Global Warming: Information on the Results of Four of EPA's Voluntary
Climate Change Programs (Letter Report, 06/30/97, GAO/RCED-97-163).

Pursuant to a congressional request, GAO determined: (1) what the
Environmental Protection Agency (EPA) has done to ensure that the
greenhouse gas reductions it reports reflect only the results of its
efforts, as opposed to other factors; and (2) whether EPA's projected
reductions are consistent with experience to date.

GAO noted that: (1) for two of the four CCAP programs GAO reviewed, EPA
adjusted the reductions in greenhouse gas emissions it had reported to
account only for the effects of its efforts; for the other two programs,
it did not adjust the reported reductions; (2) specifically, for the
Coalbed Methane Outreach and Source Reduction and Recycling programs,
EPA determined that nonprogram factors accounted for some of the
reported reductions and, therefore, adjusted those reductions; (3) for
the Green Lights Program, EPA officials said that some reported
reductions were probably the result of nonprogram factors, but they did
not attempt to quantify the extent of the nonprogram factors because
they believe it is not possible to do so; (4) they said that any
reductions resulting from nonprogram factors would likely be
counterbalanced by reductions that they believe are attributable to the
program but were not reported to EPA because the organizations did not
participate in the program; (5) for the State and Local Outreach
program, EPA did not attempt to determine whether some of the reported
reductions resulted from nonprogram factors, although program officials
said they tried to eliminate double-counting where reductions might be
the result of other CCAP programs; (6) EPA officials said they limited
their efforts to quantify how much of the reported reductions resulted
only from the effects of EPA's programs because it is difficult to make
such an assessment, especially in the early stages of the programs'
development; (7) EPA's projections of future reductions in greenhouse
gases are not consistent with experience to date for three of the four
programs but are consistent for the fourth program; (8) for the Green
Lights and Source Reduction and Recycling programs, the projected
reductions are based on an assumption that the participants will,
respectively, upgrade a larger proportion of their space and reduce
waste at the source more in the future than they have thus far; (9) for
the State and Local Outreach Program, the projections assume that one
key project will increase its impact, even though there are questions
about the basis for the reductions reported thus far; and (10) for the
Coalbed Methane Outreach Program, the projected reductions are
consistent with experience to date.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-97-163
     TITLE:  Global Warming: Information on the Results of Four of EPA's 
             Voluntary Climate Change Programs
      DATE:  06/30/97
   SUBJECT:  Projections
             Environmental monitoring
             Energy efficiency
             Waste disposal
             Recycling
             Air pollution control
             Reporting requirements
IDENTIFIER:  EPA Climate Change Action Plan
             EPA Green Lights Program
             EPA Source Reduction and Recycling Technical Assistance 
             Program
             EPA Coalbed Methane Outreach Program
             EPA State and Local Outreach Program
             
******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved.  Major          **
** divisions and subdivisions of the text, such as Chapters,    **
** Sections, and Appendixes, are identified by double and       **
** single lines.  The numbers on the right end of these lines   **
** indicate the position of each of the subsections in the      **
** document outline.  These numbers do NOT correspond with the  **
** page numbers of the printed product.                         **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************


Cover
================================================================ COVER


Report to Congressional Committees

June 1997

GLOBAL WARMING - INFORMATION ON
THE RESULTS OF FOUR OF EPA'S
VOLUNTARY CLIMATE CHANGE PROGRAMS

GAO/RCED-97-163

EPA's Voluntary Climate Change Programs

(160367)


Abbreviations
=============================================================== ABBREV

  CCAP - Climate Change Action Plan
  EIA - Energy Information Administration
  EPA - Environmental Protection Agency
  GAO - General Accounting Office
  MMTCE - million metric tons of carbon equivalent
  OIG - Office of Inspector General

Letter
=============================================================== LETTER


B-276994

June 30, 1997

The Honorable Christopher S.  Bond
Chairman, Subcommittee on VA, HUD,
 and Independent Agencies
Committee on Appropriations
United States Senate

The Honorable Jerry Lewis
Chairman, Subcommittee on VA, HUD,
 and Independent Agencies
Committee on Appropriations
House of Representatives

Increasing emissions of carbon dioxide, methane, and other
heat-trapping greenhouse gases generated by human activity are
believed to contribute to global warming.  In an effort to reduce
greenhouse gas emissions, the United States issued its Climate Change
Action Plan (CCAP) in October 1993.  The plan was designed to reduce
greenhouse gas emissions primarily through voluntary efforts by
companies, state and local governments, and other organizations.  The
Environmental Protection Agency (EPA) is responsible for 20 CCAP
programs.  The Department of Energy and other federal agencies are
responsible for other CCAP programs. 

Because of your concerns about the effectiveness of the climate
change programs, you asked us to determine (1) what EPA has done to
ensure that the greenhouse gas reductions it reports reflect only the
results of its efforts, as opposed to other factors, and (2) whether
EPA's projected reductions are consistent with experience to date. 
As agreed with your offices, we focused our review on four CCAP
programs, which are designed to reduce emissions of various
greenhouse gases through work with different kinds of organizations. 
These four programs account for about one-third of EPA's funding for
CCAP. 

