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gas accounting is used it is essential to include all sources, not just those for which quantified emission reductions are claimed.

The United States can and should take a number of steps to preserve and enhance domestic sinks for greenhouse gases as part of its overall climate mitigation plan. The President's commitment, U.Š. treaty obligations, and fundamental considerations of policy dictate, however, that these actions be taken as additional steps to limit atmospheric loadings of greenhouse gases, and not as a substitute for reducing emissions. The President's statement is clear, it calls for "reducing our emissions of greenhouse gases to their 1990 levels by the year 2000.” The climate treaty is also clear in establishing an obligation for the United States to preserve and enhance sinks in addition to reducing emissions. Article IV, paragraph 2.(a) of the convention states in part “Each of the Parties shall adopt national policies and take corresponding measures on the mitigation of climate change, by emiting its anthropogenic emissions of greenhouse gases and protecting and enhancing its greenhouse gas sinks and reservoirs. Paragraph 2.(b) also calls for reporting on resulting projected anthropogenic emissions by sources and removals by sinks of greenhouse gases not controlled by the Montreal Protocol . .” The convention's negotiating history further clarifies this point as the concept of “net emissions” was proposed, but rejected in the final text.

Even if it were not a legal obligation under the treaty, it would be essential, as a matter of policy, to maintain the distinction between measures that reduce emissions and those that preserve and enhance sinks and reservoirs. This is because the total sink capacity (forest area multiplied by carbon density) of the earth is inherently limited. To the extent that sink capacity is used to justify investments that create a long-term commitment to increased emissions (e.g. construction of a new fossil-fueled power plant) this capacity will not be available to absorb emissions from) existing infrastructure. Given that the current commitment to retum emissions to 1990 levels by 2000 is only a first step toward the substantial reduction in emissions required to stabilize atmospheric greenhouse gas concentrations, it is essential to preserve all sink capacity for making progress toward this ultimate objective.

Toward the end of fulfilling U.S. commitments under the treaty and making progress toward the ultimate objective of the convention, the national plan should include measures such as preservation of old growth forests, expanded tree-planting on Conservation Reserve and Wetland Preserve program lands, and encouragement for tillage practices that enhance soil carbon storage. Net increases in carbon storage from these programs should be estimated to the extent possible, but these increases should not be included in calculating adherence to the President's commitment, as explained above.

Despite the President's clear commitment to reduce U.S. emissions, some major U.S. emitters of greenhouse gases (GHG) are pressing for a National Action Plan that would maintain U.S. GHG emissions at levels above 1990 levels. Advocates of such an approach would have the United States seek credit for emission reducing projects in other countries to justify the U.S. failure to reduce its own emissions.

The administration should reject these efforts to avoid the President's commitment to reduce U.S. emissions. Higher GHG emissions in the United States are not compensated for by claims of “reductions” in other countries for the simple reason that no quantified target for global GHG has been established and most countries have no quantified targets for their own GHG emissions. In the absence of such targets it is conceptually and technically indefensible to implement a system of national credits for projects undertaken in other countries.

The United States should take the following steps:

-Adopt a program to retum its own emissions to 1990 levels and achieve further reductions beyond the year 2000 without reliance on credits for actions abroad,

-continue to encourage projects overseas that reduce GHG emissions and enhance sinks,

-establish systems for tracking the emission consequences of such projects, holding open the prospect of some form of credit against future obligations to reduce GHG emissions to levels compatible with global climate security,

-work with other countries to address the many issues that such a credit system must resolve,

-couple the activation of any future credit system to the achievement of environmentally protective levels of global GHG emissions.

Promoters of credit for overseas projects point to the reference to “joint implementation” in the United Nations Framework Convention on Climate Change (FCCC). They argue that joint implementation permits a "least-cost solution” to the problem of climate change. While joint implementation of obligations under a future version of the FCCC may indeed enable a least-cost solution, reliance on joint implementation now provides no solution at all. Because the FCCC does not establish obligations that will reduce GHG emissions to levels compatible with “solving" the climate change problem, the United States and others should not rely on joint implementation credits at this point.

