oversight

Diesel Pollution: Fragmented Federal Programs That Reduce Mobile Source Emissions Could Be Improved

Published by the Government Accountability Office on 2012-02-07.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United States Government Accountability Office

GAO             Report to Congressional Committees




February 2012
                DIESEL POLLUTION

                Fragmented Federal
                Programs That
                Reduce Mobile Source
                Emissions Could Be
                Improved




GAO-12-261
                                             February 2012

                                             DIESEL POLLUTION
                                             Fragmented Federal Programs That Reduce Mobile
                                             Source Emissions Could Be Improved
Highlights of GAO-12-261, a report to
congressional committees




Why GAO Did This Study                       What GAO Found
Exhaust from diesel engines is a harmful     Federal grant and loan funding for activities that reduce mobile source diesel
form of air pollution. EPA has issued        emissions is fragmented across 14 programs at the Department of Energy
emissions standards for new diesel           (DOE), the Department of Transportation (DOT), and the Environmental
engines and vehicles, but older mobile       Protection Agency (EPA). From fiscal years 2007 through 2011, the programs
sources of diesel emissions—such as
trucks and buses—continue to emit
                                             obligated at least $1.4 billion for activities that have the effect of reducing mobile
harmful pollution. Programs at DOE,          source diesel emissions. The programs have varying goals and purposes;
DOT, and EPA provide funding for             nevertheless, each program allows or requires a portion of its funding to support
activities that reduce diesel emissions,     activities that reduce mobile source diesel emissions, such as replacing fleets of
such as retrofitting existing diesel         older diesel trucks or school buses with natural gas vehicles. In addition, each of
engines and vehicles. The existence of       the 14 programs overlaps with at least one other program in the specific activities
these programs at multiple agencies has      they fund, the program goals, or the eligible recipients of funding. GAO also
raised questions about the potential for     identified several instances of duplication where more than one program
unnecessary duplication. In response to      provided grant funding to the same recipient for the same type of activities.
a mandate in the Diesel Emissions
Reduction Act of 2010, GAO examined
                                             However, GAO was unable to determine whether unnecessary duplication exists
the (1) extent of duplication, overlap,      because of limited information on program administrative costs, among other
fragmentation, or gaps, if any, among        things. GAO did not find any gaps among the programs, such as mobile sources
federal grant, rebate, and loan programs     that are not eligible for funding.
that address mobile source diesel
emissions; (2) effectiveness of federal
                                             The effectiveness of federal funding for activities that reduce mobile source
funding for activities that reduce mobile    diesel emissions is unknown because agencies vary in the extent to which they
source diesel emissions; and (3) extent      have established performance measures. DOE and EPA have established
of collaboration among agencies that         performance measures for the strategic goals related to their programs that
fund these activities. GAO analyzed          reduce mobile source diesel emissions. DOT has established such measures for
program data, documents, and relevant        two of its administrations—the Federal Aviation Administration and Federal
laws and regulations and interviewed         Highway Administration—but has not established such measures for the Federal
agency officials. GAO also reviewed          Transit Administration for two of the four strategic goals that link to its programs
three diesel-related tax expenditures.
                                             that fund diesel emissions reduction activities. Instead, agency officials said they
                                             collect information on the current condition of the nation’s transit fleet, among
What GAO Recommends                          other things, to measure the performance of its programs. As GAO has
                                             previously reported, principles of good governance indicate that agencies should
GAO recommends that DOT’s Federal            establish quantifiable performance measures to demonstrate how they intend to
Transit Administration develop               achieve their goals and measure the extent to which they have done so. In
performance measures for its two             addition, 13 of the 14 programs have purposes other than decreasing diesel
relevant strategic goals and that DOE,
                                             emissions, and diesel reductions are a side benefit of efforts to achieve these
DOT, and EPA establish a strategy for
collaboration among their programs that      other goals. As a result, few programs collect diesel-related performance
fund activities that reduce diesel           information. Incomplete performance information may limit the ability of agencies
emissions. DOE and EPA agreed with           to assess the effectiveness of their programs and activities that reduce diesel
the relevant recommendation, and DOE         emissions.
questioned several findings. DOT
questioned several findings and both         The programs that fund activities that reduce diesel emissions generally do not
recommendations and neither agreed nor       collaborate because of the differing purposes and goals of each program,
disagreed with the recommendations.          according to senior DOE, DOT, and EPA officials. The officials also were
GAO continues to believe in the need for     sometimes unaware of other programs that fund similar activities and said that
the performance measures and                 any existing collaboration was on a case-by-case basis. GAO’s previous work
collaboration.                               has shown that although federal programs have been designed for different
                                             purposes, coordination among programs with related responsibilities is essential
View GAO-12-261. For more information,
contact David Trimble at (202) 512-3841 or   to efficiently and effectively meet national concerns. Further, without a
trimbled@gao.gov.                            coordinated approach, programs can waste scarce funds, confuse and frustrate
                                             program customers, and limit the overall effectiveness of the federal effort.
                                                                                       United States Government Accountability Office
Contents


Letter                                                                                    1
               Background                                                                 4
               Federal Funding for Activities That Reduce Diesel Emissions Is
                 Fragmented across 14 Programs                                            8
               The Effectiveness of Federal Funding for Diesel Emissions
                 Reduction Activities Is Unknown                                        14
               Limited Collaboration May Hinder the Effectiveness of Federal
                 Funding for Activities That Reduce Diesel Emissions                    18
               Conclusions                                                              20
               Recommendations for Executive Action                                     21
               Agency Comments and Our Evaluation                                       21

Appendix I     Objectives, Scope, and Methodology                                       27



