$;aterPorts&$df6
Corps personnel consistently work to i)entify en$ironmentally #eneficial ways to use
)re)+e) material from har#or maintenance pro,ects! 6or instance, )re)+e) material has
#een use) #y the Corps to enhance wil)life ha#itats #y creatin+ nestin+ islan)s for
waterfowl! 6isheries also ha$e #een impro$e) #y moun)in+ )re)+e) material to esta#lish
fish refu+e ha#itats! Ene of the key uses of )re)+e) material, thou+h, is to create, preser$e
an) restore wetlan)s! 'hese pro,ects are particularly important #ecause of the crucial role
wetlan)s play in our en$ironment, pro$i)in+ homes for thousan)s of plants, fish an)
wil)life, inclu)in+ many species that are en)an+ere)! ;etlands also ser"e as rest sto$s for
mi+ratory birds, help pre$ent floo)in+ an) control erosion! Cor$s $ersonnel carefully consider
the en"ironmental im$act of each construction or dred+in+ $ro-ect they underta9e& Durin+ the
$lannin+ $hase( !e conduct com$uter modelin+ to $ro-ect the $otential im$act of $ro$osed
chan+es and ma9e ad-ustments as needed before !or9 e"en be+ins& 0e also con)uct )re)+in+
operations )urin+ Jen$ironmental win)owsJ, which are time perio)s when )isruption to
marine species can #e minimie)&
+oo) for en$ironment
(*FE' "4 3%# De$artment of 7rans$ortation( En"ironmental Ad"anta+es of Inland <ar+e
7rans$ortation() htt$'**!!!&u$$ermon&or+*"isions*D=7,en"iron,bar+e&htm6
=ne s$ecific benefit of !ater!ays is that they can interact !ith nature as a +ood en"ironmental
nei+hbor& >or e0am$le( in the $rocess of buildin+ !ater!ay $ro-ects( e&+& a ne! loc9 and dam(
$ro"isions are made to $reser"e( enhance( and create !etland and aHuatic habitats& @ational
!ildlife refu+es and desi+nated areas alon+ the ri"ers are home to many s$ecies of fish and
!ildlife( and are used by millions of mi+ratory and resident birds& 7o cite -ust one e0am$le( a
marshland !as created usin+ dis$osable material from a dred+ed channel that has become a
!inter home for some of the !orldOs remainin+ .?1 !hoo$in+ cranes on Aransas @ational
;ildlife Refu+e in 7e0as& ;ith minimal ecolo+ical im$act and uniHue en"ironmental
com$atibility( !ater trans$ort is considered by many to be the most en"ironmentally friendly
form of surface trans$ortation&
*urricanes
1redging ey to mitigate hurricane impacts
,tten and ?akker : (+"%!t%- )&('&))$! /"$ A)!t)$& D$).('&( A!!"+'%t'"& (AEDA0,
REDUCTION OF DURRICANE IM@ACT BG REICREATION OF MARSDLANDS AND
BARRIER ISLANDS, T)$$% )t A21%, N1*>)$ ;56, D)+)*>)$ 455J
http!://www(""(-)+"*/1$-?!%Ot&$+tOK&2O&)!$+O!&!"1$+)Ow)>&+.OJ&3).O
5CG,EFKAF&1$-Ohttp!<HA<4F<4Fwwww)!t)$&.$).('&("$(<4F'&.)=php<4F'&/"$*%t'"&
<4Fp$"+)).'&(!Ip$)!)&t%t'"&!<4F+%t)("$#<4FL4IH8thI%&&1%-It)=%!I%%*I.$).('&(I+"&/)$)&+)
<HF."w&-"%.<HDH94<HA9I"tt)&I$).1+t'"&I"/Ih1$$'+%&)I'*p%+tI>#I$)I+$)%t'"&I"/I
*%$!h-%&.!I%&.I>%$$')$I'!-%&.!&)'
O5PPKTBP*AG@I5EGC7!DNAw&1!(OAFEKCNFD)KLpGDF%!tGL;#-3/KtA>%GO5E0
.urricanes pose a serious threat to existence along a large part of the American coastline.
Th) wh"-) "/ th) G1-/ +"%!t %&. th) !"1th)$& p%$t "/ th) At-%&t'+ +"%!t h%! t" /)%$ /"$ -%&./%-- "/
% h1$$'+%&), %-*"!t )3)$# #)%$ !)3)$%- p-%+)! !1//)$ /$"* +%!1%-t')! %&. .%*%() F$"* % +"%!t%-
)&('&))$'&( p"'&t "/ 3')w %&. based on Butch dredging experiences with maintaining sea
defenses it seemed possible to mitigate the impact of the storm surge p%$t "/ th) p$">-)*
Ah)th)$ D1t+h )=p)$')&+) +"1-. $)%--# >) 1!)/1- '! .)p)&.'&( "& th) *%t+h w'th -"+%-
+'$+1*!t%&+)!. A typical coastal layout is diminishing marshlands protected by shrinking
barrier islands. Cecreating marshlands and strengthening barrier islands both can
contribute to mitigate the impact of storm surges. ?ut a releant reduction of dangerous
storm surge heights takes immense surfaces of marshlands to recreate using ast 7uantities
of sediment.
/eadiness
Another 2ational >uard hurricane response overe%tends military$ills
readiness
+enter for American %rogress < (Op)$%t'"&! '& I$%2 A$) L)%3'&( th) St%t)! F1-&)$%>-), M%#
4, 4559, http://www%*)$'+%&p$"($)!!"$(/'!!1)!/4559/
56/&%t'"&%-(1%$.ht*-0
$en in the face of a tragedy like .urricane Datrina, the %entagon and the Bepartment of
Befense hae not addressed the 2ational 5uard)s readiness crisis. A%-,)$ +'t). %& )!t'*%t) '& h'!
t)!t'*"&# that the 5uard)s non*deployed units had only '/ percent of their essential war*
fighting e7uipment as of Euly 6998 I& S)pt)*>)$ "/ 455J, th) G"3)$&*)&t A++"1&t%>'-'t# O//'+) )!t'*%t). th%t th) A$*#
N%t'"&%- G1%$. h%. "&-# H5 p)$+)&t "/ )!!)&t'%- )21'p*)&t "&Ih%&. %t h"*) A&. %++"$.'&( t" % $)+)&t C"&($)!!'"&%- C"**'!!'"& $)p"$t, ;;
percent of 2ational 5uard units hae less than half of the e7uipment re7uired to perform
missions at home.
If another ma0or natural or man*made disaster takes place on !.S. soil, it is unclear that
the states hae the capacity for an efficient, effectie response.
American military readiness is ey to maintain glo!al hegemony&
-AS 9# (F).)$%t'"& "/ A*)$'+%& S+')&t'!t!, Ch%pt)$ ;5, @ ;4H 56/47/57, B1.()t "/ th) US
G"3)$&*)&t, FG ;778 D)/)&!) B1.()t, B1.()t "/ th) U&'t). St%t)! G"3)$&*)&t 0
America=s armed forces remain '& th) @)$!'%& G1-/, deterring war in that critical region of the
world. In Asia and the %acific region, !.S. military forces proide the critical foundation
for peace, security, and stability, '& p%$t&)$!h'p w'th Q%p%& %&. "th)$ &%t'"&! In our own region, America=s
soldiers hae supported the return of democracy '& D%'t' and helped end the exodus of
refugees to our shores. To fulfill such missions, !1pp"$t "1$ %--')!, and reassure our friends that
America is prepared to use force in defense of our common interests, our armed forces
must be highly ready and armed w'th th) >)!t )21'p*)&t th%t t)+h&"-"(# +%& p$"3'.) I& th) 4;!t C)&t1$#, we also
must be prepared and trained for new post*+old >ar threats to American security, such as
ethnic and re7uired conflicts that undermine stability S"*) "/ th)!) p"!tIC"-. A%$ th$)%t!, such as the
proliferation of weapons of mass destruction, terrorism, and drug trafficking, ,&"w &" &%t'"&%-
>"$.)$! %&. +%& .'$)+t-# th$)%t)& "1$ /$)) %&. "p)& !"+')t#
*egemony is ey to maintain economic growth" human rights" trade
channels" democracy" and prevent natural disaster crises" terrorism" and
great power war
Thayer : (B$%.-)# A, N"3)*>)$/D)+)*>)$, 455J I& D)/)&!) "/ @$'*%+#, NATIONAL
INTEREST I!!1) 8J0
T.C,!5.,!T .IST,CF, peace and stability hae been great benefits of an era where
there was a dominant powerIIR"*), B$'t%'& "$ th) U&'t). St%t)! t".%# Scholars and statesmen hae long
recognized the irenic effect of power on the anarchic world of international politics.
$erything we think of when we consider the current international order**free trade, % $">1!t
*"&)t%$# $)('*), '&+$)%!'&( respect for human rights, growing democratization**is directly linked to
!.S. power. Cetrenchment proponents seem to think that the current system can be
maintained without the current amount of !.S. power behind it I& th%t they are dead wrong
%&. &)). t" >) $)*'&.). "/ "&) "/ h'!t"$#N! *"!t !'(&'/'+%&t -)!!"&!: Appalling things happen when international
orders collapse. The Bark Ages followed Come=s collapse. .itler succeeded the order
established at 4ersailles A'th"1t US p"w)$, th) -'>)$%- "$.)$ +$)%t). ># th) U&'t). St%t)! w'-- )&. K1!t %! %!!1$).-# A! +"1&t$#
%&. w)!t)$& ($)%t R%- D"&&)$ !%&(: MG"1 ."&Nt ,&"w wh%t #"1N3) ("t (1&t'- #"1 -"!) 't0M C"&!)21)&t-#, 't '! '*p"$t%&t t" &"t) wh%t th"!) ("".
th'&(! %$) I& %..'t'"& t" )&!1$'&( th) !)+1$'t# "/ th) U&'t). St%t)! %&. 't! %--')!, A*)$'+%& p$'*%+# w'th'& th) '&t)$&%t'"&%- !#!t)* +%1!)! *%&#
p"!'t'3) "1t+"*)! /"$ A%!h'&(t"& %&. th) w"$-. Th) /'$!t h%! >))& % *"$) p)%+)/1- w"$-. D1$'&( th) C"-. A%$, US -)%.)$!h'p $).1+).
/$'+t'"& %*"&( *%&# !t%t)! th%t w)$) h'!t"$'+%- %&t%("&'!t!, *"!t &"t%>-# F$%&+) %&. A)!t G)$*%&# T".%#, American primacy
helps keep a number of complicated relationships aligned**between 5reece and Turkey,
Israel and $gypt, South Dorea and Eapan, India and %akistan, Indonesia and Australia Th'!
'! &"t t" !%# 't /1-/'--! A"".$"w A'-!"&N! 3'!'"& "/ )&.'&( %-- w%$ >ars still occur wh)$) A%!h'&(t"&N! '&t)$)!t! %$) &"t !)$'"1!-#
th$)%t)&)., !1+h %! '& D%$/1$, but a %ax Americana does reduce war=s likelihood, particularly w%$N! w"$!t
/"$*: great power wars S)+"&., American power gies the !nited States the ability to spread
democracy %&. "th)$ )-)*)&t! "/ 't! '.)"-"(# "/ -'>)$%-'!*: D"'&( !" '! % !"1$+) "/ *1+h ("". /"$ th) +"1&t$')! +"&+)$&). %! w)-- %! th)
U&'t). St%t)! >)+%1!), %! Q"h& Ow)& &"t). "& th)!) p%()! '& th) Sp$'&( 455J '!!1), -'>)$%- .)*"+$%+')! %$) *"$) -',)-# t" %-'(& w'th th) U&'t).
St%t)! %&. >) !#*p%th)t'+ t" th) A*)$'+%& w"$-.3')w( &H0 S", !p$)%.'&( .)*"+$%+# h)-p! *%'&t%'& US p$'*%+# I& %..'t'"&, once states
are goerned democratically, the likelihood of any type of conflict is significantly reduced
Th'! '! &"t >)+%1!) .)*"+$%+')! ." &"t h%3) +-%!h'&( '&t)$)!t! I&.)). th)# ." R%th)$, 't '! because they are more open,
more transparent and more likely to want to resole things amicably in concurrence with
!.S. leadership A&. !", '& ()&)$%-, .)*"+$%t'+ !t%t)! %$) ("". /"$ th)'$ +'t'R)&! %! w)-- %! /"$ %.3%&+'&( th) '&t)$)!t! "/ th) U&'t).
St%t)! C$'t'+! h%3) /%1-t). th) B1!h A.*'&'!t$%t'"& /"$ %tt)*pt'&( t" !p$)%. .)*"+$%+# '& th) M'..-) E%!t, -%>)-'&( !1+h %/t )//"$t % *".)$&
/"$* "/ t'-t'&( %t w'&.*'--! It '! th) ">-'(%t'"& "/ B1!hN! +$'t'+! t" )=p-%'& wh# :.)*"+$%+# '! ("". )&"1(h /"$ A)!t)$& !t%t)! >1t &"t /"$ th) $)!t,
%&., "&) (%th)$! /$"* th) %$(1*)&t, !h"1-. &"t )3)& >) %tt)*pt). O/ +"1$!), wh)th)$ .)*"+$%+# '& th) M'..-) E%!t w'-- h%3) % p)%+)/1- "$
!t%>'-'R'&( '&/-1)&+) "& A*)$'+%N! '&t)$)!t! '& th) !h"$t $1& '! "p)& t" 21)!t'"& @)$h%p! .)*"+$%t'+ A$%> !t%t)! w"1-. >) *"$) "pp"!). t" I!$%)-,
>1t &"&)th)-)!!, th)'$ p)"p-) w"1-. >) >)tt)$ "// Th) U&'t). St%t)! h%! >$"1(ht .)*"+$%+# t" A/(h%&'!t%&, wh)$) 86 *'--'"& A/(h%&!, L5
p)$+)&t "/ th)* w"*)&, 3"t). '& % +$'t'+%- O+t">)$ 455L )-)+t'"&, )3)& th"1(h $)*&%&t T%-'>%& /"$+)! th$)%t)&). th)* Th) /'$!t /$)) )-)+t'"&!
w)$) h)-. '& I$%2 '& Q%&1%$# 4556 It w%! th) *'-'t%$# p"w)$ "/ th) U&'t). St%t)! th%t p1t I$%2 "& th) p%th t" .)*"+$%+# A%!h'&(t"& /"!t)$).
.)*"+$%t'+ ("3)$&*)&t! '& E1$"p), L%t'& A*)$'+%, A!'% %&. th) C%1+%!1! N"w )3)& th) M'..-) E%!t '! '&+$)%!'&(-# .)*"+$%t'+ Th)# *%# &"t
#)t -"", -',) A)!t)$&I!t#-) .)*"+$%+')!, >1t .)*"+$%t'+ p$"($)!! h%! >))& *%.) '& A-()$'%, M"$"++", L)>%&"&, I$%2, K1w%'t, th) @%-)!t'&'%&
A1th"$'t# %&. E(#pt ?y all accounts, the march of democracy has been impressie Th'$., along with
the growth in the number of democratic states around the world has been the growth of the
global economy. A'th 't! %--')!, the !nited States has labored to create an economically liberal
worldwide network characterized by free trade and commerce, respect for international
property rights, and mobility of capital and labor markets. The economic stability and
prosperity that stems from this economic order is a global public good from which all states
benefit, particularly the poorest states in the Third >orld Th) U&'t). St%t)! +$)%t). th'! &)tw"$, &"t "1t "/
%-t$1'!* >1t /"$ th) >)&)/'t %&. th) )+"&"*'+ w)--I>)'&( "/ A*)$'+% Th'! )+"&"*'+ "$.)$ /"$+)! A*)$'+%& '&.1!t$')! t" >) +"*p)t't'3),
*%='*'R)! )//'+')&+')! %&. ($"wth, %&. >)&)/'t! .)/)&!) %! w)-- >)+%1!) th) !'R) "/ th) )+"&"*# *%,)! th) .)/)&!) >1$.)& *%&%()%>-)
$conomic spin*offs foster the deelopment of military technology, helping to ensure
military prowess @)$h%p! th) ($)%t)!t t)!t%*)&t t" th) >)&)/'t! "/ th) )+"&"*'+ &)tw"$, +"*)! /$"* D))p%, L%-, % /"$*)$ I&.'%&
/"$)'(& !)$3'+) .'p-"*%t %&. $)!)%$+h)$ %t th) A"$-. B%&,, wh" !t%$t). h'! +%$))$ +"&/'.)&t '& th) !"+'%-'!t '.)"-"(# "/ p"!tI'&.)p)&.)&+) I&.'%
A>%&."&'&( th) p"!'t'"&! "/ h'! #"1th, L%- &"w $)+"(&'R)! th%t th) "&-# w%# t" >$'&( $)-')/ t" .)!p)$%t)-# p""$ +"1&t$')! "/ th) Th'$. A"$-. '!
th$"1(h th) %."pt'"& "/ /$)) *%$,)t )+"&"*'+ p"-'+')! %&. (-">%-'R%t'"&, wh'+h %$) /%+'-'t%t). th$"1(h A*)$'+%& p$'*%+#( &L0 A! % w't&)!! t"
th) /%'-). %-t)$&%t'3) )+"&"*'+ !#!t)*!, L%- '! "&) "/ th) !t$"&()!t %+%.)*'+ p$"p"&)&t! "/ A*)$'+%& p$'*%+# .1) t" th) )+"&"*'+ p$"!p)$'t# 't
p$"3'.)! F"1$th %&. /'&%--#, th) U&'t). St%t)!, '& !)),'&( p$'*%+#, h%! >))& w'--'&( t" 1!) 't! p"w)$ &"t "&-# t" %.3%&+) 't! '&t)$)!t! >1t t"
p$"*"t) th) w)-/%$) "/ p)"p-) %-- "3)$ th) (-">). The !nited States is the earth=s leading source of positie
externalities for the world Th) US *'-'t%$# h%! p%$t'+'p%t). '& "3)$ /'/t# "p)$%t'"&! !'&+) th) )&. "/ th) C"-. A%$II%&. *"!t "/
th"!) *'!!'"&! h%3) >))& h1*%&'t%$'%& '& &%t1$) I&.))., the !.S. military is the earth=s G#11 forceG**it seres,
de
facto, as the world=s police, the global paramedic and the planet=s fire department.
>heneer there is a natural disaster, earth7uake, flood, drought, olcanic eruption,
typhoon or tsunami, the !nited States assists the countries in need O& th) .%# %/t)$ Ch$'!t*%! '& 455L, %
t$)*)&."1! )%$th21%,) %&. t!1&%*' "++1$$). '& th) I&.'%& O+)%& &)%$ S1*%t$%, ,'--'&( !"*) H55,555 p)"p-) Th) U&'t). St%t)! w%! th) /'$!t t"
$)!p"&. w'th %'. A%!h'&(t"& /"--"w). 1p w'th % -%$() +"&t$'>1t'"& "/ %'. %&. .)p-"#). th) US *'-'t%$# t" S"1th %&. S"1th)%!t A!'% /"$ *%&#
*"&th! t" h)-p w'th th) %/t)$*%th "/ th) .'!%!t)$ A>"1t 45,555 US !"-.')$!, !%'-"$!, %'$*)& %&. *%$'&)! $)!p"&.). ># p$"3'.'&( w%t)$, /"".,
*).'+%- %'., .'!)%!) t$)%t*)&t %&. p$)3)&t'"& %! w)-- %! /"$)&!'+ %!!'!t%&+) t" h)-p '.)&t'/# th) >".')! "/ th"!) ,'--). O&-# th) US *'-'t%$#
+"1-. h%3) %++"*p-'!h). th'! D)$+1-)%& )//"$t. 2o other force possesses the communications capabilities or
global logistical reach of the !.S. military I& /%+t, UN p)%+),))p'&( "p)$%t'"&! .)p)&. "& th) U&'t). St%t)! t" !1pp-#
UN /"$+)! American generosity has done more to help the !nited States fight the >ar on
Terror than almost any other measure B)/"$) th) t!1&%*', 85 p)$+)&t "/ I&."&)!'%& p1>-'+ "p'&'"& w%! "pp"!). t" th)
U&'t). St%t)!? %/t)$ 't, 85 p)$+)&t h%. % /%3"$%>-) "p'&'"& "/ A*)$'+% Tw" #)%$! %/t)$ th) .'!%!t)$, %&. '& p"-- %/t)$ p"--, I&."&)!'%&! !t'-- h%3)
"3)$wh)-*'&(-# p"!'t'3) 3')w! "/ th) U&'t). St%t)! I& O+t">)$ 4556, %& )&"$*"1! )%$th21%,) !t$1+, K%!h*'$, ,'--'&( %>"1t 9L 555 p)"p-) %&.
-)%3'&( th$)) *'--'"& h"*)-)!! Th) US *'-'t%$# $)!p"&.). '**).'%t)-#, .'3)$t'&( h)-'+"pt)$! /'(ht'&( th) A%$ "& T)$$"$ '& &)%$># A/(h%&'!t%&
t" >$'&( $)-')/ %! !""& %! p"!!'>-) T" h)-p th"!) '& &))., th) U&'t). St%t)! %-!" p$"3'.). /'&%&+'%- %'. t" @%,'!t%&? %&., %! "&) *'(ht )=p)+t /$"*
th"!) w't&)!!'&( th) *1&'/'+)&+) "/ th) U&'t). St%t)!, 't -)/t % -%!t'&( '*p$)!!'"& %>"1t A*)$'+% F"$ th) /'$!t t'*) !'&+) 7/;;, p"--! "/ @%,'!t%&'
"p'&'"& h%3) /"1&. th%t *"$) p)"p-) %$) /%3"$%>-) t"w%$. th) U&'t). St%t)! th%& 1&/%3"$%>-), wh'-) !1pp"$t /"$ A-IE%).% .$"pp). t" 't! -"w)!t
-)3)- Ah)th)$ '& I&."&)!'% "$ K%!h*'$, th) *"&)# w%! w)--I!p)&t >)+%1!) 't h)-p). p)"p-) '& th) w%,) "/ .'!%!t)$!, >1t 't %-!" h%. % $)%- '*p%+t
"& th) A%$ "& T)$$"$ Ah)& p)"p-) '& th) M1!-'* w"$-. w't&)!! th) US *'-'t%$# +"&.1+t'&( % h1*%&'t%$'%& *'!!'"&, th)$) '! % +-)%$-# p"!'t'3)
'*p%+t "& M1!-'* "p'&'"& "/ th) U&'t). St%t)! As the >ar on Terror is a war of ideas and opinion as much
as military action, for the !nited States humanitarian missions are the e7uialent of a
blitzkrieg.
***8iscellaneous***
ATL J!ama >ood
Congressman !ishop supports the plan
>ov2ews +1# (3iso! o!!oses cuts in water in2rastructure invest6ents, see%s 3etter
congressional oversigt o2 ar6y cor!s, Marc )+, 0), tt!"##govne$ws#ite6#BIS5=:<
=::=SES<C4TS<IN<WATE8<INE8AST84CT48E<INSESTMENTS<SEENS<BETTE8<
C=N;8ESSI=NAB<=SE8SI;5T<=E<A8M@<C=8:S[1
WAS5IN;T=N ? Today, Congressman Tim Aishop said that as a result of cuts sustained over
the past three years to the Army Corps of ,ngineers IACJ,' !udgetL ()e are now at a
critical threshold where these reductions are BeopardiFing the a!ility to sustain our
infrastructure and protect our citiFens$ Aishop spoe at a hearing on the President+s
89#-1: Audget re7uest 2or te AC=E 2or te Su3co66ittee on Water 8esources and Environ6ent, where Aishop
is the top 1emocrat$ Te Su3co66ittee o2 te Co66ittee on Trans!ortation and In2rastructure as !ri6ary oversigt over
te agency$ 5istorically, te Su3co66ittee as !rovided direct guidance to AC=E on wic !roCects it sould !rioritiAe$ Biso! said
tat Congress needs 3etter in2or6ation on AC=E7s internal decision<6a%ing !rocess to !rovide e22ective oversigt$ 5e added tat
te President+s !udget re7uest proposes a further reduction in funding that could hinder
the ACJ,+s a!ility to protect pu!lic safety and critical infrastructure& ()e have a
tremendous investment in our countries+ water, navigation, electrical grids, and irrigation syste6s$ As we
review the Corps+ !udget" we should eep in mind this investment and mae sure we are
not impulsively cutting important and vital programs without regard for the impacts and
instead loo to ensure the decisions we are maing are focused on protecting these
investments and !eing smart with our allocation of funding&
Aipartisan support for increasing inland waterway funding
Foung 16 (K)$$#, w$'t)$ /"$ CE w)),-# % p$)*')$ !"1$+) "/ t'*)-# &)w!, ">K)+t'3) /%+t! %&.
%&%-#!'!, %&. +"3)$%() "/ )-)+t'"&! %&. th) p"-'t'+! "/ -)('!-%t'"&, F'!+%- 45;H: B$%3) N)w
F$1(%-'t#, Ap$'- 48, 45;4, http://p1>-'++2+"*/."+!/
w)),-#$)p"$t/w)),-#$)p"$tI55555L594H75ht*-0
O1t.%t). p"$t! %$) "&-# "&) $)%!"& th) &%t'"& )%$&). % D '& th) *"!t $)+)&t A*)$'+%& S"+')t# "/ C'3'- E&('&))$! $)p"$t +%$. "& '&/$%!t$1+t1$)
-or many years, +ongress hasn)t proided ade7uate money for $"%.!, p1>-'+ t$%&!'t, .%*! "$ inland
waterways, the engineers) group said. There is strong bipartisan support among Senate
appropriators to gie the Transportation Bepartment almost H'99 million more for fiscal
691' to meet some of those needs. %atty "urray "/ A%!h'&(t"&, th) 2o. / Senate Bemocrat and
chairwoman of the Transportation, .ousing and !rban Beelopment Appropriations
panel, has said skimping on infrastructure &simply turns a budget deficit into an
infrastructure deficitI th%t )&.! 1p +"!t'&( A*)$'+%&! '& "th)$ w%#!
Agriculture lo!!ies support the plan$!oost ag e%ports
I+5A 16 (Th) I--'&"'! C"$& G$"w)$! A!!"+'%t'"& (ICGA0 '! %& %!!"+'%t'"& *%.) 1p "/ LH55
+"$& /%$*)$! /$"* %-- "3)$ "1$ !t%t) (I--'&"'!0 ICGA '! ("3)$&). ># % >"%$. "/ .'$)+t"$! %&.
$)p$)!)&t! I--'&"'! +"$& /%$*)$! '& A%!h'&(t"&, DC, GOFERNMENT AND INDUSTRG CAN
@ARTNER TO FIP OUR BROKEN INLAND AATERAAG TRANS@ORTATION
SGSTEM, M%$+h 45;4, http://www'-+"$&"$(/1p-"%.!/
1!)$1p-"%.!//'-)!/-"+,!B&B.%*!/w%t)$w%#!BHI45;4p./0
Th) w"$-. p"p1-%t'"& '! p$).'+t). t" ($"w t" 9J >'--'"& ># 4545. In order for the !.S. to
capture an increasing share of the global food demand, it must increase the efficiency of
our transportation systems. I/ &"t, w) w'-- !1$$)&.)$ %&"th)$ 3%-1%>-) *%$,)t t" "1$
+"*p)t't"$! A..'t'"&%--#, @$)!'.)&t O>%*%! ("%- "/ ."1>-'&( )=p"$t! ># 45;6 *%,)! -"+, %&.
.%* *".)$&'R%t'"& %& '**).'%t) &)). Alternatie transportation systems are at full
capacityA if growth is to occur, it must occur on the "ississippi Cier system where
century*old infrastructure cannot handle the additional traffic.
Ag e%ports ey to 0owa swing vote and re$election
Q%& H ;4 http://'&t)$&%t'"&%-t$%.))=%*'&)$+"*/45;4/5;/5H/wh%t!I%tI!t%,)I/"$I'"w%/
T".%#, 3"t)$! '& I"w% w'-- !)-)+t th)'$ p$)/)$)&+) /"$ th) R)p1>-'+%& p$)!'.)&t'%- &"*'&)). The
economy remains a significant issue for a number of oters, including those from Iowa.
S'&+) '&t)$&%t'"&%- t$%.) h%! p$"3)& >)&)/'+'%- t" I"w%N! )+"&"*#, th) p$)!'.)&t'%- +%&.'.%t)!N
p)$!p)+t'3)! "& '&t)$&%t'"&%- t$%.) %$) w"$th h'(h-'(ht'&(. International trade has played a
role in Iowa=s economic growth. As recent reports show, Iowa=s economy has grown as a
result of its agricultural exports to the international market. Th) '&+$)%!). )=p"$t! %$) th)
$)!1-t "/ h'(h)$ .)*%&. /"$ US %($'+1-t1$%- p$".1+t!, %++"$.'&( t" % 45;; $)p"$t
$nironmental Jeader 16 http://www)&3'$"&*)&t%--)%.)$+"*/45;4/56/;5/+h%&('&(I%tt't1.)!I%>"1tIw%t)$w%#!I'&Ip"!tI'$)&)I
3)$*"&t/
I& th) .%#! '**).'%t)-# %/t)$ I$)&), I h)%$. %&"th)$ !t"$# /"$ wh"!) 3)$%+'t# I +%&&"t p)$!"&%--# 3"1+h It w%! t"-. t" *) ># M%tt, "&)Ih%-/ "/ "1$
t"w&! tw"Ip)$!"& $"%. .)p%$t*)&t A++"$.'&( t" M%tt, adisers from the Army +orp of $ngineers came to
4ermont and in no uncertain terms chastised local officials for their preious &let nature
take her courseI philosophy towards waterway management. In doing so, they would likely
hae been echoing the oices of 4ermonters "/ #)!t)$#)%$ A! )3'.)&+). ># th) "&("'&( )//"$t! t" $)+"3)$ /$"* I$)&),
I. !%# th%t /"$ %t -)%!t th) t'*) >)'&(, th) !t%t) h%! h)%$. th) *)!!%() -"1. %&. +-)%$ Ah)th)$ "$ &"t th'! $)p$)!)&t! % -"&(It)$* +h%&() '&
)&3'$"&*)&t%- %tt't1.) S %&. w'th 't, %& "pp"$t1&'t# t" +"&!'.)$ %&. t%,) %.3%&t%() "/ p)$h%p! "1$ *"!t ">3'"1! %&. &%t1$%- %3)&1) t" +"*p-)t)
)&)$(# '&.)p)&.)&+) S 3)$# *1+h $)*%'&! t" >) !))&
0ncreasing coal e%ports ey to J!ama win in critical swing states
Jane 8K66 (M"), C"&t$'>1t"$ /"$ th) p"p1-%$ +"&!)$3%t'3)/R)p1>-'+%& w)>!'t) R).St%t),
http://www$).!t%t)+"*/*")B-%&)/45;4/56/44/)-)+t"$%-I'*p-'+%t'"&!I"/Ith)I">%*%I
%.*'&'!t$%t'"&!Iw%$I"&I+"%-/0
Th) >%!'+ /$%*)w"$, /"$ th'! %$(1*)&t '! th'! *%p:Twh'+h !h"w! the top sixteen coal*producing states '& th) USA
There)s a total of 1;6 $lectoral 4otes at stake, th)$) : %&. '& 4558 th)$) w)$) ;85 ,bama %+t1%--# won
coal*producing states in 699;, ;55 t" 85A and if no states flip '& N"3)*>)$, he)ll win them, 7J t" 8J
$xcept thatL states are going to flip. Indiana)s already gone? %&. "/ th) $)*%'&'&( !'= O>%*% !t%t)! "&-#
N)w M)='+" %&. I--'&"'! %$) &"t +"&!'.)$). t"!!I1p! The administration)s relentless hostility towards coal
production and use may hae already contributed to Bemocratic electoral disaster@ since
,bama took office the state goernments and legislatures of ,hio, %ennsylania, and
4irginia hae all been taken oer by Cepublicans? '& C"-"$%." w) /-'pp). th) D"1!) "/ R)p$)!)&t%t'3)!? %&. '& N)w
M)='+" w) +%pt1$). th) ("3)$&"$!h'p D)+,, w) )3)& (%'&). !)%t! '& th) I--'&"'! -)('!-%t1$), %&. +%*) 3)$# +-"!) t" w'&&'&( th) ("3)$&"$!h'p
J!ama+s rhetorical shift away from coal will cost him = swing states and re$
election$plan renews J!ama+s support
>ashington Times 'K8 (C"%- h)%t! 1p %! +%*p%'(& '!!1) /"$ O>%*%, M%$+h 6, 45;4,
http://wwww%!h'&(t"&t'*)!+"*/&)w!/45;4/*%$/6/+"%-Ih)%t!I1pI%!I+%*p%'(&I'!!1)I/"$I
">%*%/?p%()O%--Up%()>$)%,0
+oal accounts for more than half of the nation)s electricity generation, and 61 states
depend on it for more than half of their electricity compared with their use of gas, nuclear
and renewable energy sources, according to a report last year in $lectric %ower "onthly.
The top coal*dependent states include eight 6916 battlegrounds or must*win states for "r.
,bama)s re*election campaign@ +olorado, Indiana, Iowa, "ichigan, "issouri, ,hio, 2ew
"exico and >isconsin. In addition, %ennsylania, a big coal*producing state and another
key swing state, depends on coal for /; percent of its electricity needs.
Rh)t"$'+%- !h'/t
A! % /"$*)$ !)&%t"$ /$"* I--'&"'!, wh)$) +"%- %++"1&t! /"$ L9 p)$+)&t "/ th) )-)+t$'+'t# !1pp-#, "r. ,bama has been a
proponent of the coal industry and a strong supporter of clean*coal technologies. $en as
"r. ,bama has embraced the idea that burning fossil fuels threatens ma0or climate change
and has backed efforts to reduce global warming, h) h%. &"t !1pp"$t). % >%& "& &)w +"%- .)3)-"p*)&t I&!t)%., h)
>%+,). p"-'+')! th%t .'!+"1$%(). th) /1$th)$ 1!) "/ '&)//'+')&t /%+'-'t')! wh'-) )&+"1$%('&( p-%&t! t" >) $)t$"/'tt). w'th +"%-I+%pt1$) %&.