Specifically, the Green Lights Program primarily encourages
businesses and other organizations to install energy-efficient
lighting in their buildings in order to reduce the use of electricity
and the emission of carbon dioxide produced by generating
electricity.  The Coalbed Methane Outreach Program encourages coal
mining companies to capture and use, as an energy source, methane
that would otherwise be vented to the atmosphere.  To reduce
greenhouse gas emissions from manufacturing, transporting, and
disposing of materials, the Source Reduction and Recycling Program
encourages businesses to reduce the amount of solid waste they
generate and to increase the amount of waste they recycle.  The State
and Local Outreach Program helps state and local governments
understand the sources of and possible solutions to global warming
and also supports selected demonstration projects. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

For two of the four CCAP programs we reviewed, EPA adjusted the
reductions in greenhouse gas emissions it had reported to account
only for the effects of its efforts; for the other two programs, it
did not adjust the reported reductions.  Specifically, for the
Coalbed Methane Outreach and Source Reduction and Recycling programs,
EPA determined that nonprogram factors accounted for some of the
reported reductions and, therefore, adjusted those reductions.  For
the Green Lights Program, EPA officials said that some reported
reductions were probably the result of nonprogram factors, but they
did not attempt to quantify the extent of the nonprogram factors
because they believe it is not possible to do so.  They said that any
reductions resulting from nonprogram factors would likely be
counterbalanced by reductions that they believe are attributable to
the program but were not reported to EPA because the organizations
did not participate in the program.  Finally, for the State and Local
Outreach Program, EPA did not attempt to determine whether some of
the reported reductions resulted from nonprogram factors, although
program officials said they tried to eliminate double-counting where
reductions might be the result of other CCAP programs.  EPA officials
said they limited their efforts to quantify how much of the reported
reductions resulted only from the effects of EPA's programs because
it is difficult to make such an assessment, especially in the early
stages of the programs' development. 

EPA's projections of future reductions in greenhouse gases are not
consistent with experience to date for three of the four programs but
are consistent for the fourth program.  For the Green Lights and
Source Reduction and Recycling programs, the projected reductions are
based on an assumption that the participants will, respectively,
upgrade a larger proportion of their space and reduce waste at the
source more in the future than they have thus far.  For the State and
Local Outreach Program, the projections assume that one key project
will increase its impact, even though there are questions about the
basis for the reductions reported thus far.  Finally, for the Coalbed
Methane Outreach Program, the projected reductions are consistent
with experience to date. 


   BACKGROUND
------------------------------------------------------------ Letter :2

According to the Intergovernmental Panel on Climate Change, climate
models project an increase in the earth's average surface temperature
of between about two and six degrees Fahrenheit in the next century
as a result of increasing emissions of greenhouse gases.\1
Furthermore, the panel reported in 1995, such increases could lead to
floods, droughts, and other harmful changes in ecosystems.  To
address concerns about the possibility of global climate change, in
May 1992 the United States and other countries signed the United
Nations Framework Convention on Climate Change.  As part of the
Convention, the United States and other developed countries agreed to
establish policies and measures with the aim of returning their
greenhouse gas emissions to 1990 levels by 2000.  In fulfilling its
obligations under the Convention, the United States developed CCAP,
whose goal is to reduce emissions by 109 million metric tons of
carbon equivalent (MMTCE), from the projected 2000 level of 1,568
MMTCE to 1,459 MMTCE, slightly below the 1990 emissions level.\2

EPA's 20 CCAP programs are generally designed to provide the
information and tools to encourage the participants to voluntarily
undertake changes that will reduce emissions of greenhouse gases
whenever the changes make economic sense.  Also, some programs are
designed to overcome the institutional barriers that have
traditionally prevented organizations from taking action.\3 The
Congress appropriated about $86 million for EPA's CCAP programs for
fiscal year 1997; EPA requested $149 million for these programs in
fiscal year 1998. 

For this review, we selected four programs because (1) they are
involved with different greenhouse gases and different kinds of
organizations, (2) each accounts for a substantial proportion of
EPA's CCAP funding, and (3) each is credited by EPA as substantially
reducing greenhouse gas emissions.  Appendix I provides funding
levels, the number of participants, and other information about each
program. 

The Green Lights Program is designed to encourage organizations to
voluntarily adopt energy-efficient lighting technologies, such as
compact fluorescent light bulbs and electronic ballasts.  EPA
provides information intended to encourage the adoption of these
technologies.  The Source Reduction and Recycling Program is designed
to reduce the volume of solid waste produced and sent to landfills. 
Under the program's WasteWise element,\4 EPA signs up businesses that
agree to voluntarily decrease the amount of waste they generate and
to increase the amount of waste they recycle.  Under the program's
Unit-Based Pricing element, local communities agree to charge
residents for waste disposal on the basis of the amount of waste they
generate. 

The Coalbed Methane Outreach Program is designed to encourage coal
mines and related industries to recover and use methane that would
otherwise be emitted.  The State and Local Outreach Program is a
foundation program, designed primarily to raise awareness about
climate change and provide technical support to state and local
agencies and nonprofit organizations in analyzing and developing
cost-effective response strategies, not to achieve short-term
reductions in greenhouse gas emissions.  The program also funds
demonstration projects designed to test innovative strategies for
reducing emissions and examine the impact of climate change on the
states. 

