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Report to Congressional Requesters: 

April 2006: 

Climate Change: 

EPA and DOE Should Do More to Encourage Progress Under Two Voluntary 
Programs: 

GAO-06-97: 

GAO Highlights: 

Highlights of GAO-06-97, a report to congressional requesters. 

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) participantsí progress in completing program steps, 
the agenciesí 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 agenciesí estimates of the share of U.S. greenhouse gas emissions 
that their programs account for and their estimates of the programsí 
impacts on U.S. emissions. 

What GAO Found: 

EPA expects Climate Leaders firms to complete several program steps 
within general time frames, but firmsí 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 programís 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 firmsí 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 
programís first year. DOE has no means of tracking trade groupsí 
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 programsí 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 firmís goal is to reduce its domestic emissions by 5 percent 
over 10 years; anotherís is to reduce its worldwide emissions per 
dollar of revenue by 35 percent over 7 years. Similarly, one Climate 
VISION groupís goal is to reduce emissions of one greenhouse gas by 10 
percent, while anotherís 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. 

What GAO Recommends: 

GAO recommends that DOE develop a system for tracking groupsí progress 
in completing program steps. Also, GAO recommends that both agencies 
develop written policies on what to do about participants not 
progressing as quickly as expected. EPA did not comment on the 
recommendation, and DOE agreed with the recommendation on a tracking 
system and said it will consider the recommendation on establishing a 
written policy. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-97]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact John Stephenson at (202) 
512-3841 or stephensonj@gao.gov. 

[End of Section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

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: 

Working with Federal Agencies, Most Participants in Both Programs Have 
Set Quantitative Emissions-Related Goals, Although Some Climate VISION 
Goals Were Qualified Based upon the Asserted Need for Reciprocal 
Federal Actions: 

Both Agencies Have Estimated Their Programs' Coverage and Are Working 
to Estimate Their Impact, but It Will Be Difficult to Determine 
Specific Emissions Reductions from Each Program: 

Conclusions: 

Recommendations: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: U.S. Government Voluntary Climate Change Programs: 

Appendix II: Scope and Methodology: 

Appendix III: Climate VISION Participant Qualifying Statements: 

Appendix IV: Comments from Environmental Protection Agency: 

Appendix V: Comments from the Department of Energy: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Shares, Sources, and Global Warming Potentials of U.S. 
Greenhouse Gas Emissions, 2003: 

Table 2: Climate Leaders' Goals as of November 2005: 

Table 3: Climate VISION Trade Groups' Goals as of November 2005: 

Table 4: Climate Leaders' Carbon Dioxide Emissions from Electricity 
Generation (i.e., Power Plants Only), 2000: 

Table 5: Other U.S. Voluntary Greenhouse Gas Emissions Reduction 
Programs: 

Figures: 

Figure 1: U.S. Energy and Emissions Intensity Trends, 1990-2025: 

Figure 2: Climate Leaders Members' Participation in Other EPA-Sponsored 
Voluntary Programs, as of November 2005: 

Abbreviations:  

DOE: Department of Energy: 

EIA: Energy Information Administration: 

EPA: Environmental Protection Agency: 

GHG: Greenhouse gas: 

HFCs: Hydrofluorocarbons: 

IMP: Inventory Management Plan: 

MMTCE: Million metric tons of carbon equivalent: 

PFCs: Perfluorocarbons: 

SF6: Sulfur hexafluoride: 

USDA: U.S. Department of Agriculture: 

Letter: 
April 25, 2006: 

The Honorable John McCain: 
The Honorable John Kerry: 
United States Senate: 

For over a century, scientists have known that concentrations of carbon 
dioxide and other greenhouse gases can alter the atmosphere in ways 
that affect the earth's climate. Humans continue to release large 
quantities of carbon dioxide and other greenhouse gases into the 
atmosphere through, among other things, the combustion of fossil fuels, 
industrial and agriculture processes, landfills, and some land use 
changes. In 1992, the United States ratified the United Nations 
Framework Convention on Climate Change, which has as its objective the 
stabilization of greenhouse gas concentrations in the earth's 
atmosphere but does not impose specific goals or timetables for 
limiting emissions. In response, federal agencies developed a plan for 
reducing greenhouse gas emissions, primarily through voluntary efforts 
by companies, state and local governments, and other organizations. 
Since that time, federal agencies have sponsored voluntary programs 
that encourage private and public sector entities to curb their 
greenhouse gas emissions by providing technical assistance, education, 
research, and information sharing. The administration has promoted such 
voluntary programs, along with other measures, as an alternative to 
mandatory emissions reductions. 

In February 2002, the President announced a Global Climate Change 
Initiative to reduce the rate of increase in greenhouse gas emissions 
in the United States. Specifically, he established the goal of reducing 
the emissions intensity of the United States by 18 percent between 2002 
and 2012. Emissions intensity is a ratio calculated by dividing 
emissions in a given year by economic output for that year. In support 
of this goal, the President announced two new voluntary programs aimed 
at securing private sector agreements to voluntarily reduce greenhouse 
gas emissions or emissions intensity. 

* Climate Leaders, an Environmental Protection Agency (EPA)-sponsored 
government-industry partnership established in February 2002, works 
with firms to develop long-term climate change strategies. According to 
EPA officials, as of November 2005, 74 firms were participating in the 
program. 

* Climate VISION (Voluntary Innovative Sector Initiatives: 
Opportunities Now), introduced in February 2003 and coordinated by the 
Department of Energy (DOE) in cooperation with EPA and other federal 
agencies, works with trade groups to develop strategies to reduce their 
members' greenhouse gas emissions intensity. Most industries 
participating in the program are represented by a single trade group. 
As of November 2005, 14 industry sectors and the Business Roundtable-- 
an association of chief executive officers representing diverse sectors 
of the economy--were participating in the program. According to DOE, 
the trade groups participating in Climate VISION typically have high 
energy requirements. 

This report examines the progress EPA and DOE have made in implementing 
their respective programs. Specifically, for each program, this report 
discusses (1) the key steps that the agencies expect participants to 
complete (such as preparing a plan for measuring emissions and 
reporting data), the progress participants have made in completing 
these steps, the agencies' efforts to track participants' progress, and 
the agencies' strategies for dealing with participants not progressing 
as expected; (2) the types of emissions or emissions intensity 
reduction goals being established by participants in this program; and 
(3) the agencies' estimates of the programs' current coverage (that is, 
the share of U.S. emissions that participants contribute to total U.S. 
emissions) and impact (in terms of emissions reduced). In addition, as 
you requested, a list of other federal voluntary climate change 
programs is presented in appendix I. 

In conducting our work, we reviewed and analyzed EPA and DOE documents 
on the Climate Leaders and Climate VISION programs, as well as other 
voluntary climate programs and met with these agencies' officials. For 
the sake of brevity, we refer to all participants in the Climate 
Leaders programs as firms, even though one of them, the National 
Renewable Energy Laboratory, is a federal research laboratory. 
Similarly, we refer to all Climate VISION participants as trade groups, 
even though one participant, the Tennessee Valley Authority, is a 
utility. For the sake of consistency, we describe both Climate Leaders 
and Climate VISION participants' emissions or emissions intensity 
targets as goals, even though DOE describes Climate VISION 
participants' targets as commitments. Most of the information in the 
report, except where otherwise noted, reflects the status of the two 
programs as of November 2005. As of March 2006, an additional 10 firms 
had joined Climate Leaders. To assess the reliability of the EPA, DOE, 
and other data, we spoke with agency officials about data quality 
control procedures and reviewed relevant documentation. We determined 
that the data were sufficiently reliable for the purposes of this 
report. We conducted our work between June 2004 and March 2006 in 
accordance with generally accepted government auditing standards, 
including an assessment of data reliability. Additional details on our 
scope and methodology are presented in appendix II. 

Results in Brief: 

EPA and DOE each expect participants in their voluntary emissions 
reduction programs to complete a number of actions; however, 
participants' progress toward completing those actions, as well as the 
agencies' efforts to track accomplishments, has varied. For example, 
within about 1 year of joining the program, EPA expects firms to enter 
into discussions with the agency to establish an emissions reduction 
goal and to complete these negotiations, generally within another year. 
As of November 2005, 38 of the 74 firms had established goals, while 
most of the other 36 firms, including 13 that joined in 2002, were 
still working to establish goals; most of the remaining firms had 
joined the program recently and had not yet established goals. EPA 
officials told us that they were developing a system for tracking 
firms' progress in accomplishing the key steps associated with program 
participation, but are still in the process of obtaining and validating 
data from participants. While EPA officials told us that they would be 
willing to remove participants from the program if they were not 
progressing as expected, they have not specified the conditions under 
which they would do so. DOE asks that trade groups participating in its 
Climate VISION Program develop a work plan for measuring and reporting 
emissions information within about 1 year after joining the program and 
later report their emissions levels. As of November 2005, 11 of the 15 
participating trade groups had completed their work plans and 5 groups 
had reported on emissions. As of November 2005, DOE officials said that 
the agency did not have a system for tracking how long each group takes 
to complete its work plan and report emissions data. Furthermore, they 
said that DOE would remove groups from the program if they did not seem 
to be taking sufficient action. However, DOE has not yet established 
specific deadlines for reporting emissions. Because DOE does not have a 
system for tracking how long participants take to complete key program 
steps--and neither agency has established written policies for taking 
action against entities not progressing as expected--it will be 
difficult for the agencies to ensure that all participants are meeting 
expectations, and hence that the programs are contributing to meeting 
the President's emissions intensity reduction goal. 

The specific types of emissions reduction goals being established by 
Climate Leaders firms and Climate VISION groups varied. Of the 38 firms 
participating in Climate Leaders that had established emissions 
reduction goals as of November 2005, 19 committed to reduce their total 
greenhouse gas emissions, 18 committed to reduce their emissions 
intensity (emissions per unit of output), and 1 firm committed to 
reduce both its total emissions and its emissions intensity. 
Furthermore, firms' goals differed in their geographic scope and the 
time period they covered. For example, Cinergy Corporation pledged to 
reduce its total U.S. domestic greenhouse gas emissions by 5 percent 
from 2000 to 2010, while Pfizer, Inc., pledged to reduce its worldwide 
emissions by 35 percent per dollar of revenue from 2000 to 2007. In 
contrast to EPA's program, 14 of the 15 trade groups participating in 
Climate VISION established an emissions-related goal in collaboration 
with DOE or another federal agency upon joining the program. (The 
remaining group, the Business Roundtable, did not establish a 
quantitative emissions goal because of the diversity of its 
membership.) According to a DOE official, participants need not 
establish new goals as a condition of joining the program. Nine of the 
14 groups set goals to improve their emissions intensity, 2 groups 
established a goal of reducing emissions of specific greenhouse gases, 
2 groups set goals to improve energy efficiency, and 1 group 
established a goal of both reducing its total emissions and improving 
its energy efficiency. For example, the American Forest & Paper 
Association pledged to reduce emissions intensity by 12 percent between 
2002 and 2012, while the American Iron and Steel Institute agreed to a 
10-percent, sector wide increase in energy efficiency by 2012. Some of 
these groups stated that their goals would be difficult to achieve 
without reciprocal federal actions, such as tax incentives or 
regulatory relief. 

EPA and DOE both estimated the share of total U.S. greenhouse gas 
emissions attributable to participants in their respective programs and 
are working to develop an estimate of the programs' impacts. EPA 
estimated that Climate Leaders participants accounted for at least 8 
percent of U.S. emissions. This is a conservative estimate, according 
to EPA, because it was based solely on emissions from the program's 
first 50 participants. DOE estimated that Climate VISION participants 
account for over 40 percent of U.S. greenhouse gas emissions and noted 
that this estimate is conservative. Both agencies are participating in 
an interagency process to estimate the effect of their programs on 
reducing emissions, which is expected to be completed in 2006. However, 
preparing accurate estimates of these programs' impacts will be 
difficult. First, there is considerable overlap between these two 
programs and other voluntary programs. For example, 60 of the 74 
Climate Leaders participants also participate in one or more other EPA 
programs, and 3 of the 14 Climate VISION participants with quantitative 
goals also participate in EPA voluntary programs. Such overlap makes it 
difficult to determine the effects that are attributable to a given 
program. Second, it will be difficult to determine how much of a firm's 
or trade group's emissions reductions can be attributed to its 
participation in the program because the level of a participant's 
emissions in the absence of the program is unknown. For example, higher 
energy prices or changes in business operations could produce emissions 
reductions, making it difficult to distinguish reductions attributable 
to participation in the program versus other causes. 