!)21)!t$%t'"& t)+h&"-"(# I& th) /'$!t th$)) #)%$! "/ h'! p$)!'.)&+#, M$ O>%*% +"&!'!t)&t-# '&+-1.). +"%- wh)&)3)$ !p)%,'&( %>"1t th) &)). t"
h%$&)!! %-- "/ A*)$'+%! *1-t'p-) )&)$(# $)!"1$+)! B1t %! )&3'$"&*)&t%- $)(1-%t'"&! h%3) $%*p). 1p %(%'&!t th) +"%- '&.1!t$#th'! #)%$, th)
p$)!'.)&t h%! &"t *)&t'"&). +"%- '& $)*%$,! "$ !p))+h)! I& !"*) +%!)!, th) !h'/t '! !t%$, I& 45;5, h) t"1t). th) US %! th) S%1.' A$%>'% "/
+"%- In mid*Eanuary, he altered the statement to say the country is the &Saudi Arabia of
natural gas.I .e also omitted the word &coalI from his State of the !nion address for the
first time this year. "ost recently, during a speech deoted to energy policy Thursday in
2ew .ampshire, "r. ,bama adocated &an all*of*the*aboe strategy that deelops eery
single source of American energy,I but he made no mention of coal. Th) Ah't) D"1!) .'. &"t $)!p"&. t"
%& '&21'$# %>"1t wh)th)$ th) "*'!!'"& "/ +"%- %&. +-)%&I+"%- t)+h&"-"(# '& $)+)&t !p))+h)! *%$,! % p"-'+# !h'/t
G$))& "pp"!'t'"&
+oal industry leaders closely watching the election*year energy debate hae suspicions
about the silence and worry that "r. ,bama has dropped his support for cleaner coal in
response to pressure from enironmentalists who call the ery idea of &clean coalI a myth.
2avigation and shipping industries support the plan
5reenwire 16 (ARMG COR@S: O>%*%N! >1.()t t"1t! &%3'(%t'"&, >1t w%t)$w%# '&t)$)!t! %$)&Nt
h%pp#, F)>$1%$# ;6, 45;4, T"p St"$')! F"- ;5 N" 70
Th) O>%*% %.*'&'!t$%t'"& '! p"$t$%#'&( 't! /'!+%- 45;H >1.()t p$"p"!%- /"$ th) A$*# C"$p! "/
E&('&))$! %! % >""& /"$ >1!'&)!!)! th%t $)-# "& &%3'(%>-) '&-%&. w%t)$w%#! A! Q"IE--)& D%$+#,
th) A$*#N! %!!'!t%&t !)+$)t%$# "/ +'3'- w"$,!, p1t! 't, th) !p)&.'&( p-%& $)/-)+t! Mth) '*p"$t%&+)
th) %.*'&'!t$%t'"& p-%+)! "& &%3'(%t'"&M 2aigation interests hae long grumbled about what
they see as the Army +orps= emphasis on ecosystem restoration at the expense of dredging
shipping channels, maintaining locks and other pro0ects aimed at keeping waterways open.
@$)!'.)&t ,bama=s oerall H/.< billion Army +orps budget proposal, D%$+# !%'. %t % >$')/'&(
M"&.%#, would send '< percent of the agency=s cash to naigation pro0ects, +"*p%$). w'th
HH p)$+)&t /"$ )&3'$"&*)&t%- $)!t"$%t'"& %&. H5 p)$+)&t /"$ /-"". +"&t$"- A&. )3)& th"1(h
O>%*%N! >1.()t p$"p"!%- '! 6L p)$+)&t !*%--)$ th%& wh%t th) %()&+# '! !p)&.'&( th'! #)%$,
D%$+# !%'., th)$) w"1-. >) V;9J *'--'"& *"$) /"$ &%3'(%t'"&, %& ;; p)$+)&t '&+$)%!) "3)$ /'!+%-
45;4 -)3)-! A&. th) +"$p! w"1-. !p)&. V8L8 *'--'"& "& h%$>"$ *%'&t)&%&+), 1p ;4 p)$+)&t /$"*
-%!t #)%$ The industry=s reactionM G,erall, disappointment,M !%'. A*# L%$!"&, p$)!'.)&t "/
th) N%t'"&%- A%t)$w%#! C"&/)$)&+), whose members include leee managers, shipping
companies and engineering firms. D)!p't) >""!t'&( w%t)$w%#! p$"K)+t!, '&.1!t$# "//'+'%-! !%#,
th) >1.()t p$"p"!%- /%'-! t" p$"3'.) )&"1(h /"$ &%3'(%t'"& %&. -)3))! t" )&!1$) US w%t)$
'&/$%!t$1+t1$) +%& %.)21%t)-# p$"3'.) /-"". p$"t)+t'"& %&. h)-p *))t O>%*%N! ("%- "/ ."1>-'&(
th) &%t'"&N! )=p"$t! ># 45;6 Th) +"$p! '! 1&.)$ 1&p$)+).)&t). p$)!!1$) t" ." *"$) w'th -)!!
Sp)&.'&( +%p! '*p"!). -%!t #)%$ .1$'&( th) Ah't) D"1!)N! .)>tI-'*'t !h"w."w& w'th C"&($)!!
h%3) $)&.)$). th) A$*# C"$p!N >1.()t % R)$"I!1* (%*) /"$ +"*p)t'&( '&t)$)!t! "/ &%3'(%t'"&,
/-"". +"&t$"- %&. )+"!#!t)* $)!t"$%t'"&
Pu!lic perceives updating inland waterways as maBor Bo! creation
2iemeyer 11 (G%$$#, p$)!'.)&t "/ N%t'"&%- C"$& G$"w)$! A!!"+'%t'"&, BS '& %($'+1-t1$%-
)+"&"*'+! /$"* th) U&'3)$!'t# "/ I--'&"'!, O1$ F')w: Up.%t'&( "1$ N%t'"&! I&-%&. A%t)$w%#!
'! C$'t'+%- /"$ F%$*)$! %&. @$"*"t)! Q"> C$)%t'"&, S)pt)*>)$ ;L, 45;;,
http://www&+(%+"*/&)w!I!t"$')!/44;I"1$I3')wI1p.%t'&(I"1$I&%t'"&I$!21"I!I'&-%&.I
w%t)$w%#!I'!I+$'t'+%-I/"$I/%$*)$!I%&.Ip$"*"t)!IK">I+$)%t'"&/0
>hen it comes to the waterways, the top priority for the 2%t'"&%- +"$& 5$"w)$! A!!"+'%t'"& is seeing
new construction moe forward on the seen pro0ects in the !pper "ississippi lock system
th%t w)$) %1th"$'R). '& th) 4559 A%t)$ R)!"1$+)! D)3)-"p*)&t A+t: M'!!'!!'pp' L&D 46, 4L, 44, 4;, 45, %&. L%G$%&() %&. @)"$'% "& th) I--'&"'!
R'3)$ These lock upgrades would re7uire a total of /; million person hours from skilled
trades throughout the "idwest.

As %resident ,bama and +ongress turn their attention to 0ob creation, we hope these
pro0ects will rise to the highest leel of priority. >e appreciate that %resident ,bama
mentioned inestment in waterways in his 0obs bill andwe hope he pushes for inestment in
the lock system "& th) Upp)$ M'!!'!!'pp' L',)w'!), we hope +ongress can see beyond partisan iews
and understand the importance of an updated waterways system to farmers %+$"!! "1$ +"1&t$#
and to promote 0ob creation.
So! creation ey to J!ama re$election
A% :K6 (U(-# K">! &1*>)$! $%tt-) O>%*%! $))-)+t'"& >'. , Q1&) 4, 45;4,
http://%$t'+-)!&#.%'-#&)w!+"*/45;4I5JI54/&)w!/H;7878JJB;BK">!I&1*>)$!IK">!I*"&thIK">!I
>'--0
AASDINGTON S 2othing upsets a president)s re*election grooe like ugly economic
numbers. A spring slowdown in hiring and an uptick in the unemployment rate are
weighing on ?arack ,bama, while enhancing Cepublican challenger "itt Comney!
%$(1*)&t th%t th) p$)!'.)&t '! '& "3)$ h'! h)%. S"*) 21)!t'"&! %&. %&!w)$! %>"1t h"w F$'.%#!
)+"&"*'+ &)w! *%# p-%# '& % +-"!) p$)!'.)&t'%- $%+): E: .ow bad is this for ,bamaM A: %retty
awful. %olls show ,bama)s handling of the economy is his biggest weak spot. Americans
oerwhelmingly rate th) )+"&"*# %! th)'$ >'(()!t w"$$# A&. 0obs are what they say matters
most.
ATL J!ama Aad
Plan proposes spending and ta% increases
5lass :K1 (@%*)-%, A%!h'&(t"&, DC, +"$$)!p"&.)&t /"$ A"$,B"%t, $)p"$t! "& th) .)+'!'"&! %&.
.)-'>)$%t'"&! "/ +"&($)!!'"&%- +"**'tt))! %&. /).)$%- %()&+')! th%t %//)+t th) *%$'t'*) '&.1!t$#,
'&+-1.'&( th) C"%!t G1%$., US M%$'t'*) A.*'&'!t$%t'"& %&. US A$*# C"$p! "/ E&('&))$!,
($%.1%t) "/ A)!-)#%& U&'3)$!'t#, G)%$>"",: '&-%&. w%t)$w%#!: >%$() "p)$%t"$! !)) !t$"&(
.)*%&. %&. 1t'-'R%t'"&, Q1&) ;, 45;4, @( 6L(60 F"- J7 N" J0
LOCK CLOSURES ARE COSTLG B1t th) '&.1!t$# /%+)! !"*) *%K"$ +h%--)&()! th%t +"1-. h1$t >1!'&)!! "& th) w%t)$w%#! Th) %('&( %&.
.)t)$'"$%t'&( +"&.'t'"& "/ '&-%&. '&/$%!t$1+t1$) h%!-). t" -"+,I%&.I.%* +-"!1$)! .1) t" 1&!+h).1-). *%'&t)&%&+) %&. *)+h%&'+%- >$)%,."w&!
A++"$.'&( t" th) US A$*# C"$p! "/ E&('&))$!, &%3'(%t'"& "1t%()! "& th) Oh'" R'3)$ '&+$)%!). *"$) th%& th$))I/"-. '& th) p%!t ;4 #)%$!, /$"*
46,555 h"1$! t" 85,555 h"1$! R)-'%>'-'t# "/ th) !#!t)* '! &"w 21)!t'"&%>-), %&. !"*) !h'pp)$! h%3) t%,)& th)'$ >1!'&)!! "// th) w%t)$
WILLUSTRATION OMITTEDX C"!t "3)$$1&! %$) %-!" % p$">-)* "& p$"K)+t! th%t t%,) /%$ t"" -"&( t" /'&'!h >)+%1!) "/ (%p! '& /1&.'&( /$"*
C"&($)!! @$"K)+t! %1th"$'R). !'&+) ;78J h%3) "& %3)$%() t%,)& 45 #)%$! t" /'&'!h %&. +"!t *"$) th%& tw'+) th) %1th"$'R). %*"1&t Th) O-*!t).
L"+,! %&. D%* p$"K)+t "& th) Oh'" R'3)$ >)tw))& I--'&"'! %&. K)&t1+,#, /"$ )=%*p-), w%! %1th"$'R). '& ;788 %t V996 *'--'"&It >$",) ($"1&. '&
;774 %&. w%! t" >) ."&) '& 4556 T".%#, 't $)*%'&! '&+"*p-)t) %&. 't! +"!t '! p1t %t VH; >'--'"& C"*p-)t'"& .%t) '! )!t'*%t). /"$ 4545, %>"1t H5
#)%$! %/t)$ 't >$",) ($"1&. MD"w +%& #"1 h%3) +"&/'.)&+) '& th) $)-'%>'-'t# "/ % !#!t)* wh)& 6J p)$+)&t "/ th) '&/$%!t$1+t1$) '! >)#"&. 't! .)!'(&
-'/)?M M%$, K&"#, p$)!'.)&t %&. CEO "/ A*)$'+%& C"**)$+'%- L'&)! (ACL0, %!,). >)/"$) % h)%$'&( "/ th) D"1!) !1>+"**'tt)) "& C"%!t G1%$.
%&. M%$'&) T$%&!p"$t%t'"& '& Ap$'- MAh)$) HL -"+,! %$) "3)$ 85 #)%$! "-.? Ah)& % !'(&'/'+%&t /%'-1$) %t % -"+, +"1-. +-"!) % *%K"$
t$%&!p"$t%t'"& %$t)$#, %.'!%!t)$ /"$ th) -"+%- %&. &%t'"&%- )+"&"*#?M K&"# &"t). th%t p$">-)*! %$) "++1$$'&( w'th %-%$*'&( /$)21)&+# %t &)w)$
-"+,!, !1+h %! R">)$t C B#$. %&. M)- @$'+), $%th)$ th%& K1!t th) "-.)$ !t$1+t1$)! O1t%()! h%3) +"!t th) >%$() '&.1!t$# *'--'"&! AE@ R'3)$
Op)$%t'"&! )!t'*%t)! 't h%! '&+1$$). V;;L *'--'"& '& .)-%# +"!t! .1) t" -"+, +-"!1$)! /$"* 45;;I45;4 MA-- th)!) .)-%#! %//)+t th) +"&!1*)$ %!
wh)& th) +"!t "/ t$%&!p"$t%t'"& '&+$)%!)!, th) /'&%- +"!t t" th) +"&!1*)$ %-!" '&+$)%!)!,M !%'. M%$t'& D)tt)-, !)&'"$ *%&%()$ "/ >1-, !%-)! %t AE@
A +%t%!t$"ph'+ /%'-1$) th%t +"1-. !t#*') +"**)$+) '! 3)$# *1+h % p"!!'>'-'t# %t +)$t%'& 31-&)$%>-) -"+, -"+%t'"&!, M%K G)& Q"h& @)%>".#,
+"**%&.)$, M'!!'!!'pp' F%--)# D'3'!'"& %t th) C"$p! "/ E&('&))$!,t"-. th) h)%$'&( D) !%'. th) C"$p! h%! /"+1!). "& *%'&t%'&'&( th) ,)#
/)%t1$)! "/ )='!t'&( '&/$%!t$1+t1$) t" %3"'. !1+h % /%'-1$), '&+$)%!). *"&'t"$'&( )//"$t!, %&. t%,)& !t)p! t" >)tt)$ *%&%() th) !#!t)* B1t th)
'&.1!t$# '! !t'-- w"$$'). WILLUSTRATION OMITTEDX MTh) !#!t)* '! /$%('-) %&. th)$) '! &" p-%& W'& p-%+)X t" /'= "$ *".)$&'R) 't,M !%'. Th"*%!
A--)($)tt', p$)!'.)&t %&. CEO "/ th) A*)$'+%& A%t)$w%#! Op)$%t"$!, %& '&.1!t$# ($"1p MTh) .%&()$ '!&Nt !" *1+h %>"1t "p)$%t'"&%- .'!$1pt'"&!,
>1t th) p"t)&t'%- /"$ % +%t%!t$"ph'+ +"--%p!) %&. "1$ '&%>'-'t# t" /'= 't. $ngineers know that we will haeNa
catastrophic failureO but that message has not gotten through to policy leaders in +ongress
and the N,bamaO administration who need tohae a plan to modernize the system before a
catastrophe occurs.G The industry beliees it has found a solution with the +apital
Beelopment %lan, a 0oint industry*+orps water*ways strategy to prioritize pro0ects and
assure their on*time and on*budget deliery It would also fund waterways construction w'th %
+"*>'&%t'"& "/ 1!)$ /))! (%&'&+$)%!) '& th) .')!)- t%= p%'. ># >%$() +"*p%&')!0 %&. +"!tI!h%$'&(+h%&()! th%t !h'/t *"$) $)!p"&!'>'-'t# t" th)
/).)$%- ("3)$&*)&t R)p E. >hitfield, RIK#, introduced legislation in "arch, but the bill faces hurdles
in this election year because it proposes spending and tax increases M)%&wh'-), th) O>%*%
%.*'&'!t$%t'"& "pp"!)! th) CD@ *"!t-# /"$ >1.()t%$# $)%!"&! >1t h%! "//)$). /)w %-t)$&%t'3)! >)#"&. %& 1&p"p1-%$ p-%& t" +h%$() /))! t"
+"**)$+'%- 1!)$! "/ th) '&-%&. w%t)$w%#! %! % w%# t" $%'!) /1&.! /"$ th) !#!t)*
Plan unpopular$ shifts funding !urden to ta%payers
Southern /K1: (I--'&"'! &)w!p%p)$, N)w w%t)$w%#! >'-- .$%w! +$'t'+'!*, Ap$'- ;J, 45;4,
http://th)!"1th)$&+"*/&)w!/-"+%-/&)wIw%t)$w%#!I>'--I.$%w!I+$'t'+'!*/%$t'+-)B6)./%6L)I899+I
;;);I%);JI55;7>>47JH/Lht*-0
A recent bill dealing with maintenance of the country)s waterways, +"I!p"&!"$). ># US R)p Q)$$#
C"!t)--", DIB)--)3'--), is drawing fire for its reamping of funding measures that critics say shift
more of the cost burden to taxpayers +ostello and !.S. Cep. $d >hitfield, C*Dy.,
announced M%$+h H5 th)'$ /'-'&( "/ th) A%t)$w%#! A$) F't%- /"$ th) E+"&"*#, E&)$(#, E//'+')&+# %&. E&3'$"&*)&t A+t "/ 45;4, "$ th)
>A4$/ Act A K"'&t &)w! $)-)%!) /$"* C"!t)--" %&. Ah't/')-. %>"1t th) >'-- !%'. th) AAFEL A+t $)21'$)!, %*"&( "th)$ th'&(!, th) 1!)
"/ ">K)+t'3) +$'t)$'% /"$ th) p$'"$'t'R%t'"& "/ )!!)&t'%- +"&!t$1+t'"& %&. *%K"$ $)h%>'-'t%t'"& p$"K)+t! %&. p$"t)+t! %(%'&!t +"!t "3)$$1&!
A..'t'"&%--#, the news release said it reises the current cost*sharing structure for inland
waterways pro0ects, reforms the Army +orps of $ngineers internal pro0ect deliery process
and calls for additional contributions from the waterways industry to pay for these ital
infrastructure inestments.
Corps unpopular with pu!lic$fa!ricates economic reports and !uilt the
levees that failed during Datrina
Ch$'! $dwards 'K1#, .'$)+t"$ "/ t%= p"-'+# !t1.')! %t th) C%t" I&!t't1t), E.w%$.! w%! % !)&'"$
)+"&"*'!t "& th) +"&($)!!'"&%- Q"'&t E+"&"*'+ C"**'tt)), % *%&%()$ w'th
@$'+)w%t)$h"1!)C""p)$!, %&. %& )+"&"*'!t w'th th) T%= F"1&.%t'"&, C1tt'&( th) A$*# C"$p!
"/ E&('&))$!, http:///'&%&+)t"w&h%--+"*/+"-1*&'!t!/+h$'!).w%$.!/
45;4/5H/;7/+1tt'&(Bth)B%$*#B+"$p!B"/B)&('&))$!/p%()//1--/0
S"*) "/ th)!) +h%$()! !t'-- $'&( t$1). The nation was reac7uainted with the +orps= shoddy
engineering with the tragic failure of the leees in 2ew ,rleans during .urricane Datrina.
In recent years, the +orps has hidden information from the public, and has been caught
distorting economic analyses to 0ustify wasteful pro0ects. ?ecause of its pro*construction
mindset, the +orps continues to pursue pro0ects that would damage the enironment and
produce limited economic benefits. I& $)+)&t .)+%.)!, for example, Gthe +orps has
channelized dozens of riers for barges that neer arriedMH6
Corps unpopular$ignore pu!lic interests for private gain
Ch$'! $dwards 'K1#, .'$)+t"$ "/ t%= p"-'+# !t1.')! %t th) C%t" I&!t't1t), E.w%$.! w%! % !)&'"$
)+"&"*'!t "& th) +"&($)!!'"&%- Q"'&t E+"&"*'+ C"**'tt)), % *%&%()$ w'th
@$'+)w%t)$h"1!)C""p)$!, %&. %& )+"&"*'!t w'th th) T%= F"1&.%t'"&, C1tt'&( th) A$*# C"$p!
"/ E&('&))$!, http:///'&%&+)t"w&h%--+"*/+"-1*&'!t!/+h$'!).w%$.!/
45;4/5H/;7/+1tt'&(Bth)B%$*#B+"$p!B"/B)&('&))$!/p%()//1--/0
E+"&"*'!t! ()&)$%--# !1pp"$t ("3)$&*)&t !p)&.'&( "& t$1) Mp1>-'+ ("".!M D"w)3)$, the
purpose of many +orps= pro0ects is to generate priate gains, not broad public benefits.
The +orps would look faorably on a pro0ect that cost taxpayers H199 million and
generated priate benefits t" /%$*)$!, .)3)-"p)$!, "$ !h'pp'&( +"*p%&')! "/ V;;5 *'--'"& B1t
p$'3%t) '&t)$)!t! !h"1-. >) w'--'&( t" '&3)!t th)'$ "w& /1&.! '& !1+h p$"K)+t! th%t h%3) p"!'t'3)
$)t1$&!9L
,nvironmental groups oppose plan
5lass 11 (@%*)-%, A%!h'&(t"&, DC, +"$$)!p"&.)&t /"$ A"$,B"%t, $)p"$t! "& th) .)+'!'"&! %&.
.)-'>)$%t'"&! "/ +"&($)!!'"&%- +"**'tt))! %&. /).)$%- %()&+')! th%t %//)+t th) *%$'t'*) '&.1!t$#,
'&+-1.'&( th) C"%!t G1%$., US M%$'t'*) A.*'&'!t$%t'"& %&. US A$*# C"$p! "/ E&('&))$!,
($%.1%t) "/ A)!-)#%& U&'3)$!'t#, G$))&, %&t'It%= ($"1p! *">'-'R) %(%'&!t '&-%&. w%t)$w%#!
/1&.'&( p-%&, L/48/;;, http://wwww"$,>"%t+"*/&)w!.)t%'-%!p=?'.O78770
$nironmental and taxpayer groups are mobilizing again on +apitol .ill to oppose a
waterways financing plan faored by the barge industry. A-th"1(h &"t %! w)-- "$(%&'R). %&. /1&.). %! th)
>%$() '&.1!t$#, th)!) ($"1p! %$) *))t'&( w'th +"&($)!!*)& %&. th)'$ !t%//! %&. .'!t$'>1t'&( ."+1*)&t! th%t $)/1t) >%$() '&.1!t$# +-%'*! th%t the
plan will more effectiely finance improements to the aging inland lock and dam system.
5reen groups launched their opposition last spring after the plan was released. ,pponents
argue that the proposal shifts too much financial burden to taxpayers and would take
money away from enironmental protection programs. C't'&( !"*) "/ th) !%*) %$(1*)&t!, th) O>%*%
%.*'&'!t$%t'"& $)K)+t). th) p-%& >1t p$"*'!). t" w"$, "& %&"th)$ !"-1t'"& N"&) h%! #)t )*)$().
,nvironmentalists ey to J!ama re$election
5eorgia %olitical Ceiew 6K18 (A'-- K)# G$"1p! R%--# B)h'&. O>%*% Th'! E-)+t'"&?,
F)>$1%$# ;6, 45;4, http://www()"$('%p"-'t'+%-$)3')w+"*/w'--I,)#I($"1p!I$%--#I>)h'&.I">%*%I
th'!I)-)+t'"&/0
,bama will be looking to present himself as a pragmatic and reasonable choice that has
only been ineffectie because of a diided and polarized +ongress. D'! *".)$%t) p"-'+# .)+'!'"&! '& "//'+),
h"w)3)$, *'(ht +%1!) !"*) -'>)$%- 3"t)$! t" !t%# %t h"*) "& )-)+t'"& .%# "$ &"t +%*p%'(& %! h%$. %! th)# .'. /"1$ #)%$! %(". ,bama is
going to need the grassroots momentum h) /"1&. .1$'&( th) -%!t +%*p%'(& +#+-) if he wishes to win
reelection. >hile these supporters may not 0ump ship and ote Cepublican, they will also
not passionately campaign for him as they did four years ago. R)p1>-'+%&! %$) %! .)t)$*'&). %! )3)$ t"
.)/)%t h'*, %&. th)'$ &"*'&)) w'-- h%3) p-)&t# "/ -)('t'*%t) w%#! t" %tt%+, O>%*% -%t)$ th'! #)%$ Th)!) th$)) ($"1p! :
enironmentalists, LGBT %+t'3'!t! %&. w"*)& : will help ,bama gain a ma0ority of the otes this
2oember, >1t !"*) *'(ht !)) h'* %! "&-# th) -)!!)$ "/ tw" )3'-!, $%th)$ th%& % +h%*p'"& /"$ th)'$ '&.'3'.1%- +%1!)! ,bama is
going to hae to rally support from these groups if he wishes to hae the same wae of
success as he did in 699; and four more years in the >hite .ouse.
)inning the agriculture states not ey to J!ama re$election
%,JITI+, :K1' (O>%*%N! p-%# /"$ th) $1$%- 3"t),
http://wwwp"-'t'+"+"*/>-"(!/+h%$-')I*%ht)!'%&/45;4/5J/">%*%!Ip-%#I/"$Ith)I$1$%-I3"t)I
;4J577ht*-0
Ah'-) B'!h"p .")!&t )=p-'+'t-# *%,) th) +"&&)+t'"&, it)s hard not to see the political context here. There
aren)t a lot of good economic stories to be told this year, so the >hite .ouse is naturally
seizing one of them ** the ag economy.
>hile rural America isn)t exactly ,bama)s sweet spot (h) -"!t th) $1$%- 3"t) '& 4558, %++"$.'&( t" )='t p"--!3,
it)s not inconse7uential to his re*election. A++"$.'&( t" th'! %&%-#!'! "/ C)&!1! .%t%, tw" !w'&( !t%t)! : I"w% %&. N)w
D%*p!h'$) : h%3) 65 p)$+)&t "$ *"$) "/ th)'$ p"p1-%t'"& -'3'&( '& $1$%- %$)%! "$ !*%-- t"w&! A&. %&"th)$ !'= : M'+h'(%&, N"$th C%$"-'&%, Oh'",
@)&&!#-3%&'%, F'$('&'% %&. A'!+"&!'& : h%3) h'(h)$ p)$+)&t%()! "/ p"p1-%t'"& -'3'&( '& $1$%- %$)%! "$ !*%-- t"w&! th%& th) &%t'"&%- %3)$%()
Coal e%ports increasing now and e%pected to continue to rise
?loomberg ?usiness >eek 8K'1 (O>%*% B""!t! C"%- E=p"$t!, @$"*pt'&( A--')! C"*p-%'&t!,
M%# H;, 45;4, http://www>1!'&)!!w)),+"*/&)w!/45;4I56IH;/">%*%I>""!t!I+"%-I)=p"$t!I
p$"*pt'&(I%--')!I+"*p-%'&t!0
>ith demand for coal slumping in the !.S. because of falling natural*gas prices, exports
are rising %&. w'th 't )&3'$"&*)&t%- /'(ht!. $xports more than doubled from 699# to 6911, totaling
H18.# billion last year. $xports are on track to top that total again this year, according to
+ommerce Bepartment statistics.
