Some Climate Leaders and Climate VISION Participants Have Not Completed Program Steps as Soon as Expected, and Both Agencies Lack a Written Policy for Dealing with Such Participants

According to EPA officials, all program participants agree to complete four  program steps, and EPA guidelines suggest that these steps generally be  completed within about 1 year, although the goal negotiation process can  take as long as 2 years. Neither agency has written criteria detailing expected  time frames for meeting expectations or the consequences of not meeting  expectations. According to agency officials, after establishing its goal to reduce  emissions, each industry group is asked to develop a work plan following a  standard template developed by DOE, generally within 1 year of joining the  program. DOE Plans to Track Participants’ Progress in Completing Program Steps, but It Lacks a Written Policy For Dealing with Those That Do Not Progress as Expected

Program officials told us that they do not have a system for tracking  participants’ actions, including completing work plans, reporting, and the  other steps identified in its work plan, but they said a contractor is working  to establish a reporting system for 2006. DOE or another federal agency conducted discussions  with the industry groups on establishing their goals, and all participating  groups had established a goal before joining Climate VISION. Finally, many groups qualified their goals based upon their  stated need for reciprocal federal actions, such as tax incentives or  regulatory relief. More Than Half of the Participants in Climate Leaders Have Set Goals, and These Goals Vary

As of November 2005, 38 of the program’s 74 firms had set emissions or  emissions intensity reductions goals. For example, Cinergy Corporation  pledged to reduce its total domestic greenhouse gas emissions by 5 percent  from 2000 to 2010, while Miller Brewing Company pledged to reduce its  domestic greenhouse gas emissions by 18 percent per barrel of production  (a unit of production intensity goal) from 2001 to 2006, and Pfizer, Inc.,  pledged to reduce its worldwide emissions by 35 percent per dollar of  revenue (a monetary intensity goal) from 2000 to 2007. Preparing such estimates will  be challenging because there is considerable overlap between these two  programs and other voluntary programs. Emissions Generated by Current Program Participants

EPA estimated in 2005 that participating firms accounted for at least 8  percent of U.S. emissions on average for the years 2000 through 2003. However, a program  manager told us that EPA has not tried to estimate the share of U.S.  emissions that the 200 firms might account for because it is difficult to  predict with any accuracy the size and types of firms that may join the  program in the future and the firms’ emissions reduction goals. While Both Agencies Are Working to Estimate Program Impacts, It Will Be Challenging to Determine Specific Emissions Reductions Attributable to Each Program

EPA and DOE are working, as part of an interagency program, to estimate  their programs’ effect on reducing U.S. greenhouse gas emissions. For example,  the emissions reductions claimed by firms participating in Climate Leaders  who are also members of trade groups participating in Climate VISION may  be counted twice—the individual firm’s achievement may be credited  under the Climate Leaders program, while the same achievement may be  counted toward the trade group achieving its goal under Climate VISION. For example, although  EPA expects that firms will generally take about 2 years to establish their  emissions reduction goals, of the 51 firms that joined in 2002 and 2003, the  first 2 years of the program, 18 firms had not done so as of November 2005. EPA is developing a system for  tracking firms’ progress in completing key steps under Climate Leaders,  but DOE does not have a system for tracking trade group’s progress under  Climate VISION. Both agencies are working this year to estimate the emissions reductions  attributable to their programs. Although  DOE agreed with our statement that Climate VISION participants account  for at least 40 percent of total U.S. greenhouse gas emissions, it noted that  the program covers about four-fifths of total U.S. industrial- and  power-related greenhouse gas emissions, which makes the potential impact  of the program substantial. We included programs that are supported by the  Departments of Agriculture, Energy, and Transportation, as well as EPA. Specifically, it depends on actions and policies to  expand wholesale electric competition and rationalize regulations, such as Federal Energy Regulatory  Commission’s standard electric market design and Regional Transmission Organization initiatives; advance  market-based multi-emissions legislation; streamline current regulatory programs, and seek better disclosure  and market transparency.”
The Nuclear Energy Institute states that, “The nation’s ability to realize the promise of nuclear energy after  2012 will depend on actions and policies we undertake in the next one to two years, particularly new policy  initiatives designed to stimulate investment in technologies that require large capital investments and long lead  times.”
As part of the SIA Memorandum of Understanding with EPA, EPA’s responsibilities include: (1) participating in  and supporting conferences to share information on emission reduction technologies; (2) addressing regulatory  barriers that may impede voluntary, worldwide emission reduction strategies; (3) recognizing SIA and the  participating companies for their emission reduction commitment, technical leadership, and achievements over  time.
Why GAO Did This Study

To reduce greenhouse gas emissions linked to climate change, two voluntary programs encourage participants to set emissions reduction goals. The Climate Leaders Program, managed by the Environmental Protection Agency (EPA), focuses on firms. The Climate VISION (Voluntary Innovative Sector Initiatives: Opportunities Now) Program, managed by the Department of Energy (DOE) along with other agencies, focuses on trade groups. GAO examined (1) participants' progress in completing program steps, the agencies' procedures for tracking progress, and their policies for dealing with participants that are not progressing as expected; (2) the types of emissions reduction goals established by participants; and (3) the agencies' estimates of the share of U.S. greenhouse gas emissions that their programs account for and their estimates of the programs' impacts on U.S. emissions.

What GAO Found

EPA expects Climate Leaders firms to complete several program steps within general time frames, but firms' progress on completing those steps is mixed. For example, EPA asks firms to set an emissions reduction goal, generally within 2 years of joining. As of November 2005, 38 of the program's 74 participating firms had set a goal. Of the 36 firms that had not set a goal, 13 joined in 2002 and thus took longer than expected to set a goal. EPA is developing a system for tracking firms' progress in completing these steps, but it has no written policy on what to do about firms that are not progressing as expected. Trade groups generally established an emissions reduction goal before joining Climate VISION, and DOE generally expects them to develop a plan for measuring and reporting emissions within about 1 year of joining. As of November 2005, 11 of the 15 participating groups had such a plan, but 2 of the groups without a plan joined in 2003, the program's first year. DOE has no means of tracking trade groups' progress in completing the steps in their plans and no written policy on what to do about groups that are not progressing as expected. A tracking system would enable the agency to ascertain whether participants are meeting program expectations in a timely manner, thereby helping the program to achieve its goals. By establishing a written policy on the consequences of not progressing as expected, both agencies could better ensure that participants are actively engaged in the programs, thus helping to achieve the programs' goals. The types of emissions reduction goals established by Climate Leaders firms and Climate VISION groups vary in how reductions are measured and the time periods covered, among other things. For example, one Climate Leaders firm's goal is to reduce its domestic emissions by 5 percent over 10 years; another's is to reduce its worldwide emissions per dollar of revenue by 35 percent over 7 years. Similarly, one Climate VISION group's goal is to reduce emissions of one greenhouse gas by 10 percent, while another's is to reduce its emissions per unit of output by 12 percent. GAO noted that some Climate VISION groups said meeting their goals may be linked to reciprocal federal actions, such as tax incentives or regulatory relief. EPA officials estimated that the first 50 firms to join Climate Leaders account for at least 8 percent of U.S. greenhouse emissions. DOE estimated that Climate VISION participants account for at least 40 percent of U.S. greenhouse gas emissions. EPA and DOE are working through an interagency process to quantify the emissions reductions attributable to their programs; the process is expected to be completed in 2006. However, determining the reductions attributable to each program will be challenging because of the overlap between these programs and other voluntary programs, as well as other factors.