Climate Change: Observations on the April 1999 Report on Climate Change
Programs (Testimony, 05/20/99, GAO/T-RCED-99-199).

Pursuant to a congressional request, GAO discussed activities relating
to climate change programs, focusing on: (1) the Energy Information
Administration's report on federal expenditures for climate change
activities; and (2) a limitation--set forth in the Environmental
Protection Agency's (EPA) appropriations act for fiscal year (FY)
1999--that was designed to prevent the agency from taking specified
regulatory actions to implement the Kyoto Protocol on climate change.

GAO noted that: (1) the Energy Information Administration's report, as
required by law, provides multiyear spending data and describes climate
change programs and activities; (2) however, it was delivered to
Congress on April 20, 1999, about two and a half months after the
specified due date; (3) also, the report did not always link its
discussion of activities and performance goals to the specific line
items shown in the President's budget; (4) the report did not always
provide a clear picture of intended performance across federal climate
change activities, for example, by specifying--in measurable and
quantifiable terms--the outcomes expected to be achieved by federal
spending; (5) a provision in EPA's appropriations act for FY 1999
prohibited the agency from taking certain regulatory actions--for
example, proposing regulations--to implement the Kyoto Protocol on
climate change; (6) to assess the scope of the prohibition, GAO reviewed
the legislative history of the act; and (7) GAO believes that the act
does not limit EPA's ability to undertake activities that are otherwise
authorized by law.

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

 REPORTNUM:  T-RCED-99-199
     TITLE:  Climate Change: Observations on the April 1999 Report on
	     Climate Change Programs
      DATE:  05/20/99
   SUBJECT:  Noncompliance
	     Performance measures
	     Air pollution control
	     Reporting requirements
	     International agreements
	     Presidential budgets
	     Environmental monitoring
	     Appropriation acts
IDENTIFIER:  Kyoto Protocol
	     DOE Climate Change Technology Initiative
	     United Nations Framework Convention on Climate Change
	     U.S. Global Change Research Program
	     FHwA Congestion Mitigation and Air Quality Improvement
	     Program

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

Before the Subcomm.  on Energy Research, Development, Production and
Regulation, Senate Comm.  on Energy and Natural Resources, and the
Subcomm.  on National Economic Growth, Natural Resources and
Regulatory Affairs, House Comm.  on Government Reform

For Release
on Delivery
Expected at
2:30 p.m.  EDT
Thursday
May 20, 1999

CLIMATE CHANGE - OBSERVATIONS ON
THE APRIL 1999 REPORT ON CLIMATE
CHANGE PROGRAMS

Statement of Peter F.  Guerrero, Director,
Environmental Protection Issues,
Resources, Community, and Economic
Development Division

GAO/T-RCED-99-199

GAO/RCED-99-199T

(160482)

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

  CBO -
  EPA -

============================================================ Chapter 0

Messrs.  Chairmen and Members of the Committees: 

Our testimony today discusses activities relating to climate change
programs.  Specifically, it responds to your request that we comment
on (1) the administration's April 20, 1999, report\1

on federal expenditures for climate change activities and (2) a
limitation--set forth in the Environmental Protection Agency's
appropriations act for fiscal year 1999--that was designed to prevent
the agency from taking specified regulatory actions to implement the
Kyoto Protocol on climate change. 

In summary, we found the following: 

The administration's report, as required by law, provides multiyear
spending data and describes climate change programs and activities. 
However, it was delivered to the Congress on April 20, 1999, about
2-1/2 months after the specified due date.  Also, the report did not
always link its discussion of activities and performance goals to the
specific line items shown in the President's budget.  Finally, the
report did not always provide a clear picture of intended performance
across federal climate change activities, for example, by
specifyingï¿½in measurable and quantifiable termsï¿½the outcomes expected
to be achieved by federal spending. 

