11 June 2001

Excerpt: White House Working Group Report on Climate Change

The U.S. government is pursuing a broad range of strategies to reduce emissions of carbon dioxide and other greenhouse gases in major sectors of the economy, such as electrical power, transportation and other industry, according to a White House report.

The June 11 report, entitled "Climate Change Review," contains the initial findings of the president's Cabinet-level Working Group on Climate Change.

According to the report, current government efforts to reduce greenhouse gases linked to global warming include, among others, voluntary public-private partnership programs that promote energy efficiency, research and development investments and tax incentives to increase energy efficiency, and programs to reduce greenhouse gas emissions from federal buildings and transportation fleets.

Programs such as these have resulted in a 15-percent decline in the amount of carbon dioxide -- a key greenhouse gas -- emitted per unit of gross domestic product from 1990 to 1999.

The report cites current greenhouse gas reduction efforts by businesses, states and locals governments. For example, one oil and gas company intends to reduce its greenhouse gases by 10 percent below 1990 levels by 2002, and the state of New Jersey has established a 3.5-percent statewide reduction goal, and is developing voluntary agreements with various businesses.

Following is an excerpt from the report:

Current U. S. Actions To Address Climate Change

The Federal Government

The U. S. government is currently pursuing a broad range of strategies to reduce emissions of greenhouse gases, including:

• Voluntary public-private partnership programs that promote energy efficiency and the broader use of renewable energy;
  

• Research and development (R&D) investments and tax incentives to increase energy efficiency and the broader use of renewable energy;
  
• Appliance standards that increase the minimum level of efficiency of products on the market;
  
• Financial incentives such as grants to states and localities; and
  
• - Programs to reduce greenhouse gas emissions from Federal buildings and transportation fleets.

These programs are achieving real reductions in greenhouse gas emissions - the U. S. government estimates that its existing climate change programs reduced emissions by 66 million metric tons of carbon equivalent (MMTCE) in 2000, approximately 2.7% of total emissions. The amount of CO2 emitted per unit of GDP declined 15% from 1990 to 1999.

The following sections highlight illustrative programs in the major greenhouse gas emitting sectors of the economy: the electric power industry (32% of total U. S. greenhouse gas emissions); transportation (27%); other industry (21%); residential and commercial buildings (13%); and agriculture and forestry (net 7%) (unlike other sectors of the economy, agricultural and forestry activities can actively remove carbon dioxide from the atmosphere).

Electricity

Federal programs promote greenhouse gas reductions through the development of cleaner, more efficient technologies for electricity generation and transmission. For example, the Environmental Protection Agency/Department of Energy Combined Heat and Power Challenge program has the goal of doubling U. S. combined heat and power capacity by 2010 by providing technical assistance and addressing regulatory issues where possible.

The Federal government is also supporting renewable resources such as solar energy, wind power, geothermal energy, hydropower, bio-energy, and hydrogen. For example, the Department of Energy supports the development of a wide range of solar and renewable energy technology, seeking to improve their reliability, expand their applicability, and reduce their costs. These activities have been very successful in bringing down technology costs. The cost of producing photo-voltaic modules has decreased 50 percent since 1991, and the cost of wind power has decreased 85 percent since 1980. Commercial success has been achieved for both of these areas in certain applications.

Transportation

The U. S. is currently promoting the development of fuel-efficient motor vehicles and trucks, researching options for producing cleaner fuels, and implementing programs to reduce the number of vehicle miles traveled. For example, through the Partnership for a New Generation of Vehicles (PNGV) program, the research has directly led to the commercial introduction of new hybrid vehicles and soon hydrogen as well. Commercialization of such vehicles could cut fuel use and carbon emissions for individual vehicles significantly and could lay the foundation for large, long-term fuel and carbon benefits. If 10% of the on-road vehicle fleet utilized PNGV technologies, the aggregate emission reductions could be approximately 20 million metric tons of carbon equivalent per year. The program is being extended to sport utility vehicles and other light trucks which, because of their lower baseline fuel economies, have the potential for even greater overall fuel and carbon savings per vehicle.