To ensure that the Congress and the public have information with which 
to evaluate the effectiveness of these voluntary programs and to 
increase the opportunities for these programs to contribute to the 
President's emissions intensity reduction goal, we are recommending 
that DOE develop a system for tracking participants' progress in 
completing key steps associated with the program. Also, we are 
recommending that both EPA and DOE develop written policies that 
establish the actions the agencies will take if participants are not 
completing program steps on time. We provided EPA and DOE with a draft 
of this report for their review and comment. EPA did not comment on our 
recommendation to the agency. DOE stated that the report provided a 
useful overview of the Climate VISION program. It agreed with our 
recommendation on a tracking system and said it will consider our 
recommendation regarding a written policy. EPA's and DOE's written 
comments are included in appendixes IV and V, respectively. 

Background: 

Carbon dioxide is by far the most prevalent greenhouse gas emitted in 
the United States, as shown in table 1. The other principal greenhouse 
gases, in order of percentage of emissions in 2003, are methane, 
nitrous oxide, and three types of synthetic gases--hydrofluorocarbons 
(HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). 

Table 1: Shares, Sources, and Global Warming Potentials of U.S. 
Greenhouse Gas Emissions, 2003: 

Greenhouse gas: Carbon dioxide;: Major sources: Fossil fuel combustion, 
nonenergy use of fuels, iron and steel production; 
Percentage of 2003 emissions: 85; 
Global warming potential[A]: 1. 

Greenhouse gas: Methane;: Major sources: Landfills, natural gas and 
petroleum systems, agriculture, coal mining; 
Percentage of 2003 emissions: 8; 
Global warming potential[A]: 21. 

Greenhouse gas: Nitrous oxide;: Major sources: Agricultural soil 
management, transportation, manure management; 
Percentage of 2003 emissions: 6; 
Global warming potential[A]: 310. 

Greenhouse gas: Synthetic gases;: Major sources: Substitution of ozone-
depleting substances, electric power transmission and distribution, 
aluminum production; 
Percentage of 2003 emissions: 2; 
Global warming potential[A]: 140 to 23,900. 

Source: EPA. 

Note: Components do not sum to 100 percent due to independent rounding. 

[A] Since greenhouse gases differ in their potential to contribute to 
global warming, each is assigned a unique weight, called a global 
warming potential, which is based on its heat-absorbing ability 
relative to carbon dioxide over a fixed time period. This provides a 
way to convert emissions of various greenhouse gases into a common 
measure, such as carbon equivalent. Thus, each molecule of methane, for 
example, has 21 times as much effect on warming as a molecule of carbon 
dioxide. 

[End of table] 

In response to the May 1992 United Nations Framework Convention on 
Climate Change, the United States developed the Climate Change Action 
Plan aimed at reducing domestic greenhouse gas emissions. As a part of 
this plan, programs were developed during the 1990s to provide 
information and tools to encourage participants to voluntarily 
undertake changes to reduce their emissions of carbon dioxide, methane, 
and other greenhouse gases. The intent of programs such as Energy STAR 
is to help organizations improve energy efficiency, thereby helping to 
reduce emissions. Other programs, such as the Coalbed Methane Outreach 
Program, encourage emissions reductions in other greenhouse gases, such 
as methane. 

The amount of energy used to generate each dollar of national output 
has declined over time. The ratio of energy used to economic output is 
called energy intensity. According to the Energy Information 
Administration (EIA), the independent statistical and analytical agency 
within DOE, energy intensity declined between 1990 and 2003, at an 
average rate of 1.8 percent per year.[Footnote 1] The rate of decline 
was the result of, among other things, energy efficiency improvements 
in industrial and transportation equipment and in commercial and 
residential lighting, heating, and refrigeration technologies.[Footnote 
2] In early 2006, EIA projected that energy intensity will decline at 
an average annual rate of 1.8 percent between 2005 and 2025.[Footnote 
3] 

The U.S. economy has also become more efficient in terms of emissions 
intensity. (According to EIA, energy and emissions intensity are 
closely related because energy-related carbon dioxide emissions make up 
more than 80 percent of total U.S. greenhouse gas emissions.)[Footnote 
4] U.S. emissions intensity declined between 1990 and 2003 at a rate of 
1.9 percent a year. The reasons for the decline include general 
improvements in energy efficiency and a long-term shift toward a 
service economy. Other reasons include greater use of nuclear power, 
development of renewable resources, substitution of less emissions- 
intensive natural gas for coal and oil, and the use of transportation 
fuels with biogenic components, such as ethanol. EIA projected in early 
2006 that between 2005 and 2025, emissions intensity will decline at a 
rate of 1.7 percent per year (see fig. 1).[Footnote 5] 

Figure 1: U.S. Energy and Emissions Intensity Trends, 1990-2025: 

[See PDF for image] 

Note: These data are used for background purposes only to demonstrate 
trends in U.S. energy and emissions intensity. We did not assess the 
reliability of the data. 

[A] Emissions intensity is defined as metric tons of carbon dioxide 
equivalent per million constant (2000) dollars of gross domestic 
product. 

[B] Energy intensity is defined as thousand British thermal units (Btu) 
per constant (2000) dollars of gross domestic product. 

[End of figure] 

The goal of the President's 2002 initiative was to reduce the emissions 
intensity of the U.S. economy by 18 percent between 2002 and 2012, a 
reduction 4 percentage points greater than would be expected absent any 
new policy. In particular, according to EIA projections cited by the 
administration, without the initiative, emissions would increase from 
1,917 million metric tons of carbon equivalent (MMTCE)[Footnote 6] in 
2002 to 2,279 MMTCE in 2012. Under the initiative, emissions will 
increase to 2,173 MMTCE in 2012, which is 106 MMTCE less than otherwise 
expected.[Footnote 7] In 2002, EIA projected that U.S. emissions 
intensity would decline (improve) by 14 percent between 2002 and 2012 
without any new policy. In 2006, EIA updated its estimate, projecting a 
decline in emissions intensity of 17 percent between 2002 and 2012. 
According to EIA, further reductions in emissions intensity are 
projected to result from, among other things, increasing energy prices 
that will tend to reduce energy consumption growth below prior 
estimates. Nevertheless, according to this estimate, total greenhouse 
gas emissions will continue to rise. Specifically, EIA projected in 
2006 that total emissions would increase by 14.2 percent between 2002 
and 2012.[Footnote 8] 

The President's 2002 initiative comprised about 30 elements. In 
addition to challenging businesses and industry to voluntarily reduce 
emissions, it included tax incentives for renewable energy and 
conservation, transportation programs, and other efforts. Climate 
Leaders and Climate VISION are two of the federal government's newest 
voluntary climate programs. According to a DOE official, they are the 
only federal programs that ask potential members for an emissions or 
emissions intensity reduction goal in order to participate. According 
to EPA, for firms that are already participating in other EPA voluntary 
programs, Climate Leaders can serve as a coordinating umbrella to 
comprehensively manage their voluntary climate change activities. 

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. The first step is to 
prepare a greenhouse gas emissions inventory; the second step is to 
prepare an inventory management plan (IMP); the third step is to enter 
into negotiations with EPA regarding a goal; and the fourth step is to 
report annually. (However, EPA does not insist that firms perform all 
four steps in that order). Overall, we found that some firms were 
taking longer to complete these steps and that EPA has no written 
policy for dealing with such firms. According to DOE officials, all 
program participants agree to complete two program steps: the first 
within about 1 year of joining the program, and the second after they 
have finished training their members in the use of reporting protocols, 
most in 2006. Overall, we found that some groups had not completed the 
first step within the specified time frame. EPA has started to develop 
a system for tracking participants' progress; DOE does not yet have 
such a system. Neither agency has written criteria detailing expected 
time frames for meeting expectations or the consequences of not meeting 
expectations. 

EPA Expects Firms to Complete Certain Program Steps, but Not All Have 
Done So: 

First, firms complete their base-year inventories, which EPA encourages 
and expects them to do, on average, within 1 year of joining the 
program. The base-year inventory contains the data that will be used to 
measure firms' progress toward their goals. As of November 2005, 61 of 
the 74 firms had submitted base-year inventory data to EPA. After the 
inventory has been submitted, the participant works with EPA to refine 
its inventory. Eleven of the 61 inventories had been finalized and 
approved by EPA. The other 50 were still in development or review. An 
EPA official noted that some firms did not submit inventories earlier 
because EPA's reporting guidelines were not completed until April 2004. 
In addition, these officials told us that it often takes firms more 
than a year to prepare their base-year inventory because firms start at 
different levels of sophistication with respect to developing an 
inventory. Some firms start with no knowledge of how to develop an 
inventory and no infrastructure in place for doing so. Furthermore, 
some corporate inventories may take longer due to their complexity, 
including complicated corporate structures, a wide variety of emissions 
sources, and the lack of available emissions data. Corporate 
reorganizations and staff turnover also contribute to delays. An EPA 
official told us that the average amount of time it takes firms to 
complete their base-year inventory once they join the program has been 
2 years, but the average amount of time firms have taken since EPA 
completed its reporting guidelines is 1 year. 

Firms have two options for having their inventories reviewed. They can 
either submit their data to EPA for review, or they can choose third- 
party verification, in which an outside organization, such as an 
environmental engineering firm with greenhouse gas verification 
experience, reviews their data. 

After they have submitted base-year inventory data to EPA, firms work 
with EPA to refine the inventory, usually resulting in some revisions. 
In reporting data, firms are to follow guidance developed by EPA that 
is based on a standardized reporting protocol established by the World 
Resources Institute and the World Business Council for Sustainable 
Development.[Footnote 9] The protocol consists of corporate emissions 
accounting standards developed by representatives from industry, 
government, and nongovernmental organizations. 

Second, EPA officials told us that EPA expects all firms to prepare an 
IMP, which is the firm's plan for collecting data, preparing the 
inventory, and managing inventory quality. EPA officials informed us 
that, as of November 2005, 60 of the 74 firms had submitted draft IMPs. 
Firms that choose to have EPA review their emissions inventories must 
also submit their IMP to EPA, while firms that choose to undergo third- 
party verification must submit a letter from the third party stating 
that all the specified components of the IMP checklist are in place and 
that at least one site visit was conducted. The IMP checklist consists 
of 30 components in seven major categories, including, among other 
things, boundary conditions (i.e., which parts of the facility will be 
covered under the program), emissions quantification methods, and data 
management processes. Nineteen of the 30 IMP components are to be in 
place within 1 year of joining the program and must be in place for 
base-year reporting to be finalized. Fifty-four of the 60 firms 
completing IMPs submitted their IMPs to EPA for review, while the other 
6 chose to have their inventories and IMPs reviewed by third parties. 
According to EPA officials, the remaining 14 firms had not submitted a 
draft IMP or informed EPA of their intention to choose third-party 
verification, although eight of these firms joined the program within 
the past year and so, according to EPA officials, would not be expected 
to have completed these steps. EPA officials told us that these 
remaining firms are still working on the necessary documentation. 

EPA conducts at least one site visit per firm to review facility-level 
implementation of the IMP to determine whether there are ways to 
improve the plan's accuracy, among other things. The site to be visited 
is mutually agreed upon; EPA aims to review the company facility with 
the highest overall risk to the accuracy of reported emissions. (Such a 
site should be a large emitter, have many of the largest emission 
types, and represent the firm's most common business activity, among 
other criteria.) As of November 2005, EPA had conducted 25 site visits 
(about one-third of all firms), with 10 more visits scheduled before 
the end of 2005. 