Plan creates temporary Bo!s at !est
Architecture 69'9 :K61 (&"&Ip$"/'t, &"&Ip%$t'!%& %&. '&.)p)&.)&t "$(%&'R%t'"&, wh"!) ("%- '! t"
/'(ht +-'*%t) +h%&() w'th )&3'$"&*)&t%--# )//'+')&t .)3)-"p*)&t p$"K)+t!, O>%*%N! Q">! @-%&:
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http://%$+h't)+t1$)45H5"$(/h"tBt"p'+!/">%*%BK">!Bp-%&B,'&(B!"-"*"&0
Ah# &"t? B)+%1!) infrastructure pro0ects depend on tax reenue and the generator of tax reenue
is the priate sector, which has been deastated. -unding infrastructure pro0ects with
stimulus funds simply substitutes federal dollars for tax reenue dollars. This approach '! %
-"!'&( >%tt-), creating temporary 0obs that can only be made into permanent 0obs by continual
federal funding Ah'-) !"*) '&/$%!t$1+t1$) !p)&.'&( %&. /'&%&+'%- h)-p t" !t%t) %&. -"+%- ("3)$&*)&t! '! w%$$%&t)., it will not
put America back to work. $ach H1 billion dollars of federal infrastructure spending
creates only <,::< one*time construction 0obs and #,999 indirect 0obs
AT States CP?Army Corps Authority?Army Corps >ood
Army corps are ey
Dr& ;illiam G& Howlan) 4 is the <asin Pro+ram Aana+er of Ba9e Cham$lain( Grand Isle( C7( %&#& ARAD C=RP# => E@GI@EER#
R=BE I@ 7HE @A7I=@O# ;A7ER RE#=%RCE @EED# I@ 7HE 1.#7 CE@7%RD( Ca$ital Hill 7estimony( Aarch J.( le0is
=ur $artnershi$ in"ol"es the states of Cermont and @e! Dor9( the Pro"ince of Tuebec( and numerous federal a+encies( includin+ the
%#EPA( the %#DA( %#DI( and the %#ACE& 7his $artnershi$ is hi+hly effecti"e and throu+h our !or9 to restore the la9e ecosystem( !e also
are ensurin+ an economic future for citizens in our re+ion& 7his !or9 is of "ital im$ortance to the re+ional economy( includin+ the tourism
and recreation economy for !hich !e are !ell 9no!n( and !hich de$ends so fundamentally u$on this +reat and !onderful la9e& =ne of the
+reat disco"eries in my !or9 !ith the Ba9e Cham$lain <asin Pro+ramOs federal a+ency $artners is the +ood faith and dedication that they
brin+ to the tas9 of cleanin+ u$ and restorin+ AmericaOs !ater!ays& I ha"e +reat admiration and a$$reciation for all of our federal $artners&
7oday( my testimony !ill focus on the essential !or9 of the %&#& Army Cor$s of En+ineers( and $articularly their role in
En"ironmental Restoration $ro-ects& Cleanin+ u$ $ollution in a la9e is e0ceedin+ly difficult and costly& And it al!ays includes interru$tin+
the flo! of $ollutants into the draina+e system to $re"ent further contamination& Pollution $re"ention reHuires chan+in+ the !ay thin+s !or9
in the landsca$e that drains into the la9e& In Ba9e Cham$lain( as in the Great Ba9es and other $arts of the nation( ecosystem
restoration efforts often reHuire ad"anced en+ineerin+ desi+n e0$ertise and leadershi$ that communities and
states sim$ly can not $ro"ide& 'he competence an) en+ineerin+ e7pertise of the (!*! Army Corps of
1n+ineers is a $ital resource for plannin+, )esi+nin+ an) e7ecutin+ restoration plans! 7he stature of the
Cor$s( its trac9 record !ith lar+e $ro-ects and its Huality control $rotocols $ro"ide the leadershi$ that is essential
to maintain and im$ro"e the !ater Huality of our ri"ers and la9es& 7he %&#& Army Cor$s is currently facilitatin+ se"eral
restoration $ro-ects in the Ba9e Cham$lain !atershed& ;ith the Cor$Os su$$ort( an infestation of !ater chestnut( an in"asi"e aHuatic $lant
that has dominated the entire southern $art of the la9e for years is no! nearly under control& 7his $ro+ram( run in $artnershi$ !ith the states
of Cermont and @e! Dor9( has lead us out of an almost ho$eless situation and !e are seein+ a return to $ublic en-oyment of shoreline areas
in the southern $art of Ba9e Cham$lain& 7his summer !e e0$ect to be+in !or9 on $ro-ects to interce$t storm !ater runoff into Ba9e Geor+e(
$art of the Ba9e Cham$lain ecosystem( and to stabilize erodin+ streamban9s in the AissisHuoi !atershed( !ith e0$ertise( o"ersi+ht
and fundin+ by the %&#& Army Cor$s& ;ithout their leadershi$ and su$$ort( this "ital !or9 could not ha$$en& 7he
role of the %&#& Army Cor$Os En"ironmental Restoration authority is a "ital nation!ide assetS +ettin+ $ro-ects
done - and done $rofessionally - all across America& Dam remo"al $ro-ects( !etland restoration( fish $assa+es
and streamban9 stabilization $ro-ects restore de+raded ecosystems( im$ro"e American li"es( stren+then our
nationOs economy and ensure that !e !ill be able to $ro"ide clean drin9in+ !ater to oursel"es( our children and their
children& Ba9e #t& Clair( and the #t& Clair Ri"er( located bet!een Ba9e Huron and Ba9e Erie( faces massi"e $roblems of nutrient loadin+(
in"asi"e s$ecies and the challen+es of a busy !ater!ay& It is in des$erate need of $ollution $re"ention and ecosystem restoration action& 7he
%&#& Army Cor$s of En+ineers has ta9en the lead role in dra!in+ to+ether federal a+encies and communities in
the %&#& and Canada to address this international challen+e& 7he stature an) e7pertise of the Corps ( and its
mandate to de"elo$ a mana+ement $lan( under #ection 1?/ of ;RDA .III( place) it in the lo+ical lea) in this
important effort& =ne of the +reatest restoration $ro+rams in the history of our nation is under!ay in the E"er+lades and #outh >lorida
Ecosystem( !ith %&#& Army Cor$s leadershi$& 7he Com$rehensi"e E"er+lades Restoration Plan a$$ro"ed by Con+ress in ;RDA 1444 is the
9ey to the future of the hu+e e"er+lades ecosystem and the "itality of a si+nificant sector of the >lorida economy& Coor)ination of the
work of ei+ht fe)eral a+encies an) more than a hun)re) local stakehol)er +o$ernments, re+ional councils
an) state a+encies, coul) only #e mana+e) #y an a+ency with the en+ineerin+ capacity, tra)itions an)
commitment of the (!*! Army Corps& >rom 7e0as to Aississi$$i in the Bouisiana Coastal Area Ecosystem( !etlands are
disa$$earin+ at the rate of nearly 11(444 acres $er year& 7he %&#& Army Cor$s is a $artner !ith the #tate of Bouisiana on a feasibility study
that !ill enable us to better understand this $roblem( and ho! to miti+ate and minimize losses( to restore a future for this re+ion& #imilar case
histories( of $ro-ects lar+e and small( could be cited from across the nation( !ith the accolades and +ratitude of millions of American citizens&
America today faces un$recedented challen+es of ecosystem dama+e and resultant declines in !ater Huality( contaminated and !eed- infested
!ater!ays( and $olluted la9es and estuaries across the nation& 7hese $roblems ha"e com$romised drin9in+ !ater su$$lies for millions of
Americans( caused des$erate stru++les for sur"i"al in the tourism and recreation industries( and created an alarmin+ trend to!ards more and
+reater $roblems in the near future& 7he (!*! Army Corps of 1n+ineers is a $ital part of our military ser$ice that
works )irectly in the homelan) to meet these challen+es with the worl)9s #est professional e7pertise& Its
stature and traditions of ser"ice to America ha"e turned to en"ironmental restoration $ro-ects that reHuire
en+ineerin+ solutions& 'he Corps #rin+s the #est tools in the nation to +uide the en+ineerin+ $roblem-sol"in+
that these s$ecial ecosystems reHuire& I !ould li9e to direct your attention to the challen+es !e face re+ardin+ the Cor$Os Continuin+
Authorities $ro+rams and #ections 14/ and ..J5& 7he e0istin+ $ro+ram limits of :15 million for each ha"e sim$ly not 9e$t $ace !ith current
needs( and are no! a fraction of !hat America needs them to be& In the Ba9e Cham$lain !atershed( this means that se"eral on+oin+ $ro-ects
are bein+ sus$ended due to a national shortfall& #us$endin+ +ood $ro-ects $art!ay throu+h their im$lementation( !hether in Ba9e Cham$lain
or else!here across the nation( neither sa"es money nor a"oids e0$ense& 7he $roblems in each case !ill +et far more costly( not less costly&
7he o$$ortunities to $re"ent or contain $ollution !ill be lost if a shortfall li9e this $ersists& 7he most cost-effecti"e solution to lar+e
ecosystem $roblems is to in"est adeHuately in their restoration at the earliest $ossible date& Any alternati"e is li9ely to be a false economy in
the short term and result a bur+eonin+ burden of additional accrued contamination and shar$ly increased costs of restoration in the lon+ term&
>inally( the !or9 of the %&#& Army Cor$s on en"ironmental restoration is not only about conser"ation $hiloso$hy or en"ironmental ethics& It
is also about our nationOs economic en+ines& As !e 9no! so !ell in the northeast( it is about the "itality of the tourism economy and the
Huality of life that 9ee$s the recreation businesses in business& It is about truc9s on the hi+h!ay( the $ulse of commerce and trade& It is about
reducin+ ban9ru$tcies and maintainin+ -obs& It is about smell of the ta$ !ater in the cities and to!ns across the nationS it is about the health of
our o!n human habitat throu+hout this nation that is our future& In the final analysis( ecosystem restoration and !ater Huality is about
insurin+ the Huality of life for citizens across America( and the health of our children and their children for +enerations to come& I ho$e the
members of this Committee !ill continue to reco+nize( a$$reciate and su$$ort the $ital role of the (!*! Army Corps of
1n+ineers in ser$ice to the American homelan) and( in $articular( !ill fully su$$ort their En"ironmental Restoration
$ro+rams& 7han9 you for the in"itation to testify before you today& I loo9 for!ard to ans!erin+ your Huestions&
9our CP is unconstitutional
:o)win 2k Jean God!in E0ecuti"e Cice President and General Counsel( American Association of Port Authorities( <E>=RE 7HE
H=%#E C=AAI77EE =@ ;AD# A@D AEA@# #%<C=AAI77EE =@ =CER#IGH7( #%<JEC7 - 7AF 7REA7AE@7 >=R
I@>RA#7R%C7%RE( le0is
As calle) for in the Constitution , the 6e)eral +o$ernment has sole ,uris)iction o$er this nation9s
na$i+ational waterways --a function $rimarily dele+ated to the %&#& Army Cor$s of En+ineers but $aid for by
s$ecialized >ederal ta0es( and other >ederal( state and local money& Bocal $ort authorities and industry $ro"ide fundin+ for land
infrastructure& Port authorities are also res$onsible for dred+in+ berthin+ areas and access channels connectin+ $ort facilities to the >ederal
na"i+ation channels( and $ro"idin+ reHuired cost-sharin+ financin+ of dred+in+& Bocal( state( and >ederal +o"ernment funds are also used to
su$$ort intermodal landside access to $orts( some of !hich is $aid throu+h the Hi+h!ay 7rust >und&

8ederal government has the responsi!ility
6lori)a 'imes-(nion // >eb 11 Public-$ri"ate $ro-ects canOt dee$en ri"ers() le0is
7he difference( he said( is the (!*! Constitution +i$es the fe)eral +o$ernment responsi#ility to maintain
na$i+a#le waterways( and Con+ress already ta0es car+o to collect funds to $ay the costs& A federal study sho!ed that e"ery dollar
s$ent on the #a"annah Ri"er !ould brin+ :? in ta0es( a more $ositi"e $aybac9 than $orts in @e! Dor9( <oston and Aiami( !hich ha"e
already been $romised funds for dee$enin+ from ;ashin+ton&

US army corps has Burisdiction over waterways
Ducas "" J& #te$hen Bucas( @ational Grain and >eed Association before the House Committee on 7rans$ortation and Infrastructure( ;ater
Resources and En"ironment #ubcommittee( testimony( >ederal @e!s #er"ice( le0is
'he (!*! Army Corps of 1n+ineers has ,uris)iction o$er impro$ement pro,ects for the (!*! inlan)
waterways& 7o increase the ca$acity and efficiency of the inland !ater!ays system( and maintain our com$etiti"e ed+e
in +lobal mar9ets( lar+e-scale im$ro"ements - such as e0$ansion of the loc9s of the %$$er Aississi$$i and Illinois Ri"er
#ystem from /44 feet to .144 feet - are needed&
8ederal government owns the locs?dams
%CC5% "R Critical >oundations( Protectin+ AmericaKs Infrastructures( 7he Re$ort of the PresidentKs Commission on Critical Infrastructure
Protection( htt$'**!!!&fas&or+*s+$*library*$cci$&$df
VAost of our nationKs trans$ortation infrastructure is o!ned by the $ri"ate sector2railroads and $i$elinesS the "ehicles and eHui$ment
o$eratin+ on our roads( on the !ater( and in the airS and by state and local +o"ernments2our roads( air$orts( mass transit systems( and $orts&
7he federal +o"ernment o!ns the @ational Airs$ace #ystem 3@A#6 o$erated by the >ederal A"iation Administration 3>AA6( and the
loc9s and dams o$erated by the %# Army Cor$s of En+ineers& 7he $ri"ate sector is lar+ely res$onsible for assurin+ its o!n
infrastructure and business $ractices&V ]JG^
And" the federal government has the responsi!ility to cover 1--Q of
maintenance costs
*tern /2 Charles C& #tern is a Analyst in @atural Resources Policy( ?*.1( Inland ;ater!ays' Recent Pro$osals and Issues for Con+ress()
htt$'**!!!&fas&or+*s+$*crs*misc*R?.?J4&$df
Inland !ater!ays are a si+nificant $art of the nationKs trans$ortation system& <ecause of the national economic benefits of
maritime trans$ort( the fe)eral +o$ernment has in"ested in na"i+ation infrastructure for t!o centuries & As a result(
bar+e shi$$in+ has recei"ed si+nificant su$$ort throu+h federal fundin+ for o$erational costs( ca$ital e0$enditures( and ma-or rehabilitation
on inland !ater!ays& #ince the ;ater Resources De"elo$ment Act of .IG/( e0$enditures for construction and ma-or
rehabilitation $ro-ects on inland !ater!ays ha"e been cost-shared on a 54*54 basis bet!een the federal
+o"ernment and users throu+h the Inland ;ater!ays 7rust >und 3I;7>6& =$erations and maintenance costs for
inland !ater!ays ty$ically e0ceed these construction costs( and are a /00% fe)eral responsi#ility pursuant to
;RDA .IG/&
Kocs are under Army Corps Burisdiction
*tates -ews *er$ice // July 8( 14.. 7hursday <=#;EBB( B=E<#ACE CABB >=R HEARI@G I@7= >B==D AA@AGEAE@7
PBA@# A@D REG%BA7I=@#( le0is
Gi"en the numerous de"astatin+ flood e"ents !itnessed in Io!a and the entire Aid!est since .IIJ( !e res$ectfully reHuest the
Committee hold a hearin+ to hear testimony from floodin+ and !eather e0$erts( local or state officials( and Army Cor$s of
En+ineers re$resentati"es to discuss the current re+ulatory and statutory en"ironment +o"ernin+ the de"elo$ment
or alterin+ of o$eration manuals and $lans( maintenance( and use of dams( reser"oirs( le"ees and locks un)er Army Corps
,uris)iction& In order to ensure the Army Cor$s has the resources to $erform their duties fully( a discussion on the fiscal situation faced by
the Army Cor$s !ith res$ect to maintainin+ these structures for their intended $ur$oses !ould be informati"e as !ell&

Supreme court proves
*pokesman .e$iew /2 Aarch 1J( 14.1 EPA R%BI@G #7RIEE# <B=; >=R PE=PBEO# D%E PR=CE##( le0is
As the *upreme Court noted in a 144/ case( the EPA and %&#& Army Cor$s of En+ineers ha"eado$ted a "ery broad
inter$retation of the !ord Vna"i+able(V e7ten)in+ their ,uris)iction o"er "irtually anythin+ !et that flo!s into
or is ad-acent to a truly na$i+a#le waterway li9e Priest Ba9e& 7he rationale( !hich the court has acce$ted( is the
$rotection !etlands $ro"ide by absorbin+ and cleanin+ runoff&
8ederal government is responsi!le for 1--Q of maintenance costs
0ater .esources Fe$elopment Act of /"8C htt$'**e$!&senate&+o"*!rdaG/&$df
#EC& .41& I@BA@D ;A7ER;AD 7RA@#P=R7A7I=@& 3a6 C=@#7R%C7I=@&2=ne-half of the costs of construction2 3.6 of
each $ro-ect authorized by title III of this Act( 316 of the $ro-ect authorized by section ..4J3-6 of this Act( and 3J6 allocated to inland
na"i+ation for the $ro-ect authorized by section G?? of this Act( shall be $aid only from amounts a$$ro$riated from the
+eneral fund of the 7reasury& =ne-half of such costs shall be $aid only from amounts a$$ro$riated from the
Inland ;ater!ays 7rust >und& >or $ur$oses of this subsection( the term WWcontructionKK shall include $lannin+(
desi+nin+( en+ineerin+( sur"eyin+( the acHuisition of all lands( easements( and ri+hts-of-!ay necessary for the
$ro-ect( includin+ lands for dis$osal of dred+ed material( and relocations necessary for the $ro-ect& 3b6 =PERA7=@ A@D
AAI@7E@A@CE&27he >ederal share of the cost of o$eration and maintenance of any $ro-ect for na"i+ation on the
inland !ater!ays is .44 $ercent& 3c6 A%7H=RIRA7I=@# >R=A GE@ERAB >%@D&2Any >ederal res$onsibility 3.6 !ith res$ect
to a $ro-ect authorized by title III or section ..4J3-6( or 316 !ith res$ect to the $ortion of the $ro-ect authorized by section G?? allocated to
inland na"i+ation( !hich res$onsibility is not $ro"ided for in subsection 3a6 of this section shall be $aid only from amounts a$$ro$riated from
the +eneral fund of the 7reasury&
ACJ, has fi%ed its technical pro!lems and is continuing to improve
;arrison, 0/ (9oey, Nasville City :a!er, Ar6y Cor!s Ac%nowledges May Elood co66unication 2ailures, 00<)F<0/,
tt!"##nasvillecity!a!er$co6#content#city<news#ar6y<cor!s<ac%nowledges<6ay<2lood<co66unication<2ailures1
5ancoc% said te cor!s as now incor!orated a redundant syste6 to ensure Internet ca!a3ility
won7t 3e lost again$ Tecnology devices suc as cell !ones and wireless air cards are a 6ainstay today as well$ I76 a
!roud Blac%Berry carrier now, said Bo3 Sneed, water 6anager 2or te Nasville district$ We ave air cards, so tat will allow us to
co66unicate and gater data$ Cor!s o22icials said one o2 te 6ost critical issues during May7s 2lood was
insu22icient ris% co66unication wit te weater service$ Eor weater e&!erts to deliver accurate 2lood 2orecasts to te
!u3lic, tey need u!<to<te<6inute, relia3le data 2ro6 te cor!s$ Tat didn7t a!!en$ We ave a long<ter6 initiative to
wor% wit te 4S;S J4nited States ;eological SurveyK and te weater service to el! te6
develo! 2lood inundation 6a!!ing, wic is a critical ris% co66unication tool wit te !u3lic,
5ancoc% said$ Te cor!s and weater service also 2ailed to tecnical ite6s, wic so6eti6es !ut te two agencies on di22erent
!ages, cor!s o22icials said$ Tey contend tey are now u!dating te weater service on data
adCust6ents 6ore 2reMuently$ :ea3ody, wo eads te ;reat Ba%es and =io 8iver division, said =ld 5ic%ory >a67s
water level was ,$, inces 2ro6 e&ceeding its li6it during May7s 2lood$ I2 it ad to!!ed te da6, e said, te result would ave 3een
an e&traordinarily dangerous situation$ 5e said cor!s wor%ers !ut teir lives on te line, wor%ing in eavy
rain2all, to !revent overto!!ing$
)hen the Army Corps commits to a proBect" it will get done
4SACE 0) (4S A8M@ C=8:S =E EN;INEE8S, 4SACE TANES C=88ECTISE ACTI=N T= ;ET A :8=9ECT BACN =N
T8ACN, H#0F#0), tt!"##www$ta6$usace$ar6y$6il#ME>0)</H<0F$as!1
UCusto6ers donLt e&!ect you to 3e !er2ect$ Tey do e&!ect you to 2i& tings wen tey go
wrong$U <<>onald :orter, Britis Airways Wen te 4$S$ Ar6y Cor!s o2 Engineers co66its to
delivering a !roCect or service 2or a custo6er, it strives to co6!lete te wor% on ti6e, witin
3udget, and at a Muality standard tat te custo6er e&!ects$
The Corps has !een widely successful in 0ra7
Ni3ler, ,<)0<0) (9oan, 9ournalist 4S Ar6y Cor!s o2 engineers, Middle East >istrict, Ar6y Cor!s o2 Engineers continues
construction in IraM, tt!"##www$ar6y$6il#article#.)F/H#Ar6yOCor!sOo2OEngineersOcontinuesOconstructionOinOIraM#1
Toug its construction !rogra6 is a 2raction o2 wat it once was in IraM, te 4$S$ Ar6y Cor!s o2 Engineers
continues to 6anage GF*/ 6illion in !roCects tere to el! 3uild 2acilities 2or te sovereign
nation$ In seven years starting in )//H, te 4$S$ Ar6y Cor!s o2 Engineers, or 4SACE,
co6!leted 6ore tan *,/// !roCects in IraM wit a value o2 G.$. 3illion$ Te construction !rogra6 was
!art o2 te e22orts to secure a new and relia3le govern6ent 2or IraM$ Today, IraMLs govern6ent
and te 4$S$ enCoy 3ilateral relations 3ased on 6utual goals$ Te arrange6ent, %nown as te Strategic
Era6ewor% Agree6ent 2or a 8elationsi! o2 Eriendsi! and Coo!eration 3etween te 4nited States and te 8e!u3lic o2 IraM, was
designed to el! te IraMi !eo!le stand on teir own wile !rotecting 4$S$ interests, according to te 4$S$ E63assy<IraM$ 4SACE
o22icials said tey re6ain co66itted to delivering !roCects tat su!!ort te nationLs sovereignty troug te Middle East >istrictLs IraM
Area =22ice$ U=ur role is to deliver in2rastructure tat contri3utes to sta3ility and security,U said Bt$
Col$ Antony Mitcell, o22icer in carge, IraM Area =22ice$ Te !ri6ary custo6ers are te =22ice o2 Security Coo!eration<IraM,
or =SC<I, and te IraM Strategic :artnersi! =22iceP 3ot are !art o2 te 4$S$ E63assy<IraM$
AT States CP I1isasters Specific'
States fail in the conte%t of disaster planning
.owan 23R <ernard Ro!an is chair $rofessor and coordinator of $olitical science and international studies at Chica+o #tate %ni"ersity
Disaster mana+ement and federalism() 14.1 htt$'**!!!&9oreatimes&co&9r*!!!*ne!s*include*$rint&as$Une!sId0X..4?I.
7he same must be said for the %nited #tatesK $re$aration and ability to deal !ith natural disasters as a federal
system& Due to its $olitical +enesis( America is one of relati"ely fe! countries that $rosecute $olitics throu+h a system that defines and
distin+uishes authority for national( state( and local +o"ernments throu+h !ritten constitutions& Americans belie"e fer"ently in
9ee$in+ $o!er locally !hen it can be 9e$t locally and dele+atin+ $o!er to the federal or national +o"ernment
only !hen the ob-ect is one that meets constitutional limits& E"ery so often( a ne! leader comes alon+ !ho !ishes to
in"i+orate the federalist com$onents of our $olitical system& #uch is one of the dialectics of American $olitical life and history& Disaster
Reduction As !e a$$roach the .4th anni"ersary of the ;orld Conference on Disaster Reduction( it is instructi"e to remind oursel"es of its
fi"e stated $riorities for disaster mana+ement' .& Ensure that disaster ris9 reduction is a national and a local $riority !ith a
stron+ institutional basis for im$lementation& 1& Identify( assess and monitor disaster ris9s and enhance early !arnin+& J& %se
9no!led+e( inno"ation and education to build a culture of safety and resilience at all le"els& ?& Reduce the underlyin+ ris9 factors& 5&
#tren+then disaster $re$aredness for effecti"e res$onse at all le"els& I !ould ar+ue that the disaster $re$aredness( res$onse ca$acity( early
!arnin+ systems( and reduction of ris9 factors in the %nited #tates all lea"e much to be desired& In a $olitical system much more concerned
!ith anti-terrorism( immi+ration $olicy( health $olicy( and economic reco"ery( there is too little discussion of this sub-ect& In a $residential
election cycle no! enterin+ full s!in+( disaster mana+ement should be discussed as a matter of national security and national de"elo$ment
for this century& And all of these needs are only accentuated by the nature of our federal system of +o"ernment& As other essays in this series
ha"e elaborated( the conseHuences of human use and abuse of natural ecosystems( the under$ro"ision of resources and $lannin+( and the need
to inte+rate ris9 reduction and res$onse structures into economic de"elo$ment $riorities and $olicies are +oin+ to become more $rominent
$arts of +lobal $ublic discourse& 7here should be no o"erreaction or notion that the end-time is near( but there should be e"ery effort to
$rotect and $reser"e our $eo$les( lands( and infrastructure throu+h the a$$lication of $ublic and $ri"ate resources to disaster ris9 reduction
and mana+ement& 'he American fe)eral system is ill-equippe) to mana+e an) to re)uce the risks atten)in+
natural )isasters in its current confi+uration & It has failed to do so in the case of Hurricane Eatrina and other
recent cataclysms& It is time to nationalize further the security of our national borders so as to $ermit fe)eral
+o$ernment authority to su$er"ise the states in dealin+ !ith natural disasters N both res$onse and reco"ery
efforts and e"en more for ris9 reduction& @atureKs mo"ements Accordin+ to a recent re$ort( there are .1(?8I miles of
coastal borders in the states of the %nited #tates of America& 7here are thousands of additional miles of Great
Ba9es and connectin+ !ater!ays or coastlines& 7his constitutes a "ast stretch of territory that must be considered
if !e !ant to ta9e seriously the need to antici$ate natureKs mo"ements and limit the effects of natural disasters& If
!e !ish to dra! a $arallel to national security( the country already has nationalized much of the air safety mana+ement a$$aratus& 7his
ma9es sense +i"en that on any $articular day there are G4(444 or more commercial air mo"ements alone( not includin+ international fli+hts or
those of ci"il aircraft& ;hile fe! !ould Huestion the need for the %nited #tates +o"ernment N the national or federal
+o"ernment N to $rotect our s9ies and airs$ace and to secure it from enemies at home or from abroad( the same
lo+ic doesnKt $re"ail !ith res$ect to disaster $re"ention alon+ coasts that ha"e the same Huality( i&e& international
borders& >lorida and 7e0as are amon+ the most "ulnerable states in terms of disaster mana+ement& Aany of the other
areas more li9ely to e0$erience natural disasters are in the #outheast and south central sections of the country& 7hey also include the states
!ith the hi+hest $ercenta+es of land lyin+ in flood$lains& 7his conte0t creates a dis$ro$ortionate burden for these states( and
it is li9ely that current in"estments do not come close to meetin+ the needs in terms of forecastin+( limitin+
im$acts( and res$onse( relief( and reco"ery& It is time to nationalize our coastal !ater!ays and coastal borders so
that the $o!er of the nation and our $eo$le( both in terms of the federal +o"ernment and in terms of the centralization
of decision-ma9in+ and fundin+ that can rea$ economies of scale and brin+ uniform and systemic solutions to
common $roblems( may be brou+ht to bear& 7homas <ir9land and #arah ;aterman ha"e !ritten about the o"er-em$hasis on
homeland security and the relati"e de-$rioritization of non-terrorist threats such as natural disasters& Hurricane Eatrina !as much more of a
disaster than it needed to be because the federal +o"ernmentKs disaster mana+ement structure and $rocesses !ere left to relati"e ne+lect& #tate
and local counter$arts !ere !holly inadeHuate& <ir9land and ;aterman describe the current era in American federalism( relyin+ on 7im
Conlan( as one of o$$ortunistic federalism() !hich e0tends a mindset that see9s short-term benefit from federal dollars and attention to the
e0clusion of lon+er-term needs and coordination& 7oo many in this country continue thin9in+ of disaster $lannin+ and mana+ement as
somethin+ to be done !hen or after the unthin9able ha$$ens N too much more at that time alon+ !ith too much less in the years that $recede
disasters& 7his is an e0$ensi"e and dan+erous mindset& >iscal dilemmas Aany of the states( $erha$s most( are in dire fiscal
condition at this $ointS the effects of the first +reat recession of this century in the %nited #tates ha"e reached and
continue to mire the states in fiscal dilemmas& 0e cannot affor) the illusion that stan)in+ on opportunistic
fe)eralism will suffice for fulfillin+ the responsi#ilities of America;s +o$ernments to the people& 7he @ational
Res$onse >rame!or9( !hich remains the basic la! for or+anizin+ federal relationshi$s around disaster mana+ement( should be scra$$ed( or
at minimum re"isited and re"ised& #tate and local +o"ernments lac9 the ca$acity to do the hea"y liftin+ as to natural
disaster $lannin+ and res$onse in this day and a+e( and the costs and reHuirements !ill only increase this century&
As <ir9land and ;atermann also ha"e noted( !hen Hurricane Eatrina occurred( and in its aftermath( the chief sca$e+oat
and $arty to blame !as the federal +o"ernment& 7his $oints to an underlyin+ $erce$tion that the miti+ation of and $re$aration
a+ainst natural disasters is a national +o"ernmental issue( not one to be left to the "a+aries of state and local $ro"ision& <ut as yet( AmericaKs
$olicyma9ers and the $ublic ha"e not demanded associated actions and chan+e& >ederalism should be in"i+orated !ith a stron+er
national com$onent( but it should not be eliminated& 'he Army Corps of 1n+ineers is +enerally welcome) to
facilitate the )e$elopment of infrastructure pro,ects throu+hout the country & 7hin9 of the benefits in terms
of -obs that disaster mana+ement industries could $ro"ide( !or9in+ in tandem !ith the Cor$s and other a+encies of
the federal( state( and local +o"ernments& >ollo!in+ Richard ;eitz of the Hudson Institute( there !ill al!ays be a role for non-+o"ernmental
or+anizations( $ublic-and $ri"ate $artnershi$s( and the de"elo$ment of a national culture around disaster mana+ement& Disaster mana+ement
a$$aratus <ut !hereas ;eitz is content to modify the disaster mana+ement a$$aratus !ith re+ional structures and la! enforcement
information sharin+ established "ia the De$artment of Homeland #ecurity( I thin9 this a$$roach does not +o far enou+h& Re+ional
institutions such as those for the >ederal Reser"e( national defense( and courts are fine( #ut the principal center for policy
)e$elopment an) implementation nee)s to #e re-$ectore) to a sin+le a+ency or $olicy $latform under the (!*!