A provision in the Environmental Protection Agency's appropriations
act for fiscal year 1999 prohibited the agency from taking certain
regulatory actions--for example, proposing regulations--to implement
the Kyoto Protocol on climate change.  To assess the scope of the
prohibition, we reviewed the legislative history of the provision. 
Based on this review, we believe that the provision does not limit
the agency's ability to undertake activities that are otherwise
authorized by law.  (See the appendix for an analysis of this issue.)

--------------------
\1 Report to Congress on Federal Climate Change Expenditures, Apr. 
20, 1999. 

   BACKGROUND
---------------------------------------------------------- Chapter 0:1

Climate change policy has been a key congressional concern recently,
focusing especially on the Kyoto Protocol, which was agreed to--in
principle--by the United States and 37 other countries in December
1997.  Under the protocol, the United States agreed to substantially
reduce its greenhouse gas emissions during the 5-year period
beginning in 2008.  The protocol will become binding upon the United
States only if the Senate ratifies it.  The protocol would amend the
United Nations Framework Convention on Climate Change, which was
agreed to in 1992 and ratified by the Senate in the same year.  Under
the convention, the voluntary goal for the United States is to reduce
greenhouse gas emissions by 2000 to their 1990 level.  Under the
Kyoto Protocol, the requirement for the United States would be to
reduce emissions to 7 percent below their 1990 level.  Meeting this
target would require a reduction of 30 percent relative to the level
of emissions that would otherwise be anticipated in 2010, the
midpoint of the 5-year period (2008-12), according to the Energy
Information Administration.\2

In February 1998, as part of the fiscal year 1999 budget submission,
the President proposed a Climate Change Technology Initiative,
designed to reduce greenhouse gas emissions.  Among other things, the
initiative proposed additional funding primarily for (1) the
Department of Energy's research and development activities; (2) tax
creditsï¿½to be administered by the Department of the Treasuryï¿½to
encourage the purchase of certain energy-efficient cars and houses,
among other things; and (3) the Environmental Protection Agency's
(EPA) voluntary programs to encourage businesses and others to
conserve energy.  The President also proposed increased funding for
the U.S.  Global Change Research Program, which includes efforts by
the National Aeronautics and Space Administration and other agencies
to study climate change. 

As part of the fiscal year 1999 appropriations process, the Congress
included a number of mandates (in laws) and directives (in committee
reports) to various executive agencies.  One law, enacted in October
1998, required the President to provide detailed information on
climate change programs and activities.  The law also stated that
this should be provided in conjunction with the President's budget
submission for fiscal year 2000.  That budget was transmitted to the
Congress on February 1, 1999.  A complementary Senate committee
report directed the administration to provide the Congress with a
detailed plan for implementing key elements of the President's
proposal on climate change.  In response to the law and committee
report, the President transmitted a report to the Congress on April
20, 1999.  Another law--providing appropriations for EPA for fiscal
year 1999--was designed to prevent EPA from taking certain regulatory
actions, for example, proposing regulations, to implement the Kyoto
Protocol. 

To assess the April 20 report, we reviewed agencies' budget
documents.  We also compared the report with an August 1998 report by
the Congressional Budget Office (CBO), which was prepared, in part,
to document current U.S.  efforts in the area of global climate
change.\3 We did not independently verify the expenditure information
or performance measures in the April 20 report.  To assess the
spending limitation, we reviewed the provision and its legislative
history and discussed these matters with officials at EPA.  We
performed our work in April and May 1999 in accordance with generally
accepted government auditing standards. 

--------------------
\2 Energy Information Administration, International Energy
Outlookï¿½1999, 1999, Table 20. 

\3 CBO, Climate Change and the Federal Budget, Aug.  1998. 

   THE REPORT PROVIDED THE
   INFORMATION REQUIRED BY LAW BUT
   ONLY SOME INFORMATION ON
   PERFORMANCE GOALS
---------------------------------------------------------- Chapter 0:2

The administration's April 20 report, as required, provides detailed
information on climate change programs and activities.  In addition,
as directed in a Senate committee report, the April 20 report, in
some but not all cases, (1) linked its discussion of activities and
performance goals to the specific line items shown in the President's
budget, and (2) provided a clear picture of intended performance
across federal global climate change activities. 

