Climate Change. NRDC is also an active participant in the Climate Action Network, an international coalition of non-governmental organizations working for climate protection.

NRDC strongly endorses the global warming policy annunciated by President Clinton on April 21, 1993. The President's commitment to reduce U.S. emissions of greenhouse gases to 1990 levels by the year 2000 and to develop a plan "that can continue the trend of reduced emission" provides essential leadership for the global effort to prevent dangerous anthropogenic interference with the climate system, as called for in the United Nations Framework Convention on Climate Change. NRDC is working actively to help the administration craft an effective plan to implement the President's commitment.

To fulfill the President's commitment the administration must aggressively implement a program that increases the efficiency of energy use in all sectors of the U.S. economy, while increasing the share of primary energy supplied by natural gas and renewable energy sources. Attachment 1 provides principles and criteria developed by members of the Climate Action Network to guide development of the August plan. The key point is that the plan can not be just a set of policy options that sit on a shelf. Rather, the August plan must be a strategic document which sets forth goals, priorities, timelines, levels of effort and program directions that are useful on a day-today basis in making policy decisions, establishing research priorities, and allocating resources.

The Plan should also contain binding procedures for ongoing assessment and midcourse correction as needed to insure that the President's commitment is fulfilled. Back-up measures should be included that would be implemented later in the decade if the United States falls behind its emissions reduction objectives. For example, additional efficiency standards, increased carbon/energy taxes, and/or a comprehensive emissions cap with tradeable permits should be included in the plan and triggered to come into effect if U.S. emissions are not on track to be at or below 1990 levels by 2000.

Experience from successful Federal, State, utility, and other programs clearly demonstrates that the United States can cost-effectively reduce greenhouse gas emissions below 1990 levels by the year 2000 through a set of aggressive initiatives designed to raise the efficiency of energy use in all sectors of the economy and to open markets for the use of natural gas and renewable energy sources. Continuing the trend of reduced emissions to environmentally sustainable levels in the longterm will require additional research and development efforts and comprehensive incentives (taxes and/or emission caps). Attachment 2 contains a list of 21 specific initiatives that have been endorsed by many organizations participating in the Climate Action Network. Attachment 3 contains a (largely overlapping) list of 10 initiatives developed by the American Council for an Energy-Efficient Economy (ACEEE), with estimated budget requirements and emission reductions. The analysis by ACEEE indicates that these efficiency measures by themselves would be almost sufficient to reduce year 2000 greenhouse gas emissions to 1990 levels. Rather than repeat this material here, let me briefly summarize some of the key initiatives that would be included in an effective plan, organized according to the working group structure established by the administration.

Reducing energy demand by increasing energy efficiency in buildings and industry is essential to any successful global warming mitigation strategy. Many of the policy tools are in place in the form of the Energy Policy Act of 1992, state-level utility regulation, the Clean Air Act, and voluntary public-private partnerships such as the Environmental Protection Agency's "Green Programs." Aggressive and effective implementation of new and existing initiative under these authorities will be more important than obtaining additional authority for these sectors. Providing adequate staff and budgetary resources will, however, be essential. Some of the key elements of an effective strategy are outlined below.

1. Implement building efficiency standards

DOE should assist states in adopting building codes equivalent to ASHRAE 90.2P (commercial) and ASHRAE 90.2P (residential). The Energy Policy Act of 1992 (EPACT) requires states to adopt a commercial building code equivalent to the ASHRAE 90.1P standard. DOE also has the authority to adopt ASHRAE 90.2P as a model standard and encourage states to adopt it as part of their building codes. ASHRAE 90.2P is somewhat more stringent than the CABO Model Energy Code referenced in EPACT, because of its inclusion of measures to cut cooling energy and because of its more rigorous trade-off procedures. Significant additional cost-effective savings are possible today beyond what would be required under this standard.

1 Geller, H., J. DeCicco, and S. Nadel. Cost-Effective Carbon Dioxide Reduction Initiatives. American Council for an Energy-Efficient Economy, Washington, DC. June 1993.