Industry

The U. S. government is implementing many partnership programs with industry to reduce emissions of carbon dioxide (CO2) and other greenhouse gases, to promote source reduction and recycling, and to increase the use of combined heat and power. For example, current voluntary partnerships directed toward eliminating market barriers to the profitable collection and use of methane that otherwise would be released to the atmosphere are expected to hold methane emissions at or below 1990 levels through 2010. Since the launch of EPA's Voluntary Aluminum Industrial Partnership in 1995, the program's membership has grown to include 22 of the nation's 23 aluminum smelters, representing 94% of U. S. production capacity. As of 2000, program partners cumulatively achieved a 45% reduction in perfluorocarbon (a high global warming potential gas) emissions from 1990 levels.

Commercial and Residential Buildings

Partnership programs promote energy efficiency in the nation's commercial, residential, and government buildings (including schools) by offering technical assistance as well as the labeling of efficient products, efficient new homes, and efficient office buildings. As one example, the EPA/DOE Energy Star program collaborates with a wide range of building owners and users -- retailers, real estate investors, small businesses, governments and schools. Each partner commits to improve the energy performance of its facilities and the most efficient buildings are awarded the Energy Star label. More than 16% of the U.S. commercial, public, and industrial building market is enrolled in Energy Star. Nationwide, Energy Star has eliminated the need for over 10,000 megawatts of peak generating capacity -- equivalent to 20 large (50 MW) power plants.

Agriculture and Forestry

The Federal government is conducting research into methods to reduce emissions of methane and nitrous oxide from agriculture, and is implementing conservation programs that have the benefit of sequestering carbon in soils and forests. For example, USDA's Conservation Reserve Program (CRP) has taken over 36 million acres of environmentally sensitive crop land out of production. CRP provides long-term environmental benefits, including the offset of up to 12 MMTCE each year.

The Federal Government

The Federal Government has taken steps to reduce greenhouse gas emissions from energy use in Federal buildings and in the Federal transportation fleet by:

• Requiring all Federal agencies to take steps to cut greenhouse gas emissions from energy use in buildings by 30% below 1990 levels by 2010.
  
• Directing Federal agencies in Washington, D. C. to offer to their employees up to $65 per month in transit and van pool benefits.
  
• Requiring Federal agencies to implement strategies to reduce their fleet's annual petroleum consumption by 20% relative to 1999 consumption levels and to use alternative fuels a majority of the time.

Businesses, States and Communities, and Non-Governmental Organizations

Businesses, states and local governments, and non-governmental organizations are also moving forward to address global climate change --through programs to improve the measurement and reporting of emission reductions; through voluntary programs, including emissions trading programs; and through sequestration programs. For example:

Under the Voluntary Reporting of Greenhouse Gases program, provided by Section 1605(b) of the Energy Policy Act of 1992, more than 200 companies voluntarily reported to the Department of Energy their voluntary measures to reduce, avoid or sequester greenhouse gas emissions, principally carbon dioxide. These companies undertook 1,715 projects and achieved greenhouse gas emission reductions and carbon sequestration equivalent to 61.5 MMTCE, or about 3.4 percent of 1999 total U. S. greenhouse gas emissions.

Electric Utilities

Several companies have committed to reducing greenhouse gas emissions. Measures include:

• Improved generation efficiency (seasonal use of natural gas, hydroelectric turbine replacements, expanded capacity, shortened outage schedules at nuclear plants);
  
• Improved pipeline, transmission and distribution equipment efficiencies (including reducing leaks);


• Increased use of renewables (wind, biomass and solar);


• Improved home and office energy efficiencies (low-income weatherization, home energy audits, inefficient refrigerator and freezer removal and recycling, installation of advanced energy management systems, planting trees, and retrofitting energy efficient lighting in company buildings); and
  
• Investments in more efficient technologies (programs to install geothermal heat pumps, commercialize emerging energy efficient and renewable energy technologies, accelerate introduction of electric vehicles into the marketplace, and enhance carbon sequestration).

Oil and Gas

Some oil and gas companies have added greenhouse gas reductions to their list of corporate priorities. One company intends to reduce its greenhouse gases by 10% by 2002 (over 1990 levels), and another company is seeking to reduce by 10% by 2010. To do this, the company is adopting an internal system of company-wide emissions trading to meet its goal in the most cost-effective way possible. Significant gains can be made from such measures as reducing flaring and leaking.