Appendix II    Additional Information on Federal Programs That Provide Grants or Loans
               for Mobile Source Diesel Emissions Reduction Activities              31



Appendix III   Tax Expenditures Related to Mobile Source Diesel Emissions Reduction
               Activities                                                          36



Appendix IV    Strategic Goals and Establishment of Performance Measures Related to
               Programs That Fund Activities That Reduce Mobile Source Diesel
               Emissions                                                            38



Appendix V     Comments from the Environmental Protection Agency                        40



Appendix VI    Comments from the Department of Energy                                   41



Appendix VII   Comments from the Department of Transportation                           49




               Page i                                            GAO-12-261 Diesel Pollution
Appendix VIII   GAO Contact and Staff Acknowledgments                                                     53



Tables
                Table 1 Estimated Federal Funds Obligated for Mobile Source
                        Diesel Emissions Reduction Activities, by Agency and
                        Program, Fiscal Years 2007-2011                                                   10
                Table 2 Overlapping Mobile Source Diesel Emissions Reduction
                        Activities, Goals, and Eligible Recipients, by Agency and
                        Program                                                                           12


Figures
                Figure 1 Effective Dates of Major Nitrogen Oxide Emission Limits
                         for Newly Manufactured Mobile Sources of Diesel
                         Emissions, by Source                                                             6
                Figure 2 Effective Dates of Major Particulate Matter Emission
                         Limits for Newly Manufactured Mobile Sources of Diesel
                         Emissions, by Source                                                             7




                Abbreviations
                DOE       Department of Energy
                DOT       Department of Transportation
                EPA       Environmental Protection Agency

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                Page ii                                                        GAO-12-261 Diesel Pollution
United States Government Accountability Office
Washington, DC 20548




                                   February 7, 2012

                                   The Honorable Barbara Boxer
                                   Chairman
                                   The Honorable James M. Inhofe
                                   Ranking Member
                                   Committee on Environment and Public Works
                                   United States Senate

                                   The Honorable Fred Upton
                                   Chairman
                                   The Honorable Henry A. Waxman
                                   Ranking Member
                                   Committee on Energy and Commerce
                                   House of Representatives

                                   Diesel engines play a vital role in public transportation, construction,
                                   agriculture, and shipping, largely because they are more durable and
                                   reliable than gasoline-powered engines, as well as 25 to 35 percent more
                                   energy efficient. However, exhaust from diesel engines is a more
                                   pervasive and harmful form of air pollution than exhaust from gasoline-
                                   powered engines. Diesel exhaust contains air pollutants such as nitrogen
                                   oxides and particulate matter, as well as other harmful substances that
                                   affect public health and the environment. 1 Since 1984, the Environmental
                                   Protection Agency (EPA) has implemented standards that have
                                   progressively lowered the maximum allowable amount of certain
                                   pollutants, including nitrogen oxides and particulate matter, from new
                                   diesel engines by more than 98 percent. However, the most stringent
                                   standards generally apply to diesel engines and vehicles built after 2007,
                                   and EPA estimates that more than 20 million mobile sources of diesel
                                   emissions built before 2007—13 million on-highway vehicles, 7 million




                                   1
                                    Nitrogen oxides are regulated pollutants commonly known as NOx that, among other
                                   things, contribute to the formation of ozone. Particulate matter is an ubiquitous form of air
                                   pollution commonly referred to as soot.




                                   Page 1                                                           GAO-12-261 Diesel Pollution
nonroad engines, and 47,000 locomotive and marine engines—continue
to emit higher amounts of harmful pollutants than newer engines. 2

Programs at the Department of Energy (DOE), the Department of
Transportation (DOT), and EPA address mobile source diesel emissions
by funding projects that, among other things, retrofit, rebuild, or replace
existing diesel engines or vehicles; install devices that reduce idling of
diesel engines; and convert diesel engines and vehicles to use cleaner
fuels, such as natural gas or propane. The existence of these programs at
multiple agencies has raised questions about the potential for
unnecessary duplication. We have previously reported that fragmentation
and overlap among government programs can lead to such duplication. 3
Fragmentation occurs when more than one federal agency, or more than
one organization within an agency, is involved in the same broad area of
national need. Overlap occurs when multiple agencies and programs
have similar goals, engage in similar activities or strategies to achieve
them, or target similar beneficiaries. We have also reported that federal
programs contributing to the same or similar outcomes should closely
coordinate to improve their overall effectiveness. 4

In response to a mandate in the Diesel Emissions Reduction Act of 2010,
this report examines the (1) extent to which duplication, overlap,
fragmentation, or gaps, if any, exist among federal grant, rebate, and loan
programs that address mobile source diesel emissions; (2) effectiveness
of federal funding for activities that reduce mobile source diesel
emissions; and (3) extent to which collaboration takes place among
agencies that fund activities that reduce mobile source diesel emissions. 5




2
 Nonroad engines are those used in machines, such as construction equipment,
agricultural equipment, and airport service vehicles. Also, EPA does not maintain
information on the number of mobile sources of diesel emissions built after 2007.
3
 GAO, Managing for Results: Using the Results Act to Address Mission Fragmentation
and Program Overlap, GAO/AIMD-97-146 (Washington, D.C.: Aug. 29, 1997). For more
information on fragmentation, overlap, and duplication in federal programs see GAO,
Opportunities to Reduce Potential Duplication in Government Programs, Save Tax
Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011).
4
 GAO/AIMD-97-146.
5
 Pub. L. No. 111-364 § 3(a)-(b). 124 Stat. 4060 (2011). Additionally, in this report, we use
the term “diesel emissions” when referring to both diesel emissions and diesel fuel use.