EPA establishes annual program targets for the programs, such as the
volume of reductions in greenhouse gases (except for foundation
programs, as noted above) and the number of participants.  It tracks
progress against these targets, relying primarily on reports from the
programs' participants.  However, EPA does not independently verify
these reported reductions. 


--------------------
\1 The panel was established in 1988 by the United Nations
Environment Programme and the World Meteorological Organization to
assess scientific and technical information about climatic change. 
See Working Group II Second Assessment Report:  Summary for
Policymakers:  Impacts, Adaptation and Mitigation Options,
Intergovernmental Panel on Climate Change, Working Group II,
Technical Support Unit, Oct.  20, 1995.  For additional information
on the issue of global warming, see Global Warming:  Difficulties
Assessing Countries' Progress Stabilizing Emissions of Greenhouse
Gases (GAO/RCED-96-188, Sept.  4, 1996.)

\2 Greenhouse gases have varied effects on the atmosphere as measured
by their global warming potentials.  These global warming potentials
are applied to emissions to arrive at a common measure for the
greenhouse gases; the measure is expressed in million metric tons of
carbon equivalent. 

\3 According to a 1992 report by the Office of Technology Assessment,
there are several reasons why energy-efficient technologies are not
used more often in buildings.  These reasons include the following: 
(1) There is often a separation between those who purchase
energy-using equipment (for example, building owners) and those who
pay to operate the equipment (building tenants).  (2) Because energy
costs are relatively low in comparison to total operating costs,
those concerned with cost reduction often focus elsewhere.  (3)
Energy efficiency is often misperceived as requiring discomfort or
sacrifice, limiting its appeal.  See Building Energy Efficiency, ch. 
3, Office of Technology Assessment (OTA-E-518, May 1992). 

\4 EPA refers to it as WasteWi$e. 


   GREENHOUSE GAS REDUCTIONS
   REPORTED BY EPA ARE NOT LIMITED
   TO PROGRAM EFFECTS IN TWO OF
   THE FOUR CCAP PROGRAMS WE
   EXAMINED
------------------------------------------------------------ Letter :3

Efforts to improve energy efficiency, increase recycling, and achieve
related goals have been under way for years.  These long-standing
efforts make it difficult to measure the programs' "net"
reductions--those that result only from CCAP programs--as compared
with total, or "gross," reductions--those that result from CCAP
programs as well as from other, nonprogram factors.  EPA officials
told us that measuring the net reductions that are strictly due to
the results of CCAP efforts is difficult.\5


--------------------
\5 According to EPA officials, in a forthcoming report the
administration will provide information on its estimates of the net
greenhouse gas reductions resulting from the climate change programs. 
The report is scheduled to be issued in July 1997. 


      GREEN LIGHTS PROGRAM
---------------------------------------------------------- Letter :3.1

According to EPA, 2,308 organizations were participating in the Green
Lights Program as of February 1997.  These organizations committed to
upgrade the lighting in 6 billion square feet of floorspace, about 9
percent of the national total, according to EPA.  Through fiscal year
1996, Green Lights participants reported upgrading the lighting in
1.3 billion square feet of floorspace, resulting in greenhouse gas
reductions of 0.6 MMTCE.  Although some of the reported reductions
may be the result of influences from outside of the Green Lights
Program, EPA did not attempt to measure the program's "net" benefits. 
Officials said that they believed that any reductions that resulted
from other factors were likely offset by the reductions achieved by
the nonparticipating organizations that were influenced by the
program but not reported to EPA. 

According to the representatives of seven former participants we
spoke with, the program had a positive impact on these organizations'
efforts to achieve energy savings from lighting technology.  When we
interviewed officials at these organizations that had completed their
participation in the Green Lights Program, representatives of all
seven said that they were pleased with the program.  For example,
some representatives said that they viewed the data provided by EPA
on the benefits of specific lighting technologies as being valuable
and objective. 

The reductions reported by EPA could be overstated if some Green
Lights participants undertook at least some of their lighting
upgrades because of nonprogram factors.  Four factors suggest that
some upgrades were made because of nonprogram factors. 

First, according to a 1992 survey of commercial buildings, a
substantial amount of floorspace was upgraded before the Green Lights
Program was well established.  The national survey of commercial
buildings was conducted by the Department of Energy's Energy
Information Administration (EIA).\6 The survey found that 43 percent
of commercial floorspace had lighting conservation features (such as
occupancy sensors and time clocks) and that 22 percent of the
floorspace had undergone an energy audit (which can identify
opportunities for saving energy) in the previous 5 years. 

Second, financial incentives that were available during the early to
mid-1990s may have induced some organizations to install
energy-efficient lighting.  Officials of the Edison Electric
Institute, an electric utility trade group, estimated that 80 to 90
percent of its members offered financial incentives during that time
period to encourage their customers to install more energy-efficient
lighting.  By offsetting some of the costs of lighting upgrades, such
assistance provides an incentive to adopt energy-efficient lighting. 
In fact, Green Lights participants reported to EPA that they had
received $143 million in such rebates through fiscal year 1996. 

