Climate Change: Greater Clarity and Consistency Are Needed in
Reporting Federal Climate Change Funding (21-SEP-06,
GAO-06-1122T).
The Congress has required annual reports on federal climate
change spending. The Office of Management and Budget (OMB)
reports funding for: technology (to reduce greenhouse gas
emissions), science (to better understand the climate),
international assistance (to help developing countries), and tax
expenditures (to encourage emissions reduction). The Climate
Change Science Program (CCSP), which coordinates many agencies'
activities, also reports on science funding. This testimony is
based on GAO's August 2005 report Climate Change: Federal Reports
on Climate Change Should Be Clearer and More Complete
(GAO-05-461). GAO examined federal climate change funding for
1993 through 2004, including (1) how total funding and funding by
category changed and whether funding data are comparable over
time and (2) how funding by individual agencies changed and
whether funding data are comparable over time.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-1122T
ACCNO: A61347
TITLE: Climate Change: Greater Clarity and Consistency Are
Needed in Reporting Federal Climate Change Funding
DATE: 09/21/2006
SUBJECT: Climate statistics
Comparative analysis
Data collection
Environmental monitoring
Federal funds
Financial analysis
Funds management
Regulatory agencies
Reporting requirements
Research programs
Tax expenditures
Climate Change Science Program
U.S. Global Change Research Program
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GAO-06-1122T
* Background
* Reported Federal Climate Change Funding Increased for Three
* Technology
* Science
* International Assistance
* Tax Expenditures
* Reported Funding for Most Agencies Increased, but Unexplaine
* OMB Reports Presented Information on Budget Authority Rather
* Conclusions
* Contact and Staff Acknowledgments
* GAO's Mission
* Obtaining Copies of GAO Reports and Testimony
* Order by Mail or Phone
* To Report Fraud, Waste, and Abuse in Federal Programs
* Congressional Relations
* Public Affairs
Testimony
Before the Committee on Government Reform House of Representatives
United States Government Accountability Office
GAO
For Release on Delivery Expected at 10:00 a.m. EDT
Thursday, September 21, 2006
CLIMATE CHANGE
Greater Clarity and Consistency Are Needed in Reporting Federal Climate
Change Funding
Statement of John B. Stephenson, Director Natural Resources and
Environment
GAO-06-1122T
Mr. Chairman and Members of the Committee:
Increases in the earth's average temperature that have already occurred
over the last 100 years, combined with additional future increases
projected by a consensus of scientists, have the potential to dramatically
change life on earth. For example, changes in the frequency and intensity
of rainfall, both possible effects of climate change, could affect
agriculture and forest health in certain locations. Effects on planetary
biodiversity are projected to be even more pronounced. For more than a
decade, the federal government has funded programs to study the earth's
climate and to reduce emissions of carbon dioxide and other greenhouse
gases linked to climate change. According to the Office of Management and
Budget (OMB), 9 of the 15 cabinet-level executive departments, along with
5 other federal agencies, received funding for climate change activities
in 2004.
In annual reports and testimony before the Congress, OMB reported climate
change funding for 1993 through 2004 using the following four categories:
o Technology, which includes the research, development, and
deployment of technologies and processes to reduce greenhouse gas
emissions or increase energy efficiency. Funding for this category
focuses on programs for energy conservation, renewable energy, and
related efforts.
o Science, which includes research and monitoring to better
understand climate change, such as measuring changes in forest
cover.
o International assistance, which helps developing countries to
address climate change by, for example, providing funds for energy
efficiency programs.
o Tax expenditures related to climate change, which are federal
income tax provisions that grant preferential tax treatment to
encourage emission reductions by, for example, providing tax
incentives to promote the use of renewable energy.1
Over the same time period, the administration also reported
annually on funding specifically for climate change science, one
of the four categories used in OMB reports. The Climate Change
Science Program (CCSP)-a multiagency coordinating group-is
currently responsible for preparing the climate change science
reports, which duplicate to some extent OMB's science funding
reports.
My remarks today are based on our August 2005 report on federal
climate change funding from 1993 through 20042 and will focus on
(1) how total funding and funding by category changed and the
extent to which data on such funding are comparable over time and
(2) how funding by agency changed and the extent to which data on
such funding are comparable over time. We also examined whether
OMB reports on climate change funding provided the data required
by the Congress. It is important to note that in April 2006, OMB
issued its fiscal year 2007 report to the Congress on federal
climate change expenditures and has implemented several of GAO's
August 2005 recommendations in that report. Likewise, in November
2005, CCSP issued its fiscal year 2006 report to the Congress and
has also implemented a GAO recommendation in that report. My
testimony today addresses only climate change spending and
reporting through fiscal year 2004.
To determine how federal climate change funding by category and
agency changed, we analyzed data from annual OMB and CCSP reports,
as well as congressional testimony. To determine the extent to
which the data on climate change funding were comparable, we
analyzed and compared the contents of the reports and interviewed
responsible officials. To determine whether OMB and CCSP reports
provided the data the Congress required, we reviewed the reporting
requirements, the legislative history of these requirements, and
the data OMB and CCSP presented in their reports. The term
"funding" in this testimony reflects discretionary budget
authority, or the authority provided in law to incur financial
obligations that will result in outlays, as reported by OMB and
CCSP in their reports.3 Unless otherwise stated, we report funding
in nominal terms (not adjusted for inflation), and all years refer
to fiscal years.4 This testimony is based on work that was
conducted between July 2004 and August 2005 in accordance with
generally accepted government auditing standards.
In summary, federal funding for climate change, as reported by
OMB, increased from $2.35 billion in 1993 to $5.09 billion in 2004
(116 percent), or from $3.28 billion to $5.09 billion (55 percent)
after adjusting for inflation. OMB reports show that, during this
period, funding increased for technology and science. CCSP, which
reports only science funding, generally presented totals that were
consistent with OMB's, but provided more detail. However, changes
in reporting methods used by both OMB and CCSP limit the
comparability of funding data over time, and therefore it was
unclear whether total funding actually increased as much as
reported. Furthermore, we were unable to compare changes in the
fourth category-climate-related tax expenditures-because OMB
reported estimates for proposed but not existing tax expenditures
from 1993 to 2004. Specifically, for 1993 through 2004:
o Technology funding, as reported by OMB, increased from $845
million to $2.87 billion (239 percent), or from $1.18 billion to
$2.87 billion (183 percent) in inflation-adjusted dollars. The
share of total climate change funding devoted to technology
increased from 36 percent to 56 percent. However, we identified
several ways that technology funding presented in OMB's more
recent reports may not be comparable to previously reported
technology funding. For example, OMB added accounts to the
technology category that were not reported before or were
presented in different categories, but it did not explain whether
these accounts reflected the creation of new programs, or a
decision to count existing programs for the first time. OMB also
expanded the definitions of some accounts to include more
activities without clarifying how the definitions were changed.