Con+ress ( this disaster mana+ement is more a$$ro$riately considered a $art of national security&
States fail
Doomis /2 Eri9 Boomis is a $rofessor of labor and en"ironmental history 7he Disincenti"e for @atural Disaster Pre$aration() Ba!yers(
Guns and Aoney >eb 5 le0is
Interestin+ 7imes article on the battle bet!een the %&#& Army Cor$s of En+ineers and areas of Illinois o"er
u$+radin+ le"ees in the !a9e of Hurricane Eatrina& Essentially( the Army Cor$s says the le"ees are not u$ to
snuff and the communities say it is too e0$ensi"e to u$+rade them& In the decentralized nature of American
+o"ernment( itOs easy to see !hy e0$ensi"e infrastructure $ro-ects donOt +et done and thus disasters stri9e the
same areas a+ain and a+ain& 7he Army Cor$s too9 tons of heat after the le"ees failed in @e! =rleans durin+
Hurricane Eatrina& #o( realizin+ that $re"ious standards !ere not u$ to snuff( $articularly in lo!-lyin+ easily flooded areas
li9e @e! =rleans and the Illinois*Aissouri ban9s of the Aississi$$i( it raised standards& It !as only .IIJ !hen this area flooded
horriblyS smaller floods ta9e $lace freHuently& It ma9es sense to u$+rade the le"ees& <ut because the federal +o"ernment
doesnOt ha"e the authority or the money to -ust ta9e care of this itself( it has to rely on local communities& @o
one !ants to remember the last natural disaster& 7hey !ant to $ut their head in the sand( not $ay the ta0es to
fi0 the le"ees( and then yell !hen they are flooded a+ain& At the same time( this area of Illinois is "ery $oor&
<ecause !e rely on local ta0es for many local ser"ices( !e as9 $oor $eo$le to $rotect themsel"es a+ainst
floodin+ and they -ust canOt do it !ithout real hardshi$s& It !ould be ideal to centralize these re$airs in federal
hands and $ro"ide the ta0 base for the Army Cor$s to fi0 the $roblem itself& <ut thatOs ob"iously not ha$$enin+&

,0S R 2ormal Ceans
,0S are normal means for the Army Corps of ,ngineers
4SACE 0) (4S ar6y cor!s o2 engineers, Eort Wort >istrict, Endangered s!ecies lin%s, 0#F0#0),
tt!"##www$sw2$usace$ar6y$6il#!u3data#environ#regulatory#endangereds!ecies$as!1
Te Endangered S!ecies Act (ESA1 declares te intention o2 te Congress to conserve treatened and endangered s!ecies and te
ecosyste6s an wic tose s!ecies de!end$ Te ESA reMuires tat 2ederal agencies, in consultation wit
te 4$S$ Eis and Wildli2e Service (4SEWS1 and te National Marine Eiseries Service (NMES1,
use teir autorities in 2urterance o2 its !ur!oses 3y carrying out !rogra6s 2or te conservation
o2 endangered or treatened s!ecies, and 3y ta%ing suc action necessary to ensure tat any action autoriAed,
2unded, or carried out 3y te Agency is not li%ely to Ceo!ardiAe te continued e&istence o2 suc endangered or treatened s!ecies or
result in te destruction or adverse 6odi2ication o2 a3itat o2 suc s!ecies wic is deter6ined 3y te Secretary o2 te Interior or
Co66erce, as a!!ro!riate, to 3e critical$ I2 a !ro!osed !roCect includes te discarge o2 dredged or 2ill
6aterial into waters o2 te 4nited States, and#or wor% in, or a22ecting, a naviga3le water o2 te
4nited States, and i2 2ederally<listed treatened or endangered s!ecies, or its critical a3itat,
6ay 3e a22ected 3y te !ro!osed activity, ten te 4SACE 6ust consult wit te a!!ro!riate
2ederal agency$ Te 4SACE 6ust consider all te direct and indirect i6!acts o2 te !ro!osed
!roCect on te 2ederally<listed s!ecies or its critical a3itat$ Eor te !ur!ose o2 evaluating >e!art6ent o2 te Ar6y a!!lications, te
sco!e o2 analysis under te ESA is te !er6it area, wic includes all waters o2 te 4nited States a22ected 3y activities associated
wit te !roCect, as well as any additional area o2 non<waters o2 te 4nited States in te i66ediate vicinity o2, directly associated
wit, and#or a22ected 3y, activities in waters o2 te 4nited States were tere is su22icient Eederal control and res!onsi3ility$
TTCoal ,%ports AadTT
TTChinese /enewa!lesTT
12C
China will mae the transition to renewa!les
Tu" 1#$
(Nevin 9ianCun, Senior associate in te Carnegie Energy and Cli6ate
:rogra6, were e leads Carnegie7s wor% on Cina7s energy and cli6ate !olicies, 4nderstanding Cina7s 8ising Coal I6!orts,
tt!"##www$carnegieendow6ent$org#2iles#cinaOcoal$!d2 '
Several ey trends are liely to drive investment patterns in the Chinese power sector
going forward& >iven the Chinese government+s emphasis on energy conservation and
air pollution control (e$g$, S=) e6issions1 during te 00t E@: !eriod and the preference for domestically
made e7uipment, ca!acity o2 large<scale su!ercritical and ultra<su!ercritical (4SC1 !ower !lants has e%panded
rapidly in China & This trend is liely to continue& >uring te 0)t E@: !eriod, energy conservation
and air pollution regulations have !een continuously tightened" and a 1NQ >*>
emissions intensity reduction target was also introduced$ As a result" lower car!on fuels
including renewa!les Iespecially wind'" nuclear" and natural gas are planned to grow
su!stantially in the coming decades, as sown in Ta3le F<F$
8lood of US coal in China would drive the price of coal down and increase
Chinese coal consumption
Plumer" 6?1$
(Brad, EAra Nelins, Wasington :ost Sta22 Writer, 5ow te 4$S$ could in2luence Cina7s coal a3its I wit e&!orts,
tt!"##www$wasington!ost$co6#3logs#eAra<%lein#!ost#can<te<united<states<in2luence<cinas<coal<
a3its#)/0)#/*#/0#gI\AgM4!uTO3log$t6l1
Still, as a recent and 2ascinating re!ort (!d21 2ro6 te Carnegie Endow6ent e&!lains, Chinese coal imports are liely
to grow enormously in the coming years$ Eor one, Chinese coal use has !een growing at a
rate of nearly < percent each year& And China+s domestic production can+t eep pace"
thans to railroad and shipping !ottlenecs from mining centers in Shan%i" Shaan%i and
0nner Congolia provinces& Wat7s 6ore, te Carnegie re!ort notes, the Chinese government is
!ecoming increasingly sensitive to the ecological damage wrought !y domestic coal
mining I as well as to te growing nu63er o2 !rotests over unsa2e 6ining conditions$ According to o22icial statistics, ,,/)+
Cinese 6iners died in )//H, toug te real nu63er is !ro3a3ly iger$ Tere are real costs to ra6!ing u! !roduction in Cina$ As
a result, China will liely try to import a growing share of its coal in the coming years$ Muc o2
tat will li%ely co6e 2ro6 Indonesia and Australia, since Cina7s i6!ort in2rastructure is geared toward tose two regions$ But 6any
analysts e&!ect the United States to play an increasingly crucial role in coming years& ITo
date" the U&S& has !een supplying China with Bust small amounts of coing coal" which is
used for iron and steel production and which is less readily availa!le in China$1 And if
American coal starts pouring into China" that will help eep prices down & 0f that happens"
Chinese power plants and factories will !urn even more coal and use the stuff less
efficiently than they otherwise would$ ;rist7s >avid 8o3erts !oints to a recent !a!er (!d21 3y To6as M$ :ower, a
2or6er econo6ics !ro2essor at te 4niversity o2 Montana, 2inding tat Cinese coal a3its are igly sensitive to !rices"
Jpening the Asian import maret to dramatic increases in U&S& coal will drive down coal
prices in that maret$ Several e6!irical studies of energy in China have demonstrated that coal
consumption is highly sensitive to cost& =ne recent study 2ound tat a 1- percent reduction in coal
cost would result in a 1# percent increase in coal consumption& Anoter 2ound tat over al2 o2 te
gain in Cina7s energy intensity i6!rove6ent during te 0--/s was a res!onse to !rices$ In oter words, coal e%ports will
mean cheaper coal in Asia" and cheaper coal means more coal will !e !urned tan would
oterwise 3e te case
Cheaper coal stops China transition to renewa!les
0A1" 6?1-$
(Investors Business >aily, Coal E&!orts Boo6P ;reens Set 5urdles, tt!"##2inance$yaoo$co6#news#coal<e&!orts<3oo6<greens<set<
)0)*//H)+$t6l'
Critics also say e%ports would !oost coal and greenhouse gases !y maing coal
cheaper$ A )/00 re!ort 3y te Sigtline Institute, a Seattle<3ased advocacy grou!, concludes tat te :aci2ic Nortwest coal
port proBects would" O undermine China@s progress towards more efficient power
generation and usage& Te re!ortLs autor, econo6ist To6as :ower, says China has Oenormous room
for improvementO in energy efficiency and does cut !ac on consumption if energy costs
rise& OThey@re !ehaving the same way that Americans do and ,uropeans do in reacting to
price "U e says$ Stan2ordLs Morse agrees tat cheaper coal can lead to more consumption !ut not in
China" where" he says" Odemand for coal is inelastic right now and most state$owned
generators are so insensitive to price they have !een !urning coal at a loss for the last
three years$
China is the !iggest contri!utor to glo!al warming$ failure to cut emissions
accelerates the warming and ills international efforts to limit
emissions
Aradsher" 1-$
(Neit, N@T, Energy and Environ6ent, Cina7s Energy 4se Treatens ;oals on War6ing,
tt!"##www$nyti6es$co6#)/0/#/*#/+#3usiness#energy<environ6ent#/+energy$t6l'!agewanted(all'
5=N; N=N; I ,ven as China has set am!itious goals for itself in clean$energy production
and reduction of glo!al warming gases" the country+s surging demand for power from oil
and coal has led to the largest si%$month increase in the tonnage of human generated
greenhouse gases ever !y a single country& Cina7s leaders are so concerned a3out rising energy use and
declining energy e22iciency tat te ca3inet eld a s!ecial 6eeting tis wee% to discuss te !ro3le6, according to a state6ent
Tursday 2ro6 te 6inistry o2 industry and in2or6ation tecnology$ Coal<2ired electricity and oil sales eac cli63ed )H !ercent in te
2irst Muarter 2ro6 a year earlier, on te eels o2 si6ilar increases in te 2ourt Muarter :re6ier Wen 9ia3ao !ro6ised touger !olicies
to en2orce energy conservation, including a 3an on govern6ent a!!roval o2 any new !roCects 3y co6!anies tat 2ailed to eli6inate
ine22icient ca!acity, te 6inistry said$ Mr$ Wen also said tat Cina ad to 2ind a way to 6eet te target in its current 2ive<year !lan o2
a )/ !ercent i6!rove6ent in energy e22iciency$ We can never 3rea% our !ledge, stagger our resolution or wea%en our e22orts, no
6atter ow di22icult it is, Mr$ Wen said$ Western e&!erts say it will 3e ard to 6eet te target, 3ut tat Cina7s leaders see6
deter6ined$ 2o country of this siFe has seen energy demand grow this fast !efore in
a!solute terms" and those who are most concerned a!out this are the Chinese
themselves"; said 9onatan Sinton, te Cina !rogra6 6anager at te International Energy Agency in :aris$ China has
!een the world+s largest emitter of greenhouse gases each year since #--<" leading the
United States !y an ever$widening margin& A failure !y China to meet its own energy
efficiency targets would !e a !ig set!ac for international efforts to limit such emissions&
0t+s real and causes e%tinction
1,0A,K PN ITerry K& 1ei!el" professor of 0/ at 2ational )ar College" 8oreign Affairs Strategy" (ConclusionL American
8oreign Affairs Strategy Today Anthropogenic caused !y CJ#;'
Einally, tere is one 6aCor e&istential treat to A6erican security (as well as !ros!erity1 o2 a nonviolent nature, wic,
toug 2ar in te 2uture, de6ands urgent action$ It is te treat o2 glo3al war6ing to te sta3ility o2 te cli6ate
u!on wic all eartly li2e de!ends$ Scientists worldwide ave 3een o3serving te gatering o2
tis treat 2or tree decades now, and what was once a mere possi!ility has passed troug
!ro3a3ility to near certainty& Indeed not one of more than .-- articles on climate change
pu!lished in refereed scientific Bournals 2ro6 0--F to )//F dou3ted tat antro!ogenic
war6ing is occurring$ In legiti6ate scienti2ic circles, writes EliAa3et Nol3ert, it is virtually impossi!le to find
evidence of disagreement over te 2unda6entals o2 glo3al war6ing $ Evidence 2ro6 a vast
international scienti2ic 6onitoring e22ort accu6ulates al6ost wee%ly, as tis sa6!le o2
news!a!er re!orts sows" an international !anel !redicts 3rutal drougts, 2loods and violent
stor6s across te !lanet over te ne&t centuryP cli6ate cange could literally alter ocean currents, wi!e away uge !ortions o2 Al!ine Snowca!s and
aid te s!read o2 colera and 6alariaP glaciers in te Antarctic and in ;reenland are 6elting 6uc 2aster tan e&!ected, and]worldwide, !lants are 3loo6ing several days
earlier tan a decade agoP rising sea te6!eratures ave 3een acco6!anied 3y a signi2icant glo3al increase in te 6ost destructive urricanesP NASA scientists ave
concluded 2ro6 direct te6!erature 6easure6ents tat )//* was te ottest year on record, wit 0--. a close secondP Eart7s war6ing cli6ate is esti6ated to contri3ute to
6ore tan 0*/,/// deats and * 6illion illnesses eac year as disease s!readsP wides!read 3leacing 2ro6 Te&as to Trinidad]%illed 3road swats o2 corals due to a )<
degree rise in sea te6!eratures$ Te world is slowly disintegrating, concluded Inuit unter Noa MetuM, wo lives F/ 6iles 2ro6 te Arctic Circle$ Tey call it cli6ate
cange]3ut we Cust call it 3rea%ing u!$ Ero6 te 2ounding o2 te 2irst cities so6e ,,/// years ago until te 3eginning o2 te industrial revolution, car3on dio&ide levels in te
at6os!ere re6ained relatively constant at a3out )./ !arts !er 6illion (!!61$ At !resent tey are accelerating toward H// !!6, and 3y )/*/ tey will reac *// !!6, a3out
dou3le !re<industrial levels$ 4n2ortunately, at6os!eric C=) lasts a3out a century, so tere is no way i66ediately to reduce levels, only to slow teir increase, we are tus in
2or signi2icant glo3al war6ingP te only de3ate is ow 6uc and ow serous te e22ects will 3e$ As te news!a!er stories Muoted a3ove sow, we are already e&!eriencing te
e22ects o2 0<) degree war6ing in 6ore violent stor6s, s!read o2 disease, 6ass die o22s o2 !lants and ani6als , s!ecies e&tinction, and
treatened inundation o2 low<lying countries li%e te :aci2ic nation o2 Niri3ati and te Neterlands at a war6ing o2 *
degrees or less te ;reenland and West Antarctic ice seets could disintegrate, leading to a sea level o2 rise o2 )/
2eet tat would cover Nort Carolina7s outer 3an%s, swa6! te soutern tird o2 Elorida, and
inundate Manattan u! to te 6iddle o2 ;reenwic Sillage$ Anoter catastro!ic e22ect would 3e te colla!se o2
te Atlantic ter6oaline circulation tat %ee!s te winter weater in Euro!e 2ar war6er tan its latitude would
oterwise allow$ Econo6ist Willia6 Cline once esti6ated te da6age to te 4nited States alone 2ro6 6oderate levels o2 war6ing at
0<, !ercent o2 ;>: annuallyP severe war6ing could cost 0F<), !ercent o2 ;>:$ But te 6ost 2rigtening scenario is
runaway greenouse war6ing, 3ased on !ositive 2eed3ac% 2ro6 te 3uildu! o2 water va!or in
te at6os!ere tat is 3ot caused 3y and causes otter sur2ace te6!eratures$ :ast ice age
transitions, associated wit only *<0/ degree canges in average glo3al te6!eratures, too% !lace in Cust decades, even toug no
one was ten !ouring ever<increasing a6ounts o2 car3on into te at6os!ere$ Eaced wit tis s!ecter, te 3est one can conclude is
tat u6an%ind7s continuing enance6ent o2 te natural greenouse e22ect is a%in to !laying 8ussian roulette wit te eart7s
cli6ate and u6anity7s li2e su!!ort syste6$ At worst, says !ysics !ro2essor Marty 5o22ert o2 New @or% 4niversity, we7re Cust
going to 3urn everyting u!P we7re going to et te at6os!ere to te te6!erature it was in te Cretaceous wen tere
were crocodiles at te !oles, and ten everyting will colla!se$ >uring te Cold War, astrono6er Carl Sagan !o!ulariAed
a teory o2 nuclear winter to descri3e ow a ter6onuclear war 3etween te 4ntied States and te Soviet 4nion would not only
destroy 3ot countries 3ut !ossi3le end li2e on tis !lanet$ >lo!al warming is the post$Cold )ar era+s
e7uivalent of nuclear winter at least as serious and considera!ly !etter supported
scientifically$ =ver te long run it !uts dangers 2or6 terroris6 and traditional 6ilitary callenges to
shame$ It is a treat not only to te security and !ros!erity to te 4nited States, 3ut !otentially
to te continued e&istence o2 li2e on tis !lanet $
TTUni7ueness
#2C Uni7ueness >eneric
China will mae the transition and stop using coal in the s7uo
CcDillop" 1#$
(Eor6er cie2 !olicy analyst, >ivision A :olicy, >; ^SII Energy, Euro!ean Co66ission, re tan F/ years e&!erience in te energy,
econo6ic and 2inance do6ains$ Trained at Bondon 4N7s 4niversity College, e as ad s!ecially long e&!erience o2 energy !olicy,
!roCect ad6inistration and te develo!6ent and 2inancing o2 alternate energy$ Tis included is role o2 in<ouse E&!ert on :olicy
and :rogra66ing at te >; ^SII<Energy o2 te Euro!ean Co66ission, >irector o2 In2or6ation o2 te =A:EC tecnology trans2er
su3sidiary, A8EC and researcer 2or 4N agencies including te IB=, Andrew, Marc )H, Cina 8eaces :ea% Coal,
tt!"##sa6cee%ong$3logs!ot$co6#)/0)#/F#cina<reaces<!ea%<oil$t6l'
Coal presently supplies a!out <NQ of China@s commercial energy !ut its National Energy
Ad6inistration, )0 Marc, released its 2ive<year )/00<)/0, plan for Chinese coal" which features a near$term
pea" and then decline of coal in the energy economy& The world+s largest user and
producer of coal intends to limit domestic output and consumption of the commodity !y
#-1N, to reduce pollution and to cur! reliance on this fuel" which also faces a rising
num!er of supply pro!lems from reserve depletion to coal import costs" infrastructure
and transport needs$ The 2,A announced that coal demand growth will !e restricted to
Fero, and consu6!tion to a 6a&i6u6 o2 around F$- to H$0 3illion 6etric tons a year 3y or 3e2ore )/0+$ CinaLs coal consu6!tion,
including a growing a6ount o2 i6!orts esti6ated at a3out )* 6illion tons tis year 3ut 2orecast to increase to )// 6illion tons a year
3y )/0*, totaled a3out F$+* 3illion tons in )/00$ At tat rate and 2or CinaLs esti6ated 0$FF 3illion !o!ulation, tis is a consu6!tion
rate o2 )$. tons !er !erson a year, wic we can co6!are wit te coal consu6!tion !ea%s attained 3y early industrialiAing Euro!e
in te late 0-t and early )/t centuries$ In 0-0F 2or e&a6!le, te 4N attained its all<ti6e coal !ea% at a3out )0* 6illion tons a year$
Eor its 0-0F !o!ulation tis was close to * tons !er !erson a year$ Current 4S coal consu6!tion o2 al6ost e&actly 0 3illion tons !er
year yields a3out F$F tons o2 coal !er !erson eac year$ China is the world+s !iggest producer of car!on
emissions and coal$related pollutants" and its authorities intend cutting !oth of these !y
as much as 1NQ per unit of >1P through the period to #-1N" 3ut its coal !at re6ains loc%ed<on to its
econo6ic growt$ Trougout te !eriod since )///, Cinese coal de6and growt as trac%ed te econo6y wit a 0<2or<0
relationsi!, resulting in coal de6and growing at 6ore tan .X a year, dou3ling te nationLs need 2or coal every + years$ Te 6ain
!ro3le6 is tere2ore CinaLs vast coal energy<de!endence, and growing coal i6!ort de!endence co6!ara3le to te =EC> grou!Ls
eavy de!endence on declining and ig<!riced su!!lies o2 i6!orted oil$
China will mae the transition coal is hitting a limit
CcDillop" 1#$
(Eor6er cie2 !olicy analyst, >ivision A :olicy, >; ^SII Energy, Euro!ean Co66ission, re tan F/ years e&!erience in te energy,
econo6ic and 2inance do6ains$ Trained at Bondon 4N7s 4niversity College, e as ad s!ecially long e&!erience o2 energy !olicy,
!roCect ad6inistration and te develo!6ent and 2inancing o2 alternate energy$ Tis included is role o2 in<ouse E&!ert on :olicy
and :rogra66ing at te >; ^SII<Energy o2 te Euro!ean Co66ission, >irector o2 In2or6ation o2 te =A:EC tecnology trans2er
su3sidiary, A8EC and researcer 2or 4N agencies including te IB=, Andrew, Marc )H, Cina 8eaces :ea% Coal,
tt!"##sa6cee%ong$3logs!ot$co6#)/0)#/F#cina<reaces<!ea%<oil$t6l'
China@s coal demand growth will definitely slow" and reach a set limit" not only !ecause
of environmental concerns !ut also !ecause of China@s value$added and technology$
!ased industrial and economic strategy$ Coal re6ains cea!, is 3asic to iron and steel
!roduction, and 2or electricity !roduction, 3ut as noting li%e te 2le&i3ility, ease o2 use and
lower environ6ental i6!act o2 oil and gas energy$ 5owever, due to China@s massive
dependence on coal" achieving Fero growth for coal !y or !efore #-1N is a difficult goal
unless the government su!stantially trims economic growth and accelerates its program
for phasing out energy$intensive industries, wic are ard to reconcile$
China is maing the switch to renewa!les
CcDillop" 1#$
(Eor6er cie2 !olicy analyst, >ivision A :olicy, >; ^SII Energy, Euro!ean Co66ission, re tan F/ years e&!erience in te energy,
econo6ic and 2inance do6ains$ Trained at Bondon 4N7s 4niversity College, e as ad s!ecially long e&!erience o2 energy !olicy,
!roCect ad6inistration and te develo!6ent and 2inancing o2 alternate energy$ Tis included is role o2 in<ouse E&!ert on :olicy
and :rogra66ing at te >; ^SII<Energy o2 te Euro!ean Co66ission, >irector o2 In2or6ation o2 te =A:EC tecnology trans2er
su3sidiary, A8EC and researcer 2or 4N agencies including te IB=, Andrew, Marc )H, Cina 8eaces :ea% Coal,
tt!"##sa6cee%ong$3logs!ot$co6#)/0)#/F#cina<reaces<!ea%<oil$t6l'
>es!ite te Cinese target o2 cutting te energy intensity o2 its ;>: 3y 0+X over * years, coal de6and growt as 3een running at
.X or 6ore, !er year, and tis sets te Uenergy ga!U 2or non<coal alternatives at around :-- million tons a year
of coal" e7uivalent to 1&6 !illion !arrels of oil energy" !y or !efore #-1N& /eplacing this
-&: CTC, Itons coal e7uivalent' with either gas or oil will have maBor impacts on world
energy trades" leaving the green energy and energy conservation option as a maBor
rational choice for Chinese planners&
#2C Uni7ueness /enewa!les >eneric
China will mae the transition to renewa!les
Tu" 1#$
(Nevin 9ianCun, Senior associate in te Carnegie Energy and Cli6ate
:rogra6, were e leads Carnegie7s wor% on Cina7s energy and cli6ate !olicies, 4nderstanding Cina7s 8ising Coal I6!orts,
tt!"##www$carnegieendow6ent$org#2iles#cinaOcoal$!d2 '
Several ey trends are liely to drive investment patterns in the Chinese power sector
going forward& >iven the Chinese government+s emphasis on energy conservation and
air pollution control (e$g$, S=) e6issions1 during te 00t E@: !eriod and the preference for domestically
made e7uipment, ca!acity o2 large<scale su!ercritical and ultra<su!ercritical (4SC1 !ower !lants has e%panded
rapidly in China & This trend is liely to continue& >uring te 0)t E@: !eriod, energy conservation
and air pollution regulations have !een continuously tightened" and a 1NQ >*>
emissions intensity reduction target was also introduced$ As a result" lower car!on fuels
including renewa!les Iespecially wind'" nuclear" and natural gas are planned to grow
su!stantially in the coming decades, as sown in Ta3le F<F$
China will mae the transition to renewa!les
Uu and 1ufree" 6?#5$
(Wan ^u and >on >ur2ree, 8euters, Cina to s!end G)+ 3illion on e6ission cuts, renewa3les,
tt!"##www$reuters$co6#article#)/0)#/*#)H#us<cina<energy<id4SB8E.HN0)C)/0)/*)H'
(8euters1 < China@s central government plans to spend 1N- !illion yuan IM#N !illion' this year
to promote energy conservation" emission reductions and renewa!le energy, the Cinistry
of 8inance said in a statement on its we3site on Tursday$ The ministry said China plans to
promote more use of energy$saving products and low or no$emission power generation
such as solar and wind& 0t also wants to accelerate the development of renewa!le energy"
as well as energy$saving technologies" suc as electric and y3rid cars$ Cina is te worldLs 3iggest e6itter o2
car3on dio&ide (C=)1, 2ollowed 3y te 4nited States$ A re!ort 3y te International Energy Agency (IEA1 on Tursday said China
spurred a Bump in glo!al CJ# emissions to their highest ever recorded level in #-11"
offsetting falls in the United States and ,urope$ 5owever, its C=) e6issions !er unit o2 ;>:, or its car3on
intensity, 2ell 3y 0* !ercent 3etween )//* and )/00, te IEA said, suggesting te worldLs second<largest econo6y was 2inding less
car3on<consu6ing ways to 2uel growt$ Bonger ter6, China is targeting cuts to its #-#- greenhouse gas
emissions !y 5-$56 percent compared with #--: levels and aims to !oost its use of
renewa!le energy to 16 percent of overall energy consumption& Negotiators 2ro6 over 0./ nations
are 6eeting in Bonn, ;er6any, until Eriday to wor% towards getting a new glo3al cli6ate !act signed 3y )/0*$ Te ai6 is to ensure
a63itious e6issions cuts are 6ade a2ter te Nyoto :rotocol e&!ires at te end o2 tis year$
China will mae transition to renewa!les
Cartina" 11$
(Micael, 8euters, Now Cina to !ro3e 4$S$ renewa3le energy su!!ort, tt!"##www$reuters$co6#article#)/00#00#)*#us<cina<usa<
energy<id4ST8E+A=/*I)/0000)*'
I/euters' $ China on Eriday announced an investigation into government policy and
su!sidy support for renewa!le energy, wee%s after the United States decided to pro!e sales
of Chinese$made solar panels& The announcement !y the Commerce Cinistry also comes
after China@s solar industry association said on Tuesday tat Cinese solar co6!anies 6ay as% BeiCing to
launc an anti<du6!ing and su3sidy !ro3e into i6!orts o2 4$S$ !olysilicon, te raw 6aterial used to 6a%e solar cells$
Chinas coal consumption is unsustaina!le they will mae the transition
to other forms of alternative energy
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
China is one of the world+s fastest growing countries in multiple aspects& China
possesses enormous potential for the development of renewa!le energy $ The
government has recently set targets to !e reached !y #-1- and #-#- for installed
generating capacity& The two main sources of renewa!le energy for China will !e from
hydropower and wind power& *ydropower (Cina accounts 2or 0)X o2 world ydro!ower1 is e%pected to
reach a capacity of 1.- >) !y #-1- and :-- >) !y #-#-$ )ind" the other large source of
renewa!le energy, is e&!ected to reac 0/ ;W 3y )/0/ and F/ ;W 3y )/)/$ Aiomass is e%pected to reach
a capacity of 6&6 >) !y #-1- and :- >) !y #-#-$ Solar is e%pected to reach :-- C) !y
#-1- and 1&= >) !y #-#-$ Tese are reasona3le goals 2or Cina, 3ut tere still re6ains 6ore !otential 2or te country$
This potential is against a !acdrop of significant need for renewa!les$ In )//,, China
!ecame the world+s largest polluter passing the US" emitting <"#-- million tons of car!on
dio%ide$ According to te Energy In2or6ation Agency (EIA1, in )//H" China accounted for 1NQ of world total
car!on dio%ide emissions" with an e%pected increase to 5-Q of the world total !etween
#--6 and #-:-" if current energy trends continue&
Cina will 6a%e te transition to renewa3le energy
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
0n China+s 1-th five$year plan" it mapped out goals to increase its installed capacity in
several different sectors of renewa!le energy $ )ithin this plan" they wanted to increase
annual solar hot water heating to 11 million s7uare meters" while also increasing
production capacity of solar cells to a cumulative 6: C)$ 0n the wind sector" it planned to
increase installed capacity to 1&# >)& 0t planned to increase !ioenergy to supply # !illion
s7uare meters of fuel& 0n order to achieve some of these goals in #--:" the government
passed the /enewa!le ,nergy Promotion Kaw& 0ncentive policies in the law were
structured to encourage development of renewa!le technologies while providing maret
opportunities for renewa!le energy companies in order to allow local governments"
companies and individuals to !oth promote and utiliFe renewa!le energy#5 $ Jverall" the
1-th five year plan was successful in promoting renewa!le energy" with installed
capacity increasing almost #6Q during the time period& As o2 )//+, ydroelectric accounted
2or )/$+X o2 total renewa3le energy ca!acity, wile nuclear accounted for 1&#Q and
geothermal?solar?wind?!iomass contri!uted Bust -&6Q& Conventional thermal" primarily
coal" remained the largest source of energy in China" contri!uting NN&<Q of the installed
capacity& There still remains an enormous potential of untapped renewa!le resources in
the geothermal" solar" wind and !iomass sectors$
#2C Uni7ueness /enewa!les *ydropower
China is trying to mae the transition to hydropower
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
China is a world leader in hydropower development" in terms of !oth proBect siFe and
generating capacity, with the world+s largest hydropower station along the 9angtFe
/iver& *ydropower remains the government+s top priority in developing renewa!le
energy" !ecause the technology is well developed" and China is relatively e%perienced in
the area& Wile Cina7s goal re6ains at F// ;W 3y )/)/, te World Watc Institute !roCects tat China has a
potential of 6-- >) of generating capacity
China will develop hydropower
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
*ydropower China is a world leader in hydropower development" in terms of proBect siFe
and capacity" with the world+s largest hydropower station located along the 9angtFe
/iver$ In )//*, Cina ad 00+ ;W o2 installed ca!acity wit te a3ove<6entioned goal o2 F// ;W 3y )/F/$ Te Worldwatc
Institute clai6s tat Cina as a !otential o2 *// ;W o2 ydro!ower ca!acityFH $ Along with nuclear and wind" hydro
seems to !e the governments top priority for the country+s energy agenda !ecause ( the
technology is mature" and China has relatively rich e%perience in this area" along with a
fairly well developed domestic industry; F* Cina7s !ower2ul water resources lay 6ainly in te underdevelo!ed
west wit te largest de6and 2or electricity situated along te coastal east$ Te 6aCority o2 Cina7s water!ower resources lie in
Sicuan, Ti3et and @unnan, were te @angtAe 3egins in Ti3et and runs troug SicuanP te :earl 8iver 3egins in @unnanF, $
Cina currently as a!!ro&i6ately * da6s in o!eration wit generating ca!acity ranging 2ro6 +,/ MW to ))$* ;W, 6ost o2 te6
located in te Sicuan and @unnan area$ Tere are currently around 00 da6s under construction, all wit co6!letion dates set
3e2ore )/)/F+ & China has done very well in tapping most of its maBor waterways for
hydropower and has little capacity left to e%ploit&
#2C Uni7ueness /enewa!les *ydroelectricity
China will mae the transition to hydro$electricity they have the a!ility to
do it
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
*ydro electricity is !y far China+s largest supplier of renewa!le energy& In )//+, tey ad an
installed ca!acity o2 00. ;W and generated H)F 3illion Nw5)* & China has grown significantly in the amount
of hydro electricity it produces " accounting for 15Q of the world+s total hydro production $
Te Tree ;orges >a6 is now te largest ydro!ower station in te world wit an 0.$) ;W rating$ According to te Energy
In2or6ation Agency, in )//+ China had almost 5:- !illion ilowatt hours of hydropower generation
and consumed the same amount" with an installed capacity of 1#=&6 >)& Studies esti6ate tat
Cina has an e%ploita!le capacity of 6-- million ilowatt hours" yet only has #6Q of that
actually installed#< $ Two o2 te largest recent ydroelectric !roCects are te Tree ;orges >a6 located along te @angtAe
8iver wit a total generating ca!acity o2 0.$) ;WP te oter is te along te @ellow 8iver wit a generating ca!acity o2 0*$. ;W)+
#2C Uni7ueness /enewa!les )ind Power
China is trying to mae the transition to wind power
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
)ind is e%pected to !ecome China+s second largest source of renewa!le energy in
China$ Since te 2irst wind 2ar6 !roCect in 0--/, China has seen considera!le increase of installed
generating capacity and is e%pected to dou!le this capacity in #--.$ Wile te current goal re6ains
at F/ ;W 3y )/)/, te 2ational /enewa!le ,nergy Ka!oratory of the Chinese Academy of
Ceteorological Sciences estimates that China has a potential of #:6 >) of generating
capacity on mainland China" with larger potential offshore& Te largest wind resources !otential lies in
Inner Mongolia
China will push wind$power development solves Bo!s
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
Along with hydropower" wind power has a huge opportunity to !ecome a leading source
of renewa!le energy in China & Te Chinese government has placed a significant emphasis
on developing China+s wind maret and its potential generating capacity" already
increasing its predicted generating capacity 2or )/)/ to F/ ;W$ Ero6 H MW o2 installed wind ca!acity in 0--/
to *,+ MW in )//F, Cina as seen a considera3le increase in te a6ount o2 !ower tat it is receiving 2ro6 wind 2ar6s across te
countryF. $ China currently has 1#&# >) of generating capacity and has claimed wind energy
(as a ey growth component in its economic stimulus pacage; wit an e&!ected dou3ling in
ca!acity in )//-F-
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
China+s wind sector was a!le to grow rapidly !ecause of government intervention& In 0---,
the 2ational 1evelopment and /eform Commission I21/C' along with the Cinistry of
Science V Technology released an official statement that included a rule setting wind
power pricing (at a level that would repay capital costs with interest plus a reasona!le
profit; H/ $ Tis was incor!orated into !olicy and 6ar%et develo!6ent along wit ta& incentives$ In )//H, te N>8C initiated te
Wind :ower Concession :roCect wit a )/year o!erational !eriod wit te ai6 to reduce te in<grid wind !ower tari22 3y 3uilding
large ca!acity wind 2ar6s and acieving econo6ies o2 scale H0 $ By )//,, N>8C ad a!!roved te construction o2 * large wind
2ar6s, all o2 wic reMuire a 6ini6u6 ca!acity o2 0// 6egawatts H) $ Accordingly" the government hopes to
create (incentives for companies to develop this renewa!le energy resource HF through
this program& In )//,, when the /enewa!le ,nergy Kaw was put into effect" power grid
companies were re7uired to sign a (grid connection agreement with the wind power
generating company and purchase the full amount of the wind power generated !y it; HH $
)hile incentives have !een put in place and the maret siFe has significantly grown over
the past couple years, coal still re6ain FFX<,/X cea!er tan wind !ower$ >es!ite tis 2act te wind 6ar%et continues to
grow, and as it grows, te !rice o2 wind !ower is e&!ected to decrease H*
#2C Uni7ueness /enewa!les Solar Power
China is trying to mae the transition to solar power
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
China is also looing to develop solar power , toug not as 6uc e6!asis see6s to
ave 3een given to solar generation$ China is the world+s largest producer and e%porter of
photovoltaic IPW' solar cells$ As the largest producer of PW cells" it e%ported almost .6Q
of
those cells to other countries" !ecause the price remained too high to !e competitive
with
other forms of energy within country& As a result, te govern6ent as i6!le6ented
su3sidies to el! de2ray te cost o2 solar !ower and !lans to increase ca!acity to 0$. ;W 3y
)/)/$ According to Professor 9in Hhi7iang" it is estimated that over .-Q of China can
support some form of solar power" mainly located in )estern China$ Another part of
solar
power in China that is relatively large is solar thermal water heaters IS)*'& Te 6ar%et
2or SW5 as e&!onentially grown over te !ast decade wit an annual !roduction o2 0F
6illion sMuare 6eters in )//H$
#2C Uni7ueness /enewa!les Aiofuel
China will mae the transition to !iofuels solves economic growth
9uanyuan" 5?#5$
(Biu, >irector o2 =!erations and Co<Eounder o2 NanCing Sanglong Co66unications, Cina See%s to >evelo! Bio2uels Industry
>es!ite :roduction >i22iculties, tt!"##www$renewa3leenergyworld$co6#rea#news#article#)/0)#/H#cina<see%s<to<!ro6ote<
develo!6ent<o2<3io2uels<industry<des!ite<!roduction<di22iculties'c6!id(rss'
BEI9IN; << China sees to promote the development of its !iofuels industry through a series
of supportive measures despite mass production difficulties$ A s!o%es!erson 2or te National Energy
Bureau said tat the Chinese government has set a goal of utiliFing five million tons of ethanol
fuel during the O1#th 8ive$9earO period spanning #-11 to #-16" nearly dou!le that set for
the prior period ()//,<)/0/1$ Wile 3io2uel tecnology is already 3eco6ing increasingly so!isticated across te country, a
lac% o2 raw 6aterials is restricting large<scale co66ercial a!!lication$ Aiofuels are not only an alternative to
petroleum !ut also a catalyst of economic growth$ The !iofuels industry is an integrated
system that can drive the development of a variety of other industries" including
agriculture" chemicals" plastics" automotive" power generation" transportation and
services while helping !oost domestic demand" said Bi SiAong, de!uty director at New Energy 8esearc
Center, Nuclear 8esearc Institute, Tsingua 4niversity$ Unlie other industries" !iofuels help maintain
social sta!ility !y addressing a num!er of agriculture$related issues" including
increasing farmers+ income and creating Bo!s for millions of farmers&;
China is trying to mae the transition to !iofuel
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
The last primary source of renewa!le energy in China is !iomass& China has an
e%tremely large rural population with a large resource of !iomass for energy& There are
appro%imately 5 !illion tons of crop residue and wood fuels used for energy in rural
areas& The government is maing strides to develop and mae more efficient use of
!iomass in rural areas" !ecause the industry is already esta!lished $ According te C$V$ Wu and
several oter scolars" !iomass technology in China has a siFea!le maret potential in maing
use of !iomass waste" and it is economically feasi!le$ Te develo!6ent o2 3io6ass tecnology in te
areas wit te largest su!!ly o2 3io6ass waste, te rural areas, will !enefit those who need relia!le and
efficient electricity& The development of !iomass in the rural areas is a win$win situation&
#2C Uni7ueness /enewa!les 2uclear
China will mae the transition to nuclear energy
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
Kie most other types of primary energy sources" nuclear power is !eginning to increase
in China& Cainland China has eleven nuclear plants in operation" seven under
construction and ten more to start construction soon$ Te !lants in o!eration are located in >aya Bay ()1,
near 5ong Nong, \isan (*1, sout o2 Sangai, Bingao ()1, and Tianwan ()1 ). $ The conveniences of nuclear
plants is that they can !e located near populated areas, decreasing te a6ount o2 trans!ortation needed
to get energy 2ro6 te source to were it is needed$ In )//+, the 2ational 1evelopment and /eform
Commission announced the target of nuclear generating capacity to reach 1<- >) !y
#-:-$ China has increased its nuclear generating capacity in the past decade" 3ut still re6ains
only )X o2 te worlds total generating ca!acity$ The eleventh five$year plan has fourteen proposed
nuclear plants" the upcoming twelfth five$year plan e%pects to see some 1< provinces,
regions and 6unici!alities su36it !ro!osals 2or new nuclear !ower !lants )- $ Some of the ey points in China+s
nuclear energy policy includeL pressuriFed water reactors as the main" !ut not sole" type
of reactorsG nuclear 2uel asse63lies are 2a3ricated and su!!lied locallyP and ma%imiFing domestic
manufacturing of plants and e7uipment&
#2C Uni7ueness 2atural >as
China will mae the transition to natural gas domestically
Hhu" <?N$
(Bloo63erg, Cina To 8e2or6 ;as :rices ;radually To Boost 4se, Vou Says, tt!"##www$3loo63erg$co6#news#)/0)</,<
/+#cina<to<re2or6<gas<!rices<gradually<to<3oost<use<Aou<says<0<$t6l'
China will reform its natural$gas pricing mechanism gradually to ensure the fuel" which
pollutes less than coal" remains afforda!le as the government encourages its use" the
country+s !iggest energy company said& Promoting the use of gas is a national strategy"
which re7uires appropriate pricing of the resource, said Vou 9i!ing, !resident o2 state<owned :etroCina
Co$ (.*+1, te world7s tird<largest co6!any 3y 6ar%et value$ Te government is studying the possi!ility of
e%tending the trial of a new pricing method to cities !eyond those in two southern
provinces, e told re!orters at te World ;as Con2erence in Nuala Bu6!ur today$ BeiCing<3ased :etroCina is losing 6oney on
sales o2 gas i6!orted 2ro6 Tur%6enistan via te nation7s only cross<3order gas !i!eline, as te govern6ent ca!s do6estic !rices o2
te 2uel to cur3 in2lation$ An oil<lin%ed !ricing 6ecanis6 was introduced in ;uangdong and ;uang&i !rovinces 2ro6 >ece63er on a
trial 3asis$ China+s gas consumption will rise = percent annually to :6- !illion cu!ic meters
!y #-#- and to 66- !illion cu!ic meters !y #-:-, Vou said in a s!eec at te con2erence$ Cina National
:etroleu6 Cor!$, :etroCina7s !arent, e&!ects to !roduce 0)/ 3illion cu3ic 6eters o2 gas do6estically in )/0* and 0*/ 3illion cu3ic
6eters in )/)/, e said$ The country is also planning two new gas pipelines to transport the fuel
from its resource$rich provinces in the west to commercial centers in the east, according to
Vou, wo is also te !resident o2 te !arent co6!any$ Sale 8eserves China" estimated to hold the world+s
!iggest shale$gas resource" has #6&1 trillion cu!ic meters of recovera!le reserves" Hou
said$ :etroCina recently drilled sale<gas wells in Sicuan, which showed good prospects" e said$ Te country
also olds F) trillion cu3ic 6eters o2 conventional gas and 0) trillion cu3ic 6eters o2 tigt gas, according to te :etroCina o22icial$
China+s shale$gas reserves have (great potential along with great challenges"; Vou said$
The nation+s deposits of gas trapped in sedimentary rocs are geologically more
comple% than those in the U$S$, and tecniMues used in Nort A6erica can7t 3e co!ied directly, e said$ China is
seeing to emulate the U&S&" where a shale !oom made it the world+s !iggest gas
producer and upended glo!al energy marets& Te 4$S$ !u6!ed -, 3illion cu3ic 6eters in )//-, overta%ing
8ussia as te largest gas !rovider$ =ut!ut surged to 0H) 3illion cu3ic 6eters in )/0/, causing !rices to slu6!$ )e need to
develop our own applica!le technology and approach, Vou said$
Coal is unsustaina!le !ecause of water for coal cooling causes a
transition to natural gas
Adelman" <?=$
(9aco3, Bloo63erg, Cina, India Bac% Water Eor Coal :lant :lans, ;E >irector Says, tt!"##www$3loo63erg$co6#news#)/0)</,<
/.#cina<india<lac%<water<2or<coal<!lant<!lans<ge<director<says$t6l'
China+s and 0ndia+s plans to !uild more coal$fired power plants to meet electricity needs
aren+t feasi!le !ecause of a lac of water needed to cool the plants , ;eneral Electric Co$ (;E17s
glo3al strategy director said$ The two countries have not ade7uately considered the water needs of
their proposed coal plants in their plans, :eter Evans, ;E7s director o2 glo3al strategy and !lanning, said
yesterday at a se6inar in To%yo$ They have not introduced a water constraint on their model, Evans
said$ They assume the water is there& So my view is that they actually will not !e a!le to
!uild as many coal plants as the proBections suggest$ Cina7s coal de6and will increase +/ !ercent to
F$+0 3illion 6etric tons coal eMuivalent 3y )/F* 2ro6 )//-, under te country7s energy !olicy, wile India7s de6and will increase 0..
