Climate Change

Information on the U.S. Initiative on Joint Implementation Gao ID: RCED-98-154 June 29, 1998

In 1994, the United States established a pilot program, the U.S. Initiative on Joint Implementation, to evaluate different approaches to reducing emissions of greenhouse gases by using a concept that allows a developed country to meet at least part of its obligation to reduce greenhouse gas emissions by receiving credit for investing in a project that reduces emissions in another country. This program encourages investments by U.S. entities (largely private sector firms) in projects to reduce greenhouse gas emissions outside the United States. Under the Initiative, U.S. entities, in cooperation with non-U.S. partners, develop project proposals and submit them to the Initiative for review and evaluation to determine which projects will be accepted into the program. This report provides information on the criteria used to accept proposed projects, the number and the types of projects accepted, the status of the seven projects accepted in the first round of proposals in February 1995, and the estimated benefits of pilot projects in terms of emissions reductions.

GAO noted that: (1) the Initiative's Evaluation Panel uses nine criteria to evaluate proposed projects for acceptance into the program; (2) among the criteria are acceptance by the host country, a reduction in greenhouse gases that would result from the proposed project and that would not have occurred otherwise, and a mechanism to verify the project's results; (3) the U.S. program generally has more criteria than similar programs administered by certain other countries; (4) also, the U.S. criteria are stricter in some respects, for example, by requiring that benefits be maintained over time; (5) through March 1998, Initiative officials had reviewed proposals for 97 different projects and accepted 32 of them; (6) of the 32 accepted projects, 17 involve reducing greenhouse gas emissions, for example, by constructing and operating a hydroelectric plant that will provide electricity previously produced by burning fossil fuels; (7) the other 15 involve capturing greenhouse gases already emitted; (8) also, 31 of the 32 projects are intended to reduce emissions of or capture carbon dioxide; the other project is intended to reduce methane emissions; (9) of the seven projects accepted into the Initiative as a result of the first round of evaluations in February 1995, five are in the process of being implemented; (10) this means that land has been acquired or facilities have been built, and the projects are in the process of reducing or capturing greenhouse gas emissions; (11) according to Initiative officials, as of March 1998, the remaining two projects--one that would reduce greenhouse gas emissions and one that would capture these emissions from the atmosphere--had not progressed because their developers had not been able to obtain financing; (12) the projects' developers estimate that, over a period of up to 60 years, the 32 approved projects, if fully funded and implemented, will result in net emissions reductions of about 200 million metric tons of carbon dioxide and 1.3 million metric tons of methane; (13) Initiative staff do not verify or attest to the reliability of the net greenhouse gas benefits estimated by the projects' developers; (14) in part, this is because standard methods for estimating projects' emissions reduction benefits specific to the U.S. Initiative have not been developed; (15) the Environmental Protection Agency (EPA) has funded studies to develop standard methods for calculating projects' benefits; and (16) according to EPA officials, these studies should be completed by the end of fiscal year 1998.

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