Auto Manufacturers

Auto manufacturers have announced production plans for hybrid gas and electric vehicles in 2003 or 2004 and have pledged to increase their sport utility vehicles' fuel economy by 25% by 2005.

Chemicals

A chemicals trade association supports voluntary programs and its members' actions to improve energy efficiency and reduce greenhouse gases. For example, one company says it will reduce its greenhouse gas emissions by 65% (by 2010, over 1990 levels). It already has cut its global emissions by 45% by making major process-change investments (reducing nitrous oxides), by holding energy consumption flat even with tremendous production growth (with powerhouse and process efficiencies), and increased use of renewable energy. Another company is working to reduce energy use by 20% per unit of production by 2005.

Non-Governmental Organizations

Several non-governmental organizations and coalitions have initiated partnership programs with large global corporations to reduce emissions of greenhouse gases, and promote the use of energy conservation, renewable energy sources, and efficient technologies. Non-governmental organizations also are working with companies to support forestry projects that sequester carbon through tree planting and forest preservation, restoration and management.

States

More than 25 states have initiated state-based action plans to reduce greenhouse gas emissions. Some states are using market-based mechanisms to achieve reductions. For example, the State of New Jersey has established a 3.5% statewide reduction goal and is developing voluntary agreements with various businesses.

The National Energy Policy

The National Energy Policy includes numerous recommendations to promote energy efficiency and conservation and to reduce emissions of greenhouse gases through the use of alternative, renewable, and cleaner forms of energy. These recommendations include:

• Efficiency and Conservation Measures

• Tax incentives and other initiatives to promote the use of combined heat and power.

The NEPD Group recommended that the President direct the Secretary of the Treasury to work with Congress to encourage increased energy efficiency through combined heat and power (CHP) projects by shortening the depreciation life for CHP projects or providing an investment tax credit.

The NEPD Group also recommended that the President direct the Administrator of the Environmental Protection Agency (EPA) to work with local and state governments to promote the use of well-designed CHP and other clean power generation at brownfields sites, consistent with the local communities' interests. EPA will also work to clarify liability issues if they are raised at a particular site.

The NEPD Group recommended that the President direct the EPA Administrator to promote CHP through flexibility in environmental permitting.

Reviewing and providing recommendations on establishing CAFE standards as well as other market-based approaches to increase the national average fuel economy of new motor vehicles.

The NEPD Group recommended that the President direct the Secretary of Transportation to:

• Review and provide recommendations on establishing Corporate Average Fuel Economy (CAFE) standards with due consideration of the National Academy of Sciences study to be released in July 2001. Responsibly crafted CAFE standards should increase efficiency without negatively impacting the U. S. automotive industry. The determination of future fuel economy standards must therefore be addressed analytically and based on sound science.
  
• Consider passenger safety, economic concerns, and disparate impact on the U.S. versus foreign fleets of automobiles.
  
• Look at other market-based approaches to increasing the national average fuel economy of new motor vehicles.

Directing all agencies to use technological advances to better protect our environment.

The Administration remains committed to investing in Intelligent Transportation Systems (ITS) and encourages the private sector to invest in ITS applications. This Department of Transportation (DOT) program funds the development of improved transportation infrastructure that will reduce congestion, such as traveler information/navigation systems,, freeway management, and electronic toll collection. ITS applications reduce fuel associated with travel.

The Administration remains committed to the DOT's fuel-cell-powered transit bus program, authored by the Transportation Equity Act for the 21st Century (TEA-21). This program demonstrates the viability of fuel-cell power plants for transit bus applications.

The Administration remains committed to the Clean Buses program. TEA-21 establishes a new clean fuel formula grant program, which provides an opportunity to accelerate the introduction of advanced bus propulsion technologies into the mainstream of the nation's transit fleet.

Promoting energy efficiency, including expanding the Energy Star program.

The NEPD Group recommended that the President direct the Secretary of Energy to conduct a review of current funding and historic performance of energy efficiency research and development programs in light of the recommendations of this report. In addition, the NEPD Group recommended that the President direct the Office of Science and Technology Policy and the President's Council of Advisors on Science and Technology to review and make recommendations on using the nation's energy resources more efficiently.

The NEPD Group recommended that the President direct the Secretary of Energy to promote greater energy efficiency:

• Expand the Energy Star program beyond office buildings to include schools, retail buildings, health care facilities, and homes.
  