The requirement for the report is contained in the Omnibus
Consolidated and Emergency Supplemental Appropriations Act, enacted
in October 1998.\4 That act required the administration to provide a
detailed accounting of federal obligations and expenditures for
climate change programs and activities.  The report was to cover
domestic and international activities for fiscal years 1998 and 1999
and any plan for programs thereafter related to the Kyoto Protocol. 
The report was also required to include an accounting of expenditures
by agency, with each agency identifying climate change activities and
associated costs by line item, as presented in the President's
budget. 

In addition, a Senate report directed the administration to provide
the Congress with a detailed plan for implementing key elements of
the President's proposal on climate change.\5 The plan was to include
performance goals for the reduction of greenhouse gases that had
objective, quantifiable, and measurable target levels and was to
provide evidence on the effectiveness of these programs in meeting
the performance goals.  In setting out this directive, the report
said that the administration must do a better job of explaining the
components of the programs, their anticipated goals and objectives,
the justification for any funding increases, a discussion of how
success would be measured, and a clear definition of how these
programs were justified by goals and objectives that were not linked
to implementing the Kyoto Protocol.\6

--------------------
\4 P.  L.  105-277, Oct.  21, 1998, sec.  573(b). 

\5 S.  Rept.  105-251, ï¿½Treasury and General Government Appropriation
Bill, 1999,ï¿½ July 15, 1998, p.  6. 

\6 Language about the need to improve budget submissions appears in
two other congressional reports.  See H.  Rept.  105-769, ï¿½Making
Appropriations for the Department of Veterans Affairs and Housing and
Urban Development, and for Sundry Independent Agencies, Boards,
Commissions, Corporations, and Offices for the Fiscal Year Ending
September 30, 1999, and for Other Purposes,ï¿½ Oct.  5, 1998, p.  274. 
Also, see S.  Rept.  105-227, ï¿½Department of the Interior and Related
Agencies Appropriations Bill, 1999,ï¿½ June 26, 1998, p.  7. 

      THE REPORT, AS REQUIRED,
      PROVIDES DETAILED
      INFORMATION ON PROGRAMS
-------------------------------------------------------- Chapter 0:2.1

The administration's report provides a detailed accounting of
domestic and international expenditures on climate change.  It does
so in several ways.  For example, it distinguishes activities that
are directly related to climate change, such as the U.S.  Global
Change Research Program, from activities that are not directly
related, such as the Department of Energy's weatherization and state
energy grant programs.  It also lists programs and tax policies
related to climate change, by appropriation account.  This listing
shows line items for 14 departments or agencies, including the
Department of Energy, EPA, and 12 others. 

To check the completeness of the administration's report, we compared
it against a similar CBO report, prepared at the request of Senate
Committee on the Budget and issued in August 1998.  We found that the
two reports generally identified the same programs as being directly
related to climate change.  One exception is that CBO included
activities under the Montreal Protocol because of the ï¿½close linkï¿½
between ozone-depleting gases (addressed by the Montreal Protocol)
and greenhouse gases (addressed by climate change programs), but the
administration's report does not include those activities. 

For programs that are classified in both reports as indirectly
related to climate change, there are similarities and differences
between the reports.  For example, both reports include the
Department of Energy's weatherization and state energy grant
programs.  But only CBO includes the Department of Transportation's
Congestion Mitigation and Air Quality Improvement Program. 

      THE REPORT WAS NOT ISSUED ON
      TIME
-------------------------------------------------------- Chapter 0:2.2

The act required the report to be provided with the President's
submission of the fiscal year 2000 federal budget, which occurred on
February 1, 1999.\7 The accompanying Senate report stated that the
administration's report was expected to be included as part of the
affected agencies' fiscal year 2000 budget submissions, which also
occurred in early February 1999.  Because the report was issued on
April 20, 1999, it was not available to the Congress for the first
2-1/2 months of annual budget process, although it was available for
the balance of the process. 