The base-year inventory is not considered final until EPA has reviewed 
both it and the IMP and conducted a site visit. An EPA official told us 
that initial inventories generally contain about 95 percent of each 
member's total emissions, so only minor and incremental revisions are 
needed at the on-site review stage. 

EPA provides up to 80 hours of technical assistance to help each firm 
complete its base-year inventory and develop and document its IMP. 
Technical assistance can include implementing greenhouse gas accounting 
methods as well as measuring, tracking, and reporting emissions. After 
the firm's base-year inventory is complete, EPA experts continue to 
offer up to 10 hours annually of technical assistance during subsequent 
years. 

Since Climate Leaders provides technical assistance to each firm as it 
develops and documents its inventory and IMP, an EPA official stated 
that most major issues that might arise in inventory design and 
development are addressed informally at the technical assistance stage. 
However, according to EPA, some issues are identified during the site 
visits. In general, the site visits have identified only a few areas 
where EPA asked for revisions. These usually involved missing small 
sources of on-site emissions (such as those from propane for forklifts 
or on-site diesel purchases for a yard truck). EPA officials told us 
that most of the items they identified during the site visits were 
minor calculation errors or ways to improve the firm's data quality 
assurance and quality control processes. They said that the majority of 
these areas are corrected on location during the site visit, and any 
others are verified by the submission of an updated IMP and greenhouse 
gas reporting form that describe respectively, the changes to the 
inventory process and the greenhouse gas emissions that were made in 
response to the findings. 

As noted earlier, firms choosing third-party verification instead of 
EPA review are to submit an independent verifier's report stating that 
at least one site visit was conducted and that all the necessary 
components of the IMP checklist were successfully implemented. As of 
November 2005, six firms had chosen to have their data verified by a 
third party, and all of these firms had undergone their third-party 
verification. Three firms had submitted inventory data and initial 
auditor reports to EPA. EPA is awaiting letters from the other three 
firms indicating that all of the components of the IMP checklist are in 
place and that any corrective actions identified in the verification 
process have been addressed. 

Third, EPA officials told us that the agency expects firms to enter 
into negotiations with EPA to set their reduction goals once their base-
year inventory is finalized, generally within about 1 year after 
joining the program, and to complete negotiations within 1 year after 
that. However, we found that some firms have taken longer to do so. 
Thirty-eight of the 74 participating firms had set goals as of November 
2005.[Footnote 10] Of the 36 firms without goals, 20 were working with 
EPA to develop goals. Seven of these 20 firms were still working on 
their base-year inventories, and 9 had joined the program within the 
past year and hence would not be expected to have set goals. The 36 
firms without goals included 18 firms that joined the program in 2002 
or 2003. Specifically, of the 35 firms that joined in 2002, the 
program's first year, 22 had set goals, 9 firms were in the process of 
negotiating their goals with EPA, and 4 more had not begun such 
negotiations. Of the 16 firms that joined in 2003, 11 had set goals, 3 
were in negotiation with EPA regarding goals, and 2 had not yet begun 
such negotiations. According to EPA officials, the 6 firms had not 
begun negotiations because their base-year inventories were not 
finalized. 

In describing why it may take a long time to set goals, EPA officials 
told us that many firms require considerable time to develop their 
inventories, which can be complex. Firms must also obtain internal 
approval of their emissions reduction goals from their senior 
management, and some firms lack enough resources to devote to inventory 
development to meet the time frame of EPA's reporting guidelines. Other 
reasons also exist. For example, one firm disagreed with EPA regarding 
whether to report a certain type of emission in its inventory and 
needed to come to agreement with EPA on addressing those emissions. 
Another firm is involved in litigation that will likely affect its 
future emissions levels and does not want to set an emissions reduction 
goal until the case is resolved, while yet a third firm is facing 
regulation that could affect its ability to meet an aggressive 
reduction goal. 

Finally, according to EPA's reporting guidelines, all firms agree to 
report to EPA annually on their emissions using EPA's Annual Greenhouse 
Gas Inventory Summary and Goal Tracking Form. This form describes the 
firm's emissions at a corporate level broken out by emissions type for 
both domestic and international sources and details progress toward the 
firm's emissions reduction goal. As of November 2005, 10 of the 11 
firms with finalized inventories had submitted annual data through 2004 
to EPA. An EPA official told us that the other firm was currently 
resolving some outstanding issues and would likely submit a report in 
early 2006. 

Although all firms are expected to complete all four steps listed 
above, EPA officials told us that firms do not need to complete the 
steps in any particular order. For example, some firms may choose to 
finalize their base-year inventory before submitting annual reports 
with multiple years of data, while other firms may choose to submit 
annual data before the inventory is fully finalized. 

EPA Is Developing a System to Track Participants' Progress, but It 
Lacks a Written Policy for Dealing with Firms That Do Not Complete 
Program Steps in a Timely Manner: 

EPA officials told us that they had started to develop a database to 
track firms' progress and are currently in the process of entering and 
validating the data. Although some firms are not completing the various 
program steps as quickly as EPA expected, the agency has not yet 
established a written policy for dealing with such firms. An EPA 
official noted that firms that voluntarily agree to participate in the 
program are aware of program expectations and are generally proactive 
in meeting them. EPA officials further stated that the agency has three 
options for dealing with firms that do not appear to be proceeding in a 
timely manner: (1) telephone calls from EPA or its contractor to 
reinvigorate the process, (2) a letter to firms urging them to act more 
expeditiously, or (3) removal from the program if the firm is not 
putting forth a good-faith effort to meet the program's expectations. 
However, EPA believes that it is better for the environment to work 
with firms that are making a good-faith effort to implement appropriate 
management systems than to remove them from the program. To date, EPA 
has not removed any firm from the program for lack of progress, 
although one firm voluntarily left after realizing it did not have 
sufficient resources to continue participation. According to EPA 
officials, as of November 2005, two firms did not appear to be working 
toward completing their reporting duties in a timely manner, and EPA 
anticipated sending letters to those firms. EPA officials noted that, 
since Climate Leaders is a voluntary program, it is difficult for EPA 
to sanction firms that do not meet all of the program's expectations in 
a timely manner. These officials said that, although they do not 
currently have a written policy on how to deal with firms that are not 
progressing as expected, including specific standards for time frames 
and consequences, they expect to begin developing such a policy in the 
near future. 

DOE Expects Trade Groups to Complete Two Steps, but Not All Have Done 
So: 

DOE has defined two program steps that it expects participating trade 
groups to complete: developing a work plan and reporting emissions 
data. 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. The template includes four items: (1) emissions 
measurement and reporting protocols; (2) plans to identify and 
implement near-term, cost-effective opportunities; (3) development of 
cross-sector projects for reducing greenhouse gas emissions intensity; 
and (4) plans to accelerate research and development and 
commercialization of advanced technology. However, DOE officials 
explained that specific elements of each industry group's work plans 
are different because each industry is different. The work plans are 
intended to help ensure that the trade groups' goals and activities are 
significant, clearly understood by the public, and aimed at producing 
results in a time frame specified by the group. 

Preparing the work plan is a collaborative process between the trade 
groups and program officials. Each work plan is reviewed three times by 
(1) a representative of the federal agency having the lead for that 
industry (e.g., DOE for the American Chemistry Council, and DOE and the 
Department of Agriculture for the American Forest & Paper Association); 
(2) Climate VISION program staff; and (3) a DOE contractor to ensure 
that the plan provides a suite of activities that will enable the group 
to meet its reduction goal. DOE officials told us that all work plans 
completed to date were subjected to at least one round of revisions 
before being finalized and posted to the program's Web site. 

According to DOE officials, as of November 2005, 11 of the 15 trade 
groups had completed their work plans. Of the four groups that had not 
completed their work plans, two were new members, joining Climate 
VISION in 2005; the other two--the Association of American Railroads 
and the National Mining Association--were original members, joining in 
2003. DOE officials said they were still working with the groups to 
finalize their work plans. They also noted that getting the trade 
groups to adhere to DOE's time lines can be challenging because the 
groups often have to clear all their activities through their 
individual member companies or through their boards of directors, which 
can be time consuming. 

In addition to developing a work plan, trade groups are expected to 
report data on their greenhouse gas emissions. As of November 2005, 5 
of the 15 groups had reported data: 2 groups reported data to DOE, and 
3 groups that have been working with EPA as participants in EPA- 
sponsored programs reported to that agency. According to a DOE 
official, as the trade groups finish developing and training their 
members in the use of reporting protocols, they are expected to begin 
reporting on their emissions, most in 2006. DOE will then ask the 
groups to report annually. Program officials explained that, at least 
in one case, a group did not report earlier because, among other 
things, DOE was revising its interim final voluntary emissions 
reporting guidelines, which were released in late 2005. 

DOE does not specify a particular format that trade groups should use 
in reporting emissions data, since all industries are different and the 
nature of the goals differ. However, the program encourages the groups 
to have their individual members report using EIA's Voluntary Reporting 
of Greenhouse Gases program[Footnote 11] or another appropriate 
reporting system, such as EPA's. Trade groups have developed or are 
developing reporting protocols as part of their work plans. 

DOE officials told us that once they receive data from the trade 
groups, they would arrange for a contractor to review these data and 
check them against EIA or EPA data for the reporting industry's sector 
for accuracy. The officials also told us they would post trade groups' 
emissions reports on DOE's Web site to provide transparency, thereby 
providing an incentive for groups to report accurate information. An 
industry may also choose on its own to hire an independent expert to 
review reports for accuracy. For example, the American Chemistry 
Council has required third-party certification of each of its member 
companies' environmental, health, and safety and security management 
systems, including the program under which members measure and report 
greenhouse gas emissions. 

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. The officials also 
said that DOE would remove trade groups from the program if they did 
not appear to be taking actions to complete program steps, but DOE has 
not yet established any deadline by which groups' emission reports must 
be submitted. However, the officials stated that they are currently 
working on setting such a deadline. The officials said that they do not 
believe it will be necessary to remove groups, since the groups are 
very enthusiastic about the program and understand the political stakes 
involved. Therefore, these officials expressed confidence that the 
groups will meet DOE's expectations to the best of their abilities. 

Working with Federal Agencies, Most Participants in Both Programs Have 
Set Quantitative Emissions-Related Goals, Although Some Climate VISION 
Goals Were Qualified Based upon the Asserted Need for Reciprocal 
Federal Actions: 

EPA worked with firms to set emissions-related goals, and more than 
half of the firms participating in Climate Leaders have set goals for 
reducing their emissions or improving their emissions intensity. The 
firms' goals vary in terms of the metric used, their geographic scope, 
and the time period covered. 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. The participants' goals varied in terms of the type of goal 
(emissions, emissions intensity, or energy efficiency) and the period 
covered by the goal (start and end dates.) Finally, many groups 
qualified their goals based upon their stated need for reciprocal 
federal actions, such as tax incentives or regulatory relief. 

EPA Helps Firms Set Goals: 

EPA works with all firms to set goals and offers flexibility in goal- 
setting, since each firm has a unique set of emissions sources and 
reduction opportunities. First, as discussed earlier, EPA works with 
firms to develop inventories and IMPs to document their base-year 
emissions. Second, EPA creates an industry standard, or benchmark, 
against which to evaluate each firm's goal. EPA uses a suite of 
modeling tools and statistical tables to develop the benchmark for each 
industry sector. The firm's goal is evaluated against a projected 
emissions improvement rate for its sector; EPA expects every firm's 
goal to be markedly better than the projected benchmark for the firm's 
sector. EPA also checks each firm's reported emissions data over the 
goal period to ensure that the firms are not reducing emissions simply 
by shrinking their size or by outsourcing. 