Third, some of the reductions attributed to the Green Lights Program
were achieved by companies involved with lighting products, which
could be expected to install energy-efficient lighting without the
program.  Of the 2,308 Green Lights participants, 593, or about
one-quarter, were classified as "allies," that is, companies that
manufacture, sell, and install lighting products.  The reductions
reported by these companies account for about 6 percent of the
program's total.  However, such companies could be expected to
install energy-efficient lighting even without the Green Lights
Program, given their knowledge of the benefits of this technology. 

Finally, most of the representatives of organizations we spoke with
about lighting upgrades, some of whom had participated and others who
had not, told us that they would likely have made some of the
upgrades without the program.  When we spoke with the representatives
of seven organizations that had completed their affiliation with the
program, five of the seven stated that they would have done some or
all of the upgrades without the program; the other two stated that
they would not have done the upgrades without the program.  In
addition, we spoke with representatives of two major national
corporations that did not participate in the program.  Both companies
told us that they had undertaken major lighting upgrades in the past
few years without EPA's assistance. 

Green Lights Program officials noted that they did not attempt to
offset the reported reductions that may have been attributable to
these other factors because they believe the program has offsetting
impacts above and beyond the reductions reported by the participating
organizations.  For example, they noted several instances of
nonparticipating companies that they believe undertook lighting
actions as a result of information furnished by the Green Lights
Program.  However, they said they had not attempted to quantify the
extent of the uncounted reductions by nonparticipants. 


--------------------
\6 This survey was conducted shortly after the Green Lights Program
was implemented.  See Commercial Building Characteristics 1992, pp. 
9-16, Energy Information Administration (DOE/EIA-0246(92), Apr. 
1994). 


      STATE AND LOCAL OUTREACH
      PROGRAM
---------------------------------------------------------- Letter :3.2

According to EPA, 29 states and Puerto Rico have conducted
inventories of their greenhouse gas emissions, 42 cities are
developing action plans, and 7 demonstration projects have been
selected for evaluation.  Program officials said that although the
program does not have a greenhouse gas reduction goal, it resulted in
a reduction of 0.8 MMTCE in 1996. 

Most of the reduction, about 0.7 MMTCE, was attributed to one
demonstration project, called the Planet Protection Center.  The main
goal of this joint project between EPA and the approximately
46,000-member National Retail Hardware Association was to reduce
residential energy use by promoting energy-efficient heating,
lighting, and plumbing products.  The participating retailers
received materials to use in their stores to inform shoppers and
salespeople, at the point of sale, about the benefits of buying
energy-saving products.  EPA officials said they initially estimated
that 8 million households could reduce their energy consumption by an
average of 10 percent because of the program.  They said that to
account for the possibility that market penetration might be less
than 10 percent, as well as purchases that might have been made
anyway, they halved the initial estimate.\7 The result of these
adjustments was an estimate that 8 million households did reduce
their energy consumption by an average of 5 percent each. 

Studies by an EPA contractor and the hardware association raised
questions about the link between the program's activities and the
reported reductions, as did our analysis of data in the hardware
association's study.  First, the EPA contractor that analyzed the
data on the project's effects said that there was no concrete
estimate of the project's impact because, among other reasons, of the
difficulty of collecting sales data and a seeming lack of methods for
reporting progress in greenhouse gas emissions (which would result
from reduced energy consumption).\8 Second, the hardware
association's 1995 study of the project's results found no overall
difference in sales between the participating retailers and a control
group of nonparticipants it surveyed, although it cautioned that the
number of retailers responding was too small to be statistically
significant.\9 The study found that about one-third of the
participating retailers who responded said they featured energy- and
water-conserving products from time to time without the project.  For
this report, we analyzed certain data presented in the association's
study, including sales data for 31 energy- and water-saving product
lines.  According to data from the responding retailers, sales at the
nonparticipating retailers increased more than sales at the
participating retailers for 17 of the product lines and less for the
other 14 product lines. 


--------------------
\7 Although program officials said they adjusted the estimated
reductions, in part, because some purchases might have been made
without the program, we found no analytical basis for either the
initial estimate or the adjustment to it. 

\8 "Planet Protection Center Program:  Presentation and Discussion of
Emissions Reductions Results," ICF, Inc.  (1996). 

\9 Environmental Merchandising and Advertising/Promotion in the
Retail Hardware/Home Improvement Industry, National Retail Hardware
Association (Indianapolis, IN:  Aug.  1995). 


      SOURCE REDUCTION AND
      RECYCLING PROGRAM
---------------------------------------------------------- Letter :3.3

Although the Source Reduction and Recycling Program has two
elements--WasteWise and Unit-Based Pricing--EPA attributed virtually
all of the program's results to WasteWise.  According to EPA, 513
companies were participating in WasteWise as of March 1997.  EPA
reported reductions from WasteWise of 0.8 to 2.3 MMTCE in fiscal year
1995--the most recent year for which it calculated greenhouse gas
reductions.  As with energy efficiency measures, the trends over the
past few years indicate a general movement toward increased
recycling.  Recognizing that recycling exists outside of the program,
EPA asks the WasteWise participants to report separately on recycling
associated with the program and general recycling efforts.  EPA
officials explained that they compile the participants' reports and
check them for general reasonableness.  However, they do not make any
further adjustments. 