Advocates of flexible compliance programs such as joint implementation contend that environmental programs should set an environmental quality objective and then allow maximum fleixibility in the means permitted to meet the objective. However, the current FCCC does not meet the first condition: countries have not yet agreed to the substantial reductions in global GHG emissions required to protect against adverse climate impacts. Rather than setting a global GHG target and establishing country obligations compatible with achieving the target, the FCCC confines itself to a series of obligations that demonstrate the ability of parties to make some changes in the right direction.

The nature of the obligations under the FCCC would make it difficult, if not impossible, to establish a legitimate system of credits against current obligations through joint implementation projects (JIP). Credits by definition require quantification, yet many FCCC obligations are not quantified. For example, while Annex I countries have quantified initial targets for reducing GHG, they also have unquantified obligations to protect and enhance GHG sinks and reservoirs, as discussed above. Similarly, developing country parties have unquantified obligations to adopt programs containing measures to mitigate climate change, promote sustainable management of sinks and reservoirs, and take climate change into account in their policies and actions. (Art. 4, Par. 1(b), (d), (f). Since parties have obligations that are not quantifiable, the question of which overseas projects may produce credits is complex and will not be resolved quickly.

Some have argued that action taken in a developing country to reduce GHG emissions or protect sinks should be automatically creditable. This is clearly not correct under the FCCC. First, it is questionable whether the FCCC permits JIP with a party that lacks quantified obligations. Second, both Annex I and developing countries have programmatic obligations to carry out GHG reductions and sink measures in developing countries. The incremental costs of developing countries' Art. 4, Par. 1 duties must be funded by Annex II countries such as the U.S. (Art. 4, Par. 3.) Thus, no credit would accrue from the U.S. funding such Par. 1 measures. Criteria and mechanisms will have to be established to distinguish between measures required to satisfy a host country's Par. 1 duties and additional measures that go beyond those duties. The lack of quantified duties invites gaming to inflate credits and is certain to stimulate lengthy disputes. Both are additional reasons to avoid reliance on JIP measures to meet current U.S. GHG emission reduction commitments.

As an example of such gaming, one large U.S. electric utility company has proposed that it should receive GHG credits for building a large new coal-fired power plant in a developing country. While such a new plant would add millions of tons of GHG annually to the atmosphere, the company claims it should receive credits because an even more polluting plant might have been built instead. By this logic a U.S. emitter could build an overseas plant increasing GHG by 10 million tons per year, argue that it could have built an 11 million ton plant, and then receive credits allowing it to emit an additional 1 million tons from its U.S. plants. Paper credit schemes like this would obviously frustrate GHG objectives and poison the well for even valid future use of JIP measures.

Finally, if the United States were to seek credit now for overseas actions that reduce GHG emissions under the rubric of JIP, the United States also would have to account for all of its other actions overseas that increase GHG emissions. If national GHG accounts are to include emissions effects overseas, one-way accounting cannot be justified. Just as some U.S. financed projects abroad may in fact reduce GHG emissions, many other U.S. overseas projects indisputably increase GHG emissions. Assembling a global inventory of such actions to establish a GHG balance of payments account will be essential to implementing a JIP credit program. The time required to produce this inventory precludes reliance on JIP credits for any near-term obligations, particularly for reductions required by the year 2000.

1. Conclusion Ample cost-effective opportunities exist for the United States to reduce emissions of greenhouse gases to 1990 levels by 2000 and achieve further reductions beyond that date. A combination of available energy efficiency measures and increased reliance on more greenhouse-friendly fuels can achieve President Clinton's commitment. Policy tools for implementing these measures are largely available under current law, such as the Clean Air Act of 1990 and the Energy Policy Act of 1992, but additional authority will be required in some areas, such as automobile fuel efficiency. These authorities must be used aggressively and adequate budgetary resources must be requested and appropriated if this strategy is to succeed. Furthermore, it is essential that the climate change mitigation plan include a binding process of assessment and mid-course correction to ensure that the United States stays on track to achieving its policy commitment. Finally, while the plan should include policies and measures to encourage the preservation and enhancement of sinks and reservoirs and the reduction of emissions overseas, “credits" from such actions must not be used to justify allowing U.S. emissions to exceed 1990 levels in 2000.

Attachment 1

PRINCIPLES FOR REVISING THE U.S. NATIONAL ACTION PLAN

1. Goals

Consistent with President Clinton's Earth Day speech, the revised National Action Plan should contain measures which not only return emissions of carbon dioxide and other greenhouse gases to their 1990 levels by the year 2000, but continue the trend of emissions reductions thereafter.