!ercent to 0$0* 3illion tons eMuivalent over tat ti6e, according to te International Energy Agency7s World Energy (ME8ENE81
=utloo% 2or )/00$ Tons o2 coal eMuivalent is a unit used 3y te IEA to co6!ensate 2or discre!ancies in energy out!ut a6ong
various ty!es o2 coal$ Cina7s water consu6!tion 2or !ower generation is set to increase to )*/ 3illion gallons (-H+ 3illion liters1 a
day in )/)* 2ro6 0H0 3illion gallons in )/00, according to ;E7s calculations$ Te )/)* 2igure is 0,+ ti6es te total current daily
water use o2 New @or% City, according to ;E$ Cina >e6and >," which produces gas$fired and wind$
powered tur!ines" solar e7uipment and other proBects that would !enefit from a shift
away from coal, was not i66ediately a3le to !rovide co6!ara3le water<use 2igures 2or India$ India7s NT:C Btd$ (NT:C1, Tata
:ower Co$ (T:W81 and 8eliance In2rastructure Btd$ (8EBI1 !lan new coal !lants in te Sout Asian country, according to a )/0/
re!ort 3y 5SBC Einance Cor!$ and te World 8esources institute tat 2ound +- !ercent o2 India7s new !ower ca!acity was 3eing
3uilt in areas o2 li6ited water availa3ility$ 0n China" coal$fired plants are planned !y such companies as
Shenhua >roup Corp&" which intends to !uild an =$gigawatt generator in the southern
province of >uan%i" the official Uinhua 2ews Agency reported in 1ecem!er& ,vans
predicted that Chinese leaders would have to adopt less water$intensive power$
generation strategies" such as a heavier reliance on wind farms and 6ore e&!ensive dry<cooled coal
!lants$ )ater constraints will also pro!a!ly prompt China to use more natural gas than it is
currently targeting" since gas$fired generators also use less water than coal$fired ones,
Evans said$ Cina7 natural gas de6and is 2orecast to increase 6ore tan 2ive<2old to */) 3illion cu3ic 6eters in )/F* 2ro6 -F 3illion
cu3ic 6eters under an IEA scenario were 2ossil 2uel su3sidies are cut, according to te )/00 World Energy =utloo%$ 0t+s
interesting when you thin a!out a new constraint lie waterL +)hat will it do to effect the
systemX+ Evans said$ 0 thin it will add more gas and wind than many people are
anticipating&;
#2C Uni7ueness Coal Unsustaina!le
Chinese coal imports are capped and cannot domestically produce
Jlson" :?#N$
(Eri%, Te >aily News Sta22 Writer, 8ising Cinese de6and could 6ean coal e&!ort 3oo6 2or West Coast,
tt!"##tdn$co6#news#local#rising<cinese<de6and<could<6ean<coal<e&!ort<3oo6<2or<west#articleOFd)d+HHc<+.+H<00e0<a)H.<
//0-33)-,F2H$t6l[i&AA0ycv2M3eF'
In a 6ere 2our years, China@s !ooming economy has transformed the nation from net e%porter
of coal into a monster importer tat can su!!ort 6ulti!le coal ter6inals !ro!osed in te :aci2ic Nortwest, industry
analysts say$ Bast year, Cina i6!orted 0.) 6illion 6etric tons o2 coal, sur!assing 9a!an as te worldLs largest coal i6!orter$ Tat
a6ount is 6ore tan te ca!acity o2 2our e&isting coal ter6inals in Alas%a and Britis Colu63ia and 2ive !ro!osed :aci2ic Nortwest
ter6inals co63ined I including one !ro!osal in Bongview and two near Clats%anie$ China consumes a!out half of
the coal !urned annually worldwide" according to Carnegie Endow6ent 2or International :eace$ And analysts donLt
e&!ect a dro! o22 any ti6e soon$ UKooing &&& forward" 0 thin people are underestimating the demand
for energy that@s going to !e re7uired for China,U said Andy 8o3erts, a coal industry analyst 2or Anna!olis,
Md$<3ased Wood Mac%enAie$ Cina is e&!ected to sa!e te :aci2ic Nortwest coal e&!ort 6ar%et 2or years to co6e$ )hile a
few factors could dent its demand for U&S& coal" the reality is clearL China and other
Asian nations will !e hungry for coal and could easily consume the coal si!!ed troug te
!ro!osed Millenniu6 Bul% Ter6inals e&!ort doc% in Bongview and two !ro!osed ter6inals at :ort Westward near Clats%anie$ Te
Cinese govern6ent announced earlier tis 6ont tat it !lans to ca! its coal !roduction and de6and at F$- 3illion 6etric tons in
)/0* to reduce 2ossil<2uel e6issions and encourage renewa3le energy generation$ TatLs 0// 6illion tons 6ore tan te nation used
last year, according to Bloo63erg News$ Analysts Muestion, owever, weter Cina will 3e a3le to !ower its econo6y under tose
standards$ UCoal is e%pected to !e China@s most dominant energy source in the foreseea!le
future"U analyst Nevin 9ianCun Tu wrote in a Ee3ruary !a!er a3out Cinese coal i6!orts 2or te Carnegie Endow6ent$ The
7uestion is where the coal will come from& Jver the past five years" a!out half of all
Chinese coals imports were from Australia and 0ndonesia$ Bot countries are !lanning to ra6! u!
!roduction 2or Cina, Tu said$ 5owever, 8o3erts said 0ndonesia needs to cap coal e%ports around #-#-
!ecause it will need more fuel for its own economy at the same time Pacific 2orthwest
coal e%port terminals are e%pected to go online" if approved !y regulators$ O0f you loo to
the future" the IChinese' demand grows !eyond the a!ility of Australia and 0ndonesia to
supply the coal& Te Muestion is wen tat is going to a!!en,U 8o3erts said, adding tat coal de6and is e&!ected to
increase in a s6aller scale in Sout Norea and oter Asian countries$ China is also e%pected to try to increase
domestic production" !ut its internal rail system already struggles to !ring coal from
inland mines to the !iggest power users on the coast, Tu said$ Also, Chinese coal production
tends to lag !ehind spies in consumption" which leaves Chinese utilities scram!ling to
!uy additional supply overseas to prevent power outages, Tu said$
Chinas coal is unsustaina!le lac of water in coal plants
Adelman" <?=$
(9aco3, Bloo63erg, Cina, India Bac% Water Eor Coal :lant :lans, ;E >irector Says, tt!"##www$3loo63erg$co6#news#)/0)</,<
/.#cina<india<lac%<water<2or<coal<!lant<!lans<ge<director<says$t6l'
China+s and 0ndia+s plans to !uild more coal$fired power plants to meet electricity needs
aren+t feasi!le !ecause of a lac of water needed to cool the plants, ;eneral Electric Co$ (;E17s
glo3al strategy director said$ The two countries have not ade7uately considered the water needs of
their proposed coal plants in their plans" :eter Evans, ;E7s director o2 glo3al strategy and !lanning, said
yesterday at a se6inar in To%yo$ They have not introduced a water constraint on their model"; Evans
said$ They assume the water is there& So my view is that they actually will not !e a!le to
!uild as many coal plants as the proBections suggest&; Cina7s coal de6and will increase +/ !ercent to
F$+0 3illion 6etric tons coal eMuivalent 3y )/F* 2ro6 )//-, under te country7s energy !olicy, wile India7s de6and will increase 0..
!ercent to 0$0* 3illion tons eMuivalent over tat ti6e, according to te International Energy Agency7s World Energy (ME8ENE81
=utloo% 2or )/00$ Tons of coal e7uivalent; is a unit used !y the 0,A to compensate for
discrepancies in energy output among various types of coal$
TTKinTT
#2C Kins >eneric
0ncreased e%ports to China will stop the transition from renewa!les in the
long$term
1e Place" .$
(Eric, Sligtline >aily Sta22 Writer, Te Cli6ate I6!act o2 Coal E&!orts, tt!"##daily$sigtline$org#)/00#/+#0-#te<cli6ate<i6!act<o2<
coal<e&!orts#'
Jne of the nation+s most respected resource economists, >r$ Thomas C& Power" Bust
released a new white paper showing that coal e%ports to China will increase that
country+s coal !urning and pollution" and decrease investments in energy efficiency& In a
nutsell, :ower de6onstrates tat the planned coal e%port facilities in the 2orthwest would add to
the supply of coal to China there!y pushing down the cost of !urning it& And !ecause
China is highly cost sensitive" even relatively small changes in price could result in
significant changes in coal !urning$ Eurter6ore, low coal prices in the near term will
encourage long term investments in new coal !urning facilities that would loc in
decades of further demand for coal&
#2C Kin US ,%ports 1ecrease Coal Prices
US e%porting coal drives down coal prices
)ong" 5?1.$
(Eayen, 8euters, 4$S$ coal e&!orts to Cina 6ay dou3le in )/0)" ^coal, tt!"##www$reuters$co6#article#)/0)#/H#0-#us<coal<
id4SB8E.FI/AN)/0)/H0-'
(8euters1 < 4$S& coal e%ports to China could more than dou!le to over 1# million tonnes in
#-1# thans to depressed freight rates and a fall in domestic demand in the United
States, te cie2 o2 to! 4$S$ coal e&!orter ^coal Energy R 8esources said$ The e%pected increase in coal
shipments could further push down coal prices in Asia where a supply glut following a
deluge from the United States and Colo63ia as 2orced !rices to slu6! recently$ Australian 2ewcastle$
grade coal has dropped M1- a tonne since end$8e!ruary" the 0ndonesian coal reference
price is down to its lowest in 1< months and South African coal has shed M6$ UE&!orts to Cina
could reac over 0) 6illion tonnes tis year 3ased on te annualiAed nu63ers,U Cie2 E&ecutive Ernie Traser told 8euters in an
interview on Wednesday$ U)e only have data for Sanuary and 8e!ruary now" !ut all anecdotal
evidence so far suggests that there are no signs of that diminishing as the year goes on ,U
e said$ U0 thin there is enough demand in Asia to a!sor! enough U&S& cargoes to stem a
decline in prices&O
Coal !rices would dro! i2 te 4S e&!orts to Asia increased
1eepa" 6?:$
(Nannan, Ter6al coal !rices could 2all 2urter i2 4S e&!orts rise" analysts,
tt!"##www$!latts$co6#8SSEeed>etailedNews#8SSEeed#Coal#.)**.0H'
Thermal coal prices could soften further if US e%ports to Asia strengthen , although
resilient demand from Asia$Pacific@s utility sector could partially offset this increased
supply, analysts at Standard R :oorLs said Tursday$ 1omestic coal demand in the US has weaened
due to the availa!ility of cheap shale gas there" which has in turn led to increased coal
e%ports from the US to ,uropean and Asian marets" pressuring thermal coal prices&
#2C Kin China /enewa!le Transition
Kow coal prices mean China doesn+t switch to renewa!les
Pope" <?#-$
(Carl, 8enewa3le Energy World, Cea! Coal Is >ead$ Bong Bive 8enewa3le
Age (:art 01,
tt!"##www$renewa3leenergyworld$co6#rea#news#article#)/0)#/,#cea!<coal<is<
dead<long<live<renewa3le<age<!art<0'
Aecause as the cost of high$car!on electricity soars" the cost of low$car!on alternatives
is plummeting$ China+s wind industry is eager to provide power at prices ranging from N
cents a ilowatt$hour to 1: cents" and India7s latest solar !roCects are 3id at 0* cents$ Costs
of wind and solar continue to decline& Te conventional wisdo6 is tat, !ecause wind and
solar are intermittent sources" they can+t !e used to power an entire economy$ 0t+s true
that it will tae some time !efore renewa!les can compete with the M5-$a$ton coal that
Asia had !een counting on$ But as callenging as te low<car3on !at to growt 6ay 3e, coal
6ar%ets are telling Asia it as no coice$ 5ig<car3on growt not only would coo% te cli6ate$ It
would also derail Asia7s econo6ies$
The lin is reverse causal e%pensive coal causes a transition to
renewa!les
Draemer" 11$
(Susanne, Cleantecinca, Coal Sortages S!eed 4! Cina7s Clean :ower :lans, tt!"##cleantecnica$co6#)/00#/.#F/#coal<
sortages<s!eed<u!<cinas<clean<!ower<!lans#'
The Chinese government continues to e%pand its clean energy production plans" to
replace increasingly e%pensive coal power that is shutting down coal plants and causing !ower
sortages o2 at least 0, ;W$ Cina7s twelt 2ive<year !lan unveiled tis wee% !lans 2or +/ ;W 2or wind, and * ;W o2 solar 3y )/0*$
4nli%e Euro!e, wic is using Eeed<in Tari22s to incentiviAe te addition o2 6ore green !ower to te nation7s grid, China is
using competitive !idding to drive down the costs of the new renewa!le energy
generation$ Tis 6igt 3e a 6ista%e" EITs are a sa2er 3et in te long run 2or newer 6ore untried energy sources, as generators
are !aid only 2or actual !roduction$ China+s first CSP tender generated an average solar power price
of C29-&.< IUSM16' per )h& The price !eing offered for CSP solar is a!out dou!le the
price of its conventional coal power$ Wind is also 6ore e&!ensive, 3ut now increasingly co6!etitive$ A new
development" pea coal" has shaen up the plan& Coal prices have risen N6Q since #--N"
while electricity prices have only !een allowed to rise 16Q& Shortages of Chinese coal as
local mines are depleted are driving up prices for imports (4S Coal Co6!anies 8ea! Wind2all Ero6
Australian Cli6ate Catastro!e1 and Cina7s coal !ower !lants are now under real 2inancial stress$ Source" Clean Tecnica
(tt!"##s$tt#0F-ot1
*igh coal prices stop China from consuming it
Power" 1#$
()<., To6as, Te ;reenouse ;as I6!act o2 E&!orting Coal 2ro6 te West Coast, tt!"##www$sigtline$org#w!<
content#u!loads#downloads#)/0)#/)#Coal<:ower<Wite<:a!er$!d2'
H$ China *as Tremendous Potential to /educe 1ependence on Coal" !ut Coal ,%ports
from the U&S& )ill /educe 0ncentives to Capture that Potential H$0 Cinese E22orts to I6!rove te
Energy E22iciency o2 te Econo6y F. The Chinese government and the large state$owned enterprises
that !oth produce" distri!ute" and use larger amounts of energy are well aware of the
!urden that high and rising energy costs can impose on the overall economy and the
via3ility and success o2 individual enter!rises$ Te energy !olicies e63odied in te last several 2ive<year !lans ave 2ocused eavily
on i6!roving overall energy e22iciency in order to e22ectively control energy costs$ Bi%e energy !lanners witin govern6ent as well as
witin autono6ous enter!rises around te world, Chinese energy planners do not simply ar!itrarily
(mae up; their energy efficiency targets& /ather they loo at energy costs and the costs
of implementing and operating different energy$using technologies and pursue the most
cost$effective measures currently availa!le$ Te value o2 te energy cost savings (along wit !otential
environ6ental, ealt, and sa2ety 3ene2its1 are weigted against te cost o2 te e22iciency i6!rove6ents$ In tat sense energy costs
(including e&ternal social costs1 drive te invest6ent in e22iciency$
#2C China >et Coal from the US
Cinas coal e&!orts will increase< tey will co6e 2ro6 te 4S
Plumer" 6?1$
(Brad, EAra Nelins, Wasington :ost Sta22 Writer, 5ow te 4$S$ could in2luence Cina7s coal a3its I wit e&!orts,
tt!"##www$wasington!ost$co6#3logs#eAra<%lein#!ost#can<te<united<states<in2luence<cinas<coal<
a3its#)/0)#/*#/0#gI\AgM4!uTO3log$t6l1
Still, as a recent and 2ascinating re!ort (!d21 2ro6 te Carnegie Endow6ent e&!lains, Chinese coal imports are liely
to grow enormously in the coming years& 8or one" Chinese coal use has !een growing at
a rate of nearly < percent each year& And China+s domestic production can+t eep pace"
thans to railroad and shipping !ottlenecs from mining centers in Shan%i" Shaan%i and
0nner Congolia provinces&
Wat7s 6ore, te Carnegie re!ort notes, te Chinese government is !ecoming increasingly sensitive to
the ecological damage wrought !y domestic coal mining I as well as to te growing nu63er o2 !rotests
over unsa2e 6ining conditions$ According to o22icial statistics, ,,/)+ Cinese 6iners died in )//H, toug te real nu63er is
!ro3a3ly iger$ Tere are real costs to ra6!ing u! !roduction in Cina$
As a result, China will liely try to import a growing share of its coal in the coming years$ Muc
o2 tat will li%ely co6e 2ro6 Indonesia and Australia, since Cina7s i6!ort in2rastructure is geared toward tose two regions$ Aut
many analysts e%pect the United States to play an increasingly crucial role in coming
years& ITo date" the U&S& has !een supplying China with Bust small amounts of coing
coal" which is used for iron and steel production and which is less readily availa!le in
China&'
ATL ,%ports 1rive up Prices
2o
)alsh" 6?:1$
(Bryan, Ti6e Eco centric MagaAine Writer, >rawing Battle Bines =ver A6erican Coal E&!orts to Asia,
tt!"##ecocentric$3logs$ti6e$co6#)/0)#/*#F0#drawing<3attle<lines<over<a6erican<coal<e&!orts<to<asia#[i&AA0y%*+5I.\'
Chinese demand for coal has !een inelastic in recent years" meaning that priceshigh or
lowhaven+t had much impact on how much coal China !urns& That+s partly !ecause the
Chinese government e%erts control over the energy maret, says 8icard Morse, director o2 coal< and
car3on<6ar%et researc at Stan2ord 4niversity, 6a%ing te e22ect on e6issions o2 cea!er coal 2ro6 te 4$S$ a co6!le& Muestion$
And it7s not Cust a3out Cina, e says$ @ou ave to net out te glo3al i6!acts against te 4$S$ i6!acts$
ATL Prices 1on+t Catter
2o true" prices affect Chinese energy consumption
Power" 1#$
()<., To6as, Te ;reenouse ;as I6!act o2 E&!orting Coal 2ro6 te West Coast, tt!"##www$sigtline$org#w!<
content#u!loads#downloads#)/0)#/)#Coal<:ower<Wite<:a!er$!d2'
5owever, !oth of these recent studies were tied to analysis of Chinese data and conditions
!ef ore #--: and were focused heavily on petroleum products over which the Chinese
government has e%erted fairly strict price controls& >iven the changes that have taen
place in Chinese energy policy over the last decade and our focus on coal" which has
!een partially e%posed to maret pricing for many years" the Muotes a3ove a3out te irrelevance o2
energy !rices in Cina a!!ear to 3e 6isleading assertions i2 a!!lied to te second decade o2 te twenty<2irst century$ F$) Te 8ole
o2 Energy :rices in te Cinese Econo6y As !ointed out in te !revious section, empirical studies of the
consumption of coal and other energy sources in China have demonstrated that coal
consumption is sensitive to the cost of coal& Also as !ointed out a3ove, analysis of the decline in
the energy intensity of the Chinese economy during the 1..-s estimated that over half of
that improvement in energy productivity was a response to the increases in energy
costs$ As tat latter study concluded" In !articular, rising energy !rices and tecnology develo!6ent activity are te !rinci!al
deter6inants o2 gains in energy e22iciency$ But tat tecnology develo!6ent 6ay also 3e driven 3y energy !rices" Sery !reli6inary
results involving te interaction o2 tecnology develo!6ent e&!enditure and energy prices suggest that rising
energy prices may !e motivating the innovation and deployment of energy$saving In
addition, recent studies o2 te relationsi! 3etween te !rices o2 various energy !roducts in Cina indicate tat movements in
energy prices demonstrate the correlations that one would e%pect if national and
regional marets were coordinating the production and sale o2 tose energy !roducts$ Te study loo%ed to
see, 2or instance, weter gasoline and diesel !rices 6oved togeter as well as coal and electric !rices$ In addition it loo%ed to see
i2 co66on !rices e6erged 2or eac o2 tese !roducts witin !articular geogra!ic areas, indicating tat 6ar%et e&canges were
creating a uni2or6 !rice$ Te analysis 2ocused on te 0--*<)//* ti6e !eriod and 2ound tat 3y 0--+<0--- gasoline and diesel
!rices were 6oving togeter and tat 3y )//)<)//* so were coal and electric !rices$ By the end of the period all four
energy prices were !ehaving as if there were integrated energy marets in operation in
China&
Cinese coal consu6!tion is !redicated o22 o2 !rice
Power" 1#$
()<., To6as, Te ;reenouse ;as I6!act o2 E&!orting Coal 2ro6 te West Coast, tt!"##www$sigtline$org#w!<
content#u!loads#downloads#)/0)#/)#Coal<:ower<Wite<:a!er$!d2'
Coal !uyers in China also have indicated that coal prices affect their coal sources$ Electric
generation 2ir6s ave to negotiate wit coal !roducers over Muantity and !rice werever tey o!erate in Cina$ 0n addition"
coal !uyers in China+s maBor ur!an and industrial centers on China+s southeast coast"
where much of the industrial manufacturing is located" ave access to 2oreign sources o2 coal, e$g$
Indonesia, Australia, and Sietna6$ Coastal Cinese coal 3uyers can co6!are te cost o2 coal delivered 2ro6 do6estic sources in
te nort and west o2 Cina against te cost o2 delivered coal 2ro6 availa3le 2oreign sources$ I2 rising maret prices for
domestic coal and the transportation costs to deliver it to the southeastern coast rise too
high " coastal coal !uyers can turn to foreign sources $ That appears to !e e%actly what
they did in #--. and have continued to do through #-1-& )hile foreign sources of coal
were (out of the money ; relative to domestic Chinese sources in #--=" !y late #--."
0ndonesian coal was as much as M5- per ton cheaper than delivered domestic Chinese
coal$ Australian coal, wit a longer trans!ortation !at, was as 6uc as G)- !er ton cea!er$ As a result, coal i6!orts into Cina
s%yroc%eted, and tat continued into )/0/$ As one analysis o2 tat surge in i6!orts !ut it )e conclude China+s coal
!uying !ehavior follows the logic of a Pcost minimiFer+] Cinese coal i6!orts are si6!ly tied to a
co6!arison o2 te delivered cost o2 coal to tese soutern coastal cities 2ro6 alternative sources o2 su!!ly$ FF Even witin a
govern6ent !lanning 2ra6ewor% were te govern6ent controls so6e !rices, tose ad6inistered !rices can 3e designed to re2lect
costs and control de6and$ Electric !rices ave continued to 3e set 3y econo6ic !lanners in Cina$ Aut the pricing
strategy often has !een similar to what economists have urged in developed maret
economies&
ATL China Caes it 1omestically
China is looing to import coal and that is decreasing their access to coal
a& Transportation !ottlenec
Tu" 1#$
(Nevin 9ianCun, Senior associate in te Carnegie Energy and Cli6ate
:rogra6, were e leads Carnegie7s wor% on Cina7s energy and cli6ate !olicies, 4nderstanding Cina7s 8ising Coal I6!orts,
tt!"##www$carnegieendow6ent$org#2iles#cinaOcoal$!d2 '
The ma Cority of China+s coal resources are located in the western and northern inland
provinces$ Te two !rovinces o2 San&i and Saan&i and te autono6ous region o2 Inner Mongolia alone account 2or nearly +/
!ercent o2 Cina7s !roven coal reserves and 6ore tan al2 o2 national coal out!ut$ . In contrast, many maBor coal$
consuming centers are located along China+s heavily populated eastern and southern
coastline, were less tan * !ercent o2 Cina7s !roven coal reserves are located 3ut nearly H/ !ercent o2 national coal
consu6!tion was re!orted in )/0/$ - This un!alanced coal resource distri!ution and consumption
pattern means that coal must !e transported long distances via railways" roads" or
waterways (3ot inland river and coastal 6arine trans!ort1 2ro6 te west to te east and 2ro6 te nort to te sout$
0ntegrated railway and coastal marine shipping is the most important mode of coal
transport in China$ But China lacs dedicated south!ound rail lines" which means that coal
from the northern and western provinces destined for consumption in the south needs to
!e first moved eastward to seaports around the Aohai Aay in northeast China$ Ero6 tere it is
si!!ed to 6aCor coal !orts o2 discarge along Cina7s souteastern coastline$ 1ue to the particular nature of the
Chinese economythe gradual shift from a planned economy to an increasingly maret$
oriented one" and a decade$long tight supply and demand !alance of coal in the
domestic maretit can !e assumed that coal transportation infrastructure in China is
usually operated at close to full capacity$ Tis i6!lies tat te ra!id growt o2 coal troug!ut in recent decades
is !ri6arily driven 3y te e&!ansion o2 in2rastructure ca!acity, rater tan 3y an i6!rove6ent in te e22iciency and utiliAation rates o2
railways or sea!orts$ Since 0-./, national coal !roduction in Cina as grown at an annual rate o2 *$+ !ercent, reacing F,)F* Mt in
)/0/$ >uring te sa6e !eriod, te growt in te total a6ount o2 coal trans!orted 3y rail corres!onded to an annual increase o2 H$,
!ercent$ In contrast, a2ter a stagnation in te 0-./s and early 0--/s, coal troug!ut (3ot inco6ing and outgoing1 andled 3y
6aCor Cinese coastal !orts increased 2ro6 -0 Mt in 0--* to 0,0,F Mt in )/0/, te eMuivalent o2 an annual growt rate o2 0-
!ercent$ 0/ In oter words, wile te ca!acity e&!ansion o2 sea!orts see6s to ave !roceeded at a rate 2aster tan national coal
!roduction, Chinese railways encountered great difficulty in eeping pace with the country+s
!urgeoning coal mining industry& 2ot surprisingly" measured as a percentage of national
coal output" coal transported !y rail has declined from <. percent in 0-./ to less tan */ !ercent in
recent years$ In co6!arison, coal troug!ut andled 3y 6aCor coastal !orts as increased 2ro6 nil in 0-./ to F, !ercent o2 national
coal out!ut (2igure F1$ Tus, compared to the !ottleneced railway infrastructure" the increasingly
less capacity congested coastal ports in China have !een a!le to handle not only higher
percentages of national coal output !ut also a siFa!le amount of coal imports in recent
years& =ne o2 te reasons 2or te sar! contrast in ca!acity e&!ansion lies in te organiAational structure o2 railways and !orts$
Since China+s Cinistry of /ailways is !oth the regulator and the monopoly operator of
China+s national railway networ" a lac of competition has led to insufficient investment
in coal rail lines thus far$ Cina7s coastal !ort sector on te oter and was o!ened u! to co6!etition in te 0--/s,
wic resulted in increased invest6ent in !ort 2acilities and led to a sea!ort 3uilding 3oo6$ The capacity e%pansion of
maBor coal ports of discharge in the southeastern provinces allows consumers there to
choose !etween domestic coal from northern ports and overseas coal from the
international maret& Coal imported from overseas suppliers can help Chinese !uyers
ensure a sta!le supply of coal especially during the pea demand season& Cinese consu6ers
along te souteastern coastline 6ay tere2ore !re2er coal i6!orts 2or te !ur!ose o2 su!!ly sta3ility$ Ero6 te !ers!ective o2 te
Cinese govern6ent, rising coal imports might !e encouraged as a way to ease China+s
deteriorating transportation !ottlenecs& Jtherwise" costly investment would !e re7uired
to !uild more dedicated coal rail lines and port facilities in northern China&
3$ Sa2ety
Tu" 1#$
(Nevin 9ianCun, Senior associate in te Carnegie Energy and Cli6ate
:rogra6, were e leads Carnegie7s wor% on Cina7s energy and cli6ate !olicies, 4nderstanding Cina7s 8ising Coal I6!orts,
tt!"##www$carnegieendow6ent$org#2iles#cinaOcoal$!d2 '
The environment could also play a part in China+s coal$importing decisions& 0mporting
coal from overseas marets might ena!le the Chinese central government to close down
many small and inefficient mines and prevent similar mines from !eing opened up, tere3y
!rotecting local environ6ents$ Still, no 6atter were coal is 6ined, the process often has detrimental
environmental effects on the host country& ,valuating this local impact against glo3al environ6ental
callenges and !reventing a 6ere shifting of local environmental !urdens from China to other coal$
producing countries re7uires closer colla!oration !etween China and its maBor coal
trading partners&
TT0mpact
#2C )arming 0mpact
)arming is an e%istential threat
CaFo 1- Ph1 in Paleoclimatology from UCKA
9e22rey MaAo, Managing Editor, Survival and 8esearc Eellow 2or Environ6ental Security and Science :olicy at te International
Institute 2or Strategic Studies in Bondon, F<)/0/, Cli6ate Con2lict" 5ow glo3al war6ing treatens security and wat to do a3out it,
!g$ 0))
Te 3est esti6ates 2or glo3al war6ing to te end o2 te century range 2ro6 )$*<H$YC a3ove !re<industrial levels, de!ending on te
scenario$ Even in te 3est<case scenario, te low end o2 te li%ely range is 0$goC, and in te worst L3usiness as usualL !roCections,
wic actual e6issions ave 3een 6atcing, te range o2 li%ely war6ing runs 2ro6 F$0<<+$0`C$ Even %ee!ing e6issions at constant
)/// levels (wic ave already 3een e&ceeded1, glo3al te6!erature would still 3e e&!ected to reac 0$)`C (=L-UU0$*`C1a3ove !re<
industrial levels 3y te end o2 te century$U )ithout early and severe reductions in emissions" the
effects of climate change in the second half of the twenty$first century are li%ely to 3e
catastro!ic 2or te sta3ility and security o2 countries in te develo!ing world < not to 6ention te associated u6an tragedy$
Climate change could even undermine te strengt and sta3ility o2 e6erging and advanced economies"
!eyond the noc$on effects on security of widespread state failure and collapse in
developing countries$L And altoug tey ave 3een conde6ned as 6elodra6atic and alar6ist, 6any in2or6ed o3servers
3elieve tat unmitigated climate change 3eyond te end o2 te century could pose an e&istential treat
to civilisation$U Wat is certain is tat there is no precedent in human e%perience for such rapid
change or such climatic conditions, and even in the !est case adaptation to tese e&tre6es
would mean profound social, cultural and !olitical changes$
Turns case ,very conflict is inevita!le with warming
SchwartF and /andall : (:eter, Cair ? ;lo3al Business Networ%, and >oug, Co<5ead ? ;lo3al Business
Networ%7s Consulting :ractice, An A3ru!t Cli6ate Cange Scenario and Its I6!lications 2or 4nited States National Security,
=cto3er, tt!"##www$6ind2ully$org#Air#)//F#:entagon<Cli6ate<Cange0oct/F$t61
Te two 6ost li%ely reactions to a sudden dro! in carrying ca!acity due to cli6ate cange are de2ensive and o22ensive$ Te 4nited
States and Australia are li%ely to 3uild de2ensive 2ortresses around teir countries 3ecause tey ave te resources and reserves to
acieve sel2<su22iciency$ Wit diverse growing cli6ates, wealt, tecnology, and a3undant resources, te 4nited States could li%ely
survive sortened growing cycles and ars weater conditions witout catastro!ic losses$ Borders will 3e strengtened around
te country to old 3ac% unwanted starving i66igrants 2ro6 te Cari33ean islands (an es!ecially severe !ro3le61, Me&ico, and
Sout A6erica$ Energy su!!ly will 3esored u! troug e&!ensive (econo6ically, !olitically, and 6orally1 alternatives suc as
nuclear, renewa3les, ydrogen, and Middle Eastern contracts$ :es%y sirmishes over fishing rigts, agricultural
support, and disaster relief will !e commonplace$ Tension 3etween te 4$S$ and Me&ico rise as te 4$S$
reneges on te 0-HH treaty tat guarantees water 2low 2ro6 te Colorado 8iver$ 8elie2 wor%ers will 3e co66issioned to res!ond to
2looding along te soutern !art o2 te east coast and 6uc drier conditions inland$ @et, even in tis continuous state o2 e6ergency
te 4$S$ will 3e !ositioned well co6!ared to oters$ Te intracta3le !ro3le6 2acing te nation will 3e cal6ing te 6ounting 6ilitary
tension around te world$ As famine" disease" and weather$related disasters strie due to te a3ru!t
climate change, 6any countries7 needs will e%ceed teir carrying capacity$ This will create a sense o2
des!eration, wic is li%ely to lead to o22ensive aggression in order to reclai6 3alance$ 0magine eastern ,uropean
countries, struggling to 2eed teir !o!ulations wit a 2alling su!!ly o2 2ood, water, and energy, eyeing /ussia, wose
!o!ulation is already in decline, 2or access to its grain, 6inerals, and energy su!!ly$ Jr, !icture Sapan, su22ering 2ro6 2looding
along its coastal cities and conta6ination o2 its 2res water su!!ly, eying /ussia+s Sahalin 0sland oil and gas
reserves as an energy source to !ower desalination !lants and energy<intensive agricultural !rocesses$ ,nvision Paistan"
0ndia" and China all armed with nuclear weapons sirmishing at their !orders over
refugees, access to sared rivers" and ara3le land$ S!anis and :ortuguese 2iser6en 6igt 2igt over 2ising rigts ?