Furthermore, OMB reports include a wide range of federal
climate-related programs and activities, some of which-such as
scientific research on global environmental change-are explicitly
climate change programs, whereas others-such as technology
initiatives promoting emissions reduction or encouraging energy
conservation-are not solely for climate change purposes.
o Science funding increased from $1.31 billion to $1.98 billion
(51 percent), according to both OMB and CCSP, or from $1.82
billion to $1.98 billion (9 percent) in inflation-adjusted
dollars. However, its share of total climate change funding
decreased from 56 percent to 39 percent. OMB and CCSP generally
presented consistent climate change science funding totals from
1993 through 2004. CCSP reports also presented more detailed data,
but these data were difficult to compare over the entire period
because CCSP periodically introduced new categorization methods
without explaining how the new methods related to the ones they
replaced. Specifically, over the period CCSP used seven different
methods to present detailed science funding data, making it
impossible to develop consistent funding trends of the entire
timeframe.
o International assistance funding reported by OMB increased from
$201 million to $252 million (25 percent), but decreased from $280
million to $252 million (10 percent) in inflation-adjusted
dollars. Moreover, its share of total climate change funding
decreased from 9 percent to 5 percent. International assistance
funding reported by OMB was generally comparable over time,
although several new accounts were added without explanation.
o Tax expenditures were not fully reported by OMB for any year,
even though climate-related tax expenditures amounted to hundreds
of millions of dollars in revenue forgone by the federal
government in fiscal year 2004. Although not required to do so,
OMB reported proposed climate-related tax expenditures. However,
OMB did not report revenue loss estimates for existing climate
change-related tax expenditures. Whereas OMB reported no funding
for existing climate change-related tax expenditures in 2004, the
federal budget for that year listed four tax expenditures related
to climate change in that year, including estimated revenue losses
of $330 million for incentives to develop certain renewable energy
sources.
OMB and CCSP officials told us that time constraints and other
factors contributed to changes in report structure and content
over time. For example, OMB officials said that the short timeline
for completing the report required by the Congress (within 45 days
of submitting the upcoming fiscal year's budget for the three most
recent reports) limited OMB's ability to analyze data submitted by
agencies. They also noted that they were not directed to use the
same report format over time or explain differences in methodology
from one report to another. Regarding tax expenditures, OMB
officials said that they consistently included in the reports
those proposed tax expenditures where a key purpose was
specifically to reduce greenhouse gas emissions. They also stated
that they had not included existing tax expenditures that may have
greenhouse gas benefits but were enacted for other purposes, and
that the Congress had not provided any guidance to suggest that
additional tax expenditure data should be included in the annual
reports. However, in response to a recommendation we made in our
2005 report, OMB in its fiscal year 2007 report to the Congress
included existing tax expenditures that could contribute to
reducing greenhouse gases. Because of these and other limitations,
determining actual changes in federal climate change funding is
difficult.
OMB reported that 12 of the 14 agencies receiving funding for
climate change programs in 2004 received more funding in that year
than they had in 1993, but it is unclear whether funding changed
as much as OMB reported because unexplained changes in what was
defined as climate change funding. Reported funding for the
Department of Energy (DOE), the agency with the most reported
climate-related funding in 2004, increased from $963 million to
$2.52 billion (162 percent), or from $1.34 billion to $2.52
billion (88 percent) after adjusting for inflation. DOE and the
National Aeronautics and Space Administration (NASA) accounted for
81 percent of the reported increase in funding from 1993 through
2004. However, because agency funding totals are composed of
individual accounts, the changes in the reports' contents
discussed earlier, such as the unexplained addition of accounts to
the technology category, limit the comparability of agencies'
funding data over time, making it difficult to determine if these
are real or definitional increases.
We found that OMB reports presented information on budget
authority, not-as required by the Congress-on expenditures. The
Congress has required that information be provided on expenditures
and obligations, the amounts actually spent or committed to be
spent, while OMB reports generally have presented information on a
different measure, budget authority, or the amount of funding
provided by the Congress. OMB officials told us that they adopted
their approach because the relevant congressional committees
generally use budget authority. They told us that they reported on
this basis because these committees have not objected to OMB's
approach.
We recommended that OMB and CCSP, from year-to-year, use the same
format for presenting data, explain changes in report content or
format when they are introduced, and provide and maintain a
crosswalk comparing new and old report structures when changes in
report format are introduced. We also recommended that OMB include
data on existing climate-related tax expenditures in future
reports. Finally, we recommended that OMB request that the
Congress clarify whether future reports should be presented in
terms of expenditures and obligations or in terms of budget
authority, and if the Congress prefers the former, OMB should
request the necessary time to prepare reports on that basis.
We received oral comments from OMB on August 1, 2005, and written
comments from CCSP in a letter dated July 28, 2005. OMB agreed
with the recommendations relating to report content and format and
said it was studying the other recommendations. CCSP agreed with
all of our recommendations.
After our report was issued in August 2005, OMB released its
fiscal year 2007 report to Congress on climate change
expenditures. Several of our recommendations were implemented in
that report. For example, OMB included data on existing
climate-related expenditures. OMB also labeled its tables for the
major types of funding with respect to fiscal year and budgetary
metric (actual budget authority, enacted budget authority,
obligations, outlays, and proposed budget authority). CCSP has
implemented our recommendation about explaining changes in report
content or format.