Page 2                                                          GAO-12-261 Diesel Pollution
This report also provides information on tax expenditures that address
mobile source diesel emissions. 6

To address the first objective, we reviewed relevant statutes and
regulations; conducted a literature review; analyzed agency documents;
interviewed agency officials and industry stakeholders; and conducted
Internet searches to identify grant, rebate, and loan programs that fund
mobile source diesel emissions reduction activities. We then reviewed
agency documents and conducted structured interviews of agency
officials from each relevant DOE, DOT, and EPA program we identified.
We conducted interviews about the program’s purpose, goals, eligible
activities, target beneficiaries, and types of funding to identify areas of
duplication, overlap, or fragmentation. We also compared the types of
eligible recipients under each program with available data on the sources
of diesel emissions to identify any gaps among the programs. In addition,
we obtained and analyzed funding data from the three agencies to
estimate the total amount of federal funding for diesel emissions reduction
projects from fiscal years 2007 through 2011. We selected this period
because, by 2007, EPA had issued emissions standards for key on-road
sources, such as heavy-duty trucks and buses, as well as a rule requiring
refiners to reduce the sulfur content of—and therefore emissions from—
certain diesel fuels. We reviewed documents about the underlying
databases and interviewed knowledgeable agency officials to assess the
reliability of the data for each program. We determined that the data
obtained from these agencies were sufficiently reliable for the purposes of
this report. To respond to the second and third objectives, we reviewed
agency documents and conducted structured interviews with agency
officials about program goals and performance, coordination with other
programs, and assessments of diesel pollution, among other things. We
then compared these programs’ efforts with best practices for federal
programs that contribute to the same outcome. To identify these best
practices, we reviewed our prior work as well as relevant statutes,
including the Government Performance and Results Act of 1993 and the
Government Performance and Results Act Modernization Act of 2010. 7 A


6
 Tax expenditures include exemptions and exclusions from taxation, deductions, credits,
deferral of tax liability, and preferential tax rates. The revenue that the government forgoes
in these instances may be viewed as spending channeled through the tax system.
7
 The Government Performance and Results Act Modernization Act of 2010, Pub. L. No.
111-352, 124 Stat. 3866 (2011), amends the Government Performance and Results Act of
1993, Pub. L. No. 103-62, 107 Stat. 285 (1993).




Page 3                                                           GAO-12-261 Diesel Pollution
             more detailed description of our scope and methodology is presented in
             appendix I.

             We conducted this performance audit from May 2011 to February 2012 in
             accordance with generally accepted government auditing standards.
             Those standards require that we plan and perform the audit to obtain
             sufficient, appropriate evidence to provide a reasonable basis for our
             findings and conclusions based on our audit objectives. We believe that
             the evidence obtained provides a reasonable basis for our findings and
             conclusions based on our audit objectives.


             Under the Clean Air Act, EPA is responsible for setting National Ambient
Background   Air Quality Standards for certain pollutants considered harmful to public
             health and the environment. EPA has set these standards for six such
             pollutants, known as criteria air pollutants: carbon monoxide, nitrogen
             oxides, sulfur oxides, particulate matter, ozone, and lead. 8 Diesel exhaust
             contains nitrogen oxides, particulate matter, and numerous other harmful
             chemicals. Exposure to nitrogen oxides can result in adverse respiratory
             effects, and nitrogen oxides contribute to the formation of ozone, which
             can cause respiratory illnesses, decreased lung function, and premature
             death. A large body of scientific evidence links exposure to particulate
             matter to serious health problems, including asthma, chronic bronchitis,
             heart attack, and premature death.

             According to EPA documents, as of 2009, mobile diesel sources emitted
             about 47 percent (6.4 million tons) of the nation’s nitrogen oxides and
             about 16 percent (300,000 tons) of its particulate matter. 9 EPA estimated
             that on-highway trucks and vehicles and nonroad sources, such as
             agriculture and construction equipment, contributed about 57 percent of
             these nitrogen oxide emissions and 58 percent of the particulate matter
             emissions, and marine and locomotive sources contributed the remaining



             8
              These standards are expressed as concentration limits in the ambient air averaged over
             a specific period—such as 1 hour or 8 hours—and compliance is determined through
             localized ground level monitoring.
             9
              Nondiesel mobile sources, industrial processes, and power plants, among other sources,
             generated the remaining nitrogen oxide emissions; fossil fuel combustion, dust, and
             agricultural activities, among other sources, generated the remaining particulate matter
             emissions.




             Page 4                                                       GAO-12-261 Diesel Pollution
43 percent and 42 percent of such emissions, respectively, from diesel
engines.

EPA has progressively implemented more stringent diesel emissions
standards to lower the amount of key pollutants from mobile diesel
sources since 1984. 10 For example, EPA regulations for heavy-duty
highway diesel engines required a 98 percent reduction from 1988
allowable levels of nitrogen oxide and particulate matter emissions for
new engines built after 2009. The most recent emissions standards for
construction and agricultural equipment began to take effect in 2008 and
required a 95 percent reduction in nitrogen oxides and a 90 percent
reduction in particulate matter from previous standards, which took effect
in 2006 and 2007. In 2008, EPA issued its most recent regulations for
new marine vessels and locomotives, which EPA expects will, by 2030,
reduce nitrogen oxide emissions from the engines of these sources by
about 80 percent and particulate matter emissions by about 90 percent
compared to previous standards. Figures 1 and 2 show the effective
dates of major reductions in allowable amounts of nitrogen oxide and
particulate matter emissions from mobile diesel sources.




10
  EPA also sets standards for new or upgraded stationary sources of diesel emissions,
such as engines used to generate electricity at power and manufacturing plants. In 2008,
EPA estimated that more than 900,000 stationary diesel engines were in operation.




