Federal Funding for Climate Change Activities Increased Substantially from 2003 through 2010, and Reflects a Complex, Crosscutting System

Funding for climate change activities reported by OMB increased from  $4.6 billion in 2003 to $8.8 billion in 2010. From 2003 through 2010, total technology funding increased from $2.56  billion to $5.5 billion (115 percent, or 83 percent after adjusting for  inflation), according to OMB. While most respondents indicated that their own  organization consistently interpreted and applied methods for defining and  reporting climate change funding, far fewer said that other agencies across  the federal government did so. Certain factors identified by respondents  help to explain this limitation, including the difficulty in distinguishing  between programs related and not related to climate change. Several respondents indicated and stakeholders said that federal agencies  use their own interpretation of definitions to account for climate-related  activities, resulting in an inconsistent accounting of these activities across  the federal government. These sources identified two key factors that  complicate these efforts: (1) the lack of a shared understanding of federal  strategic priorities among federal officials and (2) the fact that existing  mechanisms that could help align agency funding with priorities are  nonbinding, limiting their effectiveness where they conflict with agency  responsibilities and priorities. This is partly due to the multiple, often inconsistent  messages articulated in different forums and in different policy  documents. Federal entities reported that  they are already taking steps to implement several of these options. Options to Improve the Tracking and Reporting of Climate Change Funding

Respondents identified two key options to improve how climate change  funding is tracked and reported, a key element in improving how funding  is aligned with priorities: an integrated budget review process that  provides a more centralized and predictable approach for collecting and  reviewing climate change funding, and enhanced guidance on how to  define and report funding. A Governmentwide Strategic Planning Process

According to questionnaire respondents, available literature, and  stakeholders, a governmentwide strategic planning process could enhance  how strategic priorities are set by articulating what individual agencies are  expected to do within the overall federal response to climate change. Many respondents called for  improved coordination to better align funding with priorities. Among the key issues identified by questionnaire  responses, available literature, and interviews with stakeholders are that  (1) methods for defining and reporting climate change funding are not  interpreted consistently across the federal government, and (2) federal  officials do not have a shared understanding of strategic priorities. Without further improvement in these  areas, it will be difficult for Congress and the public to fully understand  how climate change funds are accounted for and how they are spent. Recommendations for Executive Action

To improve the coordination and effectiveness of federal climate change  programs and activities, we recommend that the appropriate entities within  the Executive Office of the President, including the Council on  Environmental Quality, Office of Energy and Climate Change Policy, Office  and Management and Budget, and Office of Science and Technology Policy,  in consultation with Congress, work together with relevant federal agencies  and interagency coordinating bodies to take the following two actions:    Clearly establish federal strategic climate change priorities, including the  roles and responsibilities of the key federal entities, taking into  consideration the full range of activities within the federal climate change  enterprise. Assess the effectiveness of current practices for defining and reporting  federal climate change funding and aligning funding with priorities, and  make improvements to such practices as needed for Congress and the  public to fully understand how climate change funds are spent. They did not provide  official written comments to include in our report. Instead, they provided  technical comments, which we incorporated as appropriate. Appendix I: Scope and Methodology

This report examines (1) federal funding for climate change activities and  how these activities are organized; (2) the extent to which methods for  defining and reporting climate change funding are interpreted consistently  across the federal government; (3) federal strategic climate change  priorities, and the extent to which funding is aligned with these priorities;  and (4) options, if any, available to better align federal climate change  funding with strategic priorities. We administered a Web-based questionnaire that was accessible through a  secure server. Funding from the American Recovery and Reinvestment Act of 2009 (Pub. What options, if any, are available to better align federal climate  change funding with strategic priorities? 26.
Why GAO Did This Study

Climate change poses risks to many environmental and economic systems, including agriculture, infrastructure, and ecosystems. Federal law has periodically required the Office of Management and Budget (OMB) to report on federal climate change funding. GAO was asked to examine (1) federal funding for climate change activities and how these activities are organized; (2) the extent to which methods for defining and reporting climate change funding are interpreted consistently across the federal government; (3) federal climate change strategic priorities, and the extent to which funding is aligned with these priorities; and (4) what options, if any, are available to better align federal climate change funding with strategic priorities. GAO analyzed OMB funding reports and responses to a Web-based questionnaire sent to federal officials, reviewed available literature, and interviewed stakeholders.

What GAO Found

Funding for climate change activities reported by OMB increased from $4.6 billion in 2003 to $8.8 billion in 2010, and is organized in a complex, crosscutting system. OMB reports funding in four categories: technology to reduce emissions, science to better understand climate change, international assistance for developing countries, and wildlife adaptation to respond to actual or expected changes. Over this period, technology funding, the largest category, increased from $2.56 billion to $5.5 billion and increased as a share of total funding. OMB also reported $26.1 billion as funding for climate change programs and activities in the American Recovery and Reinvestment Act of 2009, and tax expenditures to encourage emissions reductions, with $7.2 billion in federal revenue losses in 2010. Many federal entities manage related activities, including interagency programs that coordinate agency actions. Questionnaire responses suggest that methods for defining and reporting climate change funding are not interpreted consistently across the federal government. Respondents identified three methods for defining and reporting climate change funding, foremost of which is guidance contained in OMB Circular A-11. While most said their own organization consistently applied these methods internally, far fewer said that they were applied consistently across the government. Some, for example, noted that other agencies use their own interpretation of definitions, resulting in inconsistent accounting across the government, because of several factors, such as the difficulty in distinguishing between programs related and unrelated to climate change. Respondents, literature, and stakeholders identified two key factors that complicate efforts to align funding with priorities. First, notwithstanding existing coordinating mechanisms, questionnaire results indicated that federal officials do not have a shared understanding of strategic priorities. This is in part due to inconsistent messages articulated in strategic plans and other policy documents. A 2008 Congressional Research Service analysis had similarly found no "overarching policy goal for climate change that guides the programs funded or the priorities among programs." Second, respondents indicated that since mechanisms for aligning funding with priorities are nonbinding, they are limited when in conflict with agencies' own priorities. Questionnaire respondents also identified options to better align funding with strategic priorities. Such options included (1) a governmentwide strategic planning process that promotes a shared understanding among agencies of strategic priorities by articulating what they are expected to do within the overall federal response to climate change and (2) an integrated budget review process that better aligns these priorities with funding decisions through a more consistent method of reporting and reviewing climate change funding. Federal entities are beginning to implement some of these options. However, without further improvement in how federal climate change funding is defined and reported, strategic priorities are set, and funding is aligned with priorities, it will be difficult for the public and Congress to fully understand how climate change funds are accounted for and how they are spent. Among GAO's recommendations are that the appropriate entities within the Executive Office of the President (EOP), in consultation with Congress, clearly establish federal strategic climate change priorities and assess the effectiveness of current practices for defining and reporting related funding. Relevant EOP entities did not provide official written comments, but instead provided technical comments, which GAO incorporated as appropriate.