Moreover, the criteria are intended to help ensure that the projects result in real, measurable net emissions reductions. The U.S. Initiative generally uses more criteria than did certain other countries with similar programs, and the criteria are stricter, in some respects, than the criteria used in other countries’ programs, according to our analysis of a 1996 report prepared for the Agency for International Development. The Evaluation Panel accepted this project. About One-Third of the Proposed Projects Have Been Accepted

Of the 97 proposed projects submitted during six evaluation rounds, 32 projects have been accepted into the program. For example, a project in Costa Rica involves the construction and operation of a privately owned and operated hydroelectric plant. The electricity generated by this plant will displace electricity that would have otherwise been generated by burning fossil fuels, thus reducing carbon dioxide emissions. The other 15 approved projects are designed to capture carbon dioxide that is already in the atmosphere. Of the First Seven Projects Approved, Five Are in the Process of Being Implemented

Of the seven projects approved in the first round in February 1995, five have been or are being implemented, and two have not yet started. These two projects include one intended to sequester emissions and one intended to reduce emissions. The seven projects accepted during the first round of evaluations had between one and seven U.S. participants. Based on information provided by the projects’ developers, the total estimated greenhouse gas benefits for the 32 projects accepted into the Initiative as of March 1998 is equivalent to about 235 million metric tons of carbon dioxide over a period of up to 60 years. Based on the project developers’ estimates, these 32 projects will reduce greenhouse gases by more than 200 million metric tons of carbon dioxide and 1.3 million metric tons of methane (1.3 million metric tons of methane is equivalent, in terms of global warming potential, to about 31 million metric tons of carbon dioxide). According to the project’s developers, by preventing the conversion of these lands, expected to occur over the next 3 years, to marginal cropland and cattle pasture, the project will result in net greenhouse gas benefits of more than 1 million tons of carbon dioxide. The project developers for another four implemented projects reported to the Initiative staff in March 1998 that their projects were in operation and achieving greenhouse gas benefits but pointed out that the benefit data they provided at that time were estimates because either detailed monitoring results were not available or the monitoring results had not been verified. In the context of the pilot program, additionality refers to project acceptance criteria that are designed to ensure that the financing of a proposed project would not have occurred otherwise, called financial additionality, and that the associated reduction in emissions would likewise not have occurred, called emissions additionality. At EPA, we obtained and reviewed information related to its efforts to develop standard methods for measuring greenhouse gas emissions and for estimating projects’ emissions reduction benefits. Does it involve specific measures to reduce or sequester greenhouse gas emissions initiated as a result of the U.S. Initiative on Joint Implementation or in reasonable anticipation of the Initiative? 7. 8. 9. 2. Are U.S. participants who are emitting greenhouse gases within the United States taking measures to reduce or sequester those emissions? 4. 2. 4. 5. 6.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed selected aspects of the U.S. Initiative on Joint Implementation, intended to encourage investments by U.S. entities in projects to reduce greenhouse gas emissions outside the United States, focusing on the: (1) criteria used to accept proposed projects; (2) number and types of projects accepted; (3) status of the seven projects accepted in the first round of proposals in February 1995; and (4) estimated benefits of pilot projects in terms of emissions reductions.

What GAO Found

GAO noted that: (1) the Initiative's Evaluation Panel uses nine criteria to evaluate proposed projects for acceptance into the program; (2) among the criteria are acceptance by the host country, a reduction in greenhouse gases that would result from the proposed project and that would not have occurred otherwise, and a mechanism to verify the project's results; (3) the U.S. program generally has more criteria than similar programs administered by certain other countries; (4) also, the U.S. criteria are stricter in some respects, for example, by requiring that benefits be maintained over time; (5) through March 1998, Initiative officials had reviewed proposals for 97 different projects and accepted 32 of them; (6) of the 32 accepted projects, 17 involve reducing greenhouse gas emissions, for example, by constructing and operating a hydroelectric plant that will provide electricity previously produced by burning fossil fuels; (7) the other 15 involve capturing greenhouse gases already emitted; (8) also, 31 of the 32 projects are intended to reduce emissions of or capture carbon dioxide; the other project is intended to reduce methane emissions; (9) of the seven projects accepted into the Initiative as a result of the first round of evaluations in February 1995, five are in the process of being implemented; (10) this means that land has been acquired or facilities have been built, and the projects are in the process of reducing or capturing greenhouse gas emissions; (11) according to Initiative officials, as of March 1998, the remaining two projects--one that would reduce greenhouse gas emissions and one that would capture these emissions from the atmosphere--had not progressed because their developers had not been able to obtain financing; (12) the projects' developers estimate that, over a period of up to 60 years, the 32 approved projects, if fully funded and implemented, will result in net emissions reductions of about 200 million metric tons of carbon dioxide and 1.3 million metric tons of methane; (13) Initiative staff do not verify or attest to the reliability of the net greenhouse gas benefits estimated by the projects' developers; (14) in part, this is because standard methods for estimating projects' emissions reduction benefits specific to the U.S. Initiative have not been developed; (15) the Environmental Protection Agency (EPA) has funded studies to develop standard methods for calculating projects' benefits; and (16) according to EPA officials, these studies should be completed by the end of fiscal year 1998.