U.S.-China Cooperation: Bilateral Clean Energy Programs Show Some Results but Should Enhance Their Performance Monitoring
Highlights
What GAO Found
In fiscal years 2008–2015, U.S. agencies obligated a total of about $97 million for clean energy cooperation with China. Two-thirds of this money was obligated for three key programs (projects of which are depicted from left to right below):
- Department of Energy (DOE) program, the U.S.-China Clean Energy Research Center (CERC), that has focused on research and development in clean coal, clean vehicles, and energy efficiency in buildings;
- U.S. Trade and Development Agency (USTDA) program focused on export promotion through projects such as feasibility studies and trade missions; and
- Department of State (State) program that includes information sharing and technology demonstration projects across various clean energy technologies.
Examples of Projects under Key U.S.-China Clean Energy Cooperation Programs
The key programs have yielded some results and have performance monitoring tools but generally lack targets for their performance, making the significance of their progress unclear. Examples of the programs' results include: for CERC, as of the end of 2015, the launch of 15 products, such as software for enhancing energy efficiency of buildings; and for the USTDA program, through fiscal year 2015, about $230 million in U.S. exports from its clean energy projects. Based on performance monitoring principles in the GPRA Modernization Act of 2010, it is a leading practice for federal programs to link goals to performance measures with established targets. Without targets, it is unclear how results compare with intended performance and what improvements may be needed; this is particularly important as DOE and State officials are planning the next phases of their programs and USTDA emphasizes the role of data in program decisions.
DOE identified intellectual property (IP) risks CERC participants may face, such as participants not having a clear plan for protecting IP, and took steps to manage them. These steps included requiring agreements clarifying IP rights and providing training, in part to encourage participants to share IP created outside of CERC projects. DOE officials said this IP sharing is important for valuable research and development collaboration. CERC participants GAO spoke with reported no significant issues with DOE's management of IP risks but, nonetheless, have been reluctant to share IP. DOE officials acknowledged that participants face a tradeoff between the risks and benefits of sharing IP with Chinese participants and that it is appropriate for companies to assess risks for themselves.
Why GAO Did This Study
The United States and China lead the world in energy consumption, and both are investing in renewable resources and efforts to increase the efficiency of traditional fossil fuel sources in part to address climate change. In 2014, a congressional commission raised questions about bilateral cooperation between the United States and China on clean energy, including potential IP risks to U.S. participants involved in collaborative research projects.
GAO was asked to review government-led U.S.-China collaborative initiatives on clean energy. This report examines (1) how much funding U.S. agencies obligated for clean energy cooperation with China, (2) what is known about the results of key programs and the extent to which they follow leading practices in performance monitoring, and (3) the extent to which DOE managed risks that CERC participants may face. GAO analyzed funding data, reviewed documents and compiled reported results, interviewed agency officials and participants of key programs, and conducted site visits.
Recommendations
GAO is making four recommendations to enhance performance monitoring, including that DOE, USTDA, and State each develop targets for program-level performance and track progress against them for the key programs GAO reviewed. The agencies agreed with GAO's recommendations and plan to take actions to address them.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Energy | To improve CERC's performance monitoring, the Secretary of Energy should ensure that for CERC's second phase the program creates targets and tracks progress against those targets in order to measure program performance. |
DOE concurred with GAO's recommendation and has taken steps to implement it. In response to GAO's recommendation, as of February 2020, CERC has created targets for performance measures, included those targets in its performance reporting template, and communicated this information to the CERC implementing partners so that they can begin tracking performance against these targets.
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| U.S. Trade and Development Agency | To improve the agency's performance monitoring, the Director of the U.S. Trade and Development Agency should develop and make public annual targets for the agency's performance measures. |
In response to the GAO recommendation, USTDA amended its strategic plan for fiscal years 2016 through 2018 to include annual targets for two performance indicators. First, the agency established an annual target of generating $74 in U.S. exports for every dollar it programs. Second, the agency created an annual target of exceeding the requirement for U.S. government agencies to award 23 percent of their procurements to small U.S. businesses. In its fiscal year 2019 through 2022 strategic plan, the agency increased its first performance target to set a goal of generating an average of $95 in U.S. exports for every dollar it programs and maintained the same target for its second performance metric. USTDA makes its strategic plan publicly available through its website and tracks its annual progress against these targets.
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| U.S. Trade and Development Agency | To improve the East Asia Program's performance monitoring, the Director of the U.S. Trade and Development Agency should ensure that the East Asia Program sets targets for its performance measures and tracks progress against those measures. |
In response to the GAO recommendation, USTDA established an annual export multiplier for the East Asia region as well as for all regional teams. USTDA's export multiplier quantifies the amount of U.S. exports generated for every program dollar obligated by the agency. To facilitate this, USTDA's Office of Monitoring and Evaluations developed guidance for the regional teams for developing these targets. For example, each regional team determines its targets through a high-level analysis of trends that may impact the upward or downward movement of the export multiplier year-over-year. Each regional team has set a target for its export multiplier for at least one fiscal year. USTDA stated that due to a decision by the agency to cease operations in China starting in fiscal year 2019, the agency did not establish targets for the East Asia Program for fiscal years 2019 and 2020 but plans to do so again moving forward.
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| Department of State | To improve the U.S.-China Climate Change Working Group's (CCWG) performance monitoring, the Secretary of State should ensure that CCWG develops measures and targets at the program level and tracks its performance against those measures and targets. |
State agreed with the findings in the GAO report and has taken steps to implement them. In response to GAO's recommendation, as of April 2017, State had created program-level performance measures with associated targets and is tracking the program's results against these targets semiannually.
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