When we spoke with seven WasteWise participants about their
experience, six of them said they were pleased with the program,
generally because they appreciated the free information provided on
recycling and reducing wastes.  While all six also said they were
likely or somewhat likely to have made some of the improvements
without the program, two said that they accelerated their actions
because of the program.  The seventh participant said his company was
already taking all the steps recommended by the program. 

The range in estimated reductions attributable to the WasteWise
element is largely the result of incomplete reporting by the
participants.  For fiscal year 1995, less than half of the WasteWise
participants reported their program accomplishments to EPA.  The
low-end estimate (0.8 MMTCE) was based on the amounts reduced and
recycled by the reporting participants.  The high-end estimate (2.3
MMTCE) was based on program officials' judgments that (1) some of the
nonreporting participants also reduced their wastes and recycled and
(2) the nonreporting participants who reduced and recycled did as
much, on average, as did the reporting participants. 


      COALBED METHANE OUTREACH
      PROGRAM
---------------------------------------------------------- Letter :3.4

According to EPA, as of February 1997, 13 projects had been started
under the Coalbed Methane Outreach Program.  On the basis of the data
on methane reported by the coal companies, EPA reported gross
reductions of 2.7 MMTCE in 1996. 

EPA officials estimated that 60 percent of the gross reductions were
the result of nonprogram factors and that the program achieved net
reductions of 1.1 MMTCE in 1996.  The primary nonprogram factor is
the Energy Policy Act of 1992, which helped remove a barrier to the
capture of coalbed methane.  EPA officials said they calculated the
60-percent factor by estimating the increase in the amount of methane
captured as a result of their program over the amount that would have
been captured as a result of the 1992 act without their program. 

Specifically, certain provisions of the 1992 act were intended to
deal with the possibility that adjacent landowners could contest the
ownership of coalbed methane, which could discourage coal companies
from capturing that methane.  To help overcome this barrier, the act
provided that the Department of the Interior would implement a
program, in certain states, relating to those entities claiming an
ownership interest in a particular unit of coalbed methane.  Under
the program, these entities would be required to arrange for an
escrow account to be established and the proceeds from the sales of
such coalbed methane would be placed into that account.  Ultimately,
the proceeds would be distributed after a final legal determination
of ownership interest.\10

In addition, program officials said that they claimed credit for the
reductions in coalbed methane only if the coalbeds were being mined. 
Thus, the methane captured from wells drilled into coalbeds was not
counted if the coal was not yet being mined.  That methane could be
counted later, when the coalbed was being actively mined. 


--------------------
\10 Such programs were to be established in states that, among other
things, have disputes about the ownership of coalbed methane and that
do not have programs promoting the permitting, drilling, and
production of coalbed methane. 


   PROJECTED GREENHOUSE GAS
   REDUCTIONS EXCEED HISTORICAL
   RESULTS FOR THREE OF THE FOUR
   CCAP PROGRAMS WE EXAMINED
------------------------------------------------------------ Letter :4

EPA's projections of future greenhouse gas reductions depend on a
number of assumptions, such as the number of participants, the extent
to which these participants will act to decrease emissions, and the
extent to which the reductions are linked to the program's efforts. 
As discussed in detail below, for the Green Lights and Source
Reduction and Recycling Programs, the reductions projected for 2000
are based on a level of performance by the participating
organizations that exceeds the programs' results to date.  EPA
officials said they believe that the performance of many programs
will improve over time, in part because of their experience and
because of better targeting of the programs. 

For the State and Local Outreach Program, about one-half of the
projected reductions of 1.7 MMTCE for 2000 are attributed to the
Planet Protection Center project.  In the previous section, we noted
that there are questions about whether some of the project's reported
greenhouse gas reductions were the result of nonprogram factors; such
questions would also apply to its projected reductions.  For the
Coalbed Methane Outreach Program, the projected reductions are
consistent with experience to date, and EPA continues to attribute
about 60 percent of the gross reductions to the 1992 Energy Policy
Act.  Thus, the estimated gross reductions of 6.1 MMTCE in 2000 are
reduced to net reductions of 2.6 MMTCE as a result of the program. 


      GREEN LIGHTS PROGRAM
---------------------------------------------------------- Letter :4.1

EPA estimates that the Green Lights Program will result in 3.9 MMTCE
in annual greenhouse gas reductions in 2000; the estimate is based on
several assumptions, including the amount of floorspace that will be
upgraded with new lighting technology.  When they join the Green
Lights Program, the participants agree to survey the floorspace in
all of their facilities and to upgrade 90 percent of the space which
is considered upgradable and for which it is cost-effective to do so. 

EPA established year-by-year goals, leading up to the 90-percent
level after 5 years.  For example, the goal is to upgrade 18 percent
after 2 years and 54 percent after 3 years.  In addition, EPA tracks
the participants' accomplishments relative to these goals.  According
to EPA, the organizations that participated in the program for 5
years had upgraded only 34 percent of their upgradable floor space
within that time period.  (See fig.  1.)

   Figure 1:  The Results of the
   Green Lights Program for the
   First 5 Years Were Below EPA's
   Goals

   (See figure in printed
   edition.)

Source:  EPA's data. 