--------------------
\7 Because the law requiring this report was enacted on Oct.  21,
1998, the administration had less than 3-1/2 months to prepare the
report. 

      THE REPORT WAS NOT ALWAYS
      LINKED TO THE PRESIDENT'S
      BUDGET
-------------------------------------------------------- Chapter 0:2.3

As required by law, the administration's report provides a detailed
accounting of federal spending for climate change programs and
activities, both domestic and international.  In a series of tables,
it provides this information by agency and by line item in the
President's budget, as specifically required by the act.  It also
provides the information by program or program element.  However, the
report's discussion of climate change activities and the performance
goals set out in the report are organized by program or group of
programs.  This organization does not correspond to either the line
items in the President's budget nor completely to the tables in the
report itself on spending by program or program element. 

For example, the discussion of EPA's activities and performance goals
is organized by program or group of programs as follows:  (1)
buildings programs; (2) transportation programs; (3) industry
programs; (4) carbon removal programs; (5) management, planning,
analysis, and outreach programs; and (6) Clean Air Partnership
Program.  The report presents three line items for EPA:  (1)
environmental programs and management; (2) science and technology;
and (3) state and tribal assistance grants--Clean Air Partnership
Fund. 

This organizational inconsistency limits the report's usefulness. 
For example, congressional and other users of the report cannot
identify line items in the President's budget--for example, those
with large dollar amounts or those for which an increase in funding
is being requested.  Nor can users easily identify in the report what
activities are planned and what performance goals have been
established.  Including a crosswalk, or a connection, between the
programs as discussed in the report and the budget line items would
have made the report more useful. 

      THE REPORT DID NOT ALWAYS
      PROVIDE A CLEAR PICTURE OF
      INTENDED PERFORMANCE
-------------------------------------------------------- Chapter 0:2.4

The administration's report sets out 78 performance goals for its
climate change activities across the various programs discussed in
the report.  In covering this wide range of activities, the report
did not provide complete information to congressional decisionmakers
on the results to be achieved for the proposed level of resources. 
Specifically, the report did not

  -- explain why certain programs were discussed, even though no
     performance goals were established for them;

  -- establish quantifiable goals in all cases;

  -- establish results-oriented goals in all cases; and

  -- provide baseline and trend data to support these goals. 

However, we recognize that establishing useful performance goals for
research programs can be especially challenging. 

Lack of performance goals was not always explained.  The
administration's report organizes its discussion of climate change
activities around 32 programs or groups of programsï¿½17 under the
Climate Change Technology Initiative, 7 under the U.S.  Global Change
Research Program, 2 under international assistance, and 6 that are
indirectly related to climate change.  In some cases, individual
programs under the groups of programs are briefly discussed. 
However, the performance goals set out in the report generally apply
to the groups of programs. 

We found that the report contained performance goals for 19 of the 32
programs or groups of programs, but not for the 13 others.  Among the
programs lacking performance goals are the Department of Housing and
Urban Development's Partnership for Advancing Technology in Housing
program, Energy's fossil energy programs, and the six programs
indirectly related to climate change.\8 The report does not
explicitly state why performance goals were not provided or were not
considered appropriate for these programs. 

The report does note that the six programs indirectly related to
climate change exist primarily for another purpose, such as energy
conservation, or have multiple environmental benefits, but have the
additional effect of reducing fossil fuel use.  For these programs,
it is understandable that the performance goals would have been
expressed in terms of their primary purpose, such as energy
conservation, and not necessarily included in this report.  For the
other programs, the rationale for omitting performance goals is not
as clear. 