EPA encourages each firm to set a goal that is aggressive but that also 
considers company and sectoral variations. Nonetheless, each goal must 
be (1) entitywide (including at least all U.S. operations), (2) based 
on the most recent base year for which data are available, (3) achieved 
over 5 to 10 years, (4) expressed as an absolute emissions reduction or 
as a decrease in emissions intensity, and (5) aggressive compared with 
the projected greenhouse gas emissions performance for the firm's 
industry. 

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. The remaining 36 firms were 
working with EPA to set goals. The firms' goals vary in terms of three 
characteristics: (1) the metric used (absolute emissions or emissions 
intensity), (2) the geographic scope of the goal (reductions at U.S. or 
worldwide facilities), and (3) the time frame in which the reductions 
will occur. 

First, 19 firms pledged to reduce total emissions, while 18 pledged to 
reduce emissions intensity, and 1 pledged to reduce both total 
emissions and emissions intensity. Of the 19 companies with intensity 
goals, 15 measured emissions intensity in terms of their physical units 
of output (such as tons of cement or barrels of beer produced), while 
the other 4 firms measured emissions intensity in financial terms (such 
as dollar of revenue.) In addition, EPA expects that many firms that 
meet their intensity goals will also achieve absolute emissions 
reductions. In fact, EPA projected that four of the five firms that 
were expected to reach their goals in 2005 would also achieve absolute 
emissions reductions, even though only one of them has an absolute 
target. Second, 29 of the 38 companies established goals relating to 
their U.S. or North American facilities only, while the other 9 
established goals relating to their global facilities. Third, the time 
periods covered ranged from 5 to 10 years, and all goal periods began 
in 2000 or later because EPA asked firms to use the most recent data 
available when establishing the base year for their goal. EPA did this 
to prevent firms from counting reductions made prior to joining the 
program and to prevent them from selecting as their baseline a year in 
which their emissions were particularly high, hence making reductions 
appear steeper than they actually were, relative to average conditions. 

Reflecting various combinations of the three characteristics, the 
firms' goals are expressed in different terms. 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. Table 2 presents information on the 38 firms' 
goals. 

Table 2: Climate Leaders' Goals as of November 2005: 

Metric used and percent to be reduced: 3M: Emissions intensity; 
Geographic scope of goal: 3M: United States. 

Company: 3M; 
Metric used and percent to be reduced: Emissions: 30; 
Metric used and percent to be reduced: Emissions Intensity: [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2002-07. 

Company: Advanced Micro Devices, Inc; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity: 40;  
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Manufacturing index; 
Geographic scope of goal: [Empty]; 
Geographic scope of goal: Global: x; 
Time period covered: 2002-07. 

Company: American Electric Power; 
Metric used and percent to be reduced: Emissions: 4; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2001-06. 

Company: Ball Corporation; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced:  Emissions Intensity: 16; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Production index; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: 
Time period covered: 2002-12. 

Company: Bank of America Corporation; 
Metric used and percent to be reduced: Emissions: 9; 
Metric used and percent to be reduced: Emissions Intensity: [Empty]; 
Metric used and percent to be reduced: [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2004-09. 

Company: Baxter International Inc; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  16;  
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Unit of production value; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty];  
Time period covered: 2000-05. 

Company: Calpine; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  4; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Megawatt hour; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2003-08. 

Company: Caterpillar; 
Metric used and percent to be reduced: Emissions: 
Metric used and percent to be reduced: Emissions Intensity:  20; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Dollar of revenue;  
Geographic scope of goal: [Empty]; 
Geographic scope of goal: Global: x; 
Time period covered: 2002-10. 

Company: Cinergy Corporation; 
Metric used and percent to be reduced: Emissions: 5; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty];  
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty];  
Time period covered: 2000-10. 

Company: The Collins Companies; 
Metric used and percent to be reduced: Emissions: 18; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2000-10. 

Company: Eastman Kodak Company; 
Metric used and percent to be reduced: Emissions: 10; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: [Empty]; 
Geographic scope of goal: Global: x; 
Time period covered: 2002-08. 

Company: Exelon Corporation; 
Metric used and percent to be reduced: Emissions: 8; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2001-08. 

Company: First Environment, Inc; 
Metric used and percent to be reduced: Emissions: Net 0[A]; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: 
Time period covered: by 2008. 

Company: FPL Group, Inc; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  18; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Kilowatt hour; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2001-08. 

Company: Frito-Lay, Inc; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced:  Emissions Intensity: 14; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Pound of production;  
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2002-10. 

Company: GAP, Inc; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  11; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Square foot; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2003-08. 

Company: General Electric; 
Metric used and percent to be reduced: Emissions: 1; 
Metric used and percent to be reduced:  Emissions Intensity: [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty];  
Geographic scope of goal: [Empty]; 
Geographic scope of goal: Global: x; 
Time period covered: 2004-12. 

Company: General Motors Corporation; 
Metric used and percent to be reduced: Emissions: 10; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty];  
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x[B]; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2000-05. 

Company: Green Mountain Energy Company; 
Metric used and percent to be reduced: Emissions: Net 0[A]; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2005-09. 

Company: Hasbro, Inc; 
Metric used and percent to be reduced: Emissions: 30; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty];  
Time period covered: 2000-07. 

Company: Holcim (U.S.) Inc; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  12;  
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Ton of cement; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: 
Time period covered: 2000-08. 

Company: IBM Corporation[C]; 
Metric used and percent to be reduced: Emissions: 10; 
Metric used and percent to be reduced: Emissions Intensity:  4; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Energy use; 
Geographic scope of goal: [Empty]; 
Geographic scope of goal: Global: x;  
Time period covered: Average annual reduction; 
2000-05. 

Company: Interface, Inc; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  15; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Unit of production; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: 
Time period covered: 2001-10. 

Company: International Paper; 
Metric used and percent to be reduced: Emissions: 15; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2000-10. 

Company: Johnson & Johnson; 
Metric used and percent to be reduced: Emissions: 14; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2001-10. 

Company: Marriott International, Inc; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  6; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Available room; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2004-10. 

Company: Melaver, Inc; 
Metric used and percent to be reduced: Emissions: Net 0[A]; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2006-09. 

Company: Miller Brewing Company; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  18; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Barrel of production; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2001-06. 

Company: National Renewable Energy Laboratory; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  10; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Square foot; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: 
Time period covered: 2000-05. 

Company: Pfizer, Inc; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  35; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Dollar of revenue; 
Geographic scope of goal: [Empty]; 
Geographic scope of goal: Global: x; 
Time period covered: 2000-07. 

Company: PSEG; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  18; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Kilowatt hour; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2000-08. 

Company: Roche Group US Affiliates; 
Metric used and percent to be reduced: Emissions: 10; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2001-08. 

Company: SC Johnson; 
Metric used and percent to be reduced: Emissions: 
Metric used and percent to be reduced: Emissions Intensity:  23; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Pound of product; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2000-05. 

Company: Staples, Inc; 
Metric used and percent to be reduced: Emissions: 7; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2001-10. 

Company: St. Lawrence Cement; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  15; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Ton of product; 
Geographic scope of goal: [Empty]; 
Geographic scope of goal: Global: x; 
Time period covered: 2000-10. 

Company: Sun Microsystems; 
Metric used and percent to be reduced: Emissions: 20; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: x; 
Geographic scope of goal: Global: [Empty]; 
Time period covered: 2002-12. 

Company: United Technologies Corporation; 
Metric used and percent to be reduced: Emissions: [Empty]; 
Metric used and percent to be reduced: Emissions Intensity:  16;  
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: Dollar of revenue; 
Geographic scope of goal: [Empty]; 
Geographic scope of goal: Global: x; 
Time period covered: 2001-06. 

Company: Xerox Corporation; 
Metric used and percent to be reduced: Emissions: 10; 
Metric used and percent to be reduced: Emissions Intensity:  [Empty]; 
Metric used and percent to be reduced: Metric for measuring emissions 
intensity: [Empty]; 
Geographic scope of goal: [Empty]; 
Geographic scope of goal: Global: x; 
Time period covered: 2002-12. 

Source: GAO analysis of EPA data. 

[A] Net zero means that the company will substitute emissions it 
produces by some other activity such that no new, additional emissions 
are produced. Green Mountain Energy, for example, is substituting 
emissions from fossil fuel-based energy, such as coal or gas, with the 
purchase of renewable energy that produces few greenhouse gas emissions 
relative to fossil fuels. 

[B] General Motors pledged to reduce total greenhouse gas emissions 
from its North American facilities. 

[C] IBM pledged to achieve a reduction in its average annual carbon 
dioxide emissions equivalent to 4 percent of the emissions associated 
with the company's worldwide energy use. IBM also pledged to reduce its 
perfluorocarbon emissions from its semiconductor manufacturing 
processes by 10 percent from 2000 to 2005. 

[End of table] 

DOE and Other Agencies Worked with Groups to Establish Goals Before 
Joining the Program, and Certain Groups' Goals Were Developed for 
Participation in Other Voluntary Programs: 

According to program officials, DOE or another federal agency, such as 
EPA or the U.S. Department of Agriculture (USDA), conducted discussions 
with the industry groups on establishing a goal upon entering the 
program. These officials stated that, since a key element of the 
program is allowing industry groups to take ownership of their goals, 
DOE and its partner agencies generally did not actively negotiate the 
goals' specific terms. DOE officials told us that the agency remained 
flexible on goal setting because some groups had initiated their own 
internal emissions reduction programs before joining the program or had 
an existing arrangement with another agency, such as EPA. In addition, 
DOE officials believe it is important for the groups to establish goals 
that meet their unique circumstances. The officials told us that they 
compared the trade groups' goals with projected emissions for their 
respective industries to gauge their robustness. DOE calculates 
expected conditions for many industrial sectors using EIA data, where 
they are available. (We did not independently review EIA's data or 
DOE's analysis of the data.) Further, DOE officials also told us that 
the trade groups have an interest in ensuring that their goals are 
credible. 

According to a DOE official, participants need not establish a new goal 
as a condition of joining the program, and certain trade groups had 
already initiated internal emissions reduction programs before joining 
Climate VISION or had an existing arrangement with a voluntary program 
at another agency, such as EPA. For example, the nine firms in the 
aluminum industry established a goal of reducing perfluorocarbon 
emissions by 30 to 60 percent from a 1990 baseline as part of EPA's 
Voluntary Aluminum Industrial Partnership. In 2003, as part of Climate 
VISION, the Aluminum Association updated this goal. Similarly, the 
Semiconductor Industry Association's goal was established in 1999, also 
in conjunction with an EPA program. The International Magnesium 
Association likewise participates in an EPA program but did not 
establish a quantitative goal for reducing emissions until it joined 
Climate VISION in 2003. 

Fourteen Climate VISION Participants Have Set Goals, and These Goals 
Vary: 

Fourteen groups established quantitative emissions-related goals. More 
specifically, nine pledged to take actions to improve their emissions 
intensity. For example, the American Forest & Paper Association stated 
that it expected to reduce emissions intensity by 12 percent between 
2002 and 2012. Another two groups aimed to reduce emissions of specific 
greenhouse gases. For example, the Semiconductor Industry Association 
pledged to support efforts to reduce PFC emissions by 10 percent over 
1995 levels by 2010. Two more groups established a goal for improving 
energy efficiency. For example, the American Iron and Steel Institute 
agreed to a 10 percent, sectorwide increase in energy efficiency by 
2012, relative to 2002. Finally, one industry--the National Mining 
Association--established a goal of both reducing its overall emissions 
and improving its energy efficiency. The Business Roundtable did not 
set a quantified emissions reduction goal, owing to the diversity of 
its membership. Table 3 outlines the type and time frame of industry 
group goals. 

Table 3: Climate VISION Trade Groups' Goals as of November 2005: 

[See PDF for Image] 

Source: Climate VISION Web site. 

[A] According to the American Chemistry Council, the U.S. chemistry 
industry reduced its greenhouse gas intensity by 12 percent from 1990 
to 2000, with projections to 2002. 