For example, utility programs in California are achieving 20% and 30% cost-effective savings beyond Title 24, which is already more stringent than ASHRAE 90.2P. DOE should support states in the development, adoption, and enforcement of these State codes be developing detailed compliance manuals, providing training for code officials, developing appropriate compliance test procedures (e.g. for windows), and supporting compliance enforcement.

2. Implement equipment efficiency standards

DOE is required under NAECA and EPACT to adopt efficiency standards for a wide variety of appliances and other equipment used in the residential, commercial, and industrial sectors (e.g., refrigerators, fluorescent lamps and ballasts, and motors above 1 hp). The department has been falling farther and farther behind schedule on these rulemakings. Substantial additional management attention by DOE and OMB to allow faster processing of proposed rules and substantially increased funding to allow the analysis process to go on in a more timely fashion are crucial towards achieving the goals of the enabling legislation. This program could also be expanded to cover additional products, such as windows, distribution transformers, luminaires, office equipment (or electronic components), incandescent lamps, and chillers.

3. Encouraging utility efficiency incentive programs

EPACT requires that states consider utility regulatory reforms to make the leastcost resource plan the most profitable for utilities. Such reforms represent a winwin situation for all parties: utilities can be more profitable under reformed regulation, and their customers more competitive. Environmental compliance costs are reduced, and the environment is cleaner. But many commissions and utilities have not yet gotten the message about how regulatory reforms to encourage energy efficiency could diffuse many highly charged arguments and benefit both business and the environment. The Federal Government can work with utilities and their commissioners to increase the momentum for regulatory reform. Model "collaborative agreements" could be developed.

Federal support for utility efficiency programs could also provide central databases and informal ways of communicating successes and failures from one State to another. This effort should also include teams of Federal staff that could provide extended technical assistance to states in setting up programs that work. Grants to states to provide them with personnel to carry out an integrated resource planning process could have tremendous leverage in making the process work.

One factor retarding utility energy efficiency programs has been the lack of confidence of some observers in the reality of energy savings. Rigorous measurement and evaluation procedures have been evolving to provide feedback on what is succeeding and what is not in utility efficiency programs, and to provide an accounting mechanism that assures that utilities being paid for increases in energy efficiency are delivering at least as much efficiency as they are being paid for. California has adopted, with widespread support, a set of protocols for evaluating DSM accomplishments. These could be used as a basis for a national program. Such a national program would coordinate State efforts to develop measurement and evaluation protocols, to assure that lessons teamed in one State could be applied in other States, and also as a central information source on the data obtained from already completed measurement studies. Such a central data source could provide more reliable national estimates of energy consumption and its changes due to particular devices or programs, as well as information on the success and failure stories of particular analytic techniques.

Another role for DOE is to support coordination of utility efficiency programs across jurisdictions. The Consortium for Energy Efficiency, Inc. (CEE) is developing model energy efficiency programs for a variety of technologies and end-uses. There are considerable returns to scale from such a process: by working together utilities can utilize market power to facilitate the development of equipment that is not currently on the market but could be built with cost-effective energy savings.

CEE has nearly final programs for commercial rooftop air conditioners and residential clothes washers. Additional programs are possible in a wide variety of areas: e.g., new construction efficiency (whole building), space heating and cooling equipment for residential uses, water heaters, advanced cooling systems such as indirect multi-stage evaporative coolers, and electric motors, drives and drive trains. 4. Encourage retrofit of existing homes

The Federal Government should promote the establishment of home energy rating systems (HERS) in all states coupled to a uniform program of Energy Efficient Mortgages (EEMs). By allowing homeowners to finance cost-effective efficiency improvements as part of their normal home mortgage, EEMS could lead to efficiency improvements in many of the millions of homes for which new mortgages are written each year. The Federal Government could provide tax incentives to secondary

mortgage institutions and/or help buy down interest rates for the energy efficiency portion of any loan in order to further increase market penetration.