leading to con2licts at sea$ And, countries including te 4nited States would 3e li%ely to 3etter secure teir 3orders$ Wit over )//
river 3asins toucing 6ulti!le nations, we can e&!ect con2lict over access to water 2or drin%ing, irrigation, and trans!ortation$ Te
>anu3e touces twelve nations, te Nile runs toug nine, and te A6aAon runs troug seven$In tis scenario, we can e&!ect
alliances o2 convenience$ Te 4nited States and Canada 6ay 3eco6e one, si6!li2ying 3order controls$ =r, Canada 6igt %ee! its
ydro!owerIcausing energy !ro3le6s in te 4S$ Nort and Sout Norea 6ay align to create one tecnically savvy and nuclear<
ar6ed entity$ Euro!e 6ay act as a uni2ied 3loc% ? cur3ing i66igration !ro3le6s 3etween Euro!ean nations ? and allowing 2or
!rotection against aggressors$ 8ussia, wit its a3undant 6inerals, oil, and natural gas 6ay Coin Euro!e$ 0n this world of
warring states" nuclear ar6s proliferation is inevita!le$ As cooling drives u! de6and, e&isting ydrocar3on
su!!lies are stretced tin$ Wit a scarcity o2 energy su!!ly ? and a growing need 2or access << nuclear energy will 3eco6e a critical
source o2 !ower, and tis will accelerate nuclear !roli2eration as countries develo! enric6ent and re!rocessing ca!a3ilities to
ensure teir national security$ China" 0ndia" Paistan" Sapan" South Dorea" ;reat Aritain" 8rance" and
>ermany will all have nuclear weapons ca!a3ility, as will Israel, Iran, Egy!t, and Nort Norea$ Canaging the
military and !olitical tension, occasional sirmishes" and treat o2 war will !e a challenge$ Countries suc
as 9a!an, tat ave a great deal o2 social coesion (6eaning te govern6ent is a3le to e22ectively engage its !o!ulation in canging
3eavior1 are 6ost li%ely to 2air well$ Countries wose diversity already !roduces con2lict, suc as India, Sout A2rica and Indonesia,
will ave trou3le 6aintaining order$ Ada!ta3ility and access to resources will 3e %ey$ :era!s te 6ost 2rustrating callenge a3ru!t
cli6ate cange will !ose is tat we7ll never %now ow 2ar we are into te cli6ate cange scenario and ow 6any 6ore years ? 0/,
0//, 0/// <<< re6ain 3e2ore so6e %ind o2 return to war6er conditions as te ter6oaline circulation starts u! again$ Wen carrying
ca!acity dro!s suddenly, civiliAation is 2aced wit new callenges tat today see6 uni6agina3le$
)arming outweighs nuclear war
29T" < (Te New @or% End Ti6es )//, (Te New @or% End Ti6es is a non<!artisan, non<religious, non<ideological, 2ree news
2ilter$ We 6onitor world trends and events as tey !ertain to two vital treats < war and e&tinction$ We use a !ro!rietary
6etodology to Muanti2y 6ove6ents 3etween te e&tre6es o2 war and !eace, ar6ony and e&tinction$
tt!"##newyor%endti6es$co6#e&tinctionscale$as!1
We rate ;lo3al Cli6ate Cange as a greater treat 2or u6an e&tinction in tis century$ Most scientists 2orecast disru!tions and
dislocations, i2 current trends !ersist$ Te e&tinction danger is 6ore li%ely i2 we alter an environ6ental !rocess tat causes ar62ul
e22ects and leads to conditions tat 6a%e te !lanet unina3ita3le to u6ans$ Considering tat tere is so 6uc tat
is un%nown a3out glo3al syste6s, we consider cli6ate cange to 3e te greatest danger to
u6an e&tinction$ 5owever, tere is no evidence o2 i66inent danger$ Nuclear war at so6e !oint in tis
century 6igt a!!en$ It is unli%ely to cause u6an e&tinction toug $ Wile several countries
ave nuclear wea!ons, tere are 2ew wit te 2ire!ower to anniilate te world $ Eor tose
nations it would 3e suicidal to e&ercise tat o!tion$ Te !attern is tat te 6ore destructive
tecnology a nation as, te 6ore it tends towards rational 3eavior$ So!isticated !recision
wea!ons ten 3eco6e 3etter tactical o!tions$ Te 3igger danger co6es 2ro6 nuclear wea!ons in te ands o2
terrorists wit te el! o2 a rogue state, suc as Nort Norea$ Te siAe o2 suc an e&!losion would not 3e
su22icient to treaten u6anity as a wole$ Instead it could trigger a 6aCor war or even world
war$ 4nder tis scenario u6an e&tinction would only 3e !ossi3le i2 oter treats were !resent, suc
as disease and cli6ate cange$ We 6onitor war se!arately$ 5owever we also need to incor!orate te dangers ere$
#2C )arming /eal
)arming is real" anthropogenic" and happening now&
AraganFa <?15?11 (Narl, Manager, Cli6ate Monitor at te Bureau o2 Meteorology in Australia, Te Bureau !resently
o!erates under te autority o2 te Meteorology Act 0-**, wic reMuires it to re!ort on te state o2 te at6os!ere and oceans in
su!!ort o2 AustraliaLs social, econo6ic, cultural and environ6ental goals$ 5is salary is not 2unded 2ro6 any e&ternal sources or
de!endent on s!ecially 2unded govern6ent cli6ate cange !roCects$ Narl BraganAa does not consult to, own sares in or receive
2unding 2ro6 any co6!any or organisation tat would 3ene2it 2ro6 tis article, and as no relevant a22iliations Te greenouse
e22ect is real" ere7s wy
, tt!"##teconversation$edu$au#te<greenouse<e22ect<is<real<eres<wy<0*0*, AM1
In !u3lic discussions o2 cli6ate cange, te 2ull range and weigt o2 evidence under!inning te current science can 3e di22icult to
2ind$ A good e&a6!le o2 tis is te role o2 o3servations o2 te cli6ate syste6 over te !ast one undred years or 6ore$ In te
current !u3lic discourse, te 2ocus as 3een 6ostly on changes in glo!al mean temperature&
0t would !e easy to form the opinion that everything we now a!out climate change is
!ased upon the o!served rise in glo!al temperatures and o!served increase in car!on
dio%ide emissions since the industrial revolution& 0n other words" one could have the
mistaen impression that the entirety of climate science is !ased upon a single
correlation study $ In reality, te correlation 3etween glo3al 6ean te6!erature and car3on dio&ide
over te )/t century 2or6s an i6!ortant, !ut very small part of the evidence for a human
role in climate change& =ur assess6ent o2 te 2uture ris% 2ro6 te continued 3uild u! o2 greenouse gases in te
at6os!ere is even less in2or6ed 3y )/t century canges in glo3al 6ean te6!erature$ Eor e&a6!le, our understanding o2
te greenouse e22ect ? te lin% 3etween greenouse gas concentrations and glo3al sur2ace air te6!erature ? is !ased
primarily on our fundamental understanding of mathematics" physics" astronomy and
chemistry& Cuch of this science is te%t!oo material that is at least a century old and
does not rely on the recent climate record$ Eor e&a6!le, it is a scienti2ic 2act tat Senus, te !lanet 6ost si6ilar
to Eart in our solar syste6, e&!eriences sur2ace te6!eratures o2 nearly *// degrees Celsius due to its at6os!ere 3eing eavily
laden wit greenouse gases$ Bac% on Eart, tat 2unda6ental understanding o2 te !ysics o2 radiation,
co63ined wit our understanding o2 cli6ate cange 2ro6 te geological record, clearly
de6onstrates tat increasing greenouse gas concentrations will inevita3ly drive glo3al
war6ing$ Te o3servations we ave ta%en since te start o2 )/t century ave con2ir6ed our 2unda6ental understanding o2 te
cli6ate syste6$ Wile te cli6ate syste6 is very co6!le&, o3servations ave sown tat our
2or6ulation o2 te !ysics o2 te at6os!ere and oceans is largely correct, and ever i6!roving$
Most i6!ortantly, te o3servations ave con2ir6ed tat u6an activities, in !articular a H/X increase in
at6os!eric car3on dio&ide concentrations since te late 0-t century, ave ad a discerni3le and signi2icant
i6!act on te cli6ate syste6 already$ In te 2ield %nown as detection and attri3ution o2 cli6ate cange, scientists use
indicators %nown as o2 cli6ate cange$ Tese 2inger!rints sow te entire cli6ate syste6 as canged in
ways tat are consistent wit increasing greenouse gases and an enanced greenouse
e22ect$ Tey also sow tat recent, long ter6 canges are inconsistent wit a range o2 natural
causes$ A war6ing world is o3viously te 6ost !ro2ound !iece o2 evidence$ 5ere in Australia, te decade ending in
)/0/ as easily 3een te war6est since record %ee!ing 3egan, and continues a trend o2 eac
decade 3eing war6er tan te !revious, tat e&tends 3ac% +/ years$ ;lo3ally, signi2icant war6ing
and oter canges ave 3een o3served across a range o2 di22erent indicators and troug a
nu63er o2 di22erent recording instru6ents, and a consistent !icture as now e6erged$ Scientists
ave o3served increases in continental te6!eratures and increases in te te6!erature o2 te lower at6os!ere$ In te
oceans, we ave seen increases in sea<sur2ace te6!eratures as well as increases in dee!<
ocean eat content$ Tat increased eat as e&!anded te volu6e o2 te oceans and as 3een
recorded as a rise in sea<level$ Scientists ave also o3served decreases in sea<ice, a general retreat o2 glaciers and
decreases in snow cover$ Canges in at6os!eric !ressure and rain2all ave also occurred in !atterns
tat we would e&!ect due to increased greenouse gases$ Tere is also e6erging evidence tat
so6e, toug not all, ty!es o2 e&tre6e weater ave 3eco6e 6ore 2reMuent around te !lanet$ Tese
canges are again consistent wit our e&!ectations 2or increasing at6os!eric car3on dio&ide$ :atterns o2 te6!erature cange tat
are uniMuely associated wit te enanced greenouse e22ect, and wic ave 3een o3served in te real world include" greater
war6ing in !olar regions tan tro!ical regions greater war6ing over te continents tan te oceans greater war6ing o2 nigt ti6e
te6!eratures tan dayti6e te6!eratures greater war6ing in winter co6!ared wit su66er a !attern o2 cooling in te ig
at6os!ere (stratos!ere1 wit si6ultaneous war6ing in te lower at6os!ere (tro!os!ere1$ By way o2 3rie2 e&!lanation, i2 te
war6ing over te )/t century were due to so6e dee! ocean !rocess, we would not e&!ect to
see continents war6ing 6ore ra!idly tan te oceans, or te oceans war6ing 2ro6 te to!
down$ Eor increases in solar radiation, we would e&!ect to see war6ing o2 te stratos!ere
rater tan te o3served cooling trend$ Si6ilarly, greater glo3al war6ing at nigt and during
winter is 6ore ty!ical o2 increased greenouse gases, rater tan an increase in solar radiation$
Tere is a range o2 oter o3servations tat sow te enanced greenouse e22ect is real$ Te additional car3on dio&ide
in te at6os!ere as 3een identi2ied troug its isoto!ic signature as 3eing 2ossil 2uel in origin$
Te increased car3on dio&ide a3sor3ed 3y te oceans is 3eing recorded as a 6easured
decrease in ocean al%alinity$ Satellite 6easure6ents o2 outgoing long<wave radiation 2ro6 te
!lanet reveal increased a3sor!tion o2 energy in te s!ectral 3ands corres!onding to car3on
dio&ide, e&actly as e&!ected 2ro6 2unda6ental !ysics$ It is i6!ortant to re6e63er tat te enanced
greenouse e22ect is not te only 2actor acting on te cli6ate syste6$ In te sort ter6, te in2luence o2 greenouse gases can 3e
o3scured 3y oter co6!eting 2orces$ Tese include oter antro!ogenic 2actors suc as increased industrial aerosols and oAone
de!letion, as well as natural canges in solar radiation and volcanic aerosols, and te cycle o2 El Niao and Ba Niaa events$ By
coosing a range o2 indicators, 3y averaging over decades rater tan years, and 3y loo%ing at te !attern o2 cange troug te
entire cli6ate syste6, scientists are a3le to clearly discern te 2inger!rint o2 u6an<induced cange$ Te cli6ate o2 Eart is now a
closely 6onitored tingP 2ro6 instru6ents in s!ace, in te dee! ocean, in te at6os!ere and across te sur2ace o2 3ot land and
sea$ It7s now !ractically certain tat increasing greenouse gases ave already war6ed te
cli6ate syste6$ Tat continued ra!id increases in greenouse gases will cause ra!id 2uture
war6ing is irre2uta3le
#2C CCP 0nsta!ility
Pollution causes CCP insta!ility
2anivell" 6$
(9a6estown Eoundation, Cina7s :ollution and its Treat to >o6estic and 8egional Sta3ility, tt!"##www$Ca6estown$org#single#'
noOcace(0Rt&OttnewsX*BttOnewsX*>(F-/H'
As the impact of pollution on human health !ecomes more o!vious and widespread" it is
leading to greater political mo!iliFation and social unrest from those citiFens who suffer
the most$ Te latest state6ent 2ro6 te =cto3er )//* Central Co66ittee 6eeting in Sangai illustrates BeiCing7s increasing
concern regarding te correlation 3etween unrest and !ollution issues$ Tere were 6ore tan +H,/// incidents o2 !rotest and unrest
recorded in Cina in )//H, u! 2ro6 *.,/// te year 3e2ore (Asia Ti6es, Nove63er 0,, )//H1$ Wile tere are no clear statistics
lin%ing tis nu63er o2 !rotests, riots, and unrest s!eci2ically to !ollution issues, the fact that pollution was one of
four social pro!lems lined to disharmony !y the Central Committee implies that there is
at least the perception of a strong correlation& 8or the CCP and neigh!oring states" social
unrest must !e viewed as a primary security concern for three reasonsL it is creating
greater political mo!iliFation" it threatens to forge linages with democracy movements"
and demonstrations are proving more difficult to contain& These three factors have the
potential to challenge the CCP+s total political control" thus potentially desta!iliFing a
state with a huge military arsenal and a history of violent" internal conflict that cannot !e
downplayed or ignored& :rotests are uniting a variety o2 actors trougout local co66unities$ Pollution issues
are indiscriminate$ Te e22ects, toug not eMually 2elt 3y eac !erson witin a co66unity, impact rich and poor"
farmers and !usinessmen" families and individuals alie& As local co66unities res!ond to !ollution
issues troug united o!!osition, it is leaving AeiBing with no easy target upon which to !lame
unrest" and no simple option for how to 7uell whole communities with a common
grievance& Moreover, !rotests serve as a venue 2or te !olitically disa22ected wo are una!!y wit te current state o2
governance, and 6ay 3e o!en to considering alternative 2or6s o2 !olitical rule$ ,nvironmental e%perts lie
,liFa!eth ,conomy note that protests afford an opportunity for the environmental
movement to forge linages with democracy advocates$ Se notes in er 3oo%, Te 8iver 8uns Blac%,
tat several environ6entalists argue tat change is only possi!le through greater democratiFation and
notes that the environmental and democracy movements united in ,astern ,urope prior
to the end of the Cold )ar& 0t is conceiva!le that in this way" environmentally$motivated
protests might help to spread democracy and undermine CCP rule& A 2urter %ey callenge is trying
to contain !rotests once tey 3egin$ Te steady introduction o2 new 6edia li%e cell !ones, e6ail, and te&t 6essaging are
!reventing Cina7s autorities 2ro6 silencing and iding unrest$ Moreover, te a3ility to send and receive in2or6ation ensures tat
do6estic and international o3servers will 3e 6ade aware o2 unrest, 6a%ing it 2ar 6ore di22icult 2or local autorities to e6!loy state<
sanctioned 2orce$ Te security ra6i2ications o2 greater social unrest cannot 3e overloo%ed$ Kinages !etween
environmental and democracy advocates potentially challenge the Party+s monolithic
control of power & In te !ast, si6ilar callenges 3y Ealun ;ong and te Tianan6en !rotestors ave 3een 6et 3y 2orce and
detain6ent$ In an e&tre6e situation, such as national water shortages" social unrest could generate
widespread" coordinated action and political mo!iliFation that would serve as a midwife
to anti$CCP political challenges, create divisions witin te :arty over ow to deal wit te environ6ent, or lead to a
6assive sow o2 2orce$ Any of these outcomes would mar an erosion or alteration to the CCP+s
current power dynamic& And wile 6any would treat !olitical cange in Cina, es!ecially te i6!losion o2 te :arty, as a
welco6e develo!6ent" it must !e noted that any slippage of the Party+s dominance would most
liely !e accompanied !y a period of transitional violence $ Toug 6ost violence would 3e directed
toward dissident Cinese" a ripple effect would !e felt in neigh!oring states through immigration"
impediments to trade" and an increased military presence along the Chinese !order$ All
of these situations would alter security assumptions in the region&
CCP insta!ility threatens nuclear war
9ee # I :ro2essor o2 :olitics and International 8elations at te 5ong Nong Ba!tist 4niversity and Storey, Becturer in >e2ence
Studies at >ea%in 4niversity, (5er3ert @ee, :ro2essor o2 :olitics and International 8elations at te 5ong Nong Ba!tist 4niversity and
Ian Storey, Becturer in >e2ence Studies at >ea%in 4niversity, )//), Te Cina Treat" :erce!tions, Myts and 8eality, !*1
'he fourth factor contri#utin+ to the $erce$tion of a China threat is the fear of $olitical and economic
colla$se in the PRC( resultin+ in territorial fra+mentation( ci"il !ar and !a"es of refu+ees $ourin+ into
nei+hbourin+ countries& @aturally, any or all of these scenarios !ould ha"e a $rofoundly ne+ati"e im$act on
re+ional stability! 7oday the Chinese leadershi$ faces a raft of internal $roblems( includin+ the increasin+ $olitical demands of its
citizens( a +ro!in+ $o$ulation( a shorta+e of natural resources and a deterioration in the natural en"ironment caused by ra$id industrialisation
and $ollution& 7hese $roblems are $uttin+ a strain on the central +o"ernmentOs ability to +o"ern effecti"ely&
Political disinte+ration or a Chinese ci"il !ar mi+ht result in millions of Chinese refu+ees see9in+
asylum in nei+hbourin+ countries& #uch an un$recedented e0odus of refu+ees from a colla$sed PRC
!ould no doubt $ut a se"ere strain on the limited resources of ChinaOs nei+hbours! A fra+mented China
could also result in another ni+htmare scenario - nuclear !ea$ons fallin+ into the hands of
irres$onsible local $ro"incial leaders or !arlords&1 >rom this $ers$ecti"e( a disinte+ratin+ China
!ould also $ose a threat to its nei+hbours and the !orld&
CC: insta3ility causes Taiwan lasout
SFonyi # (Micael SAonyi is a !ro2essor o2 5istory at te 4niversity o2 Toronto and a
recogniAed international autority on Asia, Co66entary No$ +-" Canadian Security Intelligence
Service :u3lication tt!"##www$csis$gc$ca#!3lctns#c66ntr#c6+-<eng$as!1
Te !olitical i6!lications o2 te !ro3le6s antici!ated 2or te ne&t stage o2 re2or6 are signi2icant$ The most important
political support of the CCP has always !een farmers and industrial worers, !recisely te two
grou!s wic stand to lose te 6ost$ 4nder >eng ^iao!ingLs leadersi!, te CC: a3andoned collectivis6 and egalitarianis6 as te
3asis o2 regi6e legiti6acy, su3stituting ra!id econo6ic develo!6ent and rising inco6e 2or all$ But te 2or6er is !roving di22icult to
sustain, and in any case it is no longer o3vious tat it leads to te latter$ Te regi6eLs greatest 2ear 6ust 3e te 3otto6<u! callenge
o2 ende6ic and accelerating !attern o2 ur3an and rural 6ass !rotest$ =ver 0// /// 6ass de6onstrations were re!orted to te
govern6ent in 0---P te real nu63er is surely 6any ti6es iger$ Sarious ty!es o2 grievances send !eo!le to te streets in Cina
today$ In te cities, te 6ost i6!ortant include te closure o2 3an%ru!t state<owned enter!rises and resulting layo22sP un!aid wages,
!rivatiAation o2 ousing wic involves eviction 2ro6 !u3lic ousing and levels o2 co6!ensation inadeMuate 2or !urcase o2 a !rivate
o6e, and oter erosions o2 social wel2are$ In May, students at BeiCing 4niversity, long a toucstone 2or te national senti6ents,
de6onstrated against te unsa2e ca6!us environ6ent a2ter te ra!e and 6urder o2 a 2ellow student$ In rural areas, !eo!le
de6onstrate and riot against e&cessive ta&ation, govern6ent 2ailures to !ay 2or !rocured !roducts, land dis!utes, corru!tion and
e63eAAle6ent 3y local o22icials, and 6ani!ulation o2 village elections$ 8ural and ur3an residents !rotesting against govern6ent
closures o2 invest6ent 2unds 2or illegal activity ave 3een !articularly outs!o%en 3ecause tey 3elieved tat te state actively
!ro6oted and guaranteed te invest6ent 2unds$ =ver one undred 6ass de6onstrations related to invest6ent 2unds are said to
ave occurred in te u!!er @angtAe city o2 CongMing alone$ Tree as!ects o2 te de6onstrations are noteworty$ Eirst, tey are
occurring trougout Cina, in 3ot ric and !oor areas, 3ecause there are dissatisfied people everywhere& In a
single wee% o2 9anuary )///, there were reports of anti$government protests in >uangdong@s
Hhongshan county, close to 5ong Nong and one o2 CinaLs ricest counties, and in i6!overised San&i in te nort$(0/1
Second, te scale o2 te !rotests is large and growing$ In te nortern !rovince o2 Biaoning, over twenty tousand 6iners
de6onstrated in Ee3ruary )/// against inadeMuate !ayo22s wen teir 3an%ru!t 6ine sut down$ In May, 2ive tousand steelwor%ers
de6onstrated, also in Biaoning$ Media re!orts suggest te :eo!leLs Bi3eration Ar6y is increasingly 3eing called u!on to restore
order$ /ural protests are also growing in scale& In 9anuary 0---, over 2ive tousand villagers near te 5unan
ca!ital o2 Cangsa were dis!ersed 3y !olice a2ter gatering to de6onstrate against ta&es and corru!tion$(001 Tird, des!ite teir
siAe and intensity, the demonstrations are narrowly focused on specific economic grievances"
and there is no coordination or organiFation lining separate protests$ Tus, !o!ular e&!ressions
o2 dissatis2action will !ro3a3ly not 3eco6e regi6e<treatening in te !eriod )//0<)//,$ They would !ecome much
more worrying if their demands !roadened to include political change, i2 a coordinating
organiAation e6erged, or if they !ecome serious enough that the leadership feels compelled to
distract popular feeling !y manipulating nationalism, !era!s through aggressive action
against Taiwan, discussed 3elow$
>lo!al nuclear war&
*unovic . (A6erican Military 4niversity JBee 9, )//-, Te Cinese<Taiwanese Con2lict
:ossi3le Eutures o2 a Con2rontation 3etween Cina, Taiwan and te 4nited States o2 A6erica,
tt!"##www$la6!<6etod$org#eCo66ons#5un%ovic$!d21
A war !etween China, Taiwan and the United States has the potential to escalate into a
nuclear conflict and a third world war, tere2ore, 6any countries oter tan te !ri6ary actors could 3e a22ected
3y suc a con2lict, including 9a!an, 3ot Noreas, 8ussia, Australia, India and ;reat Britain, i2 tey were drawn into te war, as well
as all oter countries in te world tat !artici!ate in te glo3al econo6y, in wic te 4nited States and Cina are te two 6ost
do6inant 6e63ers$ 0f China were a!le to successfully anne% Taiwan" the possi!ility e%ists that
they could then plan to attac Sapan and !egin a policy of aggressive e%pansionism in
,ast and Southeast Asia" as well as the Pacific and even into 0ndia" which could in turn
create an international standoff and deployment of military forces to contain the threat& 0n
any case" if China and the United States engage in a full$scale conflict" there are few
countries in the world that will not !e economically and?or militarily affected !y it$ 5owever,
Cina, Taiwan and 4nited States are te !ri6ary actors in tis scenario, wose actions will deter6ine its eventual outco6e,
tere2ore, oter countries will not 3e considered in tis study
ATL Alt Causes to Pollution
Coal accounts for over =-Q of Chinas emission
)atts" 1-$
(9onatan, Eoreign :olicy Writer, CinaLs Coal Addiction,
tt!"##www$2oreign!olicy$co6#articles#)/0/#0)#/)#cinaOsOaddictionOtoOcoal'
Coal is co6!ressed istory, 3uried deat$ ;eologists esti6ate te sea6s o2 antracite and 3itu6inous coal in nortern Cina, 2or
instance, were 2or6ed 2ro6 te 9urassic !eriod onward$ Witin te6 are te re6ains o2 2erns, trees, 6osses, and oter li2e<2or6s
2ro6 6illions o2 years ago& Although long e%tinguished on the surface world" they still possess
form and energy& Consider coal with a superstitious eye" and foul air might seem a curse
suffered for disinterring preancient life$ >escri3ed wit a little !oetic license, glo3al war6ing is a !lanetary 2ever
caused 3y 3urning too 6uc o2 our !ast$
China recently overtoo the United States as the world@s !iggest emitter of greenhouse
gases" largely !ecause it is so dependent on this fossil fuel $ 8or each unit of energy" coal
produces =- percent more car!on dio%ide than natural gas and #- percent more than oil&
Tis does not even include 6etane released 2ro6 6ines, 2or wic China accounts for almost half the glo!al
total" or spontaneous com!ustion of coal seams" which release 1-- megatons of energy
from coal each year& CinaLs econo6y is utterly de!endent on coal$ It !rovides ,-$* !ercent o2 te countryLs energy, a
greater degree o2 reliance tan tat o2 any oter 6aCor country$ Cheap coal generates electricity for AeiBing"
Shanghai" and Chong7ing" fires the steel mills of *ua%i" powers the production lines of
>uangdong" and allows consumers in the )est to !uy Chinese goods at nocdown
prices& 2o other fuel has such an impact on the environment" !oth local and glo!al&
#2C China Coal Causes )arming
Coal use increase CJ# emissions transition to renewa!les solves
Cacalister" <?1:$
(Terry, CoalLs resurgence under6ines 2igt against glo3al war6ing, tt!"##www$guardian$co$u%#environ6ent#)/0)#Cun#0F#coal<
resurgence<glo3al<war6ing'
Coal has carved itself a :-Q share of the glo!al energy maret $ its highest level in over
5- years $ undermining attempts !y governments to reduce their car!on emissions, new
2igures sow$ China and 0ndia !oth increased their use of car!on$heavy coal !y over .Q 3ut
Euro!e, were !olitical consensus against glo3al war6ing is strongest, also saw a HX increase, according to te B: Statistical
8eview o2 World Energy$ Cristo2 8ul, B:Ls cie2 econo6ist !resenting te 2igures in Bondon on Wednesday said industrialisation
o2 develo!ing countries and cheap prices were driving coal demand which had O profound
implicationsO for CJ# output& The increased use of coal and a continued heavy use of
other fossil fuels such as oil and gas led to a :Q increase in world car!on emissions
from energy in )/00, a lower rate tan in )/0/, te statistics sow$ 8ul said concerns a3out climate change
seemed to have !een pared to one side as a Osense of frustrationO had set in over the
difficulties of finding a 7uic and easy solution to glo!al warming& 5e 3elieved a 2ast move
away from coal to gas would help reduce CJ# emissions fast !ut he 7uestioned whether
the current system of su!sidising renewa!le power would lead to the ind of technology
!reathroughs needed&
#2C China ,missions Dey
China is the num!er one emitter in the world
*ays" 1#$
(9e22, Eacts and >etails, ;B=BAB WA8MIN; IN C5INA, tt!"##2actsanddetails$co6#cina$!!'ite6id(F-FRcatid(0/Rsu3catid(,,'
China is the largest producer of greenhouse gases and the largest emitter of car!on
dio%ide& 0t was not supposed to overtae the United States as the world+s leading
producer of greenhouse gases until #-#- !ut a study !y a 1utch government<2unded grou!