[B] The American Chemistry Council measures its greenhouse gas 
emissions intensity using a special index that is particularly suited 
for an industry with a diverse product base. The index measures changes 
in the physical quantity of production, and where these data are 
unavailable, the index is based on changes in electricity consumption 
and production worker hours. 

[C] The International Magnesium Association committed to eliminate all 
SF6 emissions by 2010 and did not define a baseline year because of the 
nature of its goal. 

[D] The National Mining Association committed to maintain annual 
reductions in methane emissions achieved since 1990. 

[E] The National Mining Association committed to maximize efforts to 
reduce annual carbon reductions projected as a result of the 
partnership with DOE. These projections are 600,000 metric tons of 
carbon equivalent by 2010 and 2 million metric tons by 2015. 

[End of table] 

As shown in table 3, the majority of the groups' goals were based on 
time frames that began shortly before the program's initiation in 2003. 
Specifically, nine groups used 2000 or 2002 as a base year. For 
example, the National Lime Association stated its intention to reduce 
emissions intensity by 8 percent between 2002 and 2012. However, four 
goals had a base year of 1995 or earlier. For example, the Portland 
Cement Association pledged to reduce its emissions intensity by 10 
percent between 1990 and 2020. DOE officials told us that, even though 
some participants are using 1990 or another pre-2003 year as a base 
year, DOE will count only reductions occurring between 2002 and 2012 as 
part of the program's contribution toward the President's 18 percent 
emissions intensity reduction goal. 

In addition to setting emissions-related goals, some groups also set 
other kinds of goals. For example, the American Petroleum Institute 
committed to 100 percent member participation in EPA's voluntary 
Natural Gas STAR program (which helps U.S. natural gas companies adopt 
technologies and practices to reduce emissions of methane) and DOE's 
Combined Heat and Power Program (which works to eliminate barriers to 
the adoption of combined heat and power technology systems.) Similarly, 
the Business Roundtable established a goal of 100 percent member 
participation in voluntary actions to reduce, avoid, offset, and 
sequester greenhouse gas emissions. 

Many Climate VISION Participants Said Goals May Be Difficult to Achieve 
without Reciprocal Federal Actions: 

Although all Climate VISION participants established goals, a majority 
of the groups qualified their participation by stating that their 
ability to meet their goals would depend on some reciprocal government 
action. This includes 9 of the 14 groups with a quantitative goal as 
well as 5 of the 7 electric power groups. For example, the American 
Chemistry Council stated that "it will be difficult, if not impossible, 
for the chemical industry to do its share to reach the President's goal 
of reducing emissions intensity" without an aggressive government role 
in removing barriers to progress and providing incentives, such as tax 
code incentives. Similarly, the American Petroleum Institute stated 
that "future progress will be particularly difficult because of the 
increased energy and capital requirements at refineries due to 
significant tightening of gasoline and diesel fuel specifications in 
the coming decade." The group said it would look to the administration 
"to aggressively work to eliminate any potential regulatory barriers to 
progress in these areas." Likewise, the Association of American 
Railroads stated that the industry's efforts will depend upon DOE's 
continued funding of a government/rail industry cooperative venture to 
improve railroad fuel efficiency. Appendix III lists the reciprocal 
federal actions outlined in participants' statements. 

Both Agencies Have Estimated Their Programs' Coverage and Are Working 
to Estimate Their Impact, but It Will Be Difficult to Determine 
Specific Emissions Reductions from Each Program: 

EPA and DOE both estimated the share of U.S. greenhouse emissions 
attributable to their participants. Both agencies are also working to 
estimate the effect of their programs on reducing emissions, and they 
expect the estimates to be completed in 2006. Preparing such estimates 
will be challenging because there is considerable overlap between these 
two programs and other voluntary programs. 

Both Agencies Estimated the Share of U.S. 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. 
EPA based this estimate on emissions data from the first 50 program 
participants and believes the estimate is conservative, in part, 
because (1) it does not reflect data from the other 24 participating 
firms and (2) it does not include all types of emissions from each 
firm. For example, the estimate does not include indirect emissions 
(such as emissions from the use of purchased electricity or steam) or 
what EPA refers to as "optional" emissions, such as employee commuting 
and employee business travel. 

Because the electric utility sector accounts for about one-third of 
U.S. greenhouse emissions, we used an EPA database to determine the 
share of greenhouse gas emissions produced by Climate Leaders 
firms[Footnote 12] in that sector. As shown in table 4, we found that 
participating firms accounted for nearly 18 percent of carbon dioxide 
emissions from U.S. electricity generation (i.e., power plants only) in 
2000 (latest available data), or about 6 percent of total U.S. 
emissions. 

Table 4: Climate Leaders' Carbon Dioxide Emissions from Electricity 
Generation (i.e., Power Plants Only), 2000A: 

Climate Leaders firms: American Electric Power; 
Carbon dioxide emissions (millions of tons): 225.9; 
Percent of U.S. carbon dioxide emissions: 8.5%. 

Climate Leaders firms: Calpine Corporation; 
Carbon dioxide emissions (millions of tons): 4.2; 
Percent of U.S. carbon dioxide emissions: 0.2%. 

Climate Leaders firms: Cinergy Corporation; 
Carbon dioxide emissions (millions of tons): 66.8; 
Percent of U.S. carbon dioxide emissions: 2.5%. 

Climate Leaders firms: Entergy Corporation; 
Carbon dioxide emissions (millions of tons): 50.8; 
Percent of U.S. carbon dioxide emissions: 1.9%. 

Climate Leaders firms: Exelon Corporation; 
Carbon dioxide emissions (millions of tons): 16.7; 
Percent of U.S. carbon dioxide emissions: 0.6%. 

Climate Leaders firms: FPL Group, Inc; 
Carbon dioxide emissions (millions of tons): 45.0; 
Percent of U.S. carbon dioxide emissions: 1.7%. 

Climate Leaders firms: Green Mountain Energy Company; 
Carbon dioxide emissions (millions of tons): 0.07; 
Percent of U.S. carbon dioxide emissions: [B]. 

Climate Leaders firms: Nisource Inc; 
Carbon dioxide emissions (millions of tons): 20.0; 
Percent of U.S. carbon dioxide emissions: 0.8%. 

Climate Leaders firms: PSEG; 
Carbon dioxide emissions (millions of tons): 18.2; 
Percent of U.S. carbon dioxide emissions: 0.7%. 

Climate Leaders firms: We Energies; 
Carbon dioxide emissions (millions of tons): 26.0; 
Percent of U.S. carbon dioxide emissions: 1.0%. 

Climate Leaders firms: Total - Climate Leaders; 
Carbon dioxide emissions (millions of tons): 473.7; 
Percent of U.S. carbon dioxide emissions: 17.9%. 

Climate Leaders firms: Total - U.S. electricity generation; 
Carbon dioxide emissions (millions of tons): 2,652.9; 
Percent of U.S. carbon dioxide emissions: 100%[C]. 

Source: GAO analysis of EPA data. 

[A] Emissions data are for the year 2000 but have been updated to 
reflect corporate structures as of December 2002. 

[B] Less than 0.05 percent. 

[C] The "100 percent" refers only to those power plant emissions 
captured by the e-GRID database, about 90 to 95 percent of the U.S. 
total. 

[End of table] 

EPA program managers said they have set a participation goal of 200 
firms by 2012, and EPA is almost on track to meet this goal. 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. 

Climate Leaders program staff, with assistance from contractors, 
recruit new participants through various means. For example, they 
attend industry sector meetings and corporate environmental meetings as 
well as meetings of participants in other EPA programs, such as Energy 
STAR. In addition, EPA publishes public service announcements in trade 
and industry journals. 

According to DOE, the thousands of individual companies that are 
members of the participating trade groups (not including Business 
Roundtable members) contribute over 40 percent of total U.S. greenhouse 
gas emissions. DOE officials told us they believe this estimate, based 
largely on EIA and EPA data, is conservative, because the utility 
sector alone accounts for one-third of U.S. greenhouse gas emissions. 
(We did not independently review EIA's or EPA's data or the estimate 
based on these data.) 

DOE officials told us that they regularly seek to recruit new members 
and expect at least one more trade group to join the program, but they 
do not have a specific goal for the number of new participants expected 
to join. DOE also does not have a goal for the share of U.S. emissions 
contributed by future participants. 

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. 
Agency officials said that the estimates would be completed in 2006, in 
fulfillment of a U.S. commitment under the 1992 Framework Convention on 
Climate Change. (Under the Convention, the United States committed to 
report periodically on policies and measures undertaken to reduce 
greenhouse gas emissions.) 

In 2005, EPA estimated that participating firms' actions were reducing 
U.S. emissions by 8 MMTCE a year. This amount is equivalent to the 
annual emissions of 5 million automobiles and represents less than one- 
half of 1 percent of U.S. emissions in 2003 (the latest year for which 
data are available.) EPA derived this estimate by adding up the average 
annual expected emissions reductions for the first 35 firms that had 
set goals. (Three other firms set goals later.) However, EPA officials 
cautioned that this figure does not represent an official estimate of 
emissions reductions attributable to the program because many Climate 
Leaders firms participate in other voluntary programs to which their 
emissions reductions may be credited. 

A DOE official said that, to determine the emissions reductions 
attributable to the Climate VISION program, DOE will compare 
participating trade groups' reported emissions with comparable EIA 
projections for the time period. If the trade group comprises an entire 
industry, DOE will use the EIA projection for the entire industry; if 
the trade group comprises less than the entire industry, DOE will 
prorate the industry total based on the trade group's share of the 
industry. 

Estimating the effect of the two programs, as opposed to other 
voluntary programs and other factors, will be challenging for two 
reasons. First, because the firms and trade groups participating in 
these two programs may also participate in other voluntary programs, it 
will be difficult to determine the two programs' effect on reducing 
emissions, as opposed to other programs' effects on reducing emissions. 
Unless EPA and DOE find an effective way to disaggregate the emissions 
reductions attributable to each program, there is the possibility that 
total emission reductions from voluntary federal programs will be 
overstated because the same emissions reductions reported by 
organizations participating in Climate Leaders, Climate VISION, and 
other programs will be counted by more than one program. EPA officials 
told us that they recognize the challenge of attributing the effects of 
the various voluntary programs and stated that they are trying to avoid 
double counting of the programs' results. Second, the reductions in a 
participants' emissions that are due to a program are the difference 
between its actual emissions generated during a period of time and the 
amount of emissions that it would have generated for that period if it 
were not participating in the program. Although a participant can 
estimate its future emissions based on its estimate of future 
conditions (e.g., energy prices and other factors), all of these 
conditions may change during the time period. Any such change would 
need to be assessed to determine how it might have affected the 
participant's emissions. 

There are three types of overlap involving the firms and trade groups 
participating in Climate Leaders and Climate VISION. First, as of 
November 2005, most Climate Leaders firms also participate in other 
voluntary EPA programs. Specifically, 60 of the 74 firms took part in 
one or more other programs, while the other 14 firms did not take part 
in any other programs, as shown in figure 2. Of the 60 firms, 36 took 
part in one to three other voluntary climate programs. For example, 
Calpine participated in three programs, including the Combined Heat and 
Power Partnership, and Natural Gas STAR. Another 18 firms participate 
in four to six other programs. For example, Cinergy Corporation 
participated in EPA's Coalbed Methane Outreach Program, Combined Heat 
and Power Partnership, and Natural Gas STAR, among others. 
Additionally, six firms participate in seven or more programs. IBM, for 
example, participates in 11 other programs, including Energy STAR and 
the PFC Emissions Reduction Partnership for the Semiconductor Industry. 

Figure 2: Climate Leaders Members' Participation in Other EPA-Sponsored 
Voluntary Programs, as of November 2005: 

[See PDF for image] 

[End of figure] 

Second, some firms participating in Climate Leaders are members of 
trade groups participating in Climate VISION. We identified such firms 
in the automobile manufacturing, cement, electric power, and paper 
industries. For example, General Motors, a Climate Leaders participant, 
is a member of the Alliance of Automobile Manufacturers, a Climate 
VISION participant. 