About one-third of performance goals were expressed in quantifiable
terms.  Performance goals help translate agencies' uses of resources
into results by establishing target levels for performance expressed
as tangible, measurable objectives against which actual achievement
can be compared.  If performance goals and measures include a
quantifiable, numerical target level or other measurable value, they
more easily allow for progress toward the goal to be assessed.  An
example of a quantifiable goal would be reducing by 80 percent the
amount of lead in the air or reducing by 15 percent the number of
children with dangerous levels of lead in their blood. 

About two-thirds of the performance goals were not expressed in
quantifiable terms.  For example, one goal for fiscal year 2000 is to
ï¿½use ecosystem-scale experiments involving increased CO2 [carbon
dioxide] and other environmental factors to determine how atmospheric
change and potential climatic change may affect forest productivity,
forest health, and species distributions.ï¿½ Another goal for the same
year is to ï¿½document land-use and land-cover change in regions where
rapid change could potentially alter the
sensitivities/vulnerabilities of the region to climate change.ï¿½
Although it may be possible to determine whether these goals actually
occurred, they are difficult to use to assess the programs' progress
toward achieving their longer-term goals and overall purposes. 
Because such goals would involve different events each year, overall
progress may be hard to measure. 

About one-seventh of goals are results-oriented.  Performance goals
are most useful to congressional and other decisionmakers in judging
the results to be achieved for a proposed level of resources if they
are expressed as program outcomes and are quantifiable.  Outputs are
the direct products and services delivered by a program, such as a
regulation, inspection, or enforcement action.  Outcomes are the
results of these products and services. 

Outcome goals could be expressed in terms such as reductions in the
number of people developing respiratory diseases or cancers or dying
as a result of being exposed to pollutants in the air.  Performance
goals based on target levels of reductions in air pollutants would
also be outcome goals.  These intermediate outcome goals are not as
reflective of the program's ultimate purpose, but may be the best an
agency can do if sufficient data on health and environmental effects
are not available. 

While it is appropriate to have a mixture of outcome- and
output-oriented performance goals, the administration's report
contains a relatively small percentage of outcome-oriented
performance goals.  By our count, 11 (or 14 percent) of the 78
performance goals set out in the report are outcome-oriented.  All of
these are goals for intermediate outcomes--such as reduced emissions
of greenhouse gases believed to contribute to or cause global climate
change--rather than ultimate outcomesï¿½such as effects on health and
the environment.  However, given the state of our understanding of
climate change science, these intermediate outcome goals may be
appropriate at this time.  In addition, five of the goals are for the
year 2010, which may be too far away for congressional decisionmakers
to judge the intended performance for the funds that are being
requested for fiscal year 2000. 

Baseline and trend data were not provided.  Baseline and trend data
also provide a basis for comparing the actual results of a program
with the performance goals.  These data would provide a context for
drawing conclusions about whether performance goals are reasonable
and appropriate.  Decisionmakers could also use such data to gauge
how the programs' anticipated performance levels compare with past
performance.  The administration's report, however, does not include
either baseline or trend data. 

An example of the usefulness of such data is the Department of
Transportation's fiscal year 2000 performance plan under the
Government Performance and Results Act.  That plan includes graphs
that show baseline and trend data, as well as the targets for fiscal
years 1999 and 2000, for nearly all of its performance goals and
measures.  For instance, the performance goal for hazardous materials
incidents is to reduce the number of serious hazardous materials
incidents in transportation to 411 or fewer in 2000 from a peak of
464 in 1996.  The goal has a graph that shows the number of serious
hazardous materials incidents in transportation from 1985 through
1997 and target levels for fiscal years 1999 and 2000. 

Establishing useful performance goals for research programs can be
especially challenging.  More than half of the performance goals are
for activities related to research and development.  During our
reviews of the implementation of the Government Performance and
Results Act, we have found that federal agencies have had difficulty
measuring research annually and providing quantitative measures of
the useful outcomes of research.  Earlier this year, the Committee on
Science, Engineering, and Public Policy issued a report that may be
helpful to the agencies as they work to develop more useful
performance goals and measures for their research activities.\9 The
study's purpose was to identify and analyze the most effective ways
of assessing the results of research and to help the federal
government determine how its agencies can better incorporate research
activities into strategic and performance plans and improve the
management and effectiveness of research programs. 

