the plan will be strengthened if it strays off course, and annual reporting on the plan's implementation. Aside from vague promises, the plan as currently written commits to none of these. The CCAP is likely to have broad international ramifications, since the United States has set up its emissions reduction plan to serve as the standard against which all other countries' efforts will be judged. During the election campaign, Mr. Clinton joined environmentalists in admonishing then-President Bush for opposing a Convention that would have required industrialized countries to stabilize greenhouse gas emissions at 1990 levels. As President, Mr. Clinton has attempted to reclaim for the U.S. the mantle of international leadership on protecting the atmosphere. Europe, whose resolve to take strong action on climate has slipped due to its current economic recession, has seemed more than happy to pass the baton. Unless the U.S. confirms its commitment – again, by establishing as soon as possible a rigorous emissions tracking system -- the U.S. may signal inadvertently to the international community that even the extremely weak wording of the Climate Convention can be given a lackluster implementation. To the extent that the CCAP fails to inspire confidence that the U.S. will return to 1990 emissions levels by 2000, and that emissions will not rise again thereafter, one can expect that other countries' plans will be at least as vague. In releasing the CCAP last month, President Clinton missed an important opportunity to remove any lingering doubts about the sincerity of U.S. plans to cut its emissions by challenging the international community to strengthen the Convention. Early next year, President Clinton will be able to propose amendments and a process to add teeth to the Convention by the first meeting of its Parties in early 1995. This is an opportunity that he cannot afford to miss if he is indeed serious in his Earth Day challenge to other countries "to meet the ambitious goals of the Framework Convention on Climate Change." 7 THE U.S. NATIONAL ACTION PLAN Greenhouse Gas Reduction Policy ENVIRONMENTAL DEFENSE FUND In the spirit of reinventing government, the NAP should establish a comprehensive, competitive framework for fostering innovative actions, by both government and the private sector, to address the greenhouse challenge. Founded on reiteration of the President's pledge and rigorous emissions accounting, the NAP should create a mechanism that would ensure that the President's pledge is met by a dynamic, open-ended process that emphasizes actual emissions reduction efficacy, innovation, and cost-effectiveness. Under EDF's proposal, the Federally-funded programs to achieve emissions reductions would not be rigidly prescribed in the NAP. Rather, the NAP would operate through a Greenhouse Gas Reduction Fund (financed from the same sources that otherwise would support prescribed government programs and activities and from a portion of the funding authorized under Title XVI of the National Energy Policy Act). Federal agencies and private parties would submit bids for financing, and bids would be ranked on the basis of cost-effectiveness, quality of reductions, innovation, leveraging of private sector resources, and stimulation of U.S. market opportunities. The President's Council on Sustainable Development could play a role in recommending awards. Funding levels are provided for illustrative purposes only; a further assessment would be needed to determine the actual funding levels necessary to ensure this program's success. Of course, establishing this system would not detract from the need to pursue appropriate effective, innovative, and cost-efficient changes in the tax and regulatory codes at all levels of government to promote reductions in emissions of greenhouse gases. KEYS TO GHG STRATEGIES IMPLICATIONS FOR THE NATIONAL ACTION PLAN ♦ There are many paths between the present and 1990 GHG emission levels by the year 2000 ♦ The paths vary critically by the policy framework and the nature of the incentives provided • The paths vary in the timing and type of energy and control technologies As with Acid Rain, overcontrol through the banking of early reductions substantially boosts environmental performance and lowers cost • Early reductions are environmentally superior Demonstrate that the Administration will deliver on the President's commitment without harming the US economy Focus on creating a framework building toward an eventual legal and regulatory strategy • Keys to Cost-Effectiveness are setting the constraint firmly flexibility, not rigid allocations Competition and potential reward is the key to ingenuity. creativity and innovation Potential for future credit can lead to early reduction and enhance the President's Pledge 79-995 O-94-13 • Expectation of legislation and/or funding Agency Turf Battle rather than cooperative consensus Create a National GHG Reduction Fund ♦ I ederal Agencies submit bids for National GHG Reduction Fund ✔leverage of private sector resources stimulation of US market opportunities Stagnel! Bids evaluated by the Director of Climate Protection Award recommendations made by the President's Council on Sustainable Development Initial Funding at $25.000.000 for FY94 JOINT IMPLEMENTATION GHG REDUCTION FUND GHG REDUCTION ACCOUNTING SYSTEM Create a Separate Joint Implementation GHG Reduction Fund Allow both private and public sector proposals to the Fund Procudures for review and recommendation same as National GHG Reduction Fund Initial funding at $25,000,000 (50% of FY94 money for Section 1609) Use Section 1605 of the National Energy Policy Act as a building block Require annual GHG emission reporting for major source categories patterned after SARA Title III Reports Commit to Annual Progress Reports Encourage the development of independent auditing and certification capabilities for GHG reductions Extend to other nations through Country Studies and as a requirement for partners in Joint Implementation |