Page 5                                                       GAO-12-261 Diesel Pollution
Figure 1: Effective Dates of Major Nitrogen Oxide Emission Limits for Newly
Manufactured Mobile Sources of Diesel Emissions, by Source




a
 Grams per brake horsepower-hour is a measure of the grams of nitrogen oxides a vehicle or engine
emits per the amount of energy the vehicle or engine uses during one hour.
b
 These emission limits apply to nonroad engines at or above 175 horsepower, such as a large
bulldozer engine. EPA has also set nitrogen oxide emission standards for such engines below 50
horsepower, such as small tractor engines, and engines between 50 and 175 horsepower, which took
effect in 2006 and 2008, respectively.




Page 6                                                              GAO-12-261 Diesel Pollution
Figure 2: Effective Dates of Major Particulate Matter Emission Limits for Newly
Manufactured Mobile Sources of Diesel Emissions, by Source




a
 Grams per brake horsepower-hour is a measure of the grams of particulate matter a vehicle or
engine emits per the amount of energy the vehicle or engine uses during one hour.
b
 These emission limits apply to nonroad engines at or above 175 horsepower, such as a large
bulldozer engine. EPA has also set particulate matter emission standards for such nonroad engines
below 50 horsepower, such as small tractor engines, which took effect in 2000 and 2006.
c
 The 1998 emission limit in the figure applies to urban buses. EPA also set particulate matter
standards for heavy-duty trucks that took effect in 1998, which limited emissions from these engines
to 0.1 grams per brake horsepower-hour.


Owners and operators of diesel engines can undertake a variety of
activities to reduce diesel emissions, including retrofitting, rebuilding, or
replacing existing diesel engines or vehicles; installing devices that
reduce idling of diesel engines; and converting diesel engines and
vehicles to use cleaner fuels. Retrofitting existing diesel engines generally
involves the installation of emissions control devices, such as filters, on a
vehicle’s tailpipe. Rebuilding components of existing diesel engines can
return engines to their original emissions levels or involve the installation
of new technology that produces lower levels of emissions. Replacing



Page 7                                                                GAO-12-261 Diesel Pollution
                       existing diesel engines and vehicles with newer, lower emitting engines or
                       vehicles can lead to significant emissions reductions, but because it is a
                       costly option, it may be most appropriate for the oldest, most polluting
                       vehicles. Devices that reduce idling of diesel engines generally allow a
                       vehicle’s heat, air conditioning, and other electrical equipment to run
                       without operation of the vehicle’s main engine. Converting diesel vehicles
                       and engines to use cleaner fuels can also provide significant emissions
                       reductions.

                       The Government Performance and Results Act, as amended, requires
                       agencies to prepare annual performance plans that contain, among other
                       things, a set of annual goals that establish the agencies’ intended
                       performance and measures that can be used to assess progress toward
                       achieving those goals. DOE, DOT, and EPA establish and organize these
                       goals and performance measures at differing agency and administrative
                       levels. Specifically, DOE and EPA establish strategic goals and
                       performance measures for each goal as part of their agencywide
                       performance plans. DOT establishes strategic goals as part of its
                       agencywide strategic plan, but the agency’s administrations—the Federal
                       Aviation Administration, Federal Highway Administration, and Federal
                       Transit Administration, among others—generally establish their own
                       performance measures for assessing their programs’ contributions to the
                       department’s strategic goals.


                       Federal grant and loan funding for activities that reduce mobile source
Federal Funding for    diesel emissions is fragmented across 14 programs at DOE, DOT, and
Activities That        EPA. Many of these programs generally target air pollution, but of the 14
                       programs, one—EPA’s Diesel Emissions Reduction Act program—has a
Reduce Diesel          specific purpose of reducing mobile source diesel emissions. The
Emissions Is           remaining 13 programs focus on other goals or purposes, such as
                       supporting energy efficiency projects or reducing petroleum use.
Fragmented across 14   Nevertheless, each of these programs allows or requires a portion of its
Programs               funding to support activities that have the effect of reducing mobile source
                       diesel emissions. For example, authorizing legislation for DOT’s
                       Congestion Mitigation and Air Quality Improvement program directs grant
                       recipients to give priority to certain activities, including retrofitting diesel
                       engines and vehicles. The 14 programs provide funding through one or
                       more mechanisms, including competitive grants, formula grants, and




                       Page 8                                                 GAO-12-261 Diesel Pollution
loans. 11 Specifically, 13 of the programs provide funding through
competitive and formula grants, and 1 program—DOT’s State
Infrastructure Banks program—provides loans. 12 We did not identify any
gaps in the programs, such as mobile sources that are not eligible for
funding. See appendix II for additional information about each program.

From fiscal years 2007 through 2011, these 14 programs obligated at
least $1.4 billion for activities that have the effect of reducing mobile
source diesel emissions. 13 According to data from DOE, DOT, and EPA,
the American Recovery and Reinvestment Act of 2009 provided about
$870 million of this funding. The $1.4 billion amount is a lower bound
because DOT could not determine the amount of grant and loan funding
some of its programs have provided for projects that reduce mobile
source diesel emissions. According to DOT officials, the agency does not
track this information because statutory program requirements do not call
for the agency to do so. 14 These activities that have the effect of reducing
mobile source diesel emissions include replacing fleets of older diesel
trucks or school buses with natural gas vehicles, installing particulate
matter filters on construction equipment, and replacing diesel-powered