Finally, three of the Climate VISION trade groups also participate in 
EPA voluntary programs. Specifically, the Aluminum, Magnesium, and 
Semiconductor Associations also participate in industry-focused EPA 
programs. Further, the Aluminum and Semiconductor Associations 
previously developed their goals in conjunction with other EPA 
voluntary programs. 

The fact that there is overlap among the organizations participating in 
both Climate Leaders and Climate VISION, and among participants in 
these programs and other federal voluntary programs, creates the 
possibility that their emissions reductions will be counted more than 
once. 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. Further, for those trade 
groups that participate in Climate VISION and other EPA voluntary 
programs, it is possible that the same actions and the same emissions 
reductions will be counted by both programs. If participants' emissions 
reductions are counted by multiple programs, it is possible that any 
attempt to estimate the overall impact of voluntary federal climate 
change programs on greenhouse gas emissions will be overstated. 

In addition, it will be challenging to accurately estimate the 
programs' effects because it is difficult to determine the level of 
emissions for a firm or trade group in the absence of these programs 
and other factors. For example, increases in energy prices can be 
expected to reduce energy consumption, which is significant because 
carbon dioxide emissions from energy use account for more than 80 
percent of U.S. emissions. According to EIA's 2002 estimate, which was 
reflected in the President's February 2002 plan, U.S. emissions 
intensity was projected to improve 14 percent by 2012. However, 
according to EIA's 2006 estimate, largely because of an increase in 
energy prices, emissions intensity is now projected to improve 17 
percent over the same period. If participants had anticipated such an 
improvement, they might have projected lower emissions over time. This 
means that the difference between their reported emissions and their 
projected emissions would be smaller, which would decrease the 
emissions reductions attributable to participation in a voluntary 
program. 

Conclusions: 

The administration has chosen to pursue voluntary rather than mandatory 
activities to reduce greenhouse gas emissions. Given the potential 
gravity of the climate change problem, programs such as Climate Leaders 
and Climate VISION will need to be especially robust and involve a 
substantial portion of the economy if they are going to achieve the 
desired results. To date, according to EPA and DOE estimates, these two 
voluntary programs involve companies and industries representing less 
than one-half of total U.S. emissions, which immediately limits their 
potential impact. This makes it all the more important that the 
voluntary programs maximize the extent to which their potential is 
achieved. 

To this end, we found that opportunities remain to improve the 
management of both programs. First, while many participants appear to 
have made considerable progress in completing program steps in a timely 
manner, some participants in both programs appear not to be progressing 
at the rate expected by the sponsoring agencies. 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. Second, while 12 of these 18 firms are currently 
negotiating their goals with EPA, 6 others had not begun negotiations 
because their inventories had not been finalized. Similarly, although 
DOE expects that groups will generally complete their work plans within 
about a year of joining the program, of the 13 groups that joined 
during 2003, the program's first year, 2 had not completed their plans 
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. We believe that, without a system to track how long 
participants take to complete key program steps, DOE cannot ensure that 
the program's goals are being accomplished. Moreover, neither agency 
has a written policy on what action to take when a firm is not making 
sufficient progress in setting goals and completing other key program 
steps. We believe that, by establishing written policies regarding 
consequences for not completing these steps on schedule, the agencies 
could more easily ensure participants' active involvement in the 
programs, thereby increasing the opportunities for contributing to the 
President's emissions intensity reduction goal. 

Both agencies are working this year to estimate the emissions 
reductions attributable to their programs. No matter how many firms and 
trade groups have joined the programs and how well they are meeting 
program expectations, to demonstrate the value of voluntary programs-- 
as opposed to mandatory reductions--the agencies will need robust 
estimates of the programs' effect on reducing emissions. However, as we 
noted, making this estimate will be challenging for two reasons. First, 
the overlaps between organizations participating in these two programs 
and other voluntary programs make it difficult to attribute specific 
emissions reductions to one program. EPA and DOE will need to find a 
way to determine the emissions reductions attributable to each program 
so that the same emissions reductions reported by organizations 
participating in Climate Leaders, Climate VISION, and other voluntary 
programs are not counted by more than one program. Otherwise, estimates 
of total emission reductions from voluntary federal programs could be 
overstated. Second, it will be difficult to determine the emissions 
reductions stemming from participants' involvement in the program, as 
opposed to higher energy prices or other factors, because it is 
difficult to determine what participants' emissions would be in the 
absence of these programs. It will therefore be difficult to evaluate 
the merits of these voluntary programs. Nevertheless, it will be 
important for the agencies to overcome these challenges in determining 
their programs' emission reduction contributions. 

Recommendations: 

To ensure that the Congress and the public have information with which 
to evaluate the effectiveness of these voluntary programs and to 
increase the opportunities for contributing to the President's 
emissions intensity reduction goal, we are recommending that DOE 
develop a system for tracking participants' progress in completing key 
steps associated with the program. We are also recommending that both 
EPA and DOE develop written policies establishing the consequences for 
not completing program steps on schedule. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to EPA and DOE for their review and 
comment. EPA did not comment on our recommendation, but rather provided 
a summary of the program's accomplishments, noting that 85 firms now 
participate in Climate Leaders and that 5 firms had met their emissions 
reduction goals (see app. IV). DOE stated that, overall, the draft 
report provided a useful overview of the Climate VISION program and 
agreed with our recommendation regarding a tracking system and said it 
will consider our recommendation regarding establishing a written 
policy (see app. V). However, DOE stated that the Climate VISION Web 
page contains a wealth of information on the program, which may be 
sufficient to ensure the active involvement of participating groups. 
Because DOE's Web site does not contain information regarding the 
expected time frames for completing key program steps or the 
consequences for groups not meeting the agency's expectations, we 
continue to believe that DOE should establish a written policy 
regarding what actions it will take when a trade group is not making 
sufficient progress in completing key steps. 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. Also, although DOE agreed that higher energy 
prices may lead to lower emissions overall, it noted that, in the power 
sector, higher energy prices may lead to greater emissions. This can 
occur if electric power producers use less oil or natural gas (which 
produce fewer emissions per unit of electricity) and more coal (which 
produces more emissions, relative to oil or natural gas). Both EPA and 
DOE provided technical comments, which we have incorporated in this 
report as appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution of this report 
until 30 days after the date of this letter. At that time, we will send 
copies to the Secretary of Energy; the Administrator, EPA; and other 
interested officials. The report will also be available on GAO's home 
page at [Hyperlink, http://www.gao.gov].

If you have questions concerning this report, please contact me at 
(202) 512-3841 or stephensonj@gao.gov. Contact points for our Offices 
of Congressional Relations and Public Affairs may be found on the last 
page of this report. GAO staff who made major contributions to this 
report are listed in appendix VI. 

Signed by:

John B. Stephenson: 
Director, Natural Resources and Environment: 

[End of section] 

Appendix I: U.S. Government Voluntary Climate Change Programs: 

In addition to Climate Leaders and Climate VISION, the U.S. government 
supports numerous other voluntary programs that encourage participants 
to reduce their greenhouse gas emissions, as shown in the following 
table, arranged alphabetically by sector. For the purposes of this 
report, we define voluntary greenhouse programs as those programs that: 

* do not involve regulation, government-sponsored research and 
development, tax incentives, financial assistance, or government/ 
industry cost-sharing components; 

* were created for the specific purpose of reducing greenhouse gases or 
were created to reduce other pollutants but had the additional benefit 
of reducing greenhouse gases; and: 

* involve only dissemination of information to nonfederal parties. 

Table 5: Other U.S. Voluntary Greenhouse Gas Emissions Reduction 
Programs: 

Sector/Program: Energy: commercial, and residential. 

Sector/Program: Emerging Technologies; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide; 
Implementing agencies: Energy: commercial, and residential: DOE; 
Purpose: Energy: commercial, and residential: Increase demand for, and 
bring new, highly efficient technologies to market for buyers, while 
assisting manufacturers, energy service companies, and utilities. The 
focus is on highly energy-efficient products for commercial and 
residential building applications. 

Sector/Program: Energy STAR for the Commercial Market; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Promote strategies for 
strong energy management by engaging top company leadership, promoting 
standardized measurement tools to assess performance of buildings, and 
providing information on best practices in energy efficiency. 

Sector/Program: Energy STAR - Labeled Products; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide; 
Implementing agencies: Energy: commercial, and residential: EPA/DOE; 
Purpose: Energy: commercial, and residential: Provide information to 
consumers and homeowners so that they can make sound investments when 
buying a new home or when undertaking a home improvement project. 

Sector/Program: Energy STAR for the Residential Market; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Provide guidance for 
homeowners on designing efficiency into kitchen, additions, and whole- 
home improvement projects and work with major retailers and other 
organizations to help educate the public. 

Sector/Program: Federal Energy Management Program (FEMP); 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide, methane, nitrous oxide; 
Implementing agencies: Energy: commercial, and residential: DOE; 
Purpose: Energy: commercial, and residential: Promote energy efficiency 
and renewable energy use in federal buildings, facilities, and 
operations. 

Sector/Program: Voluntary Reporting of Greenhouse Gases Program[A]; 
Affected greenhouse gases: Energy: commercial, and residential: All; 
Implementing agencies: Energy: commercial, and residential: DOE; 
Purpose: Energy: commercial, and residential: Record the results of 
voluntary measures undertaken by companies and other organizations to 
reduce, avoid, or sequester greenhouse gas emissions. 

Sector/Program: Energy: Industrial. 

Sector/Program: Best Practices Program; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide, methane, nitrous oxide; 
Implementing agencies: Energy: commercial, and residential: DOE; 
Purpose: Energy: commercial, and residential: Offer industry tools to 
improve plant energy efficiency, enhance environmental performance, and 
increase productivity. 

Sector/Program: Energy STAR for Industry (formerly Climate Wise); 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Enable industrial 
companies to evaluate and cost-effectively reduce their energy use 
through established energy performance benchmarks, strategies for 
improving energy performance, technical assistance, and recognition for 
accomplishing reductions in energy. 

Sector/Program: Industrial Assessment Centers; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide; 
Implementing agencies: Energy: commercial, and residential: DOE; 
Purpose: Energy: commercial, and residential: Provide no-cost energy 
assessments to small-and medium-sized manufacturers to help identify 
opportunities to improve productivity, reduce waste, and save energy. 

Sector/Program: Transportation. 

Sector/Program: Best Workplaces for Commuters; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide,; 
methane, nitrous oxide; 
Implementing agencies: Energy: commercial, and residential: EPA and 
Department of Transportation; 
Purpose: Energy: commercial, and residential: Advocate employer-
provided commuter benefits and highlight the efforts of employers to 
help get employees to work safely, on time, and free of commuter-
related stress. 

Sector/Program: Clean Cities; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide, methane, nitrous oxide; 
Implementing agencies: Energy: commercial, and residential: DOE; 
Purpose: Energy: commercial, and residential: Advance the Nation's 
economic, environmental, and energy security by supporting local 
decisions to adopt practices that contribute to the reduction of 
petroleum consumption. 

Sector/Program: SmartWay Transport Partnership; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Reduce emissions from the 
freight sector by creating partnerships in which partners commit to 
measure and improve the efficiency of their freight operations using 
EPA-developed tools, reducing unnecessary engine idling, and increasing 
the efficiency and use of rail and intermodal operations. 

Sector/Program: Industry/Agriculture. 

Sector/Program: AgSTAR; 
Affected greenhouse gases: Energy: commercial, and residential: 
Methane; 
Implementing agencies: Energy: commercial, and residential: EPA and 
Department of Agriculture; 
Purpose: Energy: commercial, and residential: Reduce emissions from 
livestock waste management operations by promoting the use of biogas 
recovery systems. 