Significant energy savings can also be achieved by expanding and improving the low-income home weatherization program. Weatherization primarily attacks the largest source of residential carbon emissions, space heating, and also reduces the next two largest end-uses, cooling and water heating. The current weatherization program suffers from two major drawbacks as a carbon emissions control measure: -it reaches too small of a fraction of the market every year; and

-it is subject to arbitrary limits on expenditures per house, rather than investing in all cost-effective energy efficiency measures.

The weatherization program should be dramatically expanded to allow a larger fraction of low-income houses to be weatherized per year. It should also be expanded by increasing the income threshold for qualification for the program, particularly if there is an energy tax that otherwise raises people's heating costs. Furthermore, eligibility for the program should be expanded to rental units with centrally metered heating regardless of the income of the occupants. Then, from a technical point of view, the program content should be expanded to include all cost-effective efficiency measures without regard to the total cost per house.

5. Clean Air Act Compliance

The Clean Air Act requires that states not in compliance with clean air goals develop State implementation plans (SIP's) that include all "reasonably available control technologies". Until now, RACTS have been interpreted to mean only emissions controls on the power plant itself, but there is no reason why the definition could not be expanded to include demand-side measures. Such inclusion would create a win-win situation: it would provide states with cheaper and more effective ways of obtaining and maintaining Clean Air Act compliance, so it would reduce costs and improve air quality. EPA could cause this to happen by advising states that their SIP's should include all reasonably available demand-side programs. Examples of programs that would be strong candidates for reasonable availability would include the adoption of standards for which there are national models (for new residential and commercial buildings) and the adoption of utility regulatory policies that would encourage utilities to be part of national or regional programs such as those developed by the Consortium for Energy Efficiency.

6. Expansion of EPA Green Programs

EPA's Green Lights program has provided annual electricity savings of over 100 GWh at a cost of less than 5e/kWh and has received the widespread support of industry and environmentalists. The Energy Star computer program recently resulted in the introduction of high-efficiency desktop computer by IBM and appears poised to transform the PC industry within a few years. The Federal Government should greatly expand its support for the development and implementation of these voluntary programs.

These programs work synergistically with utility efficiency programs to hasten the commercial success of environmentally preferable technologies. Green Programs have achieved dramatic results with relatively small expenditures of Federal funding. This entrepreneurial activity of Government should be expanded greatly through the provision of increased staff and budget. Green Programs could work in a complementary fashion with virtually all of the CEE programs described above. Green Programs could also work in areas where utility incentive programs would not be effective, such as end-uses that are discretionary. (If use of a product is discretionary, then utility rebates or other incentives to provide more efficiency could backfire by inducing more people to purchase the device.) But Green Programs, with no financial incentive, would not have this perverse effect. Examples of such enduses are residential freezers, residential room air conditioners in milder climates, television sets, VCR'S, and associated cable reception devices.

7. Make the Federal Government a model of efficiency

The Federal Government has adopted a number of mandates to increase the efficiency of Federal buildings. However, inadequate funding has been appropriated to implement these mandates. Adequate funding should be made available to implement all efficiency measures with up to a 10-year payback by the year 2000. In addition, the Federal Power Marketing Authorities and TVA should implement aggressive state-of-the art energy efficiency programs. Ironically, Bonneville's efficiency programs, which have been models of success in the past, are currently threatened by severe budget cuts. WAPA and TVA should also implement aggressive programs. Transportation energy consumption is responsible for almost one-third of U.S. CO2 emissions and two-thirds of oil consumption. No climate change mitigation plan can be successful unless it attacks oil consumption for personal transportation.