released in 9une )//+ determined that China was already the world+s 2o& 1 emitter of car!on
dio%ide then$ 0t surpassed the United States in #--< when it produced N&6 percent more of
these gasses than the United States compared to # percent less in #--6& In August )//.,
;er6any7s IW8 Institute concluded tat Cina7s car3on dio&ide e6issions in )//. were ,$. 6illion tonsIte 6ost o2 any nation and
0+. !ercent iger tan te 0--/ level$ Te 4nited States and Cina togeter account 2or H/ !ercent o2 te worldLs greenouse
gases b 6ost o2 wic is derived 2ro6 coal$ China produces a!out #: percent of the world+s car!on
dio%ide " compared to #1 percent from the United States& Cina !roduced ,$)F 3illion 6etric tons o2
car3on dio&ide in )//,, co6!ared to *$. 3illion 6etric tons o2 te 4nited States$ Te increase was attri3uted 6ostly to increased
coal consu6!tion and ce6ent !roduction$ :er ca!ita car3on e6issions are H$/F tons 2or eac Cinese co6!ared to )0$+* tons !er
A6erican and 0$0) tons in India$ Cina7s e6issions 2ro6 trans!ortation and ouseold waste and aviation are relatively low wile
e6issions 2ro6 !ower generation are a6ong te igest in te world$ Te Cinese industry is relatively ine22icient in its energy
usage$ Inner Mongolia as igest !er ca!ita car3on dio&ide e6issions in Cina$ Tis is te !roduct o2 it 3eing te nu63er one
region 2or coal !roduction in Cina and aving a low !o!ulation density$ Wile Cina7s car3on e6ission average is Cust a 2i2t o2 tat
o2 te 4nited States, in tis area te 0, tons !er !erson !er year are al6ost twice te level in te 4$N$ JSource" 9onatan Watts, Te
;uardian, Nove63er 0*, )//-K >reenhouse gas emissions in China are growing very rapidly&
,missions increased !y 6< percent !etween 1..# and #--#" wen it released F$F 3illion tons o2 car3on
dio&ide$ Since )//) e6issions ave al6ost dou3led again$ In )//H, Cina !roduced H$+ 3illion 6etric tons o2 car3on dio&ide
e6issions 2or 0+$H !ercent o2 te world out!ut, co6!ared to *$- 3illion 6etric tons o2 car3on dio&ide e6issions 2or )0$- !ercent o2
te world out!ut 2or te 4nited States, 0$+ 3illion 6etric tons o2 car3on dio&ide e6issions 2or ,$) !ercent o2 te world out!ut 2or
8ussia and 0$F 3illion 6etric tons o2 car3on dio&ide e6issions 2or H$+ !ercent o2 te world out!ut 2or 9a!an$ Ay #-#6 the
emission levels in China are e%pected to dou!le or triple" e7ualing increase in the entire
industrialiFed world$ Already e6ission increases in Cina cancelled te !rogress 6ade in oter countries 3y reducing
e6issions in accordance wit te Nyoto !rotocol$ >reenhouse gas emissions are increasing" due mainly
to increase in coal use to fuel China+s industrial and economic !oom $ 2ew power plants
are !eing !uilt" more coal is !eing !urned" sales of cars" refrigerators and air
conditioners are soaring$ All o2 tese tings !roduce 6ore car3on dio&ide and oter gases$ According to a )//+ survey
3y te Center o2 ;lo3al >evelo!6ent te Cina !ower sector alone releases )$,. 3illion tons o2 car3on dio&ide, co6!ared to )$+-
3illion released 3y te 4nited States and H// 6illion tons in 9a!an$
#2C China Codeled
The world community would Chinas model for renewa!le energy
Ceisen and *awins" .$
(__:eter, :resident, ;lo3al Energy Networ% Institute (;ENI1 and __Ste22anie, 8esearc Associate, ;lo3al Energy Networ% Institute
(;ENI1, 8enewa3le Energy :otential o2 Cina" Ma%ing te Transition 2ro6 Coal<Eired ;eneration,
tt!"##www$geni$org#glo3alenergy#researc#renewa3le<energy<!otential<in<cina#8enewa3leX)/EnergyX)/:otentialX)/in
X)/Cina$!d2'
China has a huge potential in several different sectors of renewa!le energy$ Its large !otential
lies in te already well<esta3lised ydro!ower industry$ ,normous untapped potential also e%ists in wind"
solar" and !iomass$ Te Chinese government needs to stop !ringing coal$fired plants
online" !egin phasing out old coal$fired power plants and accelerate the development
more clean sources of energy$ Te Cinese govern6ent is 6a%ing great !rogress and is 3eginning to see te
i6!ortance in tis, yet uge une&!loited renewa3le !otential re6ains$ 0nstead of following the rest of the world"
the Chinese government possesses clean power resources where it can step up and lead
the rest of the world in the development of renewa!le energy$ Instead o2 letting te rest o2 te world
criticiAe Cina 2or its lac% o2 environ6ental res!onsi3ility, the Chinese government can mae changes now
and the rest of the world community can honor and emulate China+s environmental
responsi!ility&
#2C China ,conomy
Chinese investment in clean technology is ey to their economy
TC>" 1#$
(9une, )/0), Te Cli6ate ;rou!, Cina7s clean revolution" an o!en door 2or international coo!eration' Te Cinese Acade6y o2
Sciences (CAS1 and Te Cli6ate ;rou!, tt!"##www$greendrin%scina$org#w!<content#u!loads#)/0)#/,#Te<Cli6ate<;rou!<Cina<
researc<6edia<3rie2ingO0)/,0)$!d2'
China needs to place clean technology investment at the heart of its economic growth
plans& The country is currently at the cusp of driving a new glo!al Pclean+ industrial
revolution that will meet growing population and consumer growth sustaina!ly and
improve China+s international standing$ 8ailure to invest in the low car!on economy riss
slowing the pace of economic growth$ Cina and te international co66unity sould wor% 6ore closely togeter
to drive a Dlow car3on revolution7 wic will el! tac%le te glo3al 2inancial crisis 3y creating 6illions o2 green Co3s as well as cur3
car3on e6issions$ Introduction At a pivotal moment for China $ with its change of leadership
already underway" growth rates slowing down and the glo!al financial crisis not a!ating $
the ideal model for China+s future economic growth (te Cina !atway1 will !e to decouple
resource consumption and environmental impact from growth$ 0f this does not happen
China riss slower growth rates !ecause of" among other factors" the country+s negative
international image" its !lace at te lower end o2 te glo3al industrial international division and te green trade 3arrier$ At
te sa6e ti6e Cina7s invest6ent a3road ? and es!ecially in resource industries < needs to 3e 6ore res!onsi3le and sustaina3le$
ATL Alt Causes to ,missions US
US coal consumption has decreased
/TT" 5?#6$
(8TT News 4$S$ Coal Consu6!tion >ro!s 0.$.X In \H To 8ecord Bow, tt!"##www$rttnews$co6#0.,.)*0#u<s<coal<consu6!tion<
dro!s<0.<.<in<MH<to<record<low$as!&'
(8TTNews1 < The U&S& ,nergy 0nformation Administration released information via press
release )ednesday indicating that domestic coal consumption during the fourth 7uarter
of #-11 was down !y 1=&= percent from the third 7uarter o2 )/00 to ))+$0 6illion sort tons$ The
decrease !rought coal consumption to the lowest level since the second 7uarter of 1..6$
Wile te dro! was 6ostly te result o2 lower consu6!tion in te electric !ower sector, te EIA noted tat decreases in 4$S$ coal
use were !artially o22set 3y an increase in coal e&!orts to Asia and Euro!e$
US coal consumption decreasing natural gas
Kacy" 6?15$
(Ste!en, Tin% :rogress Cli6ate :rogress Sta22 Writer, 4$S$ Coal ;eneration >ro!s 0- :ercent In =ne @ear, Beaving Coal Wit
F, :ercent Sare =2 Electricity, tt!"##tin%!rogress$org#cli6ate#)/0)#/*#0H#H.FHF)#us<coal<generation<dro!s<0-<!ercent<in<one<
year<leaving<coal<wit<F,<!ercent<sare<o2<electricity#'
Power generation from coal is falling 7uicly$ According to new figures from the U&S&
,nergy 0nformation Administration" coal made up :< percent of U&S& electricity in the first
7uarter of #-1# down from 55&< percent in the first 7uarter of #-11& That stunning drop"
which represented almost a #- percent decline in coal generation over the last year" was
primarily due to low natural gas prices $ As EIA e&!lains, natural gas generation will clim!
steadily this year" while coal will see a dou!le$digit drop !y the end of #-1#L NaturalQgasQ2ired
generation continues to e&!and its sare o2 total generation at te e&!ense o2 coalQ2ired generation$ >uring te 2irst Muarter o2 )/0),
natural gas accounted 2or ).$+ !ercent o2 total generation co6!ared wit )/$+ !ercent during te sa6e Muarter last year$ In contrast,
coal7s sare o2 total generation declined 2ro6 HH$, !ercent to F,$/ !ercent over te sa6e !eriod$ :rices 2or natural gas delivered to
te electric !ower industry 2ell 3y +$* !ercent in )/00, wic contri3uted to a signi2icant increase in te sare o2 naturalQgasQ2ired
generation$ EIA e&!ects tis trend to continue in )/0), wit electric !ower sector coal consu6!tion 2alling 3y 0H !ercent& 2atural
gas in the electric power sector grows !y almost #1 percent in #-1#" primarily driven !y
the increasing relative cost advantages of natural gas over coal for power generation in
some regions&
Shift to shale gas has decreased US emissions
2ordhaus and Shellen!erger" 5?#1$
(Micael and Ted, W5@ EMISSI=NS A8E >ECBININ; IN T5E 4$S$ B4T N=T IN E48=:E,
tt!"##www$newgeogra!y$co6#content#//)+.,<wy<e6issions<are<declining<us<3ut<not<euro!e'
A funny thing happened while environmentalists were trying and failing to cap car!on
emissions in the U&S& Congress& U&S& car!on emissions started going down $ Te decline 3egan
in )//* and accelerated a2ter te 2inancial crisis$ Te latest esti6ates 2ro6 te 4$S$ Energy In2or6ation Ad6inistration now suggest
tat 4&S& emissions will continue to decline for the ne%t few years and remain flat for a
decade or more after that& Te !ro&i6ate cause o2 te decline in recent years as 3een te recession and slow
econo6ic recovery$ But te reason tat EIA is !roCecting a long<ter6 decline over te ne&t decade or 6ore is te glut o2 cea!
natural gas, mostly from unconventional sources lie shale" that has profoundly changed
America+s energy outloo over the ne%t several decades& ;as is no !anacea$ It still !uts a lot o2 car3on
into te at6os!ere and as created a range o2 new !ollution !ro3le6s at te local level$ Metane lea%age resulting 2ro6 te
e&traction and 3urning o2 natural gas treatens to undo 6uc o2 te car3on 3ene2it tat gas olds over coal$ And even were we to
6a%e a 2ull transition 2ro6 coal to gas, we would ten need to transition 2ro6 gas to renewa3les and nuclear in order to reduce 4$S$
e6issions dee!ly enoug to acieve te reductions tat cli6ate scientists 3elieve will 3e necessary to avoid dangerous glo3al
war6ing$ Aut the shale gas revolution" and its rather significant impact on the U&S& car!on
emissions outloo" offers a star re!ue to what has !een the dominant view among
policy analysts and environmental advocates as to what it would tae in order to !egin to
!end down the traBectory of U&S& emissions" na6ely a !rice on car3on and a 3inding ca! on e6issions$ Te
e&istence o2 a 3etter and cea!er su3stitute is today succeeding in reducing 4$S$ e6issions were e22orts to raise te cost o2 2ossil
2uels troug car3on ca!s or !ricing I and tere3y drive te transition to renewa3le energy tecnologies I ave 2ailed$ 0n fact"
the rapid displacement of coal with gas has re7uired little in the way of regulations at all&
Conventional air !ollution regulations do re!resent a very low, i6!licit !rice on car3on$ And a lot o2 good grassroots activis6 at te
local and regional level as raised te !olitical costs o2 %ee!ing old coal !lants in service and 3ringing new ones online$ Aut
those efforts have !ecome increasingly effective as gas has gotten cheaper& The
e%istence of a !etter and cheaper su!stitute has made the transition away from coal
much more via!le economically" and it has put the wind at the !ac of political efforts to
oppose new coal plants" close e%isting ones" and put in place stronger ,PA air pollution
regulations&
The US is shifting to natural gas
2ordhaus and Shellen!erger" 5?#1$
(Micael and Ted, W5@ EMISSI=NS A8E >ECBININ; IN T5E 4$S$ B4T N=T IN E48=:E,
tt!"##www$newgeogra!y$co6#content#//)+.,<wy<e6issions<are<declining<us<3ut<not<euro!e'
It wasnLt tat long ago tat te 4$S$ was cast as te glo3al cli6ate villain, re2using to sign te Nyoto accord wile Euro!e
i6!le6ented ca! and trade$ Aut" as we note !elow in a new article for 9ale:<-" a funny thing
happenedL U&S& emissions started going down in #--6 and are e%pected to decline further
over the ne%t decade, wile Euro!eLs ca! and trade syste6 as ad no 6easura3le i6!act on e6issions$ Even te
su!!osedly green ;er6any is 6oving 3ac% to coal$ Wy' Te reason is o3vious" te 4&S& is !enefitting from the :-$
year" government$funded technological revolution that massively increased the supply of
unconventional natural gas" maing it cheap even when compared to coal&
ATL Alt Causes to ,missions >ermany
>ermany is decreasing emisisons
SongBohan" 5?#N$
(Tin% :rogress Cli6ate :rogress Sta22 Writer, Arne, ;er6any" Eigting Cli6ate Cange And :asing =ut Nuclear :ower Are Two
Sides =2 Te Sa6e Coin, tt!"##tin%!rogress$org#cli6ate#)/0)#/H#)+#H+)+0F#ger6any<2igting<cli6ate<cange<and<!asing<out<
nuclear<!ower<are<two<sides<o2<te<sa6e<coin#'
8ecently, te editorial 3oard o2 te Wasington :ost ased if the world can fight glo!al warming without
nuclear power" looing to >ermany and Sapan for the answer& Bot countries are %nown 2or a nuclear
sutdown !at$ In 9a!an, only one o2 te *H nuclear reactors currently re6ains in o!eration$ ;er6any as closed eigts reactors
2ollowing te nuclear catastro!e o2 Eu%usi6a in Marc )/00 and te re6aining nine are sceduled to 3e closed 3y )/))$ That
o!viously must lead to rising emissions" the Post claims& >ermany+s (electricity sector
emits more car!on than it must after eight reactors shut down last year$ 0f you loo at the
most recent emissions data" however " the opposite is happening $ >ermany reduced its
car!on emissions in #-11 !y #&1 percent despite the nuclear phase out& 5ow can tat 3e' The
cut in greenhouse gases was mainly reached due to an accelerated transition to
renewa!le energies and a warm winter$ In addition, te E4 e6issions trading syste6 ca!!ed all e6issions 2ro6
te !ower sector$ Wile eigt nuclear !ower !lants were sut down, solar !ower out!ut increased 3y ,/ !ercent$ In )/00 alone, +$*
gigawatts o2 solar were installed$ By te end o2 last year, renewa3le energies !rovided 6ore tan )/ !ercent o2 overall electricity$
Te Wasington :ost re2ers to critics o2 tis transition wo reasona!ly predict that the country will instead
rely on electricity imports from neigh!ors running old" relia!le coal" gas and" yes"
nuclear plants for years to come&; So tis 6eans >ermany would import electricity from
neigh!oring countries" such as 8rance" Poland" and the CFech /epu!lic' It7s true, de!ending on
ti6e o2 day and year, tat ;er6any i6!orts electricity& *owever" even after shutting its eight oldest
nuclear power plants" >ermany is still a net e%porter of electricity& In )/00, ;er6any e&!orted ,
TW 6ore tan it i6!orted, according to te industry 2ederation ;er6an Association o2 Energy and Water Industries B>EW$
Countries lie Poland and the CFech /epu!lic are not as concerned a!out providing
electricity to >ermany$ =n te contrary, tey are 6ainly concerned a3out wind and solar !ower surges 2ro6 ;er6any
o22setting teir own !roduction o2 2ossil and nuclear !ower$ Additionally, ;er6an electricity e&!orts to Euro!e7s nuclear !ower ouse
Erance actually increased in )/00$ )hat does this tell usX The nuclear phase$out does not conflict
with efforts to fight climate change& 9ou can reduce emissions while shutting down
nuclear power& And you can still supply industry and consumers with enough power& By
te end o2 )/00, >ermany had reduced its CJ# emissions !y more than #: percent co6!ared to
0--/ levels, oversooting its Nyoto target$ In addition, the country has !uild up a competitive renewa!le
energy industry providing thousands of new Bo!s" even as co6!etitors li%e Cina enter te ga6e and catc
u! 2ast$ In ;er6any, 2igting cli6ate cange and !asing out nuclear !ower are two sides o2 te sa6e coin$
TTAff AnswersTT
#AC 2o Transition
)ont transition ey to their economy
China will mae the transition and stop using coal in the s7uo
CcDillop" 1#$
(Eor6er cie2 !olicy analyst, >ivision A :olicy, >; ^SII Energy, Euro!ean Co66ission, re tan F/ years e&!erience in te energy,
econo6ic and 2inance do6ains$ Trained at Bondon 4N7s 4niversity College, e as ad s!ecially long e&!erience o2 energy !olicy,
!roCect ad6inistration and te develo!6ent and 2inancing o2 alternate energy$ Tis included is role o2 in<ouse E&!ert on :olicy
and :rogra66ing at te >; ^SII<Energy o2 te Euro!ean Co66ission, >irector o2 In2or6ation o2 te =A:EC tecnology trans2er
su3sidiary, A8EC and researcer 2or 4N agencies including te IB=, Andrew, Marc )H, Cina 8eaces :ea% Coal,
tt!"##sa6cee%ong$3logs!ot$co6#)/0)#/F#cina<reaces<!ea%<oil$t6l'
Si6!ly due to 6ore tan ,,X o2 CinaLs current electricity 3eing !roduced 2ro6 coal, wit little !otential 2or raising CinaLs already
i6!ressive ydro out!ut, and wit te gas alternative currently 3ased only on ig<!riced BN; i6!orts, China@s coal
demand growth is loced$on to its economic growth$ Areaing that lin will in no way !e
easy and the short timeframe for achieving maBor change may indicate that China will
engage a massive energy transition plan away from coal, and 6ay 3e constrained to i6!ort 6ore oil in
te sort<ter6$
Alternative energy options fail
CcDillop" 1#$
(Eor6er cie2 !olicy analyst, >ivision A :olicy, >; ^SII Energy, Euro!ean Co66ission, re tan F/ years e&!erience in te energy,
econo6ic and 2inance do6ains$ Trained at Bondon 4N7s 4niversity College, e as ad s!ecially long e&!erience o2 energy !olicy,
!roCect ad6inistration and te develo!6ent and 2inancing o2 alternate energy$ Tis included is role o2 in<ouse E&!ert on :olicy
and :rogra66ing at te >; ^SII<Energy o2 te Euro!ean Co66ission, >irector o2 In2or6ation o2 te =A:EC tecnology trans2er
su3sidiary, A8EC and researcer 2or 4N agencies including te IB=, Andrew, Marc )H, Cina 8eaces :ea% Coal,
tt!"##sa6cee%ong$3logs!ot$co6#)/0)#/F#cina<reaces<!ea%<oil$t6l'
The Chinese government is considering a wide range of alternatives to coal" !oth on the
economic structure side" and on the energy supply side& China@s annual growth of
windpower and solar electric generating capacity is now running at a!out one$7uarter of
its annual .- >) increase in power capacity" tis annual increase 3eing eMuivalent to two<tirds o2 ;er6anyLs
total installed !ower ca!acity, and 6ay rise 2urter$ This however will not !e enough to achieve transition
away from coal" and the nuclear option remains dogged !y very high costs and long lead
times&
China wont switch coal prices
CcDillop" 1#$
(Eor6er cie2 !olicy analyst, >ivision A :olicy, >; ^SII Energy, Euro!ean Co66ission, re tan F/ years e&!erience in te energy,
econo6ic and 2inance do6ains$ Trained at Bondon 4N7s 4niversity College, e as ad s!ecially long e&!erience o2 energy !olicy,
!roCect ad6inistration and te develo!6ent and 2inancing o2 alternate energy$ Tis included is role o2 in<ouse E&!ert on :olicy
and :rogra66ing at te >; ^SII<Energy o2 te Euro!ean Co66ission, >irector o2 In2or6ation o2 te =A:EC tecnology trans2er
su3sidiary, A8EC and researcer 2or 4N agencies including te IB=, Andrew, Marc )H, Cina 8eaces :ea% Coal,
tt!"##sa6cee%ong$3logs!ot$co6#)/0)#/F#cina<reaces<!ea%<oil$t6l'
CinaLs NEA says tat it is a3le to e&!and coal !roduction and i6!ort ca!acity 3y +*/ 6illion tons a year in te sort ter6, and
6igt attain an ulti6ate !ea% o2 H$0 3illion tons a year, 3y a3out )/0*, o2 wic as 6uc as )// 6illion tons#year could 3e i6!orted$
Te role o2 CinaLs coal i6!orts, 2or energy traders, is al6ost as i6!ortant as CinaLs ever rising i6!ort de6and 2or oil$ Tis is due
to 3ot o2 AsiaLs giant e6erging econo6ies, India and Cina, 3eing increasingly o3liged to i6!ort coal due to teir overstretced
national coal 6ining and trans!ort industries 2acing cost and in2rastructure li6its and teir 6ines 2acing coal de!letion issues$ At
the same time" coal import demand !y ,urope is rising" despite its clean energy
programs" and import demand remains strong in developed Asia& Coal e%port prices"
which at oil parity would attain a!out M6-- per ton" may however hit a ceiling due to
rising K2> gas availa!ility and declining gas prices triggered !y US shale gas
development, ena!ling China and 0ndia to import more coal at prices that cease to grow&
Cant transition to K2>
CcDillop" 1#$
(Eor6er cie2 !olicy analyst, >ivision A :olicy, >; ^SII Energy, Euro!ean Co66ission, re tan F/ years e&!erience in te energy,
econo6ic and 2inance do6ains$ Trained at Bondon 4N7s 4niversity College, e as ad s!ecially long e&!erience o2 energy !olicy,
!roCect ad6inistration and te develo!6ent and 2inancing o2 alternate energy$ Tis included is role o2 in<ouse E&!ert on :olicy
and :rogra66ing at te >; ^SII<Energy o2 te Euro!ean Co66ission, >irector o2 In2or6ation o2 te =A:EC tecnology trans2er
su3sidiary, A8EC and researcer 2or 4N agencies including te IB=, Andrew, Marc )H, Cina 8eaces :ea% Coal,
tt!"##sa6cee%ong$3logs!ot$co6#)/0)#/F#cina<reaces<!ea%<oil$t6l'
)hile costly high$tech K2> infrastructures lie re$gasification terminals are rapidly !eing
!uilt !y China and 0ndia" the gas alternative to coal for !oth countries mainly concerns
their hopes for domestic shale gas development" !ut this is not growing at anywhere near
the pace needed to phase out coal" or even cover their annual growth of coal demand$ Te
net result is tat 3ot coal and oil i6!ort de6and, 3y Cina, will li%ely tend to grow 2aster tan !reviously antici!ated and 2orecast$
#AC Transition to Jil
China will transition to oil no other sustaina!le source
CcDillop" 1#$
(Eor6er cie2 !olicy analyst, >ivision A :olicy, >; ^SII Energy, Euro!ean Co66ission, re tan F/ years e&!erience in te energy,
econo6ic and 2inance do6ains$ Trained at Bondon 4N7s 4niversity College, e as ad s!ecially long e&!erience o2 energy !olicy,
!roCect ad6inistration and te develo!6ent and 2inancing o2 alternate energy$ Tis included is role o2 in<ouse E&!ert on :olicy
and :rogra66ing at te >; ^SII<Energy o2 te Euro!ean Co66ission, >irector o2 In2or6ation o2 te =A:EC tecnology trans2er
su3sidiary, A8EC and researcer 2or 4N agencies including te IB=, Andrew, Marc )H, Cina 8eaces :ea% Coal,
tt!"##sa6cee%ong$3logs!ot$co6#)/0)#/F#cina<reaces<!ea%<oil$t6l'
To 3e sure, Cinese o!es 2or sale gas are ig" with the US ,0A crediting China with the world@s
largest national resources" !ut without maBor gas transport infrastructures and shale gas
,VP only at a very early stage" Chinese hopes are not matched !y results on the ground$
K2> import e%pansion is also pro!lematic for China" for infrastructure reasons and due
to present very high K2> prices for Asian destinations" sometimes a!ove M1= per million
ATU" driven 3y sustained i6!ort de6and 2ro6 9a!an, Sout Norea, Taiwan and oter ASEAN countries$ As a net result" it
is liely China@s oil import demand may grow more than currently forecast $ rather than
tend to stagnate $ with maBor impacts on glo!al oil prices" going forward
#AC Kin Turn
Turn< e&!orts into Asian 6ar%ets drive u! te !rice and 2orce a transition
)alsh" 6?:1$
(Bryan, Ti6e Eco centric MagaAine Writer, >rawing Battle Bines =ver A6erican Coal E&!orts to Asia,
tt!"##ecocentric$3logs$ti6e$co6#)/0)#/*#F0#drawing<3attle<lines<over<a6erican<coal<e&!orts<to<asia#[i&AA0y%*+5I.\'
But tat7s only true i2 4$S$ coal adds to Asian coal consu6!tion, rater tan si6!ly dis!lacing 6ore e&!ensive sources$ And
e%porting coal from the U&S& could actually change consumption here at home" So6e argue
tat if increasing demand in Asia pushes up glo!al coal prices" it could actually help the
environment !y forcing more coal$!urning countries to start looing for cheaper energy
alternatives$ 0n the U&S&" higher coal prices could accelerate the switch from coal to
natural gas, es!ecially in !arts o2 te Midwest tat re6ain eavily de!endent on coal$ Aut that will depend on
how Asian marets respond to the potential avalanche of U&S& coal&
*igh coal prices force the shift to renewa!les
Airgoren" <?15$
(Alternative Energy and Sustaina3ility, Asia needs coal, te 4$S$ as !lenty$ Will e&!anding e&!orts 6a%e cli6ate cange worse',
tt!"##www$&ing$co6#net#erneuer3areenergien#international<3oard<F)0+#asia<needs<coal<te<u<s<as<!lenty<will<e&!anding<e&!orts<
6a%e<cli6ate<cange<worse<H0/F.**-'
Some argue that if increasing demand in Asia pushes up glo!al coal prices" it could
actually help the environment !y forcing more coal$!urning countries to start looing for
cheaper energy alternatives$ In te U&S&" higher coal prices could accelerate the switch from
coal to natural gas" especially in parts of the Cidwest that remain heavily dependent on
coal$ But tat will de!end on ow Asian 6ar%ets res!ond to te !otential avalance o2 4$S$ coal$ Chinese demand for
coal has !een inelastic in recent years" meaning that prices$$high or low$$haven@t had
much impact on how much coal China !urns& That@s partly !ecause the Chinese
government e%erts control over the energy maret" says /ichard Corse" director of coal$
and car!on$maret research at Stanford University" maing the effect on emissions of
cheaper coal from the U&S$ Ua co6!le& Muestion$ And itLs not Cust a3out Cina,U e says$ U@ou ave to net out te glo3al
i6!acts against te 4$S$ i6!acts$U
#AC Transition 0nevita!le
The transition is inevita!le
Cc1ermott" 1-$
(Mat, edits te Business and Energy sections o2 Tree5ugger, ;ood News" CinaLs 8enewa3le Energy ;rowt Now =ut!acing
Coal, tt!"##www$treeugger$co6#cor!orate<res!onsi3ility#good<news<cinas<renewa3le<energy<growt<now<out!acing<coal$t6l'
Though coal still provides the maBority of China@s power" there@s some good news
coming from Uinhua via Ausiness >reenL 2ew official Chinese stats show that the
nation@s renewa!le energy capacity is now growing faster than its coal plants$Troug te end
o2 )//- nearly 0./ ;W o2 new !ower ca!acity was under construction" with the growth of renewa!les outpacing
coal !y some 1< >)& All told" low$car!on energy sources Ihydro" nuclear" and
renewa!les' will account for #6- >)" or #<Q of China@s power capacity" !y the end of
#-1-$ Also nota3le in te 2igures is te growt o2 wind !ower in Inner Mongolia, now reacing +$F ;W at te end o2 last 6ont$
TatLs an increase 2ro6 0+/ MW in )//*$
#AC 2o Kin
2o lin prices don+t dictate Chinese coal consumption
A recent !a!er argued tat reducing the price of coal or the cost of using coal in China
might have little impact on the consumption of coal in China due to the role of central
planning" wic 6a%es !rices and costs largely irrelevant$ 0n other words" since China
remains politically dominated !y the Chinese Communist Party and its strategic direction
is guided !y periodic five$year plans developed !y the Chinese government" it might
seem plausi!le to argue that changes in prices are largely irrelevant to resource use
decisions in China & Eor e&a6!le, one recent analysis o2 Cinese energy consu6!tion and
2uture energy i6!orts concluded it is not el!2ul to use data on 2uel !rices as an in!ut into a
2orecast study$ Caret signals appear to have had little effect on Chinese energy use and
related investment& Cinese energy !rices are ad6inistered and, toug tere ave 3een
so6e e22orts at deregulation, so 2ar tey do not re2lect underlying 6ar%et scarcities$ )* Te
citation in su!!ort 2or tis assertion was to a )//* re!ort 2ro6 te Eoreign :olicy Centre in
Bondon on Energy and :ower in Cina$ That report asserted that (the current 3Chinese4
energy regulatory system is characteriFed !yY3p4rice signals that have negligi!le effect
on consumer !ehavior and investment] ),
#AC 2o )arming
8lawed studies $ warming+s not a threat and not anthropogenic
Keae 1- (9onatan, Ti6es =nline, Citing 9on Cristy o2 te 4A 5untsville, a 2or6er autor
2or te I:CC, World 6ay not 3e war6ing, say scientists, )<0H,
tt!"##www$ti6esonline$co$u%#tol#news#environ6ent#article+/),F0+$ece'
!rint(yesRrandnu6(0),-/,//,++F+1
Te 4nited Nations cli6ate !anel 2aces a new callenge wit scientists cast ing dou!t on its claim that glo!al
temperatures are rising ine%ora!ly !ecause of human pollution & In its last assess6ent te
Intergovern6ental :anel on Cli6ate Cange (I:CC1 said te evidence tat te world was war6ing was uneMuivocal$ It warned tat
greenouse gases ad already eated te world 3y /$+C and tat tere could 3e *C<,C 6ore war6ing 3y )0//, wit devastating
i6!acts on u6anity and wildli2e$ 5owever, new research, including wor% 3y Britis scientists, is casting dou!t on
such claims& Some even suggest the world may not !e warming much at all& (The
temperature records cannot !e relied on as indicators of glo!al change"; said 9on
Christy" professor of atmospheric science at te 4niversity o2 Ala!ama in 5untsville, a former lead
author on the 0PCC& Te dou3ts o2 Cristy and a nu63er o2 oter researcers 2ocus on the thousands of
weather stations around the world , wic ave 3een used to collect te6!erature data over te !ast 0*/ years$
Tese stations, tey 3elieve, have !een seriously compromised !y factors such as ur!anisation"
changes in land use and" in many cases" !eing moved from site to site& Cristy as !u3lised
researc !a!ers loo%ing at tese e22ects in tree di22erent regions" east A2rica, and te A6erican states o2 Cali2ornia and Ala3a6a$
Te story is te sa6e 2or eac one, e said$ Te !o!ular data sets sow a lot o2 war6ing 3ut te a!!arent te6!erature rise was
actually caused 3y local 2actors a22ecting te weater stations, suc as land develo!6ent$ Te I:CC 2aces si6ilar criticis6s 2ro6
8oss McNitric%, !ro2essor o2 econo6ics at te 4niversity o2 ;uel!, Canada, wo was invited 3y te !anel to review its last re!ort$
Te e&!erience turned i6 into a strong critic and e as since !u3lised a researc !a!er Muestioning its 6etods$ We
concluded, wit overwel6ing statistical signi2icance, tat the 0PCC+s climate data are contaminated with
surface effects from industrialisation and data 7uality pro!lems& These add up to a large
warming !ias"; e said$ Suc warnings are su!!orted 3y a study o2 4S weater stations co<written 3y Antony Watts, an
A6erican 6eteorologist and cli6ate cange sce!tic$ 5is study, wic as not 3een !eer reviewed, is illustrated wit !otogra!s o2
weater stations in locations were teir readings are distorted 3y eat<generating eMui!6ent$ So6e are ne&t to air< conditioning
units or are on waste treat6ent !lants$ =ne o2 te 6ost in2a6ous sows a weater station ne&t to a waste incinerator$ Watts as
also 2ound e&a6!les overseas, suc as te weater station at 8o6e air!ort, wic catces te ot e&aust 2u6es e6itted 3y ta&iing
Cets$ In Britain, a weater station at Mancester air!ort was 3uilt wen te surrounding land was 6ainly 2ields 3ut is now surrounded
3y eat<generating 3uildings$ Terry Cills" professor of applied statistics and econo6etrics at
Kough!orough 4niversity, loo%ed at te sa6e data as te I:CC$ 5e found that the warming trend it
reported over the past :- years or so was Bust as liely to !e due to random fluctuations
as to the impacts of greenhouse gases& Mills7s 2indings are to 3e !u3lised in Cli6atic Cange, an environ6ental
Cournal$ ( The earth has gone through warming spells lie these at least twice !efore in the
last 1"--- years"; e said$
#AC 2o 0mpact
2o e%tinction
20PCC 11$ Nongovern6ental International :anel on Cli6ate Cange$ Surviving te un!recedented cli6ate cange o2 te I:CC$
. Marc )/00$ tt!"##www$ni!ccre!ort$org#articles#)/00#6ar#.6ar)/00a*$t6l
In a !a!er !u3lised in !stematics and "iodiversit!, Willis et al$ ()/0/1 consider te I:CC ()//+1 U!redicted cli6atic canges 2or
te ne&t centuryU << i$e$, teir contentions tat Uglo3al te6!eratures will increase 3y )<H`C and !ossi3ly 3eyond, sea levels will rise
(Y0 6 c /$* 61, and at6os!eric C=)will increase 3y u! to 0/// !!6U << noting tat it is Uwidely suggested tat te 6agnitude and
rate o2 tese canges will result in 6any !lants and ani6als going e&tinct,U citing studies tat suggest tat Uwitin te ne&t century,
over F*X o2 so6e 3iota will ave gone e&tinct (To6as et al$, )//HP Solo6on et al$, )//+1 and tere will 3e e&tensive die<3ac% o2
te tro!ical rain2orest due to cli6ate cange (e$g$ 5unting2ord et al$, )//.1$U =n te oter and, tey indicate tat so6e
!iologists and climatologists have pointed out that O many of the predicted increases in
climate have happened !efore" in terms of !oth magnitude and rate of change (e$g$ 8oyer,
)//.P Vacos et al$, )//.1, and yet !iotic communities have remained remara!ly resilient (Mayle
and :ower, )//.1 and in some cases thrived (Svenning and Condit, )//.1$U But tey re!ort tat tose wo 6ention
tese tings are o2ten U!laced in te Lcli6ate<cange denierL category,U altoug te !ur!ose 2or !ointing out tese 2acts is si6!ly to
!resent Ua sound scienti2ic 3asis 2or understanding 3iotic res!onses to te 6agnitudes and rates o2 cli6ate cange !redicted 2or te
2uture troug using te vast data resource tat we can e&!loit in 2ossil records$U ;oing on to do Cust tat, )illis et al & focus
on Ointervals in time in the fossil record when atmospheric CJ ) concentrations increased
up to 1#-- ppm" temperatures in mid$ to high$latitudes increased !y greater than 5ZC
within <- years" and sea levels rose !y up to : m higher than present"O descri!ing studies
of past !iotic responses that indicate Othe scale and impact of the magnitude and rate of
such climate changes on !iodiversity$U And what emerges 2ro6 tose studies, as tey descri3e it, Uis
evidence for rapid community turnover" migrations" development of novel ecosystems
and thresholds from one sta!le ecosystem state to anoth er$U And, 6ost i6!ortantly in tis regard, tey
re!ort Uthere is very little evidence for !road$scale e%tinctions due to a warming world& U In
concluding, te Norwegian, Swedis and 4N researcers say tat U3ased on suc evidence we urge some caution in
assuming !road$scale e%tinctions of species will occur due solely to climate changes of
the magnitude and rate predicted for the ne%t century,U reiterating tat Uthe fossil record
indicates remara!le !iotic resilience to wide amplitude fluctuations in climate&O
#AC 0nevita!le
0f it+s real then it+s irreversi!le $ it+s too late to stop the greenhouse effect
*arris . (8icard, Science 8e!orter 2or National :u3lic 8adio, :ea3ody Award Winner, A6erican Association 2or te
Advance6ent o2 Science 9ournalis6 Award, ;lo3al War6ing Irreversi3le, Study Says, 9anuary ),
t
, N:8,
tt!"##www$n!r$org#te6!lates#story#story$!!'storyId(--...-/F1
Climate change is essentially irreversi!le, according to a so3ering new scienti2ic study$ As car3on dio&ide e6issions
continue to rise, the world will e%perience 6ore and 6ore long$term environmental disruption$ Te
da6age will !ersist even wen, and if" emissions are !rought under control" says study autor Susan
Solo6on, wo is a6ong the world@s top climate scientists$ UWeLre used to tin%ing a3out !ollution !ro3le6s as
tings tat we can 2i&,U Solo6on says$ US6og, we Cust cut 3ac% and everyting will 3e 3etter later$ =r aAe, you %now, itLll go away
!retty Muic%ly$U TatLs te case 2or so6e o2 te gases tat contri3ute to cli6ate cange, suc as 6etane and nitrous o&ide$ But as
Solo6on and colleagues suggest in a new study !u3lised in te :roceedings o2 te National Acade6y o2 Sciences, it is not true 2or
te 6ost a3undant greenouse gas" car3on dio&ide$ Turning off the car!on dio%ide emissions won@t stop
glo!al warming& U:eo!le ave i6agined tat i2 we sto!!ed e6itting car3on dio&ide tat te cli6ate would go 3ac% to nor6al
in 0// years or )// years$ Wat weLre sowing ere is tatLs not rigt$ 0t@ s essentially an irreversi!le change that will
last for more than a thousand years ,U Solo6on says$ Tis is !ecause the oceans are currently
soaing up a lot o2 te !lanetLs e&cess heat and a lot o2 te car!on dio%ide !ut into te air$ Te car3on dio&ide
and eat will eventually start co6ing out o2 te ocean$ And tat will ta%e !lace 2or 6any undreds o2 years$
#AC China 0mports *igh
China is getting tons of imports now
Wong, H#0-<
(Eayen, 8euters, 4$S$ coal e&!orts to Cina 6ay dou3le in )/0)" ^coal, tt!"##www$reuters$co6#article#)/0)#/H#0-#us<coal<
id4SB8E.FI/AN)/0)/H0-'
(8euters1 < 4$S$ coal e%ports to China could more than dou!le to over 1# million tonnes in
#-1# thans to depressed freight rates and a fall in domestic demand in the United
States" the cie2 o2 to! 4$S$ coal e&!orter ^coal Energy R 8esources said$ Te e&!ected increase in coal si!6ents could
2urter !us down coal !rices in Asia were a su!!ly glut 2ollowing a deluge 2ro6 te 4nited States and Colo63ia as 2orced !rices
to slu6! recently$ Australian Newcastle<grade coal as dro!!ed G0/ a tonne since end<Ee3ruary, te Indonesian coal re2erence
!rice is down to its lowest in 0, 6onts and Sout A2rican coal as sed G*$ U,%ports to China could reach over
1# million tonnes this year !ased on the annualiFed num!ers"O Chief ,%ecutive ,rnie
Thrasher told /euters in an interview on )ednesday$ UWe only ave data 2or 9anuary and Ee3ruary now,
3ut all anecdotal evidence so 2ar suggests tat tere are no signs o2 tat di6inising as te year goes on,U e said$ UI tin% tere is
enoug de6and in Asia to a3sor3 enoug 4$S$ cargoes to ste6 a decline in !rices$U Cany U&S& coal sellers have set
their eyes on Asia as a shrining domestic maret and tepid demand in ,urope have
pushed them to loo for new customers outside of their traditional marets& Total U&S&
coal e%ports to China" the world@s largest spot coal !uyer" stood at a!out 6 million tonnes
in the first two months of the year" with thermal coal shipments up 6&: percent on year to
some : million tonnes& China" which relies heavily on coal for power generation" is the
world@s 2o& 1 coal producer" !ut infrastructure !ottlenecs have forced many coastal
power plants to turn to cheaper and more accessi!le imports in recent years& Coal i6!orts 3y
te worldLs second<largest econo6y rose 00 !ercent on year to 0.) 6illion tonnes in )/00$ Shipments from the United
States were 5&. million tonnes" a near : percent gain on year
#AC Coal ,%ports *igh
US Coal e%ports high
Adler and Sames" :?#=$
(8euters, E:A rules 6ay !us coal co6!anies to 3oost e&!orts, tt!"##www$reuters$co6#article#)/0)#/F#).#coal<
id4SB)E.ESWN>)/0)/F).'