Sector/Program: Coalbed Methane Outreach Program; 
Affected greenhouse gases: Energy: commercial, and residential: 
Methane; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Reduce emissions by 
promoting the profitable recovery and use of coal mine methane by coal 
mining and other types of companies. 

Sector/Program: High GWP Environmental Stewardship Initiative[B]; 
Affected greenhouse gases: Energy: commercial, and residential: High 
GWP gases; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Aim to limit emissions of 
HFCs, PFCs, and SF6 in several industrial applications: semiconductor 
production, refrigeration, electric power distribution, magnesium 
production, and mobile air conditioning. 

Sector/Program: Natural Gas STAR; 
Affected greenhouse gases: Energy: commercial, and residential: 
Methane; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Reduce emissions from 
U.S. natural gas systems through the widespread adoption of industry 
best management practices. 

Sector/Program: Waste Management. 

Sector/Program: Landfill Methane Outreach Program; 
Affected greenhouse gases: Energy: commercial, and residential: 
Methane; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Promote the use of 
landfill methane gas as a renewable, green energy source. The program's 
focus is on smaller landfills not regulated by EPA's New Source 
Performance Standards and Emissions Guidelines. 

Sector/Program: Climate Change and Waste Program; 
Affected greenhouse gases: Energy: commercial, and residential: All; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Encourage recycling and 
waste reduction for the purpose of reducing greenhouse gas emissions. 
Provide technical assistance for waste prevention, recycling, and 
buying recycled products. 

Sector/Program: Other. 

Sector/Program: Clean Energy-Environment State Partnership Program; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide, methane, nitrous oxide; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Encourage states to 
develop and implement a comprehensive strategy for using new and 
existing energy policies and programs to promote energy efficiency, 
renewable energy, and other clean energy sources. 

Sector/Program: State and Local Climate Change Outreach Program; 
Affected greenhouse gases: Energy: commercial, and residential: Carbon 
dioxide, methane nitrous oxide; 
Implementing agencies: Energy: commercial, and residential: EPA; 
Purpose: Energy: commercial, and residential: Enable state and local 
decision makers to incorporate climate change planning into their 
priority planning to help them maintain and improve their economic and 
environment assets. 

Sources: U.S. Department of State, U.S. Climate Action Report 2002; DOE 
Web site, EPA Web site. Selection of programs is based on a list of 
current U.S. climate policies and measures provided by EPA. 

[A] This initiative cuts across all sectors and greenhouse gas 
emissions sources. However, for the sake of simplicity, we list it here 
under commercial and residential energy. 

[B] This initiative consists of six separate programs: the Voluntary 
Aluminum Industrial Partnership, the HFC-23 Emission Reduction Program, 
the PFC/Climate Partnership in the Semiconductor Industry, the SF6 
Emissions Reduction Partnership for Electric Power Systems, the SF6 
Emission Reduction Partnership for the Magnesium Industry, and the 
Mobile Air Conditioning Climate Protection Partnership. 

[End of table] 

[End of section] 

Appendix II: Scope and Methodology: 

To determine the steps participants are expected to complete under each 
program and the expected time frames for completion, we reviewed agency 
documents, where available, and interviewed agency officials within the 
Environmental Protection Agency's (EPA) Office of Air and Radiation and 
the Department of Energy's (DOE) Office of Policy and International 
Affairs. We also obtained energy and emissions intensity data from 
Energy Information Administration (EIA) staff. To ascertain the extent 
to which agency officials assist participants in setting emissions 
reduction goals and the types of goals established, we reviewed agency 
documents and interviewed agency officials. We also reviewed commitment 
letters sent to DOE by the various trade groups, since each group 
prepared individualized letters, but we did not review the paperwork 
submitted by Climate Leaders participants to EPA, since each firm 
signed a standardized membership agreement with EPA. 

To determine the extent to which participants' reductions are reported 
in each program, we reviewed agency guidance on reporting and 
verification and interviewed agency officials. In addition, we reviewed 
the recommended reporting protocols for each program, including EPA's 
Design Principles, which is EPA's emissions reporting guidance, and 
DOE's Draft Technical Guidelines for Voluntary Reporting of Greenhouse 
Gases Program. We also reviewed EPA's annual greenhouse gas inventory 
summary and goal tracking form, the Inventory Management Plan (IMP) 
desktop review form, the on-site IMP review facility selection form, 
and the IMP on-site review form. 

To determine how EPA quantified the share of U.S. greenhouse gas 
emissions covered by Climate Leaders and the total reductions expected 
from the program, we interviewed EPA staff. To assess the size of the 
electricity generating sector participating in Climate Leaders, we used 
EPA's e-GRID database, which contains information on the environmental 
characteristics of almost all electric power generated in the United 
States. To ascertain how DOE quantified its estimate of Climate VISION 
coverage, we reviewed DOE documents and interviewed DOE staff. To 
determine the agencies' plans for future coverage and impact, we 
reviewed performance plans and an annual report (for EPA) and 
interviewed agency officials for both agencies. To assess the 
reliability of the EPA, DOE, and other data, we talked with agency 
officials about data quality control procedures and reviewed relevant 
documentation. We determined the data were sufficiently reliable for 
the purposes of this report. 

To ascertain how many firms participating in Climate Leaders also 
participate in other EPA voluntary climate programs, we cross- 
referenced a Climate Leaders roster against EPA lists of membership in 
other EPA voluntary programs. Similarly, we reviewed membership in 
DOE's Climate VISION program and cross-referenced selected individual 
trade group members with the list of Climate Leaders members. 

Finally, to create a list of other government-sponsored, voluntary 
greenhouse gas emissions reduction programs, we requested information 
from EPA on all current U.S. policies and measures designed to reduce 
greenhouse gas emissions. We narrowed the list to those programs that 
were voluntary. We defined voluntary programs to include only those 
programs in which private sector parties agree, of their own free will, 
to reduce greenhouse gas emissions. Therefore, we excluded regulatory 
programs. We also excluded programs consisting primarily of research 
and development, tax incentive, or financial assistance, and 
government/industry cost share arrangements. However, we determined 
that voluntary programs can include programs in which the government 
provides information to private sector parties, individuals, or state 
and local governments. We also included programs that were created both 
for the specific purpose of reducing greenhouse gas emissions and that 
were created to reduce other pollutants but have as a side benefit the 
reduction of greenhouse gases. We included programs that are supported 
by the Departments of Agriculture, Energy, and Transportation, as well 
as EPA. 

We conducted our review from June 2004 through March 2006 in accordance 
with generally accepted government auditing standards. 

[End of section] 

Appendix III: Climate VISION Participant Qualifying Statements: 

Industry group: Alliance of Automobile Manufacturers; 
Qualifying statement: "Clearly, achievement of this commitment and the 
national goal will depend on a number of external factors, including 
economic stability, coordinated regulatory policies that avoid mandates 
and other market barriers, weather variations which skew energy use, 
and support from the utilities' energy mix, including emission factors 
reductions.". 

Industry group: Aluminum Association; 
Qualifying statement: No qualifying statement noted. 

Industry group: American Chemistry Council; 
Qualifying statement: " . . . government can help by removing barriers 
that impede efficiency upgrades and by providing incentives for 
companies to implement state- of-the-art technology. Without an 
aggressive government role in removing barriers to progress and 
providing incentives, it will be difficult, if not impossible, for the 
business of chemistry to do its share to reach the president's goal of 
reducing national greenhouse gas intensity by 18 percent during the 
2002-2012 timeframe." 

Industry group: American Forest & Paper Association; 
Qualifying statement: "As an organization, we believe that our success 
will depend in part on the Administration's efforts to rationalize and 
manage the activities of all government agencies, especially with 
respect to the promulgation of regulatory requirements that may result 
in increases in greenhouse gas emissions. Our commitment also will 
naturally depend on the parameters of any implementation guidelines 
that may be developed. Specifically, we strongly encourage the 
Administration to address regulatory requirements where the negative 
climate impacts outweigh any environmental benefits.". 

Industry group: American Iron and Steel Institute; 
Qualifying statement: "We propose to use the [2001 DOE Steel Industry] 
Roadmap goals as a basis for addressing the President's Business 
Challenge. The Roadmap goals, however, are expressed in terms of 
technical feasibility and are qualified by the fact that the cost of 
acquiring and implementing any new technology must be economically 
justifiable for it to achieve widespread adoption in the industry.". 

Industry group: American Petroleum Institute; 
Qualifying statement: "Future progress will be particularly difficult 
because of the increased energy and capital requirements at refineries 
due to significant tightening of gasoline and diesel fuel 
specifications in the coming decade. As part of this program, API will 
look to the Administration to aggressively work to eliminate any 
potential regulatory barriers to progress in these areas.". 

Industry group: Association of American Railroads; 
Qualifying statement: "Most recently we have embarked on a cooperative 
venture with DOE's Office of Energy Efficiency and Renewable Energy to 
explore methods of improving railroad fuel efficiency. . . The 
industry's efforts, of course, will also depend upon DOE's funding the 
above- described government/rail industry cooperative venture to 
improve railroad fuel efficiency as DOE had previously indicated it was 
prepared to do. . . We concur with DOE that industry expertise and in- 
kind contributions--coupled with federal government funding and the 
resources of DOE's national laboratories--are necessary for an 
effective program to be planned and executed.". 

Industry group: Business Roundtable; 
Qualifying statement: No qualifying statement noted. 

Industry group: Industrial Minerals Association - North America; 
Qualifying statement: "We encourage the Administration to do all that 
it can to support the domestic soda ash, borates, and sodium silicates 
industries, not only because they contribute significantly to the U.S. 
economy, but also because they are more protective of the environment 
than their competitors outside the U.S. Shifts in production to the 
U.S. from offshore producers of soda ashes, borates, and sodium 
silicates would decrease the world's production of greenhouse gases.". 

Industry group: Magnesium Industry; 
Qualifying statement: No qualifying statement noted. 

Industry group: National Lime Association; 
Qualifying statement: "There is much that the government can do to 
address regulatory barriers that inhibit progress towards these goals, 
as well as to support voluntary efforts by the lime industry . . . In 
particular, we encourage the Administration to rationalize and manage 
the implementation of regulations that impede the permitting of 
projects to improve the efficiency and environmental performance of 
lime manufacturing operations." (Attached is a list of specific 
activities that will enhance the ability of the Lime Association to 
meet its Climate VISION goals. These activities include regulatory 
streamlining, government assistance in obtaining permits to use 
alternative fuels; tax code improvements in two areas; funding 
assistance for small businesses; assistance in persuading some lime 
customers to accept changes in product characteristics resulting from 
GHG intensity reductions; and assurance that domestic companies do not 
lose market share to foreign industries). 

Industry group: National Mining Association; 
Qualifying statement: No qualifying statement noted. 

Industry group: Portland Cement Association; 
Qualifying statement: No qualifying statement noted. 

Industry group: Power Partners (electric power sector); 
Qualifying statement: Some of the seven members of the Power Partners 
coalition included, in their individual commitment letters, 
expectations of the federal government. For example: 

* The American Public Power Association and the Large Public Power 
Council joint letter states that, "Full realization [of hydropower 
potential] hinges on achieving targeted reforms to the current Federal 
Energy Regulatory Commission (FERC) regulatory process.". . . and " 
Although estimates vary, opportunities exist to improve the generation 
efficiency of existing coal-fired capacity by 4 to 8 percent. . . Our 
ability to implement such energy efficiency projects will hinge on 
removal of regulatory barriers to such projects under the Clean Air 
Act."; * The Edison Electric Institute (EEI) states that, "A 
combination of power sector and government efforts will be necessary, 
including . . . government laws, regulations, and policies favoring the 
full utilization or maintenance of nuclear and hydroelectric plant 
generating capacity; adequate supplies and delivery infrastructure for 
natural gas; economic incentives for renewables; and the full benefits 
of energy efficiency and DSM, as well as offset projects." Attached to 
the letter is a list of specific government policies that would help 
EEI meet its goals. These policies include, among other things, 
hydroelectric licensing reform, nuclear power plant licensing 
extensions, reform of New Source Review regulations under the Clean Air 
Act, transmission siting authority for the federal government, and tax 
policies, such as accelerated depreciation and amortization of 
pollution control equipment and tax credits for renewable energy; * The 
Electric Power Supply Association states that, "EPSA member companies 
are committed to utilizing this generation capacity to the fullest 
extent possible and will work diligently to develop and maximize 
electricity production for clean energy sources to levels that are 
necessary to achieving the greenhouse gas intensity goals outlined 
above. The ability of our members to realize these industry goals is 
tied to the advancement of policies for promoting competitive markets 
for electricity. 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.". 