Background
In 1990, the Congress enacted the Global Change Research Act. 5
This act, among other things, required the administration to (1)
prepare and at least every 3 years revise and submit to the
Congress a national global change research plan, including an
estimate of federal funding for global change research activities
to be conducted under the plan; (2) in each annual budget
submission to the Congress, identify the items in each agency's
budget that are elements of the United States Global Change
Research Program (USGCRP), an interagency long-term climate change
science research program; and (3) report annually on climate
change "expenditures required" for the USGCRP.6 In 1992, the
United States signed and ratified the United Nations Framework
Convention on Climate Change, which was intended to stabilize the
buildup of greenhouse gases in the earth's atmosphere, but did not
impose binding limits on emissions.
In response to the requirements of the 1990 act, the
administration reported annually from 1990 through 2004 on funding
for climate change science in reports titled Our Changing Planet.7
From 1990 through 2001, the reports presented detailed science
funding data for the USGCRP. Federal climate change science
programs were reorganized in 2001 and 2002. In 2001, the Climate
Change Research Initiative (CCRI) was created to coordinate
short-term climate change research focused on reducing
uncertainty, and in 2002, CCSP was created to coordinate and
integrate USGCRP and CCRI activities. CCSP is a collaborative
interagency program designed to improve the government wide
management of climate science and research. Since 2002, CCSP has
been responsible for meeting the reporting requirement and has
published the Our Changing Planet reports. The most recent report
in this series was published in November 2005.
The Climate Change Technology Program (CCTP) is a multiagency
technology research and development coordinating structure similar
to CCSP. Its overall goal is to attain, on a global scale and in
partnership with other entities, a technological capability that
can provide abundant, clean, secure, and affordable energy and
related services needed to encourage and sustain economic growth,
while achieving substantial reductions in emissions of greenhouse
gases and mitigating the risks of potential climate change.
In March 1998, OMB, in response to a congressional requirement for
a detailed account of climate change expenditures and obligations,
issued a brief report summarizing federal agency programs related
to global climate change. OMB produced another climate change
expenditures report in March 1999 and, in response to a request at
a 1999 hearing, OMB provided climate change funding data for 1993
through 1998 for the hearing record. Each year since 1999, the
Congress has included a provision in annual appropriations laws
requiring OMB to report in detail all federal agency obligations
and expenditures, domestic and international, for climate change
programs and activities. As a result of these reporting
requirements, OMB annually publishes the Federal Climate Change
Expenditures Report to Congress, which presents federal climate
change funding for the technology, science, and international
assistance categories, and tax expenditures. The climate change
activities and associated costs presented in OMB reports must be
identified by line item as presented in the President's budget
appendix. OMB has interpreted this to mean that the data in the
reports must be shown by budget account. For the last 3 years for
which we reviewed data, the Congress had required that the
administration produce reports for climate change expenditures and
obligations for the current fiscal year within 45 days after the
submission of the President's budget request for the upcoming
fiscal year. OMB's most recent report was released in April 2006.
OMB reports include a wide range of federal climate-related
programs and activities. Some activities, like scientific research
on global environmental change by USGCRP, are explicitly climate
change programs, whereas others, such as many technology
initiatives, are not solely for climate change purposes. For
example, OMB reports included some programs that were started
after the United States ratified the Framework Convention in 1992
and were specifically designed to encourage businesses and others
to reduce their greenhouse gas emissions, for example, by
installing more efficient lighting. OMB reports also included
programs that were expanded or initiated in the wake of the 1973
oil embargo to support such activities as energy conservation (to
use energy more efficiently), renewable energy (to substitute for
fossil fuels), and fossil energy (to make more efficient use of
fossil fuels), all of which can help to reduce greenhouse gas
emissions, but were not initially developed as climate change
programs.
Reported Federal Climate Change Funding Increased for Three of the
Four Funding Categories, but Data May Not Be Comparable Over Time
Federal climate change funding, as reported by OMB, increased from
$2.35 billion in 1993 to $5.09 billion in 2004 (116 percent), or
from $3.28 billion to $5.09 billion (55 percent) after adjusting
for inflation. Funding also increased for technology, science, and
international assistance between 1993 and 2004, as shown in table
1. However, changes in reporting methods have limited the
comparability of funding data over time; therefore it is unclear
whether funding increased as much as reported by OMB.8 OMB did not
report estimates for existing climate-related tax expenditures
during this period, although climate-related tax expenditures
amounted to hundreds of millions of dollars in revenue forgone by
the federal government in fiscal year 2004. OMB officials told us
that changes in reporting methods were due to such reasons as the
short amount of time available to prepare the report, the fact
that the reporting requirement is not permanent law, but appears
each year in their appropriations legislation, and changes in
administration policy and priorities. As a result of our
recommendations, however, OMB made changes in its report on
climate change funding for fiscal year 2007, which was published
in April 2006. For example, OMB more clearly labeled data
throughout the report and added information on existing tax
provisions that can contribute to reducing greenhouse gas
emissions.
Table 1: Reported Federal Climate Change Funding by Category,
Selected Years
Discretionary budget authority in millions of dollars
Category 1993 1997 2001 2004
Technology $845 $1,056 $1,675 $2,868
Science 1,306 1,656 1,728 1,976
International assistance 201 164 218 252
Tax expenditures a a a a
Total $2,352 $2,876 $3,603 $5,090
Source: GAO analysis of OMB data.
aOMB did not report revenue loss estimates for existing
climate-related tax expenditures for this year.
Technology
From 1993 through 2004, technology funding increased as a share of
total federal climate funding from 36 percent to 56 percent, as
reported by OMB. Over this period, technology funding increased
from $845 million to $2.87 billion (239 percent), or adjusted for
inflation, from $1.18 billion to $2.87 billion (143 percent). For
example, funding for energy conservation increased from $346
million to $868 million, and funding for renewable energy
increased from $249 million to $352 million. Table 2 presents
funding data for selected years for the seven largest accounts,
which accounted for 92 percent of technology funding in 2004.
