economic activities that give rise to greenhouse gas emissions. CCTP's Strategic Plan sets out an overall strategy to guide and strengthen our technical efforts to reduce emissions, articulates a vision of the role for advanced technology in addressing climate change, and provides a longterm planning context in which the nature of both the challenges and the opportunities for advanced technologies are illuminated and balanced. Innovations can be expected to change the ways in which the world produces and uses energy, performs industrial processes, grows crops and livestock, manages carbon dioxide, and uses land. In keeping with U.S. climate change strategy, which is consistent with the United Nations' Framework Convention, these technologies could both enable and facilitate a gradual shift toward significantly lower global greenhouse gas emissions. They would also continue to provide the energy-related and other services needed to spur and sustain economic growth. REFERENCES CCTP 2006-U.S. Climate Change Technology Program, Strategic Plan, Chapter 3, "Synthesis Assessment of Long-term Climate Change Technology Scenarios,” (Washington, DC: CCTP). Available at: www.climatetechnology.gov. Chairman TOM DAVIS. Thank you very much. STATEMENT OF JOHN B. STEPHENSON Mr. STEPHENSON. Mr. Chairman, thank you for inviting GAO to testify today on our report issued last year regarding Federal funding for climate research. As you know, in 1992 the United States ratified the U.N. Framework Convention on Climate Change, which has as its objective the stabilization of greenhouse gas concentrations in the Earth's atmosphere but does not impose specific goals or timetables forlimiting emissions. Since that time, 14 Federal agencies have provided billions of dollars for climate change activities. OMB, at the direction of Congress, annually reports on expenditures for these activities in four broad categories: one, science, which includes research and monitoring to better understand climate change; two, technology, which is the subject of today's hearing, which includes the research, development, and deployment of technologies to reduce greenhouse gas emissions or increase energy efficiency; three, international assistance, which helps developing countries to address climate change; and, four, tax expenditures which are Federal income tax provisions that grant preferential tax treatment to encourage emission reductions such as renewable energy uses. The climate change science program, which is a multi-agency coordination body, also reports on the science portion of these expenditures. In analyzing overall Federal climate change funding, we found that OMB and CCSP reported that climate change budget authority more than doubled from $2.4 billion in 1993 to $5.1 billion in 2004, with almost all of this increase in terms of real or inflationadjusted terms occurring in technology; however, it was difficult for us to determine if this was real or a definitional increase because of numerous changes in reporting format from year to year without adequate explanation. We found that in some cases OMB and/or CCSP added new accounts not previously included and expanded the definitions of some accounts to include more activities. For example, $152 million NASA research program to reduce emissions in aircraft was included for the first time in 2003. In addition, we found that over 50 percent of the increase in technology funding between 2002 and 2003 was the result of DOE expanding the definition of two accounts to include over $500 million in nuclear research. OMB explained this difference by stating that the prior administration did not consider nuclear programs to be part of its activities related to climate change, but that the current administration does, as explained in yesterday's released strategic plan on climate change technology. Also, the merging of direct research, that specifically for climate change, and indirect research, that research primarily for another purpose with residual benefits in climate change, in the 2002 through 2004 reports in our opinion made the reports more confusing and less useful. For example, this merging, in effect, caused carbon sequestration research, a direct activity, and grants to help low-income families weatherize their homes, an indirect activity, appear in the same technology reporting category at the summary level. In our report, we, among other things, recommended that OMB and CCSP use the same format for presenting data in its annual reports, explain changes in report content or format when they are introduced, and provide and maintain a crosswalk comparing new and old report structures. OMB and CCSP generally agreed with our recommendations and have tried to incorporate them into this year's climate change expenditure reports. However, OMB told us during the course of our work that the short time line required by Congress for completing that report within 60 days of the budget submission limits its ability to fully analyze data submitted by agencies. As a result, OMB must rely on funding estimates quickly developed by each agency in order to produce the report within a specified time. It seemed to us that the fact that we don't yet have a clear explanation and understanding of the Federal Government's $5 billion annual investment climate change portfolio and the fact that it is built from the bottom up instead of the top down is very relevant to the purposes of this hearing. We at GAO are strong proponents of setting goals, measuring performance against those goals, and reporting publicly on progress. We believe that this framework is the cornerstone of good program management and sound investment decisions. Although we have not formally reviewed either the CCSP or the CCTP strategic plans, we believe that as an implementation of these plans move forward there needs to be clearly articulated relationship between the Government's $5 billion investment portfolio and the goals of both programs. In addition, there needs to be a mechanism to ensure that agency investment decisions directly relate to the goals and priorities expressed in the plans. Mr. Chairman, that concludes the summary of my statement and I will be happy to answer any questions that you or members of the committees may have. [The prepared statement of Mr. Stephenson follows:] GAO Highlights Highlights of GAO-06-1122T, testimony before the Committee on Government Reform, House of Representatives September 2006 CLIMATE CHANGE Greater Clarity and Consistency Are Why GAO Did This Study Management and Budget (OMB) This testimony is based on GAO's What GAO Recommends GAO recommended, among other things, that OMB include data on existing climate-related tax expenditures. OMB agreed with most of GAO's recommendations and has implemented most of them. CCSP agreed with all of GAO's recommendations and has begun explaining changes in report format or content when they are introduced. What GAO Found According to OMB, from 1993 to 2004, federal funding for climate change increased from $3.3 billion to $5.1 billion (55 percent) after adjusting for inflation. During this period, reported inflation-adjusted funding increased for technology and science, but decreased for international assistance. However, it is unclear whether funding changed as much as reported because changes in the format and content of OMB and CCSP reports make it difficult to compare funding data over time. For example, over time, OMB expanded the definitions of some accounts to include more activities, but did not specify how it changed the definitions. OMB officials stated that it is not required to follow a consistent reporting format from year to year. Further, CCSP's science funding reports were difficult to compare over time because CCSP introduced new methods for categorizing funding without explaining how they related to previous methods. The Director of CCSP said that its reports changed as the program evolved. These and other limitations make it difficult to determine actual changes in climate change funding. Similarly, OMB reported that 12 of the 14 agencies that funded climate change programs in 2004 increased such funding between 1993 and 2004, but unexplained changes in the reports' contents limit the comparability of data on funding by agency. For example, reported funding for the Department of Energy (DOE), the agency with the most reported climate-related funding in 2004, increased from $1.34 billion to $2.52 billion (88 percent) after adjusting for inflation. DOE and the National Aeronautics and Space Administration accounted for 81 percent of the reported increase in funding from 1993 through 2004. However, because agency funding totals are composed of individual accounts, changes in the reports' contents, such as the unexplained addition of accounts to the technology category, make it difficult to compare agencies' funding data over time and, therefore, to determine if this is a real or a definitional increase. Furthermore, GAO found that OMB reported funding for certain agencies in some years but not in others, without explanation. OMB told GAO that it relied on agency budget offices to submit accurate data. These data and reporting limitations make determining agencies' actual levels of climate change funding difficult. Reported Federal Climate Change Funding by Category, 1993-2004 stion-adjusted discretionary budget authority in billions of dollars International Assistance www.gao.gov/cgi-bin/getrpt?GAO-06-11227. To view the full product, including the scope and methodology, click on the link above. For more information, contact John B.. Stephenson at (202) 512-3841, or stephenson@gao.gov. 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 United States Government Accountability Office |