2. The process must result in a comprehensive plan, not simply a basket of measures The revised Action Plan should be a strategic document which sets forth goals, priorities, timelines, levels of effort and program directions that are useful on a day-to-day basis bere in the US. in making research, policy, and resource decisions, and instructive to other countries. The plan should be comprehensive, and should achieve substantial reductions in each sector. 3. A structure must be put in place to insure that the plan achieves its goal by the year 2000

The Plan should contain binding procedures for ongoing assessment and mid-course correction as needed to insure progress towards targeted emission reduction goals. Back-up measures should be implemented later in the decade if the U.S. falls behind its emissions reduction objectives. These might be needed, for escample, if the economy grows faster than expected, if energy prices remain lower than expected, or if certain measures achieve lower than expected emission reductions

4. The analysis must be credible and open

The U.S. should employ rigorous, defensible, and explicit methodologies for all quantitative aspects of the NAP. The assumptions used to determine the emissions impacts of the measures contained in the plan should be fully articulated (including funding levels and market penetration). The plan should determine the extent of compliance attributable to each measure, as well as the uncertainties of achieving the goals associated with each measure. As part of the ongoing analysis and review of the plan, a credible system of emission monitoring and accounting should be established. Each stage in the process should include participation from all segments of the public. businesses, industry, consumer environmental and social justice organizations and unions.

5. Reporting and Revision must be ongoing processes

The U.S. should publish an annual report on the implementation of the NAP, describing progress towards reducing greenhouse gas emissions. The adequacy of the US targets and timetables themselves must be periodically reexamined in light of new scientific findings and international progress towards emissions reductions.

6. The US should take the lead in International Action

The United States should assist other countries in addressing global warming especially by promoting technology transfer, and providing aid for adaptation. The US Plan should identify strategies to both assist developing countries in reducing their long term emissions growth and to ensure that developed countries are taking the lead in modifying long-term trends in anthropogenic emissions at home.

CRITERIA FOR EVALUATING THE U.S. NATIONAL ACTION PLAN

ON GLOBAL CLIMATE CHANGE

1. Jobs for America Today and Tomorrow

Does the plan promote job creation in new, environmentally safe industries and enhance US competitiveness? Many measures to reduce greenhouse gas emissions bave the potential to provide long term benefits to the nation's economic competitiveness and economic growth. The NAP should seek to craft policies which will: improve the nation's economic competitiveness for the next century by cutting wasteful energy consumption; reduce od imports which drain money and jobs from the US economy, and aggressively develop the efficient and low-polluting technologies which will be in such great demand worldwide over the next several decades (and create high paying industrial jobs in the United States). The development and export of US produced environmental technologies internationally is also critical if this global problem is to be dealt with effectively in developing nations as they continue to industrialize and expand their economic base.

2. A Framework for the Future

Does the plan put us on a path to sustainable development? Measures included in the plan sbould be designed to contribute to continuing the trend of emissions reductions beyond the year 2000. Policies contained in the plan should promote new modes of economic development and renewal that do not destroy the environment on which America depends. These policies should give businesses the signals to invest in and develop appropriate technologies for a competitive and efficient low-emissions future. The plan should reflect the need for significant structural changes in all sectors, such as reform of, transportation and energy infrastructure investments, energy price structures, land-use planning and basic research, development and commercialization priorities.

3. Reduce the cost to our children: Act Constructively Now

Does the plan take adequate steps to reduce the risks from global warming? Our children will benefit far more in the long run from actions taken now to prevent global warming than from costly future efforts to adapt to a changing climate. The potential societal cost of global climate change is so great that it warrants taking preventative action for that reason alone. As the NAS wrote in its May 1991 report on global warming policy, 'investment in mitigation measures acts as insurance protection against the great uncertainties and the possibility of dramatic surprises".

Prepared by the following participants in the U.S. Climate Action Network Alliance to Save Energy, American Council for an Energy Efficient Economy, Center for International Environmental Law, Environmental Action, Environmental and Energy Study Institute, Friends of the Earth, National Audubon Society, Natural Resources Defense Council, Sierra Club, Union of concerned Scientists, U.S. Public Interest Research Group

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