Table 2: Reported Technology Funding for Selected Accounts and
Years
Discretionary budget authority in millions of dollars
Agency Account 1993 1997 2001 2004
Department of Energy Energy Conservation $346 $414 $810 $868
Energy Supply - Fossil
Energy Research and
Development (R&D) 250 201 292 455
Energy Supply -Renewable
Energy 249 244 370 352
Science (Fusion,
Sequestration, and
Hydrogen)a b b 35 333
Energy Supply - Nuclear c b b 39 309
National Aeronautics Exploration, Science, and
and Space Aeronautics
Administration b b b 227
Environmental Environmental Programs and
Protection Agency Management b 70 96 89
Other b 127 33 235
Total $845 $1,056 $1,675 $2,868
Source: GAO analysis of OMB data.
aSequestration can be defined as the capture and isolation of
gases that otherwise could contribute to global climate change.
bOMB did not report a value in the technology category for this
account for this year.
cFor 2001 Energy Supply - Nuclear funding, we counted the Nuclear
Energy Research Initiative and Energy Supply - Nuclear budget
accounts as presented by OMB. OMB did not separately present these
accounts for 2004, and included funding for the Nuclear Energy
Research Initiative within the Energy Supply-Nuclear account.
We identified three ways that the data on technology funding
presented in three of OMB's recent reports may not be comparable
to the data presented in previous reports. First, OMB added
accounts that were not previously presented. For example, OMB
reported that NASA had $152 million in funding for
technology-related activities, which included research to reduce
emissions associated with aircraft operations in 2003. OMB did not
report this account in the technology category in 2002. In
addition, OMB included and removed some accounts, without
explanation, from reports in years other than 2003. For example,
OMB reported combined funding of $195 million in 1999, and $200
million in 2000, for bio-based products and bio-energy at the
Departments of Energy and of Agriculture. No funding for these
accounts was reported from 1993 through 1998 or from 2001 through
2004. In each of these cases, OMB did not explain whether the new
accounts reflected the creation of new programs, a decision to
count an existing program for the first time, or a decision to
re-classify funding from different categories as technology
funding.
According to OMB officials, these changes in report structure and
content for technology funding, as well as similar changes in
science and international assistance funding, were the result of
time constraints and other factors. They told us that the short
timeline required by the Congress for completing the report
(within 45 days of submitting the upcoming year's budget) limited
OMB's ability to analyze data submitted by agencies. They said
that they must rely on funding estimates quickly developed by
agencies in order to produce the report within the specified
timeframe, and that the reports are often compilations of agency
activities and programs, some of which may or may not have been
presented separately in prior years. Moreover, these officials
told us that the presentation of data has changed over time for a
variety of reasons other than short time limits, including changes
in administration priorities and policy, changes in congressional
direction, changes to budget and account structures, and attempts
to more accurately reflect the reporting requirement as specified
in the annual appropriations language. The officials also stated
that in each report they ensured consistency for the 3 years
covered (prior year, current year, and budget year).
Furthermore, OMB officials told us that the presentation of new
accounts in the technology category, as well as the international
assistance category, was due to the establishment of new programs
and the inclusion of existing programs. They told us that the
account-by-account display in the reports has been changed over
time as the CCSP and the Climate Change Technology Program (CCTP),
a multiagency technology research and development coordinating
structure similar to the CCSP, have become better defined.
Second, OMB reported that it expanded the definitions of some
accounts to include more activities but did not specify how the
definitions were changed. We found that over 50 percent of the
increase in technology funding from 2002 to 2003 was due to
increases in two existing DOE accounts: nuclear energy supply and
science (fusion, sequestration, and hydrogen). OMB reported
funding of $32 million in 2002 and $257 million in 2003, for the
nuclear energy supply account9 and reported funding of $35 million
in 2002, and $298 million in 2003, for the science (fusion,
sequestration, and hydrogen) account. Although OMB stated in its
May 2004 report that 2003 funding data included more activities
within certain accounts, including the research and development of
nuclear and fusion energy, the report was unclear about whether
the funding increases for these two existing accounts were due to
the addition of more programs to the accounts or increased funding
for existing programs already counted in the accounts. Finally, if
new programs were counted in these accounts, OMB did not specify
what programs were added and why.
OMB officials told us that the definitions of some accounts were
changed to include more nuclear programs because, while the prior
administration did not consider nuclear programs to be part of its
activities relating to climate change, the current administration
does consider them to be a key part of the CCTP.
Third, OMB did not maintain the distinction that it had made in
previous reports between funding for programs whose primary focus
is climate change and programs where climate change is not the
primary focus. As a result, certain accounts in the technology
category were consolidated into larger accounts. From 1993 through
2001, OMB presented funding data as directly or indirectly related
to climate change. The former programs are those for which climate
change is a primary purpose, such as renewable energy research and
development. The latter are programs that have another primary
purpose, but which also support climate change goals. For example,
grants to help low-income people weatherize their dwellings are
intended primarily to reduce heating costs, but may also help
reduce the consumption of fossil fuels. OMB did not maintain the
distinction between the two kinds of programs for 2002, 2003, and
2004 funding data. For example, OMB presented energy conservation
funding of $810 million in 2001, including $619 million in direct
research and development funding, and $191 million in indirect
funding for weatherization and state energy grants. In contrast,
2002 funding data presented by OMB reflected energy conservation
funding of $897 million, including $622 million in research and
development, $230 million for weatherization, and $45 million for
state energy grants, but did not distinguish between direct and
indirect funding. OMB presented energy conservation funding of
$880 million in 2003 and $868 million in 2004 as single accounts
without any additional detail.
OMB officials stated that they had adopted a different approach to
reporting climate change funding to reflect the new program
structures as the CCSP and CCTP were being established. They
stated that the result was, in some cases, an aggregation of
activities that may have previously been reported on separate
accounts. According to the officials, the 2003 and 2004 data more
accurately reflect the range of climate change-related programs as
they are now organized. OMB included a crosswalk in its May 2004
report that showed 2003 funding levels as they would have been
presented using the methodology of previous reports. While the
crosswalk identified funding for accounts that were presented in
previous reports, it did not identify new funding reported by OMB
or specify whether such funding was the result of counting new
programs, a decision to start counting existing programs as
climate change-related, or shifts between categories. OMB
officials told us that the reporting methodology has changed since
the initial reports and that it may be difficult to resolve the
differences because of changes in budget and account structure.
Finally, they noted that each report has been prepared in response
to a one-time requirement and that there has been no requirement
for a consistent reporting format from one year to the next or for
explaining differences in methodology from one report to another.
However, in its fiscal year 2007 report to the Congress, OMB
responded to our recommendations by labeling the data more clearly
and reporting changes were footnoted.