1. Light Vehicles

Increasing new automobile fuel efficiency to an average of 45 miles per gallon within a decade is a cornerstone of reducing emissions in the year 2000 and beyond. Available technological and marketing resources that could be going into increased efficiency is instead being used to boost power while leaving fuel economy stagnant. Higher fuel efficiency standards should be coupled with investment incentives for retooling domestic manufacturing capacity to build more efficient vehicles. Independently, the Federal Government should organize a "golden carrot" program to provide advanced purchase guarantees for a truly "green" car, achieving 80 miles per gallon and ultra-low emissions.

2. Transportation system efficiency

The Federal Government should use the Clean Air Act conformity provisions together with the Intermodal Surface Transportation Efficiency Act (ISTEA) to steer transportation investment away from expanding highway capacity. Experience shows that expanding highway capacity is not a solution to congestion, but only allows continued rapid growth in vehicle miles traveled to fill in all the empty space on the road. Rather, the Federal Government should encourage State and regional reforms such as pay-as-you drive insurance, parking subsidy reform, and congestion pricing, that provide drivers with price signals that better approximate the true cost of driving.

3. Renewable transportation fuels

In addition to reducing fuel demand through vehicle and system efficiency improvements, it is widely recognized that we must begin a transition away from total dependence on petroleum for transportation fuels. It is essential that policies promoting alternative fuels promote reduced greenhouse gas emissions as well as reduced petroleum dependence. Unfortunately, ethanol and methanol as currently produced provide little or no reduction in greenhouse gas emissions relative to gasoline on a full fuel-cycle basis. Compressed natural gas provides only modest benefits, and then only if leakage rates are low. Policy should focus on promoting truly renewable alternative fuels, such as ethanol or methanol from woody biomass, solar-hydrogen, and electricity from renewable sources.

In particular, Congress should modify the existing ethanol subsidy so that by 2000 it is proportional to reductions in full-fuel-cycle greenhouse gas emissions. Thus, without affecting the total value of the ethanol subsidy to the industry as a whole, producers that achieve an 80 percent reduction in full-fuel-cycle emissions, for example, should qualify for tax credits worth four times as much per gallon as producers that only achieve a 20 percent emission reduction. Producers that achieve no emission reductions should not qualify for tax benefits. Such an emission-sensitive tax structure should be phased in between 1995 and 2000.

Successful implementation of the energy demand reduction strategies described above would reduce or eliminate the need for new electrical and natural gas supply capacity in the short run. Nonetheless, additional emission reductions can be obtained by accelerating the replacement of old inefficient and highly polluting plants with efficient natural gas and renewable energy technology. It is also essential to lay the foundation and begin a transition to renewable energy sources as the primary component of our supply mix.

1. Accelerate replacement of existing fossil capacity

Old dirty powerplants should not be allowed to operate indefinitely without being subjected to current pollution control standards. By the time a plant has operated for 40 years the utility's initial investment has been completely amortized. Thus a utility wishing to extend the life of a unit beyond 40 years should be required to bring the plant into compliance with New Source Performance Standards. This will provide significant clean air benefits while reducing CO2 emissions to the extent that plants are made more efficient or are replaced by demand-side energy efficiency or new capacity with lower emissions per kilowatt-hour of generation.

2. Use natural gas for Clean Air Act compliance

EPA should set the summer NO, performance standard in non-attainment areas by 1995 based on natural gas firing as Reasonably Available Control Technology (RACT). Reductions in NOx emissions are critical to achieving EPA ambient air quality standards for ozone (smog). Natural gas firing (alone or co-fired with coal) is an effective NOx, control strategy for powerplants that are currently coal fired. Natural gas is available and cost-effective in the summer (and parts of spring and fall) for most units because pipeline capacity is underutilized during this period. Thus gas firing is a Reasonably Available Control Technology. Flexibility in implementing this standard (including emissions trading within defined regions) should be allowed in recognition of site-specific variations in the costs of implementing this strategy. This initiative would generate extremely cost-effective smog reductions and significant CO2 emission reductions as a side benefit.