11
  Competitive grant programs award funds for specific projects or activities based on
eligibility and selection criteria as established by law or regulation, or on an administrative
basis. Formula grant programs allocate funds to states or their subdivisions in accordance
with a distribution formula prescribed in law or administrative regulation. Grant recipients
may then allocate these funds to specific projects based on program eligibility guidelines.
12
  Under DOT's State Infrastructure Banks program, states may use allocated federal
transportation funds to capitalize state infrastructure banks, which in turn provide loans
and other nongrant financial assistance to eligible projects.
13
  All dollar amounts in this report are in nominal dollars.
14
  DOT’s Federal Transit Administration was unable to provide this information for the Bus
and Bus Facilities program; Clean Fuels Grant program; Congestion Mitigation and Air
Quality Improvement program, for which the Federal Transit Administration manages
grant data; the Transit in Parks program; and the Urbanized Area Formula Grants
program. According to agency officials, the agency does not track which grants fund
projects that reduce diesel emissions, and agency officials said that they would have to
perform a labor-intensive, time-consuming review—diverting limited resources at the
critical end of the fiscal year period—to estimate the amount of program funding that has
reduced diesel emissions. Instead, the agency provided us with access to its grants
database, from which we estimated the amount of funding provided for diesel emissions
reduction projects for the Clean Fuels Grant, Congestion Mitigation and Air Quality
Improvement, and Transit in Parks programs, but we were unable to estimate the amount
of funding provided through the Bus and Bus Facilities or Urbanized Area Formula Grants
programs due to the time frame of our review. See appendix I for additional information.




Page 9                                                            GAO-12-261 Diesel Pollution
                                            airport luggage transporters with electric vehicles. As table 1 shows,
                                            some of the programs that support these activities have broad purposes,
                                            such as increasing energy efficiency in transportation, reducing petroleum
                                            consumption, or funding public transportation projects, and other
                                            programs have narrower purposes, such as reducing emissions at
                                            airports, constructing ferry boats and related facilities, or promoting
                                            alternative transportation systems in and around national parks.

Table 1: Estimated Federal Funds Obligated for Mobile Source Diesel Emissions Reduction Activities, by Agency and
Program, Fiscal Years 2007-2011

Dollars in millions
Agency/program                                Purpose                                                                  Grants      Loans
DOE
    Clean Cities program                      To advance the nation’s economic, environmental, and energy                  $305        —
                                              security by funding projects that reduce petroleum use in
                                              transportation
    Energy Efficiency and Conservation        To support energy efficiency and conservation projects that reduce            256        —
    Block Grant program                       fossil fuel emissions and energy use and improve energy efficiency
                                              in the transportation and building sectors
    State Energy Program                      To support state development and implementation of strategies and               11       —
                                              goals that promote energy efficiency and conservation
DOE total                                                                                                                  $572        —
DOT
Federal Aviation Administration
    Voluntary Airport Low Emissions           To reduce airport ground vehicle and equipment emissions at                     18       —
    program                                   airports in air quality nonattainment and maintenance areas
Federal Highway Administration
    Congestion Mitigation and Air Quality     To support transportation projects that contribute to the attainment          178        —
    Improvement program                       or maintenance of carbon monoxide, ozone, and particulate matter
                                              air quality standards and relieve congestion
    Ferry Boat Discretionary program          To fund the construction of ferry boats and ferry terminal facilities           26       —
    State Infrastructure Banks program        To facilitate state establishment of infrastructure banks to provide            —       $6a
                                              nongrant assistance for eligible transportation projects
Federal Transit Administration
    Bus and Bus Facilities program            To replace, rehabilitate, and purchase buses and related                       —b        —
                                              equipment and construct or rehabilitate bus-related facilities
    Clean Fuels Grant program                 To assist achievement and maintenance of air quality standards by               17       —
                                              providing grants for clean fuel buses and facilities
    National Fuel Cell Bus Technology         To develop commercially viable fuel cell bus technology and related             11       —
    Development program                       infrastructure
    Transit in Parks program                  To promote alternative transportation systems in and around                    —c        —
                                              national parks and other federal lands




                                            Page 10                                                            GAO-12-261 Diesel Pollution
Dollars in millions
Agency/program                               Purpose                                                                               Grants      Loans
    Transit Investments for Greenhouse       To reduce energy consumption or greenhouse gas emissions of                                  96       —
    Gas and Energy Reduction program         public transportation systems
    Urbanized Area Formula Grants            To support capital projects, planning, transit enhancements, and                            —b        —
    program                                  certain operating costs for public transportation in urbanized areas
DOT total                                                                                                                             $346d       $6
EPA
    Diesel Emissions Reduction Act           To reduce emissions from existing diesel engines and vehicles                              512        —
    Program
Estimated total federal funding                                                                                                      $1,430d      $6
                                         Source: GAO analysis of relevant laws and DOE, DOT, and EPA data and documents.


                                         Notes: The American Recovery and Reinvestment Act of 2009 provided funding for DOE’s Clean
                                         Cities, Energy Efficiency and Conservation Block Grant, and State Energy programs; DOT’s Ferry
                                         Boat Discretionary, Transit Investments in Greenhouse Gas and Energy Reduction, and Urbanized
                                         Area Formula Grants programs; and EPA’s Diesel Emissions Reduction Act Program.
                                         a
                                          This amount is a lower bound because Federal Highway Administration officials do not obtain
                                         complete data from states on projects funded through the State Infrastructure Bank program.
                                         b
                                          DOT was unable to provide information on the amount of funding this program awarded for projects
                                         that reduced mobile source diesel emissions.
                                         c
                                          We were unable to identify any projects this program funded during fiscal years 2007-2011 that
                                         reduced mobile source diesel emissions. However, this program does allow its funding to support
                                         activities that reduce these emissions.
                                         d
                                          This total is a lower bound because agencies were unable to determine the amount of funding that
                                         some of their programs provided for activities that reduce diesel emissions.