Program officials believe that in the future the participants will be
able to achieve the 90-percent level because EPA has increased its
level of support for the participants.  For example, they are
contacting participants more often to see if there is additional
information that EPA can provide or if there are particular
impediments that EPA can help them overcome.  Program officials noted
that the companies joining in 1995 exceeded the 18-percent goal
established for upgrades through the second year of program
participation.  However, for participants joining in the 4 earlier
years (1991-94), EPA's data show that the participants did not meet
the 18-percent goal after participating for 2 years. 

It may be difficult for EPA to achieve its Green Lights goals for two
other reasons.  The first reason relates to electricity prices.  The
Energy Information Administration projects that the average price of
electricity will decline over the next 20 years by 0.6 percent per
year after inflation, which would tend to make lighting investments
less attractive.  Moreover, the widespread discussion of deregulating
electricity at the retail level, and the possible substantial cost
decreases for larger users, create uncertainty about future
electricity prices.  An EPA program official noted that lighting
investments are highly cost-effective and that any marginal decrease
in electricity prices should make little difference to organizations
that have joined the program.  However, we note that decreasing or
uncertain prices could make lighting investments appear less
attractive to prospective Green Lights participants. 

The second reason relates to possible "self-selection" bias among the
initial Green Lights participants.  In this context, self-selection
is the likelihood that the organizations that voluntarily join a
program may have been most likely to undertake those activities even
if there were no program.  Self-selection bias is a concern in
evaluating the effectiveness of voluntary energy-efficiency programs,
according to a paper on evaluating such programs.\11 To the extent
that the organizations most likely to upgrade were the ones that
joined the program initially, it may be difficult for EPA to continue
to recruit large numbers of organizations into the program.  However,
EPA officials said they believe that a continued education campaign,
coupled with successful upgrades by businesses, will make recruitment
easier. 


--------------------
\11 Gretchen B.  Jordan and Darrell A.  Beschen, "Planning for
Evaluation of the U.S.  Department of Energy's Energy
Partnership/Climate Change Programs," presented at the 1995
International Energy Program Evaluation Conference, Chicago, IL (Aug. 
1995). 


      SOURCE REDUCTION AND
      RECYCLING PROGRAM
---------------------------------------------------------- Letter :4.2

EPA estimated that the program's WasteWise and Unit-Based Pricing
elements would both achieve substantial reductions in 2000.  For
WasteWise, the reductions were estimated to range from 1.9 to 6.7
MMTCE.  The lower estimate is based on the assumptions that a higher
proportion of participants will reduce waste at the source and
recycle in the future and that their average levels of source
reduction will increase.  Specifically, EPA assumes that the
proportion of WasteWise participants that reduce waste will increase
from 40 percent in 1995 to 90 percent in 2000 and that the proportion
that recycle will increase from 75 percent in 1995 to 90 percent in
2000.  Moreover, EPA assumes that the amount of waste reduced per
participant will increase by 50 percent between 1995 and 2000.  The
higher level (6.7 MMTCE--more than three times the lower level) is
based on additional assumptions designed to adjust for the reductions
that EPA believes were underreported in 1995. 

For Unit-Based Pricing, EPA estimated in 1995 that it would achieve
reductions of 2.2 MMTCE in greenhouse gases in 2000.  This projected
level was based on an assumption that 575 communities would adopt a
unit-based pricing approach to waste disposal each year.  However,
EPA program officials later found that only 72 communities adopted
unit-based pricing in 1995.  Program officials believe that the lower
results for 1995 were the result of underestimating the time needed
for the communities to implement unit-based pricing.  The officials
said that they now have the tools to promote a much greater adoption
of unit-based pricing and that enrollments in 1996 and 1997 increased
substantially. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :5

We provided copies of a draft of this report to EPA for review and
comment.  We received responses from three EPA offices.  We received
a letter from the Director, Office of Atmospheric Programs, Office of
Air and Radiation, whose office manages the Green Lights and Coalbed
Methane Outreach programs.  (App.  II contains the complete text of
his letter, along with our detailed responses.) We also obtained
comments from the Director, Climate Policy and Programs Division,
Office of Policy and Program Evaluation; and the Director, Municipal
and Industrial Solid Waste Division, Office of Solid Waste and
Emergency Response.  The former office manages the State and Local
Outreach Program, and both offices are involved in the Source
Reduction and Recycling Program. 

The Director, Office of Atmospheric Programs, discussed the
difficulties of evaluating the effects of voluntary programs.  Also,
he said that the draft report inaccurately used EIA's survey data to
suggest that EPA overstated the reductions achieved by the Green
Lights Program.  We believe that we used these data fairly.  We cited
them to demonstrate that some companies with commercial office space
had undertaken energy audits and installed energy-efficient lighting
by 1992, when the Green Lights Program was just beginning.  We
believe that the factors that induced companies to take such actions
before 1992 would likely have continued beyond 1992 and may, in part,
account for some companies' decisions to join the Green Lights
Program and to undertake upgrades.  However, as noted in the report,
EPA's reported reductions did not account for nonprogram factors that
may have induced Green Lights participants to undertake upgrades. 

The Director, Office of Atmospheric Programs, also stated that the
climate-change programs are improving over time and that he does not
believe that the projected reductions are optimistic.  We noted that
the projections are not consistent with experience to date.  It is
possible that, with the improvements he mentioned, the programs could
meet their goals for 2000. 

