Climate Change:

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

GAO-06-97: Published: Apr 25, 2006. Publicly Released: May 25, 2006.

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

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

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In our April 2006 report, we recommended that DOE develop a system for tracking participants progress in completing key steps associated with its Climate VISION program. While DOE agreed that a tracking system would prove useful in helping it gauge the progress being made by the partners, and initially agreed to develop such a system, they found methodological challenges for tracking the individual progress of each partner, and indicated that they were unable to develop the originally envisioned tracking system. However,DOE, through its contractor, did develop a methodology that tracks progress toward the collective overarching goal by the partners. While this methodology does not enable the agency to ascertain whether individual participants are meeting program expectations in a timely manner, it does provide a comparable metric that relies on reproducible, widely available data. DOE also agreed to produce annual updates using this methodology for the entire program until the emission intensity goal has been met, or until a final analysis is completed. In addition, they are providing the public with information to help evaluate the effectiveness of the voluntary program. The Progress Report 2007 is available on DOE's website at http://www.climatevision.gov/sectors/progress_reporrt/pdfs?CV_Progress_Repoprt_Final_Report.pdf. In December 2007, DOE's contractor issued a Memo describing its Industry and Power Group GHG Tracking for Voluntary GHG Programs that provides a variety of time series data. This public information provides additional incentives to improve the accuracy of participant reporting. In conclusion, while DOE did not establish the specific tracking system GAO recommended, its actions collectively address the intent of GAO's recommendation.

    Recommendation: 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, DOE should develop a system for tracking participants' progress in completing key steps associated with the program.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: In our April 2006 report (GAO-06-97), we recommended that EPA develop written policies establishing the consequences for not completing its Climate Leaders Program, a voluntary program that encourages firms to set emission reduction goals to reduce greenhouse gas emissions. We reported that EPA had not developed a written policy on what to do about firms that are not progressing as expected. Following our report, EPA developed a written policy regarding the agency's expectations of each program participant in the Climate Leaders Program and the consequences for failure to meet the program's requirements. The Policy on Conformance with Program Requirements, which is available on the agency's Web site (http://www.epa.gov/climateleaders/partners/conformance.html), was posted in February 2010. The Policy establishes key milestones for both Climate Leaders Partners--large commercial and industrial companies--and Small Business Network members. For example, it states that Climate Leader Partners must complete both base year reporting and a goal proposal no later than 24 months after the join date or EPA will automatically remove the Partner from the program. In another example, the Policy states that each Small Business Network member must submit its GHG emission reduction goal to EPA no later than 12 months after the join date. According to the Policy, if a member fails to submit its goal on time EPA will contact the member to inquire about that delay and may send a letter to the member stating that the member has 3 months to submit the goal. The Policy states that if the member still fails to submit its goal within 3 months EPA will automatically remove the member from the program.

    Recommendation: EPA and DOE should develop written policies establishing the consequences for not completing program steps on schedule.

    Agency Affected: Environmental Protection Agency

  3. Status: Closed - Not Implemented

    Comments: DOE determined that a public written policy establishing consequences for not meeting program steps on a specified schedule is not needed, and indicated that they believe it may be detrimental to recruiting companies to undertake the significant voluntary effort that is necessary to meet the program requirements. In the event that DOE found that a partner was not making a concerted effort to complete the program requirements in a timely manner, DOE committed itself to take the following actions: (1) meet with the partner in an attempt to rejuvenate the process; (2) send an official letter to the partner detailing steps it needs to take, and a timeline, to meet its commitment, and (3) send an official letter formally removing the partner from the program.

    Recommendation: EPA and DOE should develop written policies establishing the consequences for not completing program steps on schedule.

    Agency Affected: Department of Energy

 

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