Industry group: Semiconductor Industry Association; 
Qualifying statement: 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. 

Source: Information from DOE's Web site. 

[End of table] 

[End of section] 

Appendix IV: Comments from Environmental Protection Agency: 

United States Environmental Protection Agency: 
Washington, D.C. 20460: 

April 7, 2006: 

Office Of Air And Radiation: 

Mr. John B. Stephenson: 
Director, Natural Resources and Environment: 
U.S. Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Stephenson: 

The U.S. Environmental Protection Agency (EPA) appreciates the 
opportunity to review and comment on the Government Accountability 
Office (GAO) report, "Climate Change: EPA and DOE Should Do More to 
Encourage Progress Under Two Voluntary Programs" (GAO-06-97, April 
2006). 

The Climate Leaders program was launched in February 2002 in order to 
encourage companies to develop long-term comprehensive climate change 
strategies. EPA partners with companies from a variety of economic 
sectors who have agreed to take significant voluntary steps to reduce 
their climate change footprint. Specifically, Partners have agreed to 
inventory their corporate-wide greenhouse gas (GHG) emissions, develop 
a high-quality GHG management system, set an aggressive GHG reduction 
goal, and report annually to EPA on their progress. 

EPA has seen substantial progress by companies in the four years since 
Climate Leaders was launched. The program now numbers 85 companies, and 
continues to expand its reach into additional sectors. Companies report 
that joining the program and initiating a GHG management process has 
led them to identify additional opportunities for significant 
efficiency gains. In January of this year, EPA announced that five 
corporations had achieved their initial Climate Leaders GHG reduction 
goals. These are real reductions that are helping to improve our 
environment today. EPA looks forward to reaching this important 
milestone with the rest of our Partners. 

Thank you again for the opportunity to respond. 

Sincerely, 

Signed by: 

William L. Wehrum: 
Acting Assistant Administrator: 

[End of section] 

Appendix V: Comments from the Department of Energy: 

Department of Energy: 
Washington, DC 20585: 

April 6, 2006: 

John B. Stephenson Director: 
Natural Resources and Environment: 
Government Accountability Office: 
441 G St., NW: 
Washington, DC 20548: 

Dear Director Stephenson: 

The Department of Energy (DOE) appreciates the opportunity to review 
and comment on the Government Accountability Office (GAO) draft report, 
Climate Change: EPA and DOE Should Do More to Encourage Progress Under 
Two Voluntary Programs (GAO-06-97, April 2006). Overall, we believe 
this report provides a useful overview of the Climate VISION program. 

In February 2002, President Bush set a goal of reducing the greenhouse 
gas intensity of the U.S. economy by 18 percent between 2002 and 2012. 
Climate VISION (Voluntary Innovative Sector Initiatives: Opportunities 
Now) is one of many voluntary and incentive programs designed to help 
achieve the President's goal. In February 2003, the Departments of 
Energy, Transportation, and Agriculture, the Environmental Protection 
Agency (EPA), and 13 industry organizations representing thousands of 
companies from energy-intensive economic sectors joined to launch the 
program. Today, business associations and trade groups representing 14 
industry sectors and the Business Roundtable are Climate VISION 
partners, and 14 of the 15 have issued a letter of intent to meet 
specific targets for improving the energy efficiency or greenhouse gas 
emissions intensity for its sector that will contribute to meeting the 
18 percent intensity goal.[Footnote 1] The responsibility for meeting 
these goals rests with the relevant trade groups; the participating 
federal agencies in this program have not undertaken any obligations 
with respect to these commitment letters. 

The draft report states that taken together Climate VISION and Climate 
Leaders ". . . involve companies and industries representing less than 
one-half of total U.S. emissions, which places an immediate limit on 
their potential impact." As GAO notes, we estimate, based only on those 
emissions addressed by the partners' quantitative commitments, that the 
sectors in the Climate VISION program account for (conservatively) 
between 40 and 45 percent of total U.S. greenhouse gas emissions. 
[Footnote 2] However, of even greater significance is that the program 
also accounts for a large portion of industrial emissions, which is the 
program's primary focus. We estimate that the program covers about four 
fifths of total U.S. industrial-and power-related greenhouse gas 
emissions. When viewed in these terms, the potential impact of the 
program is substantial. 

Voluntary programs by their very nature place a premium on flexibility. 
This is evident in the disparate commitments the Climate VISION sectors 
have made, not only in the parameters they selected (e.g., energy 
efficiency or greenhouse gas emissions intensity), but also in their 
starting and ending years (from 1990 to 2020). While GAO is correct 
that for the purposes of measuring the program's contribution to the 
President's goal we will consider only those emissions intensity 
reductions that occur from 2002 to 2012, we want to make clear that we 
value all the voluntary activities these trade groups undertook before 
2002 or will undertake after 2012. 

The draft report devotes considerable attention to the difficulty in 
quantifying emissions intensity reductions attributable to voluntary 
programs such as Climate VISION, citing overlaps with other voluntary 
programs and the inherent difficulty in determining what a sector's 
emissions would be absent the program. We recognize the challenges 
associated with this process. 

The Energy Information Administration's (EIA) projections of emissions 
intensity improvement, for example, may vary considerably from year to 
year. GAO notes the significant difference between EIA's 2002 to 2012 
business as usual baseline intensity projections for the United States 
from the EIA's Annual Energy Outlook (AEO) 2002 and the most recent 
AE02006 (14% vs. 16.8%), a difference attributed primarily to 
expectations of greater conservation and efficiency prompted by high 
energy prices. From this, the draft report infers: "This means that the 
difference between their [the sectors'] reported emissions and their 
projected emissions would be smaller, which would decrease the 
emissions reductions attributable to the program." This assumes that 
EIA's higher emissions intensity baseline of 16.8 percent for the 
entire U.S. economy will be reflected to one degree or another across 
each Climate VISION industry sector. This is may be the case for some, 
but not necessarily for all, sectors. In particular, relatively high 
oil and natural gas prices may make coal more attractive for 
electricity generation and thus increase the power sector's potential 
contribution under the program. 

These and other issues highlight the need for a standard baseline. DOE 
has plans to engage a contractor to help develop a baseline forecast, 
consistent with the original analysis used to set the 18 percent 
intensity reduction goal, for evaluating the progress of the industrial 
sector (including power generation) as a whole. As: 

Climate VISION sectors account for roughly four fifths of total U.S. 
industrial emissions, these emissions can serve as a reasonably good 
proxy for measuring progress for Climate VISION and other programs 
focusing on the industrial sector. Using this type of baseline, we hope 
to track progress in a common metric, capture quantitative as well as 
qualitative commitments, create a baseline that is independent of 
future AEO projections that can change (sometimes appreciably) from 
year to year, and measure intensity as well as tonnage of emissions 
avoided. 

One of the primary recommendations emerging from the GAO draft report 
concerns the issue of ensuring that sectors fulfill their commitments 
and meet key program steps. Overall, DOE is pleased with the progress 
Climate VISION trade groups have made in meeting their commitments. We 
would note that since GAO completed its interviews with DOE, the agency 
has received, and is currently reviewing, drafts of three of the 
outstanding four work plans. Nonetheless, we agree with GAO that a 
tracking system would prove useful in helping us gauge the progress 
being made by the partners. With the assistance of a contractor, DOE 
began work on such a system late last year, and in 2006 we intend to 
develop this system further. 

GAO also recommends that DOE establish a written policy on what action 
the program will take when a trade group is not making sufficient 
progress in completing key program steps. We expect that our partners 
will continue to work diligently to meet their goals. These goals were 
established by the partners with a great deal of forethought and care 
and were approved by their membership. The role of the Climate VISION 
program is best described as one of coordinator and facilitator, 
ensuring transparency and verifiability, so that the actions of the 
partners may be clearly understood. The Climate VISION web page-which 
has a wealth of material on the program and the activities of 
participating trade groups-plays a significant role in this effort. 
While we believe the transparency afforded by the program's web page 
provides sufficient incentive to ensure the active involvement of the 
partners, we will consider establishing a written policy in 
consultation with our other agency partners. 

Thank you again for giving DOE the opportunity to respond. 

Signed by: 

Karen Harbert: 
Assistant Secretary: 
Office of Policy and International Affairs: 

Footnotes: 

[1] Because of it diverse membership, which cuts across many different 
sectors, the Business Roundtable has committed to 100 percent 
participation by members in voluntary efforts to reduce, avoid, offset, 
or sequester greenhouse gas emissions. 

[2] This estimate is based on EIA (Emissions of Greenhouse Gases in the 
United States 2004 and Annual Energy Outlook 2005) and EPA (Inventory 
of U.S. Greenhouse Gas Emissions and Sinks 2005) emissions data and 
information in the letters of intent submitted by the trade groups. 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO contact: 

John Stephenson (202) 512-3841 or stephensonj@gao.gov: 

Acknowledgments: 

In addition to the contact named above, David Marwick, Assistant 
Director; John Delicath; Anne K. Johnson; Chester Joy; Micah McMillan; 
and Joseph D. Thompson were the major contributors to this report. 
Kisha Clark, Heather Holsinger, Karen Keegan, Jean McSween, Bill Roach, 
and Amy Webbink also made important contributions. 

(360529): 

FOOTNOTES 

[1] EIA, Annual Energy Outlook 2005, DOE/EIA-0383(2005) (Washington, 
D.C.: February 2005). 

[2] EIA, Emissions of Greenhouse Gases in the United States 2003, DOE/ 
EIA-0573(2003) (Washington, D.C.: December 2004). 

[3] EIA, Annual Energy Outlook 2006, DOE/EIA 0383(2006) (Washington, 
D.C.: February 2006). 

[4] EIA, Emissions of Greenhouse Gases in the United States 2003, DOE/ 
EIA-0573(2003) (Washington, D.C.: December 2004). 

[5] EIA, Annual Energy Outlook 2006, DOE/EIA 0383(2006) (Washington, 
D.C.: February 2006). 

[6] Carbon equivalent is a metric measure commonly used to compare the 
emissions of different greenhouse gases based on their different 
specific contributions to warming the atmosphere. 

[7] See GAO's October 2003 testimony, Climate Change: Preliminary 
Observations on the Administration's February 2002 Climate Initiative, 
GAO-04-131T (Washington, D.C.: Oct. 1, 2003). 

[8] EIA, Annual Energy Outlook 2006, DOE/EIA 0383(2006) (Washington, 
D.C.: February 2006). 

[9] The World Resources Institute is a nonprofit environmental research 
and policy organization that, among other things, works to reverse 
global warming. The World Business Council for Sustainable Development 
is a coalition of 175 international companies that provides business 
leadership on sustainable development issues. 

[10] EPA officials informed us that, as of March 20, 2006, 10 
additional firms had joined the program, for a total of 84 firms, 46 of 
which had announced goals. 

[11] Section 1605(b) of the Energy Policy Act of 1992 directed DOE to 
issue guidelines establishing a voluntary greenhouse gas reporting 
program. 

[12] We used EPA's e-GRID database, which represents emissions from 
U.S. power plants greater than a megawatt in size. EPA estimates that 
the database captures 90 to 95 percent of U.S. carbon dioxide emissions 
from the generation of electric power in 2000. 

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