The Director, Climate Policy and Programs Division, objected to our
including the State and Local Outreach Program in this review because
it is considered a foundation program.  That is, the program is not
primarily intended to achieve reductions in greenhouse gas emissions. 
Rather, it is intended, among other things, to motivate state and
local officials to understand the rationale behind taking actions to
reduce emissions.  As noted in the report, we included the program
because, according to EPA's data, it was responsible for substantial
reductions in greenhouse gas emissions in 1996 and is projected to
achieve even more substantial reductions in 2000. 

The Director, Municipal and Solid Waste Division, as well as the
other two directors who commented on the report, provided updated
data and technical corrections, which we incorporated in the report
as appropriate. 


---------------------------------------------------------- Letter :5.1

We conducted our review from September 1996 through June 1997 in
accordance with generally accepted government auditing standards. 
See appendix III for the details of our scope and methodology. 

As arranged with your offices, we plan no further distribution of
this report until 15 days after the date of this letter unless you
publicly announce the report's contents earlier.  At that time, we
will send copies to the appropriate congressional committees and the
Administrator of EPA.  We will also make copies available to others
upon request.  If you have any questions or need additional
information, please call me at (202) 512-6111.  Major contributors to
this report are listed in appendix IV. 

Peter F.  Guerrero
Director, Environmental Protection
 Issues


PARTICIPANTS, FUNDING, AND OTHER
DETAILS ABOUT FOUR CCAP PROGRAMS
=========================================================== Appendix I

                              (Dollars in millions)

                            Source Reduction  Coalbed Methane   State and Local
          Green Lights      and Recycling     Outreach          Outreach\a
--------  ----------------  ----------------  ----------------  ----------------
Targeted  Carbon dioxide    Carbon dioxide    Methane           Various
gas(es)                     and methane

Type of   Businesses and    Businesses and    Coal companies    States,
particip  governments       local                               territories, and
ants                        governments                         local
                                                                governments

Number    2,308             513               13\b              29 states,
of                                                              Puerto Rico, 42
particip                                                        cities
ants

FY 1996   $20.1             $2.9              $1.7              $5.3
funding

Greenhou  0.6               0.9-2.4\c         2.7\d             0.8
se gas
reductio
ns
through
FY 1996
(MMTCE)

Greenhou  3.9               4.1-8.9           6.1\d             1.7
se gas
reductio
ns
estimate
d in
2000
(MMTCE)
--------------------------------------------------------------------------------
\a The State and Local Outreach Program was primarily intended to
help lay a foundation for greenhouse gas emission reductions beyond
2000, not to achieve greenhouse gas reductions by 2000.  However,
according to EPA, the program did achieve substantial reductions
through 1996 and is expected to achieve even greater reductions in
2000. 

\b Represents number of projects. 

\c Data for the Source Reduction and Recycling Program are for fiscal
year 1995. 

\d Represents "gross" reductions.  "Net" reductions are estimated to
be about 40 percent of the "gross" reductions--1.1 MMTCE in 1996 and
2.6 MMTCE in 2000. 




(See figure in printed edition.)Appendix II
COMMENTS FROM THE ENVIRONMENTAL
PROTECTION AGENCY
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


The following are GAO's comments on the Environmental Protection
Agency's letter dated June 9, 1997. 


   GAO COMMENTS
--------------------------------------------------------- Appendix I:1

1.  When we began our work on this assignment, one of our objectives
related to the types of performance measures used for EPA's climate
change programs.  As agreed with the requesters' offices, we did not
pursue this issue in detail.  However, our report does provide
information about EPA's performance targets, collection of data from
participants, and related matters. 

2.  As part of our review, we considered the Office of the Inspector
General's (OIG) report.  The OIG's report differs somewhat from our
report in terms of both scope and objectives.  Whereas we reviewed
only voluntary climate change programs, the OIG reviewed voluntary
climate change programs, as well as the Radon Action Program, which
is not related to climate change.  In terms of objectives, we focused
exclusively on the reported and projected reductions of greenhouse
gas emissions for the four climate change programs.  The OIG's
objectives were to determine (1) the management practices that worked
well and areas in which improvements are needed and (2) whether
voluntary programs achieve environmental benefits.  Although the
second OIG objective sounds similar to our objectives, the OIG did
not attempt to determine whether nonprogram factors may account for
some of the reductions reported by EPA.  The OIG's report states that
"it is difficult to directly attribute changes in the environment to
a particular statute, regulation, or program." For these reasons, we
believe that the OIG's report is not directly comparable to ours, and
we therefore did not change our report to address this comment. 

3.  EPA noted that measuring the success of programs to bring about
change in specific markets is difficult.  We agree.  EPA
characterized its approach in estimating the effects of its programs
as "conservative" and stated that the "true program impact of the
Green Lights program is likely much larger" than the reductions
reported by EPA.  While EPA states that the program's total impact is
likely to be much larger than its reported impact, this can be true
only if the unreported reductions that are due to the program are
larger than the reported reductions that are due to nonprogram
factors.  However, EPA has not attempted to measure either of these
indicators. 

With respect to the issue of evaluating the net effect of the Green
Lights Program, we are pleased to learn that EPA "intends to study
improved means of measuring" the program's total impact.  Successful
completion of this study and implementation of its suggestions should
help ensure that, in the future, there will be more reliable
information on the program's gross and net impacts. 