                                         As table 2 shows, each of the 14 relevant programs overlaps with at least
                                         one other program in the specific types of activities they fund, the
                                         program goals, or the eligible recipients of funding. For example, 6 of the
                                         14 programs share a broad goal of increasing energy efficiency, and local
                                         governments are eligible to receive grants under 10 of the programs. In
                                         addition, we found that 13 of the 14 programs fund activities that retrofit
                                         diesel engines or vehicles, and 11 programs fund activities that reduce
                                         diesel vehicle idling. We also identified the potential for overlap among
                                         these 11 programs and an excise tax exemption for certain vehicle idling
                                         reduction devices because the tax expenditure and the 11 programs all
                                         provide incentives to use idle reduction devices to reduce diesel
                                         emissions. Appendix III provides additional information on this and two
                                         other tax expenditures related to diesel emissions reductions.




                                         Page 11                                                                           GAO-12-261 Diesel Pollution
Table 2: Overlapping Mobile Source Diesel Emissions Reduction Activities, Goals, and Eligible Recipients, by Agency and
Program

                                                                    Activities                                                                                     Goals                                                                                  Eligible recipients




                                                                                                                                                      areas not meeting air




                                                                                                                                                                                                                                                                                                                   Private or nonprofit
                                                                                                                                                      Reduce pollution in




                                                                                                                                                                                                                                      Local governments
                                                                                                                                                                                                                  State governments



                                                                                                                                                                                                                                                          Land management
                                                                                                                                   Reduce emissions
                                                                          Replace vehicle or
                                                     Rebuild vehicle or
                               Retrofit vehicle or




                                                                                                                                                      quality standards




                                                                                                                                                                                                                                                                                               recognized tribes
                                                                                                                                                                                                                                                                            Transit agencies
                                                                                                                Use cleaner fuel




                                                                                                                                                                                                Reduce fuel use
                                                                                                                                                                              Increase energy
                                                                                               Reduce vehicle




                                                                                                                                                                                                                                                                                                                   organizations
                                                                                                                                                                              efficiency




                                                                                                                                                                                                                                                                                               Federally
                                                                                                                                                                                                                                                          agencies
                               engine


                                                     engine


                                                                          engine


                                                                                               idling

Agency/program
DOE
Clean Cities                         ●                                            ●                ●                   ●                                                            ●                  ●              ●                   ●                    ●                    ●              ●                    ●
Energy Efficiency and                ●                     ●                      ●                ●                   ●                  ●                                         ●                                 ●                   ●                                                        ●
Conservation Block Grant
State Energy Program                 ●                     ●                      ●                ●                   ●                                                            ●                  ●              ●
DOT
Federal Aviation
Administration
Voluntary Airport Low                ●                                            ●                                    ●                  ●                    ●                                                      ●                   ●
Emissions
Federal Highway
Administration
Congestion Mitigation and            ●                     ●                      ●                ●                   ●                                       ●                                                      ●                   ●                                         ●
Air Quality Improvement
Ferry Boat Discretionary             ●                     ●                      ●                                    ●                                                                                              ●                   ●                                                                             ●
State Infrastructure Banks           ●                     ●                      ●                ●                   ●                                                                                              ●
Federal Transit
Administration
Bus and Bus Facilities               ●                     ●                      ●                                    ●                                                                               ●              ●                   ●                                         ●              ●
Clean Fuels Grant                    ●                     ●                      ●                ●                   ●                  ●                    ●                    ●                  ●              ●                   ●                                         ●
National Fuel Cell Bus                                                            ●                ●                   ●                  ●                                         ●                  ●                                                                                                                ●
Technology Development
Transit in Parks                     ●                     ●                      ●                ●                   ●                  ●                                                                           ●                   ●                    ●                    ●              ●                    ●
Transit Investments in               ●                     ●                      ●                ●                   ●                  ●                                         ●                  ●              ●                                                             ●              ●
Greenhouse Gas and
Energy Reduction
Urbanized Area Formula               ●                     ●                      ●                ●                   ●                                                                               ●              ●                   ●                                         ●
Grants
EPA
Diesel Emissions Reduction           ●                     ●                      ●                ●                   ●                  ●                                                                           ●                   ●                                         ●              ●                    ●
Act Program
                                                                 Source: GAO analysis of relevant laws and DOE, DOT, and EPA documents and interviews.




                                                                 Page 12                                                                                                                                                      GAO-12-261 Diesel Pollution
We also identified several instances of duplication where more than one
program provided funding to the same recipient for the same type of
activities. In one case, a state transportation agency received $5.4 million
from DOT’s Transit Investments in Greenhouse Gas Emissions Reduction
program to, among other things, upgrade 37 diesel buses to hybrid
diesel-electric buses; $3.5 million from DOT’s Congestion Mitigation and
Air Quality Improvement program to replace diesel buses with 4 hybrid
diesel-electric buses; and $2.3 million from DOT’s Clean Fuels Grant
program to replace 4 diesel buses with hybrid electric buses. In another
case, a nonprofit organization received $1.1 million from EPA’s Diesel
Emissions Reduction Act Program to install emission reduction and idle
reduction technologies on 1,700 trucks as well as $5.6 million from a state
infrastructure bank established under DOT’s program to equip trucks and
truck fleets with emissions control and idle reduction devices.