Science
According to both OMB and CCSP, the share of total climate change
funding devoted to science decreased from 56 percent in 1993 to 39
percent in 2004, even though science funding increased from $1.31
billion to $1.98 billion (51 percent), or from $1.82 billion to
$1.98 billion (9 percent) after adjusting for inflation. For
example, according to OMB, funding for NASA on activities such as
the satellite measurement of atmospheric ozone concentrations
increased from $888 million to $1.26 billion.10
OMB reported new science funding for 2003 and 2004 to reflect the
creation of CCRI. Funding for CCRI increased from $41 million in
2003, the first year funding for CCRI was presented, to $173
million in 2004, and included funding by most of the agencies
presented in table 3. We present funding for CCRI as a separate
program to illustrate the new organization's role in increasing
reported climate change funding. Table 3 presents funding as
reported by OMB for the eight largest agencies and programs in the
science category, which accounted for 99 percent of the science
total for 2004.
Table 3: Reported Science Funding by Agency or Program for
Selected Years
Discretionary budget authority in millions of dollars
Agency or program Account 1993 1997 2001 2004
NASAa Science, Aeronautics,
and Technology $888 $1,218 $1,176 $1,256
National Science Research and Related
Foundation Activities 124 166 181 185
CCRI Various accounts for
eight agencies b b b 173
DOE Science (Biological
and Environmental
Research) 118 109 116 102
Department of Commerce - Operations, Research,
National Oceanic and and Facilities
Atmospheric
Administration 66 60 93 82
Department of Agriculture Research
Agriculture Service and four
other accounts 55 57 51 64
Department of Health and National Institutes
Human Services of Health (NIH) b b 54 62
Department of Interior - Surveys and Research
U.S. Geological Survey 22 26 27 28
Other 33 20 30 24
Total $1,306 $1,656 $1,728 $1,976
Source: GAO analysis of OMB data.
Note: OMB generally presented climate science funding with one
account per agency.
aBeginning in 2004, NASA funding reflects full-cost accounting,
meaning institutional activities such as personnel and facilities
(which had been held in separate accounts) are included. NASA's
climate change funding varies based on changes in its budget for
space-observing platforms, the natural development cycle of its
satellites, and revisions to mission profiles.
bOMB did not report a value in the science category for this
agency or program for this year.
Science funding data from 1993 through 2004, as reported by OMB
and CCSP, were generally comparable, although there were more
discrepancies in earlier years than in later years.11 Science
funding totals reported by CCSP from 1993 through 1997 were within
3 percent of the OMB totals for all years except 1996 and 1997.
Science funding totals reported by CCSP in 1996 and 1997 were $156
million (9 percent) and $162 million (10 percent) higher than
those reported by OMB. Over 90 percent of the difference for those
years occurred because CCSP reported greater funding for NASA than
OMB reported. CCSP stated in its fiscal year 1998 report that it
increased its 1996 and 1997 budget figures to reflect the
reclassification of certain programs and activities in some
agencies that were not previously included in the science funding
total.
Total science funding reported by OMB and CCSP from 1998 through
2004 was identical for 4 of the 7 years. The largest difference
for the 3 years that were not identical was $8 million in 2001,
which represented less than 1 percent of the science funding total
reported by OMB for that year. The other differences in total
science funding were $3 million in 2002, and $1 million in 1999,
and each represented less than 1 percent of the OMB science total
for those years.
Science funding by agency, as presented by OMB and CCSP from 1993
through 1997, differed in many cases, with the exception of
funding for the National Science Foundation (NSF), which was
nearly identical over that time period. For example, CCSP reported
$143 million more funding for NASA in 1996 than OMB reported, and
OMB reported $24.9 million more funding for DOE in 1994 than CCSP
reported. The greatest dollar difference related to NASA's funding
in 1997. Whereas OMB reported funding of $1.22 billion, CCSP
reported funding of $1.37 billion-$151 million, or 12 percent more
than the OMB amount. The greatest percentage difference related to
the Department of the Interior's funding in 1993. Whereas OMB
reported funding of $22 million, CCSP reported funding of $37.7
million-$15.7 million, or 71 percent more than reported by OMB.
Further, from 1993 through 1997, OMB did not report science
funding by some agencies that were reported by CCSP. For example,
CCSP reported that DOD's funding ranged from $5.7 million to $6.6
million from 1993 through 1995, and that the Tennessee Valley
Authority received funding of $1 million or less per year from
1993 through 1997, but OMB did not report any such funding.
OMB officials told us that data used for the 1993 to 1997 science
funding comparison with CCSP were collected too long ago to be
able to identify the differences. However, they stated that the
data from early years were produced in a very short period for use
in testimony or questions for the record. According to OMB, this
quick turnaround did not allow time for a thorough consistency
check with other data sources.
From 1998 through 2004, OMB and CCSP data on funding by agency
were nearly identical. Both OMB and CCSP reported science funding
for nine agencies over the entire 7-year period, for a total of 63
agency funding amounts. Of these, 52, or 83 percent, matched
exactly. Of the 11 differences, there was one difference of $8
million, one of $2 million, and nine of $1 million or less. The
greatest difference from 1998 through 2004 was $8 million in
funding for the Department of Commerce in 2001, which was 9
percent of the Department of Commerce total, or less than 1
percent of total science funding as reported by OMB for that year.
The director of CCSP told us that changes to reports, such as the
creation and deletion of different categorization methods, were
made because CCSP is changing towards a goals-oriented budget, and
that categorization methods changed as the program evolved. The
director also said that future reports will explicitly present
budget data as they were reported in prior reports to retain
continuity, even if new methods are introduced. Another CCSP
official told us that CCSP now works with OMB to ensure that
consistent funding information is presented in Our Changing Planet
reports and OMB reports, and that, beginning with the fiscal year
2006 report (which was published in late 2005), CCSP would attempt
to explain when and why changes are made to reporting methods. In
its 2006 fiscal year report, CCSP did explain changes to its
reporting.
International Assistance
From 1993 through 2004, international assistance funding decreased
from 9 percent to 5 percent of total federal funding on climate
change, as reported by OMB. Over the same time period,
international assistance funding increased from $201 million to
$252 million (an increase of 25 percent), but after adjusting for
inflation, decreased from $280 million to $252 million (a decrease
of 10 percent). For example, reported funding for the Department
of the Treasury to help developing countries invest in energy
efficiency, renewable energy, and the development of clean energy
technologies, such as fuel cells, increased from zero in 1993 to
$32 million in 2004. Table 4 presents funding as reported by OMB
for the three largest accounts in the international assistance
category.