NEW @=8N, Marc ). (8euters1 < Tougher emission rules at U&S& power stations will liely force
coal companies to mae up for lost domestic customers !y e%porting more to countries
in Asia where environmental regulations are less stringent, analysts said$ 8ailroads, wic aul a3out
+/ !ercent o2 4$S$ coal, could also try to 6itigate te da6age 2ro6 lower si!6ents to utilities 3y carrying 6ore coal 2or e&!orts$
Proposed rules that will limit new power plants@ CJ# emissions" the first move !y the
world@s largest economy to regulate the gas !lamed for contri!uting to glo!al warming"
were announced Tuesday !y the ,nvironmental Protection Agency I,PA'&& Currently, coal<2ired
!lants !roduce a3out HH !ercent o2 4$S$ electricity Wall Street saw te rule cange as a sort<ter6 negative 2or coal and stoc%s 2ell
on Wednesday$ Arc CoalLs stoc% dro!!ed H !ercent to close at G0/$./ and :ea3ody Energy 2ell F$H !ercent to G).$.F on te New
@or% Stoc% E&cange$ Al!a Natural 8esources was H$0 !ercent lower at G0H$.+ and Consol Energy was o22 0$- !ercent at GFF$FF$
8ailroad sares also declined$ CS^ Cor! 2ell )$H !ercent to G)0$*) and 4nion :aci2ic dro!!ed )$F !ercent to G0/+$-0$ Micael
>udas, a coal industry analyst at Sterne Agee" said the ,PA rules" liely to come into effect
in a year" will force the coal industry to cut production" !ut also ramp up e%ports$ Bast year
e&!orts accounted 2or a3out 0/ !ercent o2 total 4$S$ coal !roduction o2 .00 6illion tons, according to te Energy >e!t$ UThe U&S&
will !ecome a much more important supplier to the world"O he said" noting that demand
was high in Asia for !oth thermal coal, used in !ower generation and 6etallurgical coal, wic is used to 6a%e
steel$ UWe ave te ca!acity to e&!ort 6ore and te industry is trying to develo! 6ore !orts on te West Coast 2or te coal 2ro6 te
:owder 8iver Basin (o2 Wyo6ing and Montana1,U >udas said$
#AC 0nevita!le
China will inevita!ly !urn coal
Plumer" 6?1$
(Brad, EAra Nelins, Wasington :ost Sta22 Writer, 5ow te 4$S$ could in2luence Cina7s coal a3its I wit e&!orts,
tt!"##www$wasington!ost$co6#3logs#eAra<%lein#!ost#can<te<united<states<in2luence<cinas<coal<
a3its#)/0)#/*#/0#gI\AgM4!uTO3log$t6l1
At 2irst glance, it 6ay loo% li%e te United States couldn+t possi!ly have much sway over
China+s coal$hungry ha!its& China" after all" has plenty of its own coal" !oasting the
second$largest reserves in the world$ 0n #-1-" the country imported less than 6 percent of
the coal it used from overseas& And the United States maes up a tiny sliver of this
maret I !ecause of how Chinese ports and rail networs are set up" China still gets
most of its imported coal from 0ndonesia and AustraliaL
TTCoal ,%ports >oodTT
TTCoal 0ndustryTT
#AC Coal 0ndustry
Coal co6!anies are colla!sing te status Muo
9ervey, *#F<
(Ben, E&!orting Coal" Struggling 4$S$ Coal Industry Trying to Stay 8elevant By Si!!ing Troug te Nortwest,
tt!"##www$des6og3log$co6#e&!orting<coal<struggling<u<s<coal<industry<trying<stay<relevant<si!!ing<troug<nortwest'
4&S& coal companies are facing some tricy math these days$ Production levels have
remained more or less the same since #--6" according to the ,nergy 0nformation Agency
I,0A'" !ut during that time domestic consumption has dropped nearly 11 percent& Were is
all tat e&tra coal going' So6e is !iling u! at !ower !lants, 3ut increasingly, 6ore and 6ore o2 it is 3eing si!!ed overseas$ The
coal industry is hoping to accelerate that e%port trend" !ut their a!ility to eep delivering
steady volumes of coal is entirely dependant on their a!ility to open up new e%port
terminals at coastal ports around the country, !articularly in te :aci2ic Nortwest were te dirty roc% could
3e 6ore directly si!!ed to te 3urgeoning Asian 6ar%ets$
Coal ,%ports are ey to economic competitiveness
5al Quinn +1# (writer 2or te National Miners Association, W5AT S5=4B> 4$S$ :=BIC@ BE
=N ENE8;@ E^:=8TS', A!ril 0F, )/0), tt!"##www$n6a$org#!d2#/H0F0)OMuinnOnCO3log$!d21
,%porting U&S& Coal *elps America and 1eveloping )orld ? 3y 5al \uinn, NMA Te United States
has an unrivalled self$interest in serving international marets that urgently need coal to
grow their economies and improve the livelihoods of their people& 0n fact" increasing our
coal e%ports is an unusually clear e%ample of how unfettered trade !enefits !oth
e%porting and importing countries$ Wit te world7s largest coal reserves, te 4$S$ 2inds itsel2 in te envia3le
!osition o2 aving 6ore o2 wat te 2astest<growing countries o2 te world need$ Cina and India are li2ting undreds o2 6illions o2
!eo!le out o2 !overty 3y 3uilding vast electricity grids tat 3ring coal<generated !ower to o6es and wor%!laces$ Coal is te only
2uel 2or electricity generation tat is su22iciently a22orda3le and a3undant to literally 3ring tis !ower to te !eo!le$ It is also a vital
ingredient 2or te steel6a%ing !lants in Asia and BraAil tat are laying 2oundations 2or a )0 st century industrial revolution$ A6erican
6etallurgical coal is a 3uilding 3loc% o2 tis !rogress 6uc as it is 2or our own industrial !rogress$ Te !enefits of U&S& coal
e%ports are reciprocal& Te 4$S$ as a #<6$year coal supply" more than enough to serve its
domestic needs$ 8ar from depriving Americans of opportunities" coal e%ports provide
them high$wage Bo!s in coal country 2ro6 A!!alacia to te :owder 8iver Basin, in the rail industry
that transports coal to ports and in e%port terminals that e%ist or are envisioned for the
>ulf and !oth coasts$ Te M1< !illion worth of U&S& coal e%ported last year also delivered
revenue to hardpressed communities across the U&S& heartland& Some critics are !linded
!y their wealthy lifestyles to the powerful evidence that coal$!ased generation has
greatly improved the lives of millions a!road who are less fortunate& Eor te 0$H 3illion !eo!le
worldwide wo ave no access to electricity, e22icient coal3ased generation !rovides a ealtier and 3etter li2e$ It o2ten o22sets te
de6ands 2or eat and ligt tat ereto2ore ave 3een 6et wit 2uels derived 2ro6 de2orestation, ani6al wastes and uncontrolled in<
o6e use o2 %erosene and oter 2uels$ In sort, coal e%ports are a classic e%ample of America+s
competitive advantage& 8ecent history offers grim e%amples of what happens to countries
that only !uy from the rest of the world and sell nothing to them$ Te !resident a!!ears to
understand tis lesson wit is call to dou3le e&!orts in 2ive years$ :resu6a3ly e also understands ow coal e&!orts, u! al6ost a
tird last year, are el!ing i6 reac tis goal$To forego this competitive advantage would !e a classic
e%ample of short$sighted pu!lic policy that will only deepen the economic gloom
Americans now face&
Tis results in great !ower con2lictIecono6ic growt is vital to !revent te
colla!se o2 4$S$ ege6ony$
DhalilFad 11 I Val6ay NalilAad, Counselor at te Center 2or Strategic and International
Studies, served as te 4nited States a63assador to A2ganistan, IraM, and te 4nited Nations
during te !residency o2 ;eorge W$ Bus, served as te director o2 !olicy !lanning at te
>e2ense >e!art6ent during te :residency o2 ;eorge 5$W$ Bus, olds a :$>$ 2ro6 te
4niversity o2 Cicago, )/00 (Te Econo6y and National Security, National Review, Ee3ruary
.
t
, Availa3le =nline at tt!"##www$nationalreview$co6#articles#!rint#)*-/)H, Accessed /)</.<
)/001
Today, economic and fiscal trends pose the most severe long$term threat to the U nited States7
position as glo!al leader& )hile the United States suffers from fiscal im!alances and low
economic growth" the economies of rival powers are developing rapidly& The
continuation of these two trends could lead to a shift from American primacy toward a
multi$polar glo!al system" leading in turn to increased geopolitical rivalry and even war
among the great powers$
Te current recession is te result o2 a dee! 2inancial crisis, not a 6ere 2luctuation in te 3usiness cycle$ 8ecovery is li%ely to 3e
!rotracted$ Te crisis was !receded 3y te 3uildu! over two decades o2 enor6ous a6ounts o2 de3t trougout te 4$S$ econo6y I
ulti6ately totaling al6ost F*/ !ercent o2 ;>: I and te develo!6ent o2 credit<2ueled asset 3u33les, !articularly in te ousing
sector$ Wen te 3u33les 3urst, uge a6ounts o2 wealt were destroyed, and une6!loy6ent rose to over 0/ !ercent$ Te decline
o2 ta& revenues and 6assive countercyclical s!ending !ut te 4$S$ govern6ent on an unsustaina3le 2iscal !at$ :u3licly eld
national de3t rose 2ro6 F. to over ,/ !ercent o2 ;>: in tree years$
)ithout faster economic growth and actions to reduce deficits" pu!licly held national
de!t is proBected to reach dangerous proportions& 0f interest rates were to rise
significantly" annual interest payments I wic already are larger tan te de2ense 3udget I would
crowd out other spending or re7uire su!stantial ta% increases that would undercut
economic growth$ Even worse, if unanticipated events trigger wat econo6ists call a (sudden stop;
in credit marets for U&S& de!t" the United States would !e una!le to roll over its outstanding
o!ligations" precipitating a sovereign$de!t crisis that would almost certainly compel a
radical retrenchment o2 te 4nited States internationally$
Such scenarios would reshape the international order $ It was te econo6ic devastation o2 Britain and
Erance during World War II, as well as te rise o2 oter !owers, tat led 3ot countries to relinMuis teir e6!ires$ In te late 0-,/s,
Britis leaders concluded tat tey lac%ed te econo6ic ca!acity to 6aintain a !resence east o2 SueA$ Soviet econo6ic wea%ness,
wic crystalliAed under ;or3acev, contri3uted to teir decisions to witdraw 2ro6 A2ganistan, a3andon Co66unist regi6es in
Eastern Euro!e, and allow te Soviet 4nion to 2rag6ent$ 0f the U&S& de!t pro!lem goes critical" the United
States would !e compelled to retrench " reducing its military spending and shedding
international commitments$
We 2ace tis do6estic callenge wile other maBor powers are e%periencing rapid economic growth$
Even toug countries such as China" 0ndia" and AraFil ave !ro2ound !olitical, social, de6ogra!ic, and
econo6ic !ro3le6s, teir econo6ies are growing faster tan ours, and tis could alter the glo!al
distri!ution of power & These trends could in the long term produce a multi$polar world & 0f
U&S& policymaers fail to act and other powers continue to grow" it is not a 7uestion of
whether !ut when a new international order will emerge & The closing of the gap !etween
the United States and its rivals could intensify geopolitical competition among maBor
powers " increase incentives for local powers to play maBor powers against one another"
and undercut our will to preclude or respond to international crises !ecause of the
higher ris of escalation$
The staes are high & 0n modern history" the longest period of peace among the great
powers has !een the era of U&S& leadership$ By contrast, multi$polar systems have !een
unsta!le " with their competitive dynamics resulting in fre7uent crises and maBor wars
among the great powers & 8ailures of multi$polar international systems produced !oth
world wars$
American retrenchment could have devastating conse7uences & )ithout an American
security !lanet" regional powers could rearm in an attempt to !alance against emerging
threats& Under this scenario" there would !e a heightened possi!ility of arms races"
miscalculation" or other crises spiraling into all$out conflict$ Alternatively, in see%ing to acco66odate
te stronger !owers, wea%er !owers 6ay si2t teir geo!olitical !osture away 2ro6 te 4nited States$ Eiter way, hostile
states would !e em!oldened to mae aggressive moves in their regions$
As rival powers rise" Asia in !articular is liely to emerge as a Fone of great$power
competition$ BeiCing7s econo6ic rise as ena3led a dra6atic 6ilitary 3uildu! 2ocused on acMuisitions o2 naval, cruise, and
3allistic 6issiles, long<range stealt aircra2t, and anti<satellite ca!a3ilities$ Cina7s strategic 6oderniAation is ai6ed, ulti6ately, at
denying te 4nited States access to te seas around Cina$ Even as coo!erative econo6ic ties in te region ave grown, Cina7s
e&!ansive territorial clai6s I and !rovocative state6ents and actions 2ollowing crises in Norea and incidents at sea I ave roiled
its relations wit Sout Norea, 9a!an, India, and Souteast Asian states$ Still, te 4nited States is te 6ost signi2icant 3arrier 2acing
Cinese ege6ony and aggression$
>iven the riss" the United States must focus on restoring its economic and fiscal condition
while checing and managing the rise of potential adversarial regional powers such as
China$ Wile we 2ace signi2icant callenges, te 4$S$ econo6y still accounts 2or over )/ !ercent o2 te world7s ;>:$ A6erican
institutions I !articularly tose !roviding en2orcea3le rule o2 law I set it a!art 2ro6 all te rising !owers$ Social coesion
underwrites !olitical sta3ility$ 4$S$ de6ogra!ic trends are ealtier tan tose o2 any oter develo!ed country$ A culture o2
innovation, e&cellent institutions o2 iger education, and a vital sector o2 s6all and 6ediu6<siAed enter!rises !ro!el te 4$S$
econo6y in ways di22icult to Muanti2y$ 5istorically, A6ericans ave res!onded !rag6atically, and so6eti6es troug trial and error,
to wor% our way troug te %ind o2 crisis tat we 2ace today$
Te !olicy Muestion is ow to enance econo6ic growt and e6!loy6ent wile cutting discretionary s!ending in te near ter6 and
cur3ing te growt o2 entitle6ent s!ending in te out years$ 8e!u3lican 6e63ers o2 Congress ave outlined a !lan$ Several tin%
tan%s and co66issions, including :resident =3a6a7s de3t co66ission, ave done so as well$ So6e consensus e&ists on 6easures
to !are 3ac% te recent increases in do6estic s!ending, restrain 2uture growt in de2ense s!ending, and re2or6 te ta& code (3y
reducing ta& e&!enditures wile lowering individual and cor!orate rates1$ Tese are !ro6ising o!tions$
Te %ey re6aining Muestion is weter te !resident and leaders o2 3ot !arties on Ca!itol 5ill ave te will to act and te s%ill to
2asion 3i!artisan solutions$ Weter we ta%e te needed actions is a coice, owever di22icult it 6igt 3e$ It is clearly witin our
ca!acity to !ut our econo6y on a 3etter traCectory$ In garnering !olitical su!!ort 2or cut3ac%s, te !resident and 6e63ers o2
Congress sould !oint not only to te do6estic conseMuences o2 inaction I 3ut also to te geo!olitical i6!lications$
As te 4nited States gets its econo6ic and 2iscal ouse in order, it sould ta%e ste!s to !revent a 2lare<u! in Asia$ Te 4nited States
can do so 3y signaling tat its do6estic callenges will not i6!ede its intentions to cec% Cinese e&!ansionis6$ Tis can 3e done
in cost<e22icient ways$
Wile Cina7s econo6ic rise ena3les its 6ilitary 6oderniAation and international assertiveness, it also 2rigtens rival !owers$ Te
=3a6a ad6inistration as wisely 6oved to strengten relations wit allies and !otential !artners in te region 3ut 6ore can 3e
done$
So6e Cinese !olicies encourage oter !arties to Coin wit te 4nited States, and te 4$S$ sould not let tese o!!ortunities !ass$
Cina7s 6ilitary assertiveness sould ena3le security coo!eration wit countries on Cina7s !eri!ery I !articularly 9a!an, India,
and Sietna6 I in ways tat co6!licate BeiCing7s strategic calculus$ Cina7s 6ercantilist !olicies and currency 6ani!ulation I wic
ar6 develo!ing states 3ot in East Asia and elsewere I sould 3e used to 2asion a coalition in 2avor o2 a 6ore 3alanced trade
syste6$ Since BeiCing7s over<te<to! reaction to te awarding o2 te No3el :eace :riAe to a Cinese de6ocracy activist alienated
Euro!ean leaders, igligting u6an<rigts Muestions would not only draw su!!orters 2ro6 near3y countries 3ut also e63olden
re2or6ers witin Cina$
Since the end of the Cold )ar" a sta!le economic and financial condition at home has
ena!led America to have an e%pansive role in the world& Today we can no longer tae
this for granted& Unless we get our economic house in order" there is a ris that domestic
stagnation in com!ination with the rise of rival powers will undermine our a!ility to deal
with growing international pro!lems& /egional hegemons in Asia could seiFe the
moment" leading the world toward a new" dangerous era of multi$polarity $
,%tL ,%ports ey to Coal 0ndustry
Coal industry companies are declining now" !ut e%ports from China are ey
to the industry new water infrastructure is ey
/o!erts" 6?#$
(>avid, Sta22 Writer 2or ;rist, Wy Eigting Coal E&!ort Ter6inals Matters,
tt!"##tin%!rogress$org#cli6ate#)/0)#/*#/)#H+*0+/#wy<2igting<coal<e&!ort<ter6inals<6atters#'
The rapid move away from coal is hitting U&S& coal$mining companies where it hurts & Te
Wall Street 9ournal re!orts on te 2ortunes o2 Arc Coal and Al!a Natural 8esources, te second< and tird<largest coal<6ining
2ir6s in te 4$S$" Jn a 6#$wee !asis" shares of !oth Arch and Alpha are down N#Q& Y Arch is
e%pected to see its profit fall !y 55Q" to M:: million& Alphastill struggling to digest
Cassey ,nergy 0nc& after spending MN&1 !illion to ac7uire the competitor last yearIis seen
swinging to a 2irst<Muarter loss o2 G0. 6illion, down 2ro6 a year<ago !ro2it o2 GH- 6illion$ Pea!ody ,nergy" the largest
U&S& coal company" says U&S& coal demand will fall !y a!out 1- percent this year& So6e
utilities are even canceling coal deliveries 3ecause tey7ve got 3ig stoc%!iles o2 unused coal$ (:ea3ody a!!ens to 3e seltered
2ro6 te stor6 3y te 2act tat it as 6ines in Australia$1 Now, ere7s te %ey 3it" Arch" Alpha and the rest of the
industry hope that increased coal demand from fast$growing China and 0ndia will help
turn the tide& But tat !oses additional !ro3le6s$ 4$S& companies are scram!ling to increase their
access to ports in the >ulf Coast and ,ast Coast to ship coal a!road& Arc7s and Al!a7s e&!ort
outloo%s, as well as sales 2orecasts 2or te iger<!riced ty!es o2 coal used in steel6a%ing, will 3e %ey to ow investors view te
industry7s !ros!ects in te year aead$ Moral o2 te story" The health of the U&S& coal industry hinges on its
a!ility to increase e%ports to China and 0ndia& To so6e e&tent tis is already a!!ening, as te 4$S$ Energy
In2or6ation Ad6inistration re!orted last year$ >o6estic consu6!tion is 2alling, e&!orts are rising Te Muestion 2or te 4$S$ coal
industry is" Can e&!orts rise 2ast enoug to o22set declining do6estic de6and' Te Muestion 2or cli6ate aw%s is" Wat a!!ens i2
e&!orts can7t rise 2ast enoug' More to te !oint, wat a!!ens i2 cli6ate activists are a3le to 3loc%, slow, or at least raise te
!olitical and econo6ic costs o2 coal e&!orts' Te a!!y answer would 3e tat 4$S$ coal co6!anies witer and a good 3it o2 4$S$
coal stays in te ground$ 5owever, as te WS97s !rase scram!ling to increase their access; would
indicate" those ports are crowded $ Wat7s 6ore, de6and as 3een si2ting 2ro6 te E$4$ to China and 0ndia"
while supply is e%ploding in the Powder /iver Aasin of )yoming and Contana& Aoth of
those trends create huge incentives for )estern e%ports& Sure enoug, tere are si& new coal !orts
(:>E1 !ro!osed 2or te West Coast" Coos Bay, te :ort o2 Morrow (near Board6an1, and :ort Westward in =regonP Bongview,
Bellinga6, and ;rays 5ar3or in Wasington$ I2 they are all !uilt" the Pacific 2orthwest will e%port over
16- million short tons of coal a year" maing it one of the world+s largest coal e%port
regions$
TTChina ,conomyTT
#AC China ,conomy
Coal e%ports ey to Chinese economic growth
Ki and Keung 11 (Coal consu6!tion and econo6ic growt in Cina, May )/00, Energy
:olicy, Solu6e H/, tt!"##www$dee!dyve$co6#l!#elsevier#coal<consu6!tion<and<econo6ic<
growt<in<cina<)+-NC3AsIF1
Coal is the principal primary energy source in China and it is given a strategic role in the
economic growth of the country& According to te o22icial 2igures 2ro6 te National Bureau o2 Statistics, in )//-,
Coal accounted for N-Q of the total energy consumed and NNQ of the total energy
produced in China& Aecause of its a!undance in proven reserves and its sta!ility in
supply" coal will continue to !e a ey component of the primary energy mi% in the
country at least over the ne%t few decadesT 5owever, coal also accounts 2or a large sare o2 greenouse gas
(C5;1 e6issions generated 3y antro!ogenic activities, and coal is te 6ost car3on intensive 2ossil 2uel$ C5; e6issions reduction
in tis car3on<constrained glo3al environ6ent will !rove to 3e inevita3le and te Cinese coal industry 6ay e&!erience signi2icant
i6!act 2ro6 C5; e6issions reduction !olicies$
The relationship !etween coal consumption and economic growth is an important issue
regardless of the direction of causality$ Eirst, as coa0 is an input to production process" the
consumption of coal may influence economic growth& As noted 3y so6e oter autors (e$g$ A!crgis and
:ayne$1 )/ I2 causality 2lows tis way, ten atte6!ts to cur3 C5C e6issions troug energy conservation 6ay 3e ar62ul to
econo6ic growt$
Chinese economy collapse causes glo!al nuclear war
Plate :, To6, East Asia E&!ert, AdCunct$ :ro2$ Co66unications d 4CBA, ,<).<)//F,
Neo<cons a 3igger ris% to Bus tan Cina, Strait Ti6es
But imagine a China disintegrating< on its own, witout neo<conservative or Central Intelligence Agency !ro6!ting,
6uc less outrigt 6ilitary invasion !ecause the economy (against all !redictions1 suddenly collapses$ That
would noc Asia into chaos$ A massive flood of refugees would head for Indonesia and oter
!laces wit !oor 3order controls, which don+t+ want them and cant handle themP so6e in Sapan might
lic% teir li!s at te !ros!ect o2 World War II revisited and loo% to anne% a slice of China& That would send
Singapore and Calaysia< once occu!ied 3y 9a!an< into nervous !readowns$ Meanwile, 0ndia might
mae a gra! for Ti!et" and Paistan for Dashmir& Then you can say hello to )orld )ar 000,
Asia style$ That+s why wise policy encourages Chinese sta3ility, security and economic growth ? te
very direction te Wite 5ouse now see6s to !re2er$
,%tL Coal Dey to ,conomy
Coal is the cornerstone to Chinese economic growth$ they are looing to
shift towards imports
Tu" 1#$
(Nevin 9ianCun, Senior associate in te Carnegie Energy and Cli6ate
:rogra6, were e leads Carnegie7s wor% on Cina7s energy and cli6ate !olicies, 4nderstanding Cina7s 8ising Coal I6!orts,
tt!"##www$carnegieendow6ent$org#2iles#cinaOcoal$!d2 '
China is home to the world+s second largest proven coal reserves after the United States$
In addition, !rior to )//-, Cina was a net coal e&!orter$ Coal is a cornerstone of the Chinese economy"
representing NN percent of China+s primary energy production and fueling almost =-
percent of its electricity& Moreover, China is the world+s top coal consumer" accounting for
nearly half of glo!al consumption in #-1-& 1 Jver the past decade, China+s do6estic coal out!ut
as more than dou!led while its coal imports have increased !y a factor of <-the
country+s dependence on other nations+ coal e%ports is growing& ) In )//-, the glo!al coal
maret witnessed a dramatic realignment as China !urst onto the scene" importing coal
from as far away as Colo63ia and te 4nited States$ Wit 0.) 6illion tons (Mt1 o2 coal sourced 2ro6 overseas su!!liers
in )/00, China has overtaen Sapan as the world+s top coal importer& F Moreover, as te world7s to!
coal consu6er, Cina7s i6!orts could rise signi2icantly again 3y )/0*$ H ;iven te enor6ous siAe o2 Cina7s do6estic coal reserves,
why is China moving to import coal from a!road instead of producing all its needs
domestically' Migt tis !eno6enon 3e as su!er2luous and 2oolardy as carrying coals to Newcastle, England7s 6aCor
e&!orter o2 coal in te 2i2teent century' Newcastle, a2ter all, ad 6ore coal tan anywere else$ Several factors could
!e contri!uting to China+s sudden entrance into coal import marets" including
transportation !ottlenecs" environmental and safety considerations" economic factors"
and concerns a!out depleting coing coal reserves& ;aining a toroug understanding o2 te !aradig6
si2t under way in te international coal trade reMuires e&!loring tese 2actors in order to develo! !olicies to 3est 6anage
3urgeoning coal i6!orts in Cina and 3eyond$ China+s move to import increasing amounts of coal to
add to its vast stores of domestic reserves will influence the glo!al economy"
geopolitics" and the environment& E22ective !olicy tools and governance structures will 3e needed 2or Cina to
6anage its coal use and 2or te international co66unity to deal wit re!ercussions 2ro6 te 3urgeoning coal i6!ort 6ar%ets$ Te
outloo% 2or e22ective !olicy res!onses is !re6ised on new %nowledge and assess6ent o2 coal trade, !roduction, and consu6!tion
!atterns" Eirst, Cina will need to enance its coal value cainI2ro6 coal 6ining to !re!aration, trans!ort, and end useIto i6!rove
e22iciency, reduce te environ6ental and car3on 2oot!rint o2 coal, and address sa2ety in te 2ace o2 Cina7s increased glo3al coal
utiliAation and trade$ Second, it will 3e i6!ortant to gain a 3etter understanding o2 te relative costs and 3ene2its o2 Cina7s
e6erging coal trade and te di22erences a6ong Cinese 6ining co6!anies and 3etween Cinese and 2oreign 6ining o!erations
regarding 6ining !ractices, regulatory oversigt, and o!erations$ Tird, te !arallels under!inning energy and cli6ate concerns in
te 4nited States and Cina could serve as te i6!etus 2or 6ore 3ilateral coo!eration on co66on coal conditions$ Einally, oversigt
over growing glo3al coal 6ar%ets could 3e organiAed troug new governance structuresIinternational 2oru6s, regulations and
standards, 2iscal 6easures, and in2or6ationIs!eareaded 3y 6aCor coal e&!ort and i6!ort nations$ China+s recent move
from !eing a net coal e%porter to a net coal importer portends significant changes on the
glo!al stage" especially in terms of climate change& Understanding China+s rising coal
imports is crucial for managing their glo!al impact
Coal is ey to Chinese economy
*olmes" 11
(Eran%, CE= and Cie2 Invest6ent =22icer, 4$S$ ;lo3al Investors Coal 4se in Cina Sines Bigt on ;rowt,
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Coal pow ers the Chi nese econ omy& The coun try is the world+s largest con sumer" go! $
!ling up nearly half of the world+s coal con sump tion in #--. $ Coal accounted 2or +0 !ercent o2 Cina7s
energy in )//.I6ore tan tree ti6es te 4nited States7 sare$ The ,lec tric ity Coun cil esti mates that the
country+s coal demand will reach 1&.# !il lion tons in #-11" up nearly 1- per cent from
#-1-& China hasn+t always !een such a glut ton for coal& 0n fact" coal con sump tion actu $
ally declined from 1..< to #///$ 5owever, consu6!tion as sot u! 0./ !ercent since ten and Cina accounted 2or
./ !ercent o2 de6and growt 3etween 0--/ and )/0/, according to B:$ Tis is 3ecause de6and 2or electricity e&!loded over tat
ti6e$ China+s rapid ur!an iFa tion and ris ing mid dle class has led to an e%po nen tial num !er
of new refrig er a tors" air con di tion ers and other appli ances in homes&
TTAnswers
China cutting dependence on coal anyway
Aloom!erg :?## (Cina To 8estrict Coal >e6and, =ut!ut To F$- Billion Tons, Marc )), )/0),
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coal<de6and<out!ut<to<F<-<3illion<tons$t6l1
China" the world+s !iggest user and producer of coal" will limit domestic output and
consumption of the commodity in the five years through #-16 to reduce pollution and
cur! reliance on the fuel&
Production and demand will !e restricted to a!out :&. !illion metric tons a year !y #-16"
according to a five$year plan for the coal industry released !y the 2ational ,nergy
Administration at a 3rie2ing in BeiCing today$ Te nation !roduced a3out F$. 3illion tons in )/00, according to 5elen Bau, a
5ong Nong<3ased analyst at 4=B<Nay 5ian Btd$