Even with duplication among the programs, several factors make it
difficult to precisely determine whether unnecessary duplication exists.
First, when different programs fund the same diesel emissions reduction
activities, it is not necessarily wasteful. For example, a transit agency
could use funds from two different programs to replace two separate
fleets of aging diesel buses. Second, grant recipients may leverage
funding from more than one program to support the full cost of diesel
emissions reduction projects. In some cases, grant recipients have used
funding from multiple agencies, in addition to local matching funds, to
support the cost of large projects that include multiple diesel emissions
reduction activities. Third, agencies were often unable to provide
information necessary to determine whether and to what extent
unnecessary duplication exists among the programs. For example,
several agencies reported that they do not track costs for administrative
functions at the program level. Without information on these costs, it is
difficult to determine whether and to what extent programs perform
duplicative administrative functions that could be consolidated to provide
grants and loans more efficiently.

The fragmentation, overlap, and duplication among these programs
result, in part, from their legislative creation as separate programs with
different purposes that fund a wide range of activities, some of which
have the effect of reducing mobile source diesel emissions. We have
previously reported that, as the federal government has responded over
time to new needs and problems, many agencies have been given




Page 13                                             GAO-12-261 Diesel Pollution
                       responsibilities for addressing the same or similar national issues. 15 Some
                       of this shared responsibility was intended to recognize that addressing
                       some issues from a national perspective would necessarily involve more
                       than one agency or approach. However, the resulting fragmentation,
                       overlap, and duplication may waste administrative resources and create
                       an environment in which participants are not served as efficiently and
                       effectively as possible. In addition, we have previously reported that
                       fragmentation, overlap, and duplication suggest the need for further
                       examination of programs to identify potential areas for improvement,
                       realignment, consolidation, or elimination. 16


                       The effectiveness of federal funding for activities that reduce mobile
The Effectiveness of   source diesel emissions is unknown because agencies vary in the extent
Federal Funding for    to which they have established performance measures. In addition, few
                       programs collect performance information on their diesel emissions
Diesel Emissions       reduction activities because 13 of the 14 programs that fund these
Reduction Activities   activities have purposes other than reducing diesel emissions. This
                       incomplete performance information may limit the ability of agencies to
Is Unknown             assess the effectiveness of their programs and activities that reduce
                       diesel emissions.

                       Agencies that fund activities that reduce mobile source diesel emissions
                       have established performance measures for their strategic goals to
                       varying degrees. DOE and EPA have established performance measures
                       for the strategic goals related to their programs that reduce mobile source
                       diesel emissions. For example, EPA monitors progress toward its
                       strategic goal of reducing greenhouse gas emissions and developing
                       adaptation strategies to protect and improve air quality by measuring,
                       among other things, the tons of mobile source emissions its programs
                       reduce. DOT has established such performance measures for two of its
                       administrations—the Federal Aviation Administration and Federal
                       Highway Administration—but has not established such measures for the
                       Federal Transit Administration for two of the four strategic goals that link
                       to its programs that fund diesel emissions reduction activities. Appendix



                       15
                        GAO/AIMD-97-146 and GAO, Agencies’ Annual Performance Plans Under the Results
                       Act: An Assessment Guide to Facilitate Congressional Decisionmaking,
                       GAO/GGD/AIMD-10.1.18 (Washington, D.C.: February 1998).
                       16
                        GAO/AIMD-97-146.




                       Page 14                                                GAO-12-261 Diesel Pollution
IV provides additional information on these agencies’ strategic goals and
performance measures related to programs that reduce mobile source
diesel emissions.

The Government Performance and Results Act, as amended, generally
requires agencies to provide a basis for comparing actual results with
established goals, and as such, federal departments and agencies are to
comply with Government Performance and Results Act requirements. As
we have previously reported, Government Performance and Results Act
requirements also can serve as leading practices at lower levels within
federal agencies, such as individual divisions, programs, or initiatives. 17
We have also reported that principles of good governance indicate that
agencies should establish quantifiable performance measures to
demonstrate how they intend to achieve their goals and measure the
extent to which they have done so. 18 The Federal Transit Administration
has not established performance measures for its goals of (1)
environmental sustainability—that is, advancing environmentally
sustainable policies and investments that reduce carbon and other
harmful emissions from transportation sources—and (2) economic
competitiveness—that is, promoting transportation policies and
investments that bring lasting and equitable economic benefits to the
nation and its citizens. Agency officials said they generally collect
information on the current condition of the nation’s transit fleet, the use of
public transportation, and transit fleet compliance with the Americans with
Disabilities Act to measure the performance of the agency’s transit
programs. 19 However, this information will not enable the agency to
determine the extent to which it has met its goals related to environmental
sustainability and economic competitiveness.

At the program level, limited performance information is available about
the results of activities that reduce mobile source diesel emissions. The
14 programs that fund activities that reduce diesel emissions currently



17
  See GAO, Environmental Justice: EPA Needs to Take Additional Actions to Help Ensure
Effective Implementation, GAO-12-77 (Washington, D.C.: Oct. 6, 2011).
18
  See GAO/GGD/AIMD-10.1.18 and GAO, The Results Act: An Evaluator’s Guide to
Assessing Agency Annual Performance Plans, GAO/GGD-10.1.20 (Washington, D.C.:
April 1998).
19
 Americans with Disabilities Act of 1990. Pub. L. No. 101-336, 104 Stat. 327, codified as
amended at 42 U.S.C. §§ 12101 et seq.