Table 4: Reported International Assistance Funding for Selected
Accounts and Years
Discretionary budget authority in millions of dollars
Agency Account 1993 1997 2001 2004
U.S. Agency for Development Assistance
International Development
(USAID) $200 $147 $112 $125
Assistance for the
Independent States of the
Former Soviet Union b b 31 47
Department of the Treasury Global Environment
Facilitya b 14 41 32
Other 1 3 34 48
Total $201 $164 $218 $252
Source: GAO analysis of OMB data.
aOMB did not include the Department of the Treasury's funding for
the Global Environment Facility (GEF) in the international
assistance category from 1994 through 2001. OMB presented GEF
funding in the international assistance category from 2002 through
2004. To maintain consistency, we included GEF funding in the
international assistance category from 1994 through 2004 for the
purposes of this testimony.
bOMB did not report a value in the international assistance
category for this account for this year.
International assistance funding reported by OMB was generally
comparable over time, although some new accounts were added
without explanation. In its reports, OMB did not provide an
explanation of whether such new accounts reflected the creation of
new programs or a decision to count existing programs as climate
change-related for the first time. OMB officials told us that the
presentation of new accounts in the international assistance
category was due to the establishment of new programs and the
inclusion of existing programs. They told us that the
account-by-account display in the reports has been changed over
time as climate change programs have become better defined.
Tax Expenditures
Although not required to provide information on tax expenditures
related to climate change, OMB reported certain information
related to climate-related tax expenditures for each year.
Specifically, it listed proposed climate-related tax expenditures
appearing in the President's budget, but it did not report revenue
loss estimates for existing climate-related tax expenditures from
1993 through 2004. Based on the Department of the Treasury's tax
expenditure list published in the 2006 budget,12 we identified
four existing tax expenditures that have purposes similar to
programs reported by OMB in its climate change reports. In 2004,
estimated revenue losses amounted to hundreds of millions of
dollars for the following tax expenditures:13
o $330 million in revenue losses was estimated for new technology
tax credits to reduce the cost of generating electricity from
renewable resources. A credit of 10 percent was available for
investment in solar and geothermal energy facilities. In addition,
a credit of 1.5 cents was available per kilowatt hour of
electricity produced from renewable resources such as biomass,
poultry waste, and wind facilities.
o $100 million in revenue losses was estimated for excluded
interest on energy facility bonds to reduce the cost of investing
in certain hydroelectric and solid waste disposal facilities. The
interest earned on state and local bonds used to finance the
construction of certain hydroelectric generating facilities was
tax exempt. Some solid waste disposal facilities that produced
electricity also qualified for this exemption.
o $100 million in revenue losses was estimated for excluded
income from conservation subsidies provided by public utilities to
reduce the cost of purchasing energy-efficient technologies.
Residential utility customers could exclude from their taxable
income energy conservation subsidies provided by public utilities.
Customers could exclude subsidies used for installing or modifying
certain equipment that reduced energy consumption or improved the
management of energy demand.
o $70 million in revenue losses was estimated for tax incentives
for the purchase of clean fueled vehicles to reduce automobile
emissions. A tax credit of 10 percent, not to exceed $4,000, was
available to purchasers of electric vehicles. Purchasers of
vehicles powered by compressed natural gas, hydrogen, alcohol, and
other clean fuels could deduct up to $50,000 of the vehicle
purchase costs from their taxable income, depending upon the
weight and cost of the vehicle. Similarly, owners of refueling
properties could deduct up to $100,000 for the purchase of
re-fueling equipment for clean fueled vehicles.
OMB officials said that they consistently reported proposed tax
expenditures where a key purpose was specifically to reduce
greenhouse gas emissions. They also stated that they did not
include existing tax expenditures that may have greenhouse gas
benefits but were enacted for other purposes, and that the
Congress had provided no guidance to suggest additional tax
expenditure data should be included in the annual reports.
OMB's decision criteria for determining which tax expenditures to
include differed in two key respects from its criteria for
determining which accounts to include. First, OMB presented
funding for existing as well as proposed accounts, but presented
information only on proposed, but not existing, tax expenditures.
Second, OMB presented funding for programs where a key purpose was
specifically to reduce greenhouse gas emissions, as well as for
programs that may have greenhouse gas benefits but were enacted
for other purposes. However, OMB presented information only on
proposed tax expenditures where a key purpose was specifically to
reduce greenhouse gas emissions. In response to GAO's
recommendation to report existing climate-related tax
expenditures, OMB's fiscal year 2007 report to the Congress
includes existing tax expenditures that contribute to reducing
global warming.
Reported Funding for Most Agencies Increased, but Unexplained
Changes in Report Content Limit the Comparability of Data Over Time
OMB reported that 12 of the 14 agencies that received funding for
climate change programs in 2004 received more funding in that year
than they had in 1993. However, it is unclear whether funding
changed as much as reported by OMB because unexplained
modifications in the reports' contents limit the comparability of
agencies' funding data. From 1993 through 2004, climate change
funding for DOE increased more than any other agency, from $963
million to $2.52 billion, for an increase of $1.56 billion (162
percent). Adjusted for inflation, such funding increased from
$1.34 billion to $2.52 billion, for an increase of $1.18 billion
(88 percent). The second largest increase in agency funding was
for NASA, which received a $660 million (74 percent) increase in
funding over the same time period. NASA's funding increased $310
million (25 percent) over this period after adjusting for
inflation. The funding increases for these two agencies accounted
for 81 percent of the reported total increase in federal climate
change funding from 1993 through 2004. Conversely, USAID
experienced the largest decrease in funding-from $200 million in
1993 to $195 million in 2004 (3 percent), or, in
inflation-adjusted terms, from $279 million to $195 million (30
percent). Table 5 shows OMB's reports on climate change funding by
agency for selected years.