• Extend the Energy Star labeling program to additional products, appliances, and services.
  
• Strengthen Department of Energy public education programs relating to energy efficiency.

The NEPD Group recommended that the President direct the EPA Administrator to develop and implement a strategy to increase public awareness of the sizable savings that energy efficiency offers to homeowners across the country.

The NEPD Group recommended that the President direct the Secretary of Energy to establish a national priority for improving energy efficiency. The priority would be to improve the energy intensity of the U. S. economy as measured by the amount of energy required for each dollar of economic productivity. This increased efficiency should be pursued through the combined efforts of industry, consumers, and federal, state, and local governments.

Conserving energy at federal facilities.

The NEPD Group recommended that the President direct heads of executive departments and agencies to take appropriate actions to conserve energy use at their facilities to the maximum extent consistent with the effective discharge of public responsibilities.

Improving and expanding appliance standards.

The NEPD Group recommended that the President direct the Secretary of Energy to improve the energy efficiency of appliances:

• Support the appliance standards program for covered products, setting higher standards where technologically feasible and economically justified.
  
• Expand the scope of the appliance standards program, setting standards for additional appliances where technologically feasible and economically justified.

Promoting congestion mitigation technologies.

The NEPD Group recommended that the President direct the Secretary of Transportation to review and promote congestion mitigation technologies and strategies and work with Congress on legislation to implement these strategies.

Reducing demand for transportation fuels by establishing a ground freight management program.

The NEPD Group recommended that the President direct the EPA and DOT to develop ways to reduce demand for petroleum transportation fuels. These agencies will work with the trucking industry to establish a program to reduce emissions and fuel consumption from long-haul trucks at truck stops by implementing alternatives to idling, such as electrification and auxiliary power units at truck stops along interstate highways. EPA and DOT will develop partnership agreements with trucking fleets, truck stops, and manufacturers of idle-reducing technologies (e.g., portable auxiliary packs, electrification) to install and use low-emission-idling technologies.

Alternative, Renewable, and Clean Forms of Energy

Increasing America's use of renewable and alternative energy

The NEPD Group recommended that the President direct the Secretaries of the Interior and Energy to re-evaluate access limitations to federal lands in order to increase renewable energy production, such as biomass, wind, geothermal, and solar.

The NEPD Group supported the increase of $39.2 million in the FY 2002 budget amendment for the Department of Energy's Energy Supply account that would provide increased support for research and development of renewable energy resources.

The NEPD Group recommended that the President direct the Secretary of Energy to conduct a review of current funding and historic performance of renewable energy and alternative energy research and development programs. Based on this review, the Secretary of Energy is then directed to propose appropriate funding of those research and development programs that are performance-based and are modeled as public-private partnerships.

The NEPD Group recommended that the President direct the Secretary of the Treasury to work with Congress to develop legislation to provide for a temporary income tax credit available for the purchase of new hybrid or fuel-cell vehicles between 2002 and 2007.

The NEPD Group recommended that the President direct the Secretary of the Treasury to work with Congress on legislation to expand the section 29 tax credit to make it available for new landfill methane projects. The credit could be tiered, depending on whether a landfill is already required by federal law to collect and flare its methane emissions due to local air pollution concerns.

The NEPD Group recommended that the President direct the Secretary of the Interior to determine ways to reduce the delays in geothermal lease processing as part of the permitting review process.

The NEPD Group recommended that the President direct the Secretary of the Treasury to work with Congress on legislation to extend and expand tax credits for electricity produced using wind and biomass. The President's budget request extends the present 1.7 cents per kilowatt hour tax credit for electricity produced from wind and biomass; expands eligible biomass sources to include forest-related sources, agricultural sources, and certain urban sources; and allows a credit for electricity produced from biomass co-fired with coal.

The NEPD Group recommended that the President direct the Secretary of the Treasury to work with Congress on legislation to provide a new 15 percent tax credit for residential solar energy property, up to a maximum credit of $2,000.

The NEPD Group recommended that the President direct the Secretary of the Treasury to work with Congress to continue the ethanol excise tax exemption.

The NEPD Group recommended that the President direct the Secretary of Energy to develop next-generation technology