The Administration Has Several Broad Goals and a Broad Plan for Stage 1

The administration has several broad goals for what it wants to accomplish in stage 1 and a broad plan for accomplishing those goals. However, the administration has not established a quantitative goal for reducing greenhouse gas emissions by the end of stage 1—a primary focus of its initiative. The administration’s goals and plan for accomplishing its goals are contained in the President’s October 1997 speech, according to OMB’s Office of Natural Resources, Energy and Science. While OMB officials acknowledge that the existing stage 1 plan is broad, they have no specific time frame for preparing a more detailed plan that would include overall performance goals and measures to meet the spirit of the Government Performance and Results Act. Extent to Which Stage 1 Will Meet Kyoto Target Is Unclear

The extent to which the $6.3 billion stage 1 proposal will help the United States meet the protocol’s target for reduced emissions is unclear. The largest investment under the proposal, tax credits, with an estimated cost of about $3.6 billion, has no estimate of the expected benefits and thus is not tied to the protocol’s emissions reduction target. The administration has set performance goals for most of the $2.7 billion proposed for research and development and the increased use of energy-efficient products and has estimated potential emissions reductions. However, DOE only recently provided its estimates, while commenting on a draft of this testimony, and we have not analyzed the method or assumptions used to support them. In addition, EPA’s estimates may be overstated. Therefore, it is uncertain how much these activities will help the United States meet the target specified by the protocol. Results of Research and Development Are Uncertain

DOE is responsible for implementing most of the research and development activities under the administration’s climate change proposal. Lack of Key Information on Stage 1 Has Implications for the Future

Because stage 1 lacks a quantitative goal for reducing greenhouse gas emissions, does not have a specific performance plan, and contains incomplete information on expected outcomes and links to the protocol’s target, stage 1 may not provide a firm foundation for stages 2 and 3. There may be penalties for noncompliance if the United States ratifies the protocol but does not reach the target, although the specific penalties have not been agreed upon. First, the United States would be required by the protocol to meet the emissions target during the 5-year period, 2008 through 2012. Finally, according to the Department of State, the protocol’s targets are binding on nations that enter into the accord, and noncompliance could eventually carry penalties. The parties are to begin discussing procedures for eventually establishing penalties for noncompliance in Buenos Aires in November 1998. 2. 3. 6. 7. 8.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed: (1) the potential impact of efforts to comply with the Kyoto Protocol; (2) whether the administration has an overall goal for stage 1 and a plan for accomplishing that goal; (2) if funded, to what extent will the $6.3-billion stage 1 climate change proposal help the United States meet the protocol's emissions target; and (3) what the current implications are for the United States if the Senate ratifies the protocol, given the current status of the administration's efforts to implement the climate change proposal.

What GAO Found

GAO noted that: (1) the administration has several broad goals for what it wants to accomplish in stage 1 and a broad plan for accomplishing them; (2) both the broad goals and plan are contained in the President's October 1997 speech; (3) the administration has not established a quantitative goal for reducing greenhouse gas emissions by the end of stage 1--a primary focus of its initiative; (4) while Office of Management and Budget officials acknowledge that the plan is broad, they have no specific timeframe for preparing a more detailed plan that would include overall performance goals and measures to meet the spirit of the Government Performance and Results Act; (5) the extent to which the $6.3-billion stage 1 proposal will help the United States meet the protocol's target for emission reductions is unclear; (6) the largest investment under the proposal, tax credits, with an estimated cost of about $3.6 billion, has no estimate of the expected benefits and thus is not explicitly tied to the protocol's target for emission reductions; (7) the administration has set performance goals for most of the $2.7 billion proposed for research and development and the increased use of energy-efficient products and has estimated potential emissions reductions; (8) the Department of Energy only recently provided its estimates, while commenting on a draft of this testimony, and GAO has not analyzed them; (9) in addition, the Environmental Protection Agency's estimates may be overstated; (10) therefore, it is uncertain how much these activities will help the United States meet the target specified by the protocol; (11) without an overall goal and plan for stage 1 and complete information on expected outcomes and links to the protocol's emission reduction target, it is uncertain whether stage 1 will effectively lay the foundation for the 31-percent emissions reduction required by the protocol; and (12) although the administration's response to the protocol is relatively recent, a firm foundation in stage 1 is important because the protocol's targets for emission reductions are binding on the nations that agree to the protocol, and penalties for noncompliance with the targets are to be discussed by the parties to the protocol in November 1998.