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To the extent future funding requests may be submitted which would increase funding for climate change activities prior to Senate consideration of the Kyoto Protocol (whether under the auspices of the Climate Change Technology Initiative or any other initiative), the Administration must do a better job of explaining the components of the programs, their anticipated goals and objectives, the justification for any funding increases, a discussion of how successes will be measured, and a clear definition of how these programs are justified by goals and objectives independent of implementation of the Kyoto Protocol. The conferees expect these items to be included as part of the fiscal year 2000 budget submission for all affected agencies... With regard to these submissions, the Committee expects all affected agencies to comply fully with the letter and spirit of the Government Performance and Results Act of 1993 (GPRA). The GAO is directed to prepare a report that evaluates the Agency's completed plan and submit its report to the Appropriations Committee 90 days after receipt of the Agency's plan."

This report responds to Congress' request. EPA has also modified here the approach it took to the 1999 Report to Congress on Climate Change Activities in response to comments from GAO on EPA's 1999 report. As GAO suggested, EPA has broadened the scope of the report to cover all climate change activities, not just those under the President's CCTI, as EPA had interpreted Congress' 1999 request to cover. In addition, EPA has provided a more detailed budget justification for key programs as well as provided a detailed explanation of how program success will be measured.

1.3 Organization of Report

The report provides the following information:

Section 2 provides an overview of EPA's GPRA performance measures and goals for EPA's climate change programs, a review of how the programs have performed against the performance goals through 1999, and an overview of key programmatic accomplishments through 1999;

Section 3 provides an overview of EPA's performance goals for 2001 and describes the additional environmental and economic benefits that will result from the request for increased funding (at requested levels) for EPA's climate change programs;

Section 4 provides a discussion of the methods EPA uses to evaluate the accomplishments of its
climate change programs;

Section 5 provides an overview of the statutory authorities under which EPA operates its climate change programs; and

Section 6 provides program by program descriptions of EPA's current climate change programs.

'GAO commented on EPA's report in a report entitled, Climate Change. Observations on EPA's April 1999 Climate Change Report.

2.0 Performance Measures and Accomplishments

for EPA's Climate Programs

2.1

Overview of EPA Climate Change Programs and Performance Measures

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EPA is meeting the United States' climate change objectives by working in partnership with business and other sectors to deliver multiple benefits from cleaner air to lower energy bills while improving overall scientific understanding of climate change and its potential consequences. In FY 2001, EPA expects to continue expanding on the significant accomplishments of its Climate Change Programs.

The core of EPA's climate change efforts are government/industry partnership programs designed to capitalize on the tremendous opportunity consumers, businesses, and organizations have to make sound investments in efficient equipment and practices. Thousands of equipment purchases are made every day, and generally people buy the equipment that is the least costly and least efficient, thereby committing themselves to higher energy bills for ten and twenty years at a time, depending upon the life of the equipment.

The opportunity to save on our nation's $500 billion annual energy bill over the next decade while reducing air pollution is tremendous. The opportunity to reduce greenhouse gas emissions is also large. We currently expect that more than half of the nation's greenhouse gas emissions in 2010 will come from equipment that we purchase between now and then.

Current Programs Overcoming Barriers in the Marketplace

Numerous studies document the potential for government programs and policies to spur greater investment in
energy-efficient technologies and
to cost-effectively limit emissions
of greenhouse gases and criteria air
pollutants. Many efficient
technologies have not penetrated
into the market as far as their
financial returns would indicate
they should. There is clear
evidence that this potential is not
being realized in the current
market system because of a
number of informational,
institutional, organizational, and
other barriers that work against the
diffusion of existing, energy-
efficient technologies and the
development of advanced
technologies. Programs like EPA's
ENERGY STAR Buildings
Partnership, ENERGY STAR
Labeling Program and ENERGY
STAR Homes Program are
designed to help consumers and
organizations ask for and get
energy efficiency, and to deliver
the economic and environmental

Lack of Reliable Consumer Information. The ENERGY STAR®
Program partners with manufacturers to label energy-efficient
products. Consumers are then provided with reliable, unbiased
information on the environmental and economic benefits of these
products. As of 1999, this program provides labels to over 5,000
products across 1,500 manufacturers. The program is saving
businesses and consumers more than $11 billion in lower energy
bills, and is substantially reducing emissions of greenhouse gases.

Low Incentive to Manufacturers for Efficiency R&D. Through the
Partnership for a New Generation of Vehicles (PNGV), the U.S. has
joined with U.S.-based auto manufacturers to develop new
automotive technologies, with the goal of tripling the fuel efficiency
of passenger cars.

Lack of Corporate Data. Due to the low cost of fuel, many companies do not even know how much energy they use in a year, let alone have a comprehensive view of the potential benefits of actions they could take to reduce energy use and emissions. The Climate Wise program, in addition to providing information on industrial energy efficiency opportunities, helps companies track and report corporate energy use and emissions data, and monitor and share information on successful reduction strategies across the corporation.

benefits energy efficiency has to offer. The EPA portion of the Partnership for a New Generation of Vehicles (PNGV) conducts focused R&D on clean and efficient new technologies.

Under the President's Climate Change Technology Initiative (CCTI), EPA manages a number of efforts such as the ENERGY STAR programs and PNGV to remove barriers in the marketplace and deploy technology faster in the residential, commercial, transportation, and industrial sectors of the economy. EPA programs do not provide financial subsidies. Instead, they build upon the traditional role of government to provide information and to engage in key research so as to yield large public benefits.