After holding a series of workshops, the committee concluded that
research programs, no matter what their character and goals, can be
evaluated meaningfully on a regular basis in accordance with the
spirit and intent of the Results Act.  The committee said that, if,
for example, Energy adopted the goal of producing cheaper solar
energy, it could annually measure the results of the research
designed to decrease the cost of solar cells against specific
milestones.  Basic research, on the other hand, requires a different
method of assessment since the ultimate outcomes are seldom
identifiable while the research is in progress.  For this reason, the
committee suggested a three-pronged expert review process that may
apply to many of the climate change research programs.  We anticipate
that the guidance provided by this report will help agencies develop
more meaningful performance goals and measures for research programs
and activities. 

--------------------
\8 Other programs for which no goal was established are the National
Institute of Standards and Technology's industry programs; the carbon
sequestration or removal programs of the departments of Agriculture
and Energy and EPA; and Energy's programs related to the management,
planning, and analysis of its climate change activities. 

\9 Committee on Science, Engineering, and Public Policy of the
National Academy of Sciences, National Academy of Engineering, and
Institute of Medicine, Evaluating Federal Research Programs: 
Research and the Government Performance and Results Act, 1999. 

-------------------------------------------------------- Chapter 0:2.5

This concludes our prepared statement.  We would be pleased to
respond to questions from you or Members of the Committees. 

ANALYSIS OF THE LIMITATION ON EPA
EXPENDITURES
=========================================================== Appendix I

A proviso in the appropriations act that provides fiscal year 1999
funds for EPA states that those funds may not be used for certain
purposes related to the Kyoto Protocol.\10 Specifically, the law says
that funds shall not be used ï¿½to propose or issue rules, regulations,
decrees or orders for the purpose of implementation, or in
preparation for implementationï¿½ of the Kyoto Protocol. 

The scope of the proviso was both clarified and narrowed during the
legislative process.  First, the scope of the proviso was clarified
in the conference report discussion, to make it clear that the
limitation applies to those activities of EPA that are predicated
ï¿½solelyï¿½ on implementing, or preparing to implement, the Kyoto
Protocol.\11 Thus, an EPA activity justified by some other authority,
even if it also facilitated the implementation of the protocol, would
not be covered by this proviso. 

Also, the scope was narrowed during the legislative process.  The
House-passed version would have prohibited EPA from using funds to
ï¿½develop, propose, or issueï¿½ rules ï¿½in contemplation of
implementationï¿½ of the Kyoto Protocol.  However, the law, as enacted,
prevents EPA only from using funds to ï¿½propose or issueï¿½ rules whose
purpose is implementation, or ï¿½preparationï¿½ for implementation, of
the protocol.  The law, as enacted, is thus narrower in two respects. 
First, it prohibits EPA from proposing or issuing rules, rather than
more broadly preventing EPA from developing rules.  Second, the
prohibition extends only to ï¿½preparationï¿½ for implementing the
Protocol, rather than ï¿½contemplationï¿½ of its implementation. 
Accordingly, the final statutory language would apply only to
proposing or issuing rules or similar requirements having a
demonstrable relationship to implementing the protocol. 

In summary, in light of the clarification and narrowing of the
proviso's scope during congressional consideration, we conclude that
the limitation does not preclude EPA from engaging in activities that
are otherwise authorized by law. 

--------------------
\10 P.  L.  105-276, ï¿½Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act,
1999,ï¿½ Oct.  21, 1998. 

\11 H.  Rept.  105-769, Conference Report, ï¿½Making Appropriations for
the Department of Veterans Affairs and Housing and Urban Development,
and for Sundry Independent Agencies, Boards, Commissions,
Corporations, and Offices for the Fiscal Year Ending September 30,
1999, and For Other Purposes," Oct.  5, 1998, pp.  273 and 274. 

*** End of document. ***