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Climate change

impact to be expected from the programs as a result of the nearly 40

percent reduction of CCAP funding by Congress from the amount requested by

the President, higher-than-expected electricity demand, and lower-than-

expected energy prices. In addition, before the programs' implementation,

CCAP program managers could not always anticipate the impacts of projected

climate change emission reductions. Information available from the first

tranche of activity was considered in developing the current projections.

A second product of the review was the identification of several

measures that have since been added to the CCAP portfolio. The most

significant of these is the Environmental Stewardship Initiative, which

greatly expands activities already included in the CCAP, and focuses on

reducing the emissions of extremely potent greenhouse gases from three

industrial applications--semiconductor production, electrical transmission

and distribution systems, and magnesium casting. The expanded initiative is

anticipated to reduce emissions by an additional 6.5 MMTCE by 2000, and

10.0 MMTCE by 2010. Other programs include improving energy efficiency in

the construction of and supply of energy to commercial and industrial

buildings, expanding residential markets for energy-efficient lighting

products, and providing information on renewable energy to reduce barriers

to the adoption of clean technologies.

The analysis of individual actions is integrated with revised forecasts

of economic growth, energy prices, program funding, and regulatory

developments to provide an updated comprehensive perspective on current and

projected greenhouse gas emission levels. This analysis involved an

updating of the baseline calculation in light of new economic assumptions

regarding energy prices, economic growth, and technology improvements,

among other factors. In 1993, the first U.S. submission projected year 2000

baseline emissions to be 106 MMTCE above their 1990 levels; with current

program funding, emissions are now projected to exceed 1990 levels by 188

MMTCE. Two principal factors are responsible:

The analysis used to develop CCAP significantly underestimated the

reductions that would be needed by programs to return emissions to 1990

levels by the year 2000. This was due to several factors, including lower-

than-expected fuel prices, strong economic growth, regulatory limitations

within and outside of CCAP, and improved information on emissions of some

potent greenhouse gases.

In addition, diminished levels of funding by Congress have affected both

CCAP programs and other federal programs that reduce emissions, limiting

their effectiveness.

While neither the measures initiated in 1993 nor the additional actions

developed since then and included in this report will be adequate to meet

the emissions goal enunciated by the President, they have significantly

reduced emissions below growth rates that otherwise would have occurred.

Based on current funding levels, the revised action plan is expected to

reduce emissions by 76 MMTCE in the year 2000--or 70 percent of the

reductions projected in the CCAP. Annual energy cost savings to businesses

and consumers from CCAP actions are anticipated to be $10 billion (1995

dollars) by the year 2000. Even greater reductions are estimated from these

measures in the post-2000 period: reductions of 169 MMTCE are projected for

2010, and 230 MMTCE for 2020. Annual energy savings are projected to grow

to $50 billion (1995 dollars) in the year 2010.

A separate component of this chapter addresses the U.S. Initiative on

Joint Implementation. Projects undertaken through this initiative allow

private-sector partners to offset emissions from domestic activities

through reductions achieved in other countries. The Climate Convention

established a pilot program for joint implementation at the first meeting

of the Conference of the Parties. Guidelines for reporting under the pilot

program were established by the Subsidiary Body for Scientific and

Technological Advice at its fifth session in February 1997. This report

uses those guidelines to report on project activity.

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