Table 5: Reported Climate Change Funding by Agency, Selected Years
Discretionary budget authority in millions of dollars
Agency 1993 1997 2001 2004
DOE $963 $968 $1,665 $2,519
NASA 888 1,218 1,176 1,548
NSF 124 222 181 226
USAID 200 147 157 195
Department of Commerce 66 102 93 144
EPA 26 99 146 127
Department of Agriculture 55 57 54 115
Other 30 63 131 216
Total $2,352 $2,876 $3,603 $5,090
Source: GAO analysis of OMB data.
Unexplained changes in the content of OMB reports make it
difficult to determine whether funding changed as much as was
reported by OMB. Because agency funding totals are composed of
individual accounts, the changes in the reports' contents
discussed earlier, such as the unexplained addition of accounts to
the technology category, limit the comparability of agencies'
funding data over time. For example, OMB reported Army, Navy, Air
Force, and Defense-wide funding totaling $83 million in 2003, and
$51 million in 2004, in accounts titled Research, Development,
Test, and Evaluation, but did not report these accounts for prior
years. OMB did not explain whether these accounts reflected the
creation of new programs or a decision to count existing programs
for the first time.
OMB officials told us that agencies can be included in reports for
the first time when new initiatives or programs are started, such
as the CCTP. In some cases, those initiatives or programs are made
up of entirely new funding but in other cases they may be
additions on top of a small amount of base funding. These
officials told us that agencies sometimes include data that were
not previously reported when they requested funding for those
initiatives, but they assured us that the data are reported
consistently for the 3 years presented in each report.
OMB Reports Presented Information on Budget Authority Rather Than�
as Required by the Congress�on Expenditures and Obligations
The federal budget process is complex, and there are numerous
steps that culminate in the outlay of federal funds. Among the key
steps in this process are the following, as defined by OMB:
o Budget authority means the authority provided in law to incur
financial obligations that will result in outlays.
o Obligations are binding agreements that will result in outlays,
immediately or in the future.
o Expenditures are payments to liquidate an obligation. The
Congress, in the Congressional Budget and Impoundment Control Act
of 1974, as amended, has defined outlays as being the expenditures
and net lending of funds under budget authority.
In simplified terms, budget authority precedes obligations, which
precede outlays in the process of spending federal funds.
As noted above, since 1999, the Congress has required the
President to submit a report each year to the Senate and House
Committees on Appropriations describing in detail all federal
agency obligations and expenditures, domestic and international,
for climate change programs and activities. In response, OMB had
annually published the Federal Climate Change Expenditures Report
to Congress which presented budget authority information in
summary data tables instead of obligations and expenditures, as
the title of the report and the table titles suggested. The only
indication that the table presented budget authority information,
rather than expenditures, was a parenthetical statement to that
effect in a significantly smaller font.
OMB officials told us that the term "expenditures" was used in the
report title and text because that was the term used most often in
the legislative language. They also said that the reports
presented data in terms of budget authority because OMB hads
always interpreted the bill and report language to request the
budget authority levels for each activity in a particular year.
They stated further that, from a technical budget standpoint,
expenditures are usually synonymous with outlays, and that one way
to think of budget authority is that it is the level of
expenditures (over a period of 1 or more years) that is made
available in a particular appropriations bill. OMB viewed this as
an appropriate interpretation of the congressional requirements
since the committees on appropriations work with budget authority
and not outlays. Moreover, OMB told us that these committees had
never objected to its interpretation of "obligations and
expenditures" as budget authority and that OMB had always
identified the data provided in the table as budget authority.
In our August 2005 report, we expressed several concerns with
OMB's approach. First, OMB's approach of reporting budget
authority did not comply with the language of the annual legal
requirements to report on climate change "obligations and
expenditures." Second, in reviewing the legislative history of
these reporting requirements, we found no support for OMB's
interpretation that when the Congress called for "obligations and
expenditures" information, it actually meant "budget authority"
information. Third, OMB's interpretation was not consistent with
its own Circular A-11, which defines budget authority as stated
above, not actual obligations and expenditures. Nonetheless, we
recognize that it is not possible for OMB to meet the most recent
reporting requirements because it must provide a report on climate
change obligations and expenditures for the current fiscal year
within 45 days of submitting the President's budget for the
following fiscal year (which must be submitted the first Monday of
February). For example, the President submitted the fiscal year
2006 budget on February 7, 2005, so OMB's report on fiscal year
2005 climate change expenditures and obligations had to be
submitted in March 2005-approximately halfway through the 2005
fiscal year. However, complete expenditures data are available
only after the end of each fiscal year. Thus, OMB could not meet
both the timing requirement and report all actual expenditures and
obligations in fiscal year 2005.
CCSP has also reported budget authority data in its Our Changing
Planet reports. As noted above, CCSP, or its predecessor
organization, initially was required to report annually on certain
climate change "amounts spent," "amounts expected to be spent,"
and "amounts requested," but this reporting requirement was
terminated in 2000. Currently, CCSP is responsible for reporting
information relating to the federal budget and federal funding for
climate change science, not climate change expenditure
information. Since 2000, CCSP has fulfilled these reporting
requirements by providing budget authority information in its Our
Changing Planet reports.
Conclusions
In conclusion, we found that the lack of clarity in OMB's and
CCSP's reports made it difficult to comprehensively understand the
federal government's climate change expenditures. A better
understanding of these expenditures is needed before it is
possible to assess CCSP's and other federal agencies' progress
towards their climate change goals. We therefore made seven
recommendations to OMB and three to CCSP to clarify how they
present climate change funding information. OMB agreed with most
of our recommendations and has also implemented several of them.
CCSP agreed with all of our recommendations and has implemented
our recommendation about explaining changes in report content or
format.
Mr. Chairman, this concludes my prepared statement. I would be
pleased to respond to any question you or other Members of the
Committee may have.
Contact and Staff Acknowledgments
For further information regarding this testimony, please contact
me at (202) 512-3841. John Healey, Anne K. Johnson, and Vincent P.
Price made key contributions to this testimony. Richard Johnson,
Carol Kolarik, Carol Herrnstadt Shulman, and Anne Stevens also
made important contributions.
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1The revenue losses resulting from provisions of federal tax laws may, in
effect, be viewed as expenditures channeled through the tax system. The
Congressional Budget and Impoundment Control Act of 1974, as amended,
requires that the budget include the level of tax expenditures under
existing law. Like the annual lists of tax expenditures prepared by the
Department of the Treasury, this testimony considers only tax expenditures
related to individual and corporate income taxes and does not address
excise taxes.