EPA measures success across its CCTI programs through the use of four key performance measures under the Government Performance and Results Act of 1993 (GPRA), which can be categorized as follows:

reduced greenhouse gas emissions;

reduced energy consumption;

progress toward development of the "3X" or 80 mpg mid-size family sedan; and

progress working with 10 to 12 key developing countries and countries with economies in transition to develop strategies and actions for reducing greenhouse gas emissions and for enhancing carbon sequestration.

EPA has annual goals for these performance measures. Most of the goals were developed within the framework of the Climate Change Action Plan." In addition to these measures, EPA tracks results such as:

reduced criteria pollutant emissions;

investment in energy-efficient and climate-friendly technologies and practices;

savings to organizations and consumers; and

number of partners.

EPA developed measures for advancing automotive technology through the Administration-wide effort on the Partnership for a New Generation of Vehicles (PNGV) and developed measures for the international work within the context of the Framework Convention on Climate Change (FCCC).

'EPA's program goals for the greenhouse gas reduction programs were established in 1997 for the years 1997 through 2010. Annual goals for key years are reported in the US. Climate Change Action Report. 1997 Submission of the United States of America Under the United Nations Framework Convention on Climate Change. EPA's current program goals are revisions from the original Climate Change Action Plan (CCAP).

In addition to CCTI programs, EPA participates in another climate change effort, the U.S. Global Change Research Program (GCRP). This multiagency program is committed to evaluating the potential consequences of global change for human health, ecosystems, and socioeconomic systems in the United States. EPA also assesses the potential to adapt to global change in order to reduce the risks and take advantage of opportunities presented by global change. The long-term goal of the GCRP is to understand and articulate, in terms that are meaningful for decision-makers and other stakeholders, the potential consequences of global environmental change for human health and ecosystems in the U.S.

2.2

Overall Program Performance and Effectiveness Through 1999

EPA's CCTI programs address all major greenhouse gases in all major sectors of the economy. EPA has identified a wide range of cost-effective, smart technology pathways. By working with businesses, organizations, and consumers, EPA is achieving greenhouse gas reductions while reducing energy bills. These market based programs are demonstrating that reductions in greenhouse gas emissions and criteria air pollutants are achievable with cost savings. Programs including ENERGY STAR Labeling, Climate Wise and ENERGY STAR Buildings and Green Lights save businesses, consumers and organizations across the country billions of dollars while reducing the emissions of harmful greenhouse gases by millions of tons.

EPA has had substantial success across its CCTI and global change research efforts (encompassing the EPA programs as shown in Table 1). Through 1999, EPA's CCTI programs are substantially reducing emissions of carbon dioxide and other greenhouse gases such as methane and perfluorocompounds (PFCs). These programs have reduced U.S. greenhouse gas emissions by more than 115 million metric tons of carbon equivalent (MMTCE), while also saving families and businesses over $11 billion on their energy bills and keeping about 275,000 tons of smog-forming nitrogen oxide (NO) pollution from entering the air. In 1999 alone, these programs:

reduced greenhouse gas emissions by 44 million metric tons of carbon equivalent (MMTCE);

reduced energy consumption by about 55 billion kilowatt hours;

successfully demonstrated 61 miles per gallon (gasoline equivalent) on a mid-size research chassis at 3,500 pound test weight with a state-of-the-art diesel engine and an EPA-invented, patented, and developed hybrid drivetrain; and

worked with 9 developing countries to develop important infrastructure for reducing greenhouse gas

emissions.

EPA's CCTI programs have also:

offset growth in greenhouse gas emissions above 1990 levels since that year by about 19% from where they would have otherwise been;

conserved enough energy to light more than 50 million homes for the year,

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These are the four primary GPRA performance measures for EPA's CCTI programs. Each of the goals has been met for 1999. There are also goals for some of the key subparts of EPA's CCT!. Table 2 shows that these goals have been met as well.

♦ prevented NOx emissions equivalent to the annual pollution from 75 power plants; and

♦ avoided greenhouse gas emissions equivalent to eliminating the pollution from about 35 million cars.

Thcsc programs have also locked in substantial benefits over the next decade or so. Since many of the investments promoted through EPA's climate programs involve energy-efficient equipment with lifetimes of ten years or more, the investments that have been spurred through 1999 will continue to deliver environmental and economic benefits through 2010 and beyond EPA currently estimates that based on investments in equipment already made due to EPA's programs through 1999,

organizations and consumers across the country will save more than $25 billion through 2015, and

✦ greenhouse gas emissions will be reduced by more than 230 MMTCE'.

EPA's programs continue to be highly cost-effective approaches for spurring investment in technologies and practices and reducing greenhouse gas emissions. For every dollar spent by EPA, the deployment programs

have

reduced greenhouse gas emissions by more than 2.5 tons of carbon dioxide equivalent and

delivered $70 in energy bill savings to consumers and organizations.

These results demonstrate that climate protection and economic growth can go hand in hand.

In addition to these benefits, the transportation research and development component of CCTI has produced important technological advancements that will generate substantial energy and carbon benefits in future years.

EPA has been also successful with its Global Change Research Program. EPA has completed preliminary assessments of regional scale consequences of climate change at 2 geographic locations, completed a key report on problem formulation for ecosystems services assessment, and another key report on the development and use of climate change indicators. Completion of these efforts means that EPA has met most of its GPRA goals for this research program. The third geographic assessment is behind schedule due to difficulties obtaining a high-quality project proposal able to pass rigorous scientific peer review.

These are estimates of benefits based on EPA's current estimates of the 1999 accomplishments of each program. As final results are determined in the Spring of 2000, these numbers may change to some extent.

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