4.  EPA raises questions about both the purpose and the results of
our discussions with the organizations that participated in the Green
Lights Program.  The purpose was to ask them about their experience
with the program, including the extent to which the program
contributed to their lighting upgrades.  By contacting only those
organizations that had participated successfully, we were dealing
with a group that was likely to be relatively favorable toward the
program.  The result of the discussions was that, rather than
exhibiting perfect hindsight, as EPA's response suggests, all gave
credit to EPA for providing valuable and reliable information and for
being responsible for some or all of their upgrades.  We believe this
information, along with the other information presented, supports the
point that only some, but not all, of these organizations' upgrades
were due to the program. 

5.  With respect to possible improvements in the program's
effectiveness, we presented data from EPA on results through 2 years
for organizations that joined in 1995 (the class of 1995).  The
future implications of this reported improvement are unclear for two
reasons.  First, we also noted that, unlike the four previous
classes, the class of 1995 was the only one to meet EPA's goal of
upgrading 18 percent of upgradable floorspace after 2 years.  Second,
the reason for the improvement is not clear.  EPA claimed that its
improved efforts accounted for the improvements.  However, it is also
possible that a change in reporting practices may have contributed to
the reported improvement.  Specifically, starting in 1993,
organizations joining the program were permitted to claim credit for
upgrades they had completed prior to joining the program.  Initially,
they were permitted to claim credit for upgrades made in the previous
12 months; later, they were permitted to claim credit for upgrades
made in the previous 18 months.  Thus, the larger reported results
for the class of 1995 may, in part, reflect a change in reporting
practices. 

6.  We cited the 1992 Energy Information Administration's survey data
for the same reason we interviewed former participants (see comment
4).  We wanted to see whether there was evidence that companies with
commercial office space were undertaking energy audits and installing
energy-efficient lighting independent of the Green Lights Program. 
The survey data confirmed that there was substantial activity in the
years before the program was established.  If energy-efficient
lighting was installed in some buildings before the program was
established, we believe that energy-efficient lighting installed
afterwards in other buildings may have been due, at least in part, to
nonprogram factors. 


SCOPE AND METHODOLOGY
========================================================= Appendix III

As agreed with your offices, of the Environmental Protection Agency's
(EPA) 20 Climate Change Action Plan (CCAP) programs, we selected the
following four for our review:  Green Lights, Source Reduction and
Recycling, Coalbed Methane Outreach, and State and Local Outreach. 
These four programs represent about one-third of EPA's CCAP funding
and about one-third of the estimated greenhouse gas reductions
planned by EPA for 2000--the year in which the action plan hoped to
stabilize greenhouse gas emissions at about the 1990 level.  Although
the State and Local Outreach Program was not intended primarily to
achieve reductions through 2000, we included it in our review because
EPA reported that it did achieve substantial reductions through 1996
and was expected to achieve even greater reductions in 2000. 

To address our objectives for all four programs, we met with EPA
program officials for the four programs to discuss their reported
program reductions and the steps they take to ensure that the
reductions reflect the program's actions, rather than other factors. 
We also reviewed the reported results from the organizations that
have joined the programs and the program offices' methods for
calculating actual and planned greenhouse gas reductions.  We also
reviewed other available reports, from GAO and other organizations,
on EPA's voluntary programs.  In those cases where EPA adjusted
reported or projected reductions (to remove the effects of nonprogram
factors), we did not attempt to determine the reasonableness of those
adjustments. 

In addition, as noted below, we discussed the programs with selected
current or former participants and nonparticipants.  Although we
tried to select a mix of organizations, in terms of size and
geographic location, the organizations we contacted may not be
representative of all such organizations.  Finally, as noted below,
we used other data sources. 

For the Green Lights program, we interviewed officials at seven
former participants, which had graduated from the program, about
their motivations for joining the program and their experiences in
the program.  We picked these seven from a list of about 300 program
graduates provided by EPA.  The seven included small, medium, and
large organizations, which are located in various regions of the
country and are in different industries.  Because program officials
said they were concerned that our contacting current Green Lights
participants might discourage participation, we did not contact any
current participants.  We also interviewed officials at two major
corporations that were not participating in the program, to determine
whether they had undertaken lighting upgrades.  To review the extent
of the lighting upgrades already under way, we reviewed the results
of a 1992 Energy Information Administration survey on commercial
buildings and energy-saving features.  We also reviewed data provided
by the Edison Electric Institute on electric utilities that sponsored
energy-efficient lighting rebate programs. 

For the Source Reduction and Recycling Program, we interviewed
officials at seven current program participants about their
motivations for joining the WasteWise component.  We also reviewed
EPA's March 1996 report, Characterization of Municipal Solid Waste in
the United States:  1995 Update, to determine the historical trends
in the recycling of waste.  For the Coalbed Methane Program, we
interviewed representatives from two coal mining companies about
their motivation for joining the program and their satisfaction with
EPA's efforts. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV

RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION

Philip L.  Bartholomew
James B.  Hayward
David Marwick
Robert D.  Wurster

OFFICE OF THE GENERAL COUNSEL

Karen Keegan


*** End of document. ***