2U.S. Government Accountability Office, Climate Change: Federal Reports on
Climate Change Funding Should be Clearer and More Complete. GAO-05-461
(Washington, D.C.: Aug. 25, 2005).
3An OMB official stated that there is no mandatory budget authority for
climate change programs.
4When we adjusted for inflation, we used a fiscal year price index that we
calculated based on a calendar year price index published by the
Department of Commerce's Bureau of Economic Analysis. Unless otherwise
specified, figures represent actual funding (not estimates), with the
exception of 1993, 1994, and 2004, where we present estimated funding
reported by CCSP because actual data are not available. For the purposes
of this testimony, the term "agency" includes executive departments and
agencies, and we use the term "account" to describe the budget accounts,
line items, programs, and activities presented in OMB and CCSP reports.
Throughout this testimony, we characterize all climate change science
reports from 1993 through 2004 as CCSP reports, even though CCSP has been
in existence only since 2002, and reports prior to 2002 were published by
a predecessor organization. Totals and percentages may not add due to
rounding.
5Pub. L. No. 101-606, 104 Stat. 3096 (1990) (partially terminated pursuant
to the Federal Reports Elimination and Sunset Act of 1995, Pub. L. No.
104-66, S: 3003 (1995)).
6The annual reporting requirement for climate change expenditures was
terminated effective May 15, 2000. The reporting requirement had called
for "(A) the amounts spent during the fiscal year most recently ended; (B)
the amounts expected to be spent during the current fiscal year; and (C)
the amounts requested for the fiscal year for which the budget is being
submitted."
7To maintain consistency with OMB data, which are available from 1993 to
2004, we reviewed reported science funding from 1993 to 2004.
8Technology funding increased as a share of total funding over time, while
science and international assistance funding declined as shares of the
total because technology funding increased at a faster rate than the other
categories.
9We counted the Nuclear Energy Research Initiative (NERI) account as
Nuclear Energy Supply funding for 2002. The NERI line item is counted in
the aggregate Energy Supply - Nuclear budget account in OMB's 2004 and
2005 reports, and is no longer presented separately.
10The $1.26 billion includes NASA's reported funding for the United States
Global Change Research Program. NASA funding for CCRI is reported
separately.
11CCSP's most recent report (July 2004) presents estimated 2004 funding,
whereas OMB's most recent report (March 2005) presents actual 2004
funding. Whenever we compare 2004 science funding as reported by OMB and
CCSP, we are comparing estimated 2004 funding presented in OMB's May 2004
report and CCSP's July 2004 report.
12The Department of the Treasury reported 2004 tax expenditures in the
Budget of the U.S. Government, Fiscal Year 2006 edition, Analytical
Perspectives volume, chapter 19.
13The Department of the Treasury calculated each tax expenditure estimate
assuming other parts of the tax code remained unchanged. Because tax
provisions can be interdependent, we do not report the mathematical sum of
the revenue losses estimated for the four climate-related tax
expenditures, and instead present this general gauge of the magnitude of
revenue forgone for climate-related tax expenditures.
(360764)
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Highlights of GAO-06-1122T , testimony before the Committee on Government
Reform, House of Representatives
September 2006
CLIMATE CHANGE
Greater Clarity and Consistency Are Needed in Reporting Federal Climate
Change Funding
The Congress has required annual reports on federal climate change
spending. The Office of Management and Budget (OMB) reports funding for:
technology (to reduce greenhouse gas emissions), science (to better
understand the climate), international assistance (to help developing
countries), and tax expenditures (to encourage emissions reduction). The
Climate Change Science Program (CCSP), which coordinates many agencies'
activities, also reports on science funding.
This testimony is based on GAO's August 2005 report Climate Change:
Federal Reports on Climate Change Should Be Clearer and More Complete
(GAO-05-461). GAO examined federal climate change funding for 1993 through
2004, including (1) how total funding and funding by category changed and
whether funding data are comparable over time and (2) how funding by
individual agencies changed and whether funding data are comparable over
time.
What GAO Recommends
GAO recommended, among other things, that OMB include data on existing
climate-related tax expenditures. OMB agreed with most of GAO's
recommendations and has implemented several of them. CCSP agreed with all
of GAO's recommendations and has begun explaining changes in report format
or content when they are introduced.
According to OMB, from 1993 to 2004, federal funding for climate change
increased from $3.3 billion to $5.1 billion (55 percent) after adjusting
for inflation. During this period, reported inflation-adjusted funding
increased for technology and science, but decreased for international
assistance. However, it is unclear whether funding changed as much as
reported because changes in the format and content of OMB and CCSP reports
make it difficult to compare funding data over time. For example, over
time, OMB expanded the definitions of some accounts to include more
activities, but did not specify how it changed the definitions. OMB
officials stated that it is not required to follow a consistent reporting
format from year to year. Further, CCSP's science funding reports were
difficult to compare over time because CCSP introduced new methods for
categorizing funding without explaining how they related to previous
methods. The Director of CCSP said that its reports changed as the program
evolved. These and other limitations make it difficult to determine actual
changes in climate change funding.
Similarly, OMB reported that 12 of the 14 agencies that funded climate
change programs in 2004 increased such funding between 1993 and 2004, but
unexplained changes in the reports' contents limit the comparability of
data on funding by agency. For example, reported funding for the
Department of Energy (DOE), the agency with the most reported
climate-related funding in 2004, increased from $1.34 billion to $2.52
billion (88 percent) after adjusting for inflation. DOE and the National
Aeronautics and Space Administration accounted for 81 percent of the
reported increase in funding from 1993 through 2004. However, because
agency funding totals are composed of individual accounts, changes in the
reports' contents, such as the unexplained addition of accounts to the
technology category, make it difficult to compare agencies' funding data
over time and, therefore, to determine if this is a real or a definitional
increase. Furthermore, GAO found that OMB reported funding for certain
agencies in some years but not in others, without explanation. OMB told
GAO that it relied on agency budget offices to submit accurate data. These
data and reporting limitations make determining agencies' actual levels of
climate change funding difficult.
Reported Federal Climate Change Funding by Category, 1993-2004
*** End of document. ***