3. Aggregate a market for renewable energy technology

The Federal Government should help to organize and partially fund initiatives, such as the Utility PhotoVoltaic Group (UPVG), designed to aggregate markets for selected renewable energy technologies. The goal of these consortia should be to place sufficiently large orders to stimulate investment in the next generation of manufacturing technology at a scale sufficient to dramatically reduce costs. In addition to photovoltaics, candidate technologies include variable-speed wind turbines and integrated biomass gassilier-advanced gas turbines.

D. Methane and Other Greenhouse Gases

Although the climate change mitigation plan must focus on carbon dioxide emissions, which constitute the vast majority of total U.S. greenhouse gas emissions, it is also important to address other contributors to global warming. In particular, it is essential to limit the global warming potential of CFC substitutes and reduce methane emissions from landfills. It is also important to encourage action to reduce other source of methane as well as nitrous oxide emissions, as required under the climate treaty, even if reductions from these sources can not be quantified.

1. Minimize global warming impact of CFC substitutes

The chemical, refrigeration, and other industries are currently undertaking major investments to replace CFCs with a variety of alternative chemicals and processes. The administration and Congress should ensure that the global warming implications of these choices are fully considered. The global warming potential of CFC substitutes is growing from essentially zero in 1990, so whatever level these emissions reach in 2000 will have to be offset through reductions in emissions of other compounds. To minimize this growth, EPA should use its authority under the Clean Air Act to restrict the use of long-lived hydrofluorocarbons (HFCS) and perfluorocarbons (PFCs), which have high global warming potentials. EPA should also apply capture, recycling, anti-venting, and leakrepair rules to these compounds. At the same time, Congress should extend the tax on ozone depleting substances to HFC's and PFC's based on their global warming potentials, considering both direct and indirect (energy efficiency) impacts.

2. Capture methane from landfills

Landfills in the United States emit an estimated 8 to 15 million metric tons of methane annually, accounting for 20-30 percent of total U.S. methane emissions. Many landfills already utilize landfill gas collection systems to reduce explosion hazards. In many cases, the gas (which is roughly 50 percent methane) could be costeffectively recovered and used to generate electricity or be purified to pipeline quality natural gas. Instead, most landfill gas is either flared or simply vented. Existing Clean Air legislation requires new controls on landfill gas emissions from new and existing municipal solid waste landfills. Significant additional methane reductions could be achieved by implementing a more stringent standard under the Clean Air Act mandate than the control standard originally proposed by EPA in 1991, but not yet finalized.

EPA should require mandatory methane recovery at landfills with annual methane emissions exceeding 290 metric tons/yr. Based on pollutant concentrations in the average landfill gas emissions stream, a methane control standard of 290 metric tons per year would correspond to the 25 ton/yr non-methane organic compound (NMOC) standard considered, but not proposed by EPA. The 290 ton/yr control level should be established as an independent methane standard in conjunction with the 25 ton/yr NMOC standard. This would ensure that landfills with below average concentrations of NMOC emissions would still be controlled for methane emissions. This approach would reduce annual methane emissions by 6.4 million metric tons compared to only a 2 million metric ton reduction that would be achieved by the 150 ton/yr NMOC standard EPA originally proposed. Further, by requiring energy recovery in all cases where it is cost effective, additional greenhouse gas reductions can be achieved by displacing the need for some consumption of fossil fuel.

3. Other sources

A variety of additional greenhouse gas sources merit attention in the national plan. Quantifiable reductions may be obtainable from the following: methane from coal seams; methane from of oil and gas production and distribution systems; nitrous oxide from nylon production; nitrous oixde from fluidized beds and catalytic converters; and CF4 and C2F6 from aluminum production. In addition it will be important to develop techniques that can reduce methane and nitrous oxide emissions from agricultural practices, even if reductions can not be immediately quantified. Sources such as cattle, rice paddies, and fertilizer use are not trivial in the United States, and are very important internationally. Projected changes in these sources will have to be included in the baseline in any case to provide an accurate accounting of trends in total greenhouse gases; if a comprehensive approach to greenhouse