incentives (integrated resource planning), and improving energy efficiency through research and development. All of the demand-side actions interact with supply-side actions in a manner that could either offset or reinforce reductions. The aggregate effect of actions is not the simple summation of their estimated individual effects. It was found that:

• Standards will force consumers to use more energyefficient equipment. As a result, demand for energy will decrease.

• Integrated resource planning (IRP) encourages conservation, regardless of whether there are standards. IRP programs are projected to increase in effectiveness over time due to projected higher energy prices. If an IRP program encourages consumers to adopt a technology that is equal to or more efficient than the standards, the benefits prescribed by the standards will be reduced. This reduction increases over time as technology improves and energy prices rise. Consequently, the independently derived effects of standards and IRP cannot be added.

• Research and development measures, however, reinforce the benefits of IRP and have positive effects on energy conservation. They will improve energy efficiency, lower the costs of conservation, and make IRP a more attractive choice because it increases the return on conservation.

Assumptions about economic growth and energy prices are incorporated in the model runs. Tables 15 and 16 compare the results with those generated by the model under somewhat different assumptions in Figure 26. The figure shows the effect on carbon emissions of increasing the economic growth rate assumption and of increasing and decreasing the world price of oil.

The No Action Case is one of many possible projections of future U.S. energy markets. It is based on an extensive set of assumptions regarding economic growth rates, world oil prices, U.S. energy resources, and cost and performance characteristics of energyconsuming and -producing technologies.

Economic growth rates and the level of world oil prices are two key factors that strongly affect both domestic demand and supply of primary energy and, consequently, carbon emissions. Assumed economic growth rates determine the future gross national product (GNP), which reflects the level of various economic activities (e.g., commercial growth, industrial production, and travel). All of these economic activities demand energy. In general, higher GNP is associated with higher energy demand. Assumptions about the

between 80 and 115 MMTs. For the High GNP growth rate case, carbon emissions are projected to increase to 148-178 MMTs in 2000. This reflects the result of increased economic activities associated with higher economic growth. For the High Oil Price case, carbon emissions are projected to increase to 51-88 MMTs. Increases in carbon emissions for this last case are the smallest among all four cases because the high prices choke off demand. On the other hand, in the Low Oil Price case, carbon emissions are projected to increase to 99-132 MMTs.

The results from this sensitivity analysis show that increases in carbon emissions in 2000 over the 1990 level can range between 51 and 178 MMTs. This range reflects some of the uncertainty regarding future economic growth rates and crude oil prices. Clearly, other factors could also affect the projected carbon emissions. There are a variety of ways to represent the contribution of U.S. greenhouse gas emissions. In contemplating projected greenhouse gas emissions, one needs to consider the overall economic activity, the composition of that activity, and a measure of efficiency. Table 17 presents the absolute level of the emissions of these gases, as well as the relative size of their emissions to gross national product. Table 18 presents their level and relative position in the transportation sector. Table 18 also presents emissions resulting from electricity generation. Noting that economic activity is a critical parameter for understanding a nation's emissions, this table presents the ratios of total electricity sales to GNP and of the total vehicle kilometers traveled to GNP and population.

Since greenhouse gases mix globally, emission limitations achieved anywhere are of global significance. For this reason, the Framework Convention for Climate Change allows parties to the Convention the flexibility to pursue limitations wherever they are most cost-effective. This provides the opportunity for countries to achieve greater total emission reductions than they would if they were confined to higher-cost actions available within their own national borders. It also offers an important avenue for other parties, particularly countries with developing economies and economies in transition, to attract significant investment income.

As with any actions to limit emissions-whether implemented within one country or jointly among parties-it is important that any quantitative reductions claimed be verifiable. Claimed reductions need to be accompanied by transparent supporting analysis and by follow-up to evaluate the success of long-term projects in achieving real emission reductions.

In addition to undertaking many actions at home to meet its commitments under the Convention, the United States is keenly interested in pursuing opportunities for joint implementation. The United States would like to develop cost-effective cooperative arrangements with other countries to limit net greenhouse gas emissions. Title 16 of the Energy Policy Act of 1992 also encourages U.S. private-sector enterprises to support actions abroad as well as at home that limit net greenhouse gas emissions.

Because joint implementation was authorized in the Convention signed in June 1992 (and ratified by the United States in October), and because joint implementation implies an agreement at some level between interested parties (governments) on a joint action, like many countries the United States is only now exploring formal agreements styled as “joint implementation” under the Convention. As joint implementation actions become more concrete, they will be quantified in the National Action Plan, just as domestic actions are currently quantified in this chapter. Allocation of the greenhouse gas reductions achieved will necessarily be worked out among the cooperating parties.

Ongoing efforts are expected to result in several joint implementation actions. Success is especially likely

where the actions are cooperatively organized, not just by government agencies, but also with the active participation by nongovernmental organizations (NGOs), including both nonprofit and for-profit enterprises. These NGOs can contribute relevant expertise and international contacts, independent and transparent estimates of the costs and effectiveness of projects, and financial support. They can also assist governments in selecting projects that pose valuable opportunities. Current activities that appear promising for joint implementation include:

• The U.S.-Canada Joint Project on Cost-Effective Greenhouse Gas Reduction Strategies is a cooperative activity by the U.S. Environmental Protection Agency and Environment Canada. Partly under the auspices of the U.S.-Canada Air Quality Agreement and with a view to joint implementation under the Climate Convention, this project seeks to identify the most cost-effective greenhouse gas reduction actions available in both countries.

• With the explicit purpose of advancing joint implementation under the Climate Convention, in June 1992 the Environmental Defense Fund (EDF) (a U.S. NGO) and the Institute of Market Economics (IME) (a Russian NGO affiliated with the Russian Ministry of Ecology) signed a memorandum of agreement to develop forest conservation projects in Russia that help conserve forest values and sequester carbon. EDF and IME are now developing specific projects. The first project proposal (draft November 1992) is for conservation and carbon sequestration in the threatened forests of the northern Vologda Region. EDF and IME are seeking both public- and private-sector financing for this joint implementation action, and have approached U.S. electric utilities as well as the U.S. government about the Forests for the Future Initiative.

• U.S. companies are also pursuing activities overseas to conserve forest values and reduce net CO, emissions. Examples include Applied Energy Systems, the New England Electric System, and the Los Angeles Department of Water & Power.

Additional joint implementation actions may grow out of ongoing international assistance efforts. These include the following-many of which are discussed in the chapter on international activities:

• U.S. and Russian agencies have formed the U.S.GAZPROM Working Group to identify opportunities for reducing methane leaks from natural gas systems in Russia using U.S. technology.

• In June 1992, the U.S. Department of Energy in cooperation with Siemens Solar Industries-U.S. signed agreements to promote solar photovoltaic electricity in rural Brazil.

• EPA has begun projects in China to recover coal-bed methane from coal mines.

• EPA and private-sector companies are currently exploring an opportunity with India to improve the feed of Indian dairy cattle by adding molasses urea block, thus reducing methane emissions.

• AID and EPA have formed a U.S.-Polish Working Group to reduce methane emissions from coal mining. The project has completed an inventory that identified the seventeen gassiest mines in Poland.