Page 15                                                       GAO-12-261 Diesel Pollution
collect performance information on their diesel emissions reduction
activities to varying degrees. According to agency documents and
officials, EPA’s Diesel Emissions Reduction Act Program collects
performance information on the amount and type of diesel emissions
reductions each project achieves; DOE’s three programs collect some
emissions reduction information but do not quantitatively collect diesel
emissions reduction information; three of DOT’s programs collect some
performance information related to diesel emissions reductions; and the
remaining seven DOT programs do not collect performance information
related to diesel emissions. This variation in the amount of diesel-related
performance information programs collect occurs partially because 13 of
the 14 programs that fund these activities have purposes other than
reducing diesel emissions, such as supporting energy efficiency projects
or reducing petroleum use. However, without information on the results of
the programs’ activities that reduce mobile source diesel emissions, the
overall effectiveness of federal grant and loan funding for activities that
reduce diesel emissions cannot be determined.

EPA. EPA’s Diesel Emissions Reduction Act Program collects information
on the number of diesel engines it replaces, retrofits, and rebuilds as well
as information on the estimated tons of particulate matter, nitrogen oxide,
carbon dioxide, carbon monoxide, and hydrocarbon emissions it reduces.
According to agency documents, in fiscal year 2008—the most recent
year for which data were reported—the program reduced approximately
46,000 tons of nitrogen oxide emissions and 2,200 tons of particulate
matter emissions. 20 EPA documents show that the cost for these
emissions reductions ranged from $400 to $2,000 per ton of nitrogen
oxide emissions reduced and from $9,000 to $27,700 per ton of
particulate matter emissions reduced.

DOE. DOE’s Clean Cities program collects information on reductions in
gasoline and diesel fuel use that the program achieves to measure
progress toward its program goal of reducing national petroleum use by
2.5 billion gallons by 2020. DOE’s Energy Efficiency and Conservation
Block Grant and State Energy programs estimate emissions reductions
that result from program activities, but neither of these programs
separately tracks diesel emissions from other emissions reductions.


20
   EPA calculated these emissions reduction figures in tons of emissions reduced over the
lifetime of each project funded. Also, EPA collects information on emissions reductions but
has not reported data more current than fiscal year 2008.




Page 16                                                        GAO-12-261 Diesel Pollution
DOT’s Federal Aviation Administration. The Federal Aviation
Administration’s Voluntary Airport Low Emissions program collects
information on the total amount of criteria pollutant emissions each project
will reduce, but it does not currently track reductions in diesel emissions.

DOT’s Federal Highway Administration. The Federal Highway
Administration’s Congestion Mitigation and Air Quality Improvement
program collects information from grant recipients on the type and
quantity of emissions reduced through each project the program funds.
However, the program does not review or compile this information at the
national level. The Ferry Boat Discretionary and State Infrastructure
Banks programs do not collect performance information related to diesel
emissions reductions.

DOT’s Federal Transit Administration. The Federal Transit
Administration’s Transit Investments for Greenhouse Gas and Energy
Reduction program obtains information from grant applicants on the
amount of energy use and greenhouse gas emissions each project is to
reduce, but the program does not separately track reductions in diesel
energy use or diesel emissions. The remaining five Federal Transit
Administration programs that fund diesel emissions reduction activities—
Bus and Bus Facilities, Clean Fuels Grant, National Fuel Cell Bus
Technology Development, Transit in Parks, and Urbanized Area Formula
Grants—do not collect performance information related to diesel
emissions reductions.

Efforts to measure the effects of programs that decrease diesel emissions
are also hindered by the absence of a baseline assessment of nationwide
diesel emissions from which agencies could measure progress. EPA has
assessed national levels of nitrogen oxide and particulate matter pollution
from some mobile diesel sources, including highway vehicles and some
nonroad equipment, and DOT maintains data on the number of diesel
transit vehicles currently in use. However, no agency has
comprehensively assessed existing diesel pollution to identify the most
significant mobile sources of diesel emissions and the specific areas that
face the greatest health risks from diesel pollution. Without a more
comprehensive assessment, agencies cannot identify and target, within
their discretion, funding toward specific sectors or geographic areas of




Page 17                                             GAO-12-261 Diesel Pollution
                        greatest need. 21 Agencies generally provide funds to recipients based on
                        criteria that may derive from law, agency discretion, or a combination
                        thereof. Under some programs, agencies allocate funding based on
                        statutory formulas or criteria. For example, DOT’s Urbanized Area
                        Formula Grants program uses a statutory formula to allocate funds on the
                        basis of population and population density. EPA’s Diesel Emissions
                        Reduction Act program awards funds competitively but, based on
                        statutory criteria, must prioritize projects that maximize health benefits,
                        are the most cost-effective, and serve areas with poor air quality, among
                        other factors. Under other programs, agencies have some discretion in
                        awarding funds. These agencies generally consider applicant eligibility
                        and other relevant factors, but this does not include consideration of
                        which areas face the greatest diesel-related health risks.


                        The federal programs that fund activities that have the effect of reducing
Limited Collaboration   mobile source diesel emissions generally do not collaborate. According to
May Hinder the          DOE, DOT, and EPA officials, the three agencies consult on broad
                        issues, such as to discuss available technologies or emissions standards,
Effectiveness of        but these efforts do not involve collaboration on diesel-related issues.
Federal Funding for     Moreover, officials from most of the 14 programs reported that any
                        collaboration across the programs occurs on an informal, case-by-case
Activities That         basis. For example, officials from EPA’s Diesel Emissions Reduction Act
Reduce Diesel           Program said they may contact officials from the Federal Highway
Emissions               Administration’s Congestion Mitigation and Air Quality Improvement
                        program to discuss a specific emissions reduction technology or project
                        that appears in a grant application but that they do not collaborate with
                        officials from this program on a regular basis. Also, some program
                        officials reported that enhanced collaboration could improve the
                        effectiveness of federal funding for activities that reduce diesel emissions.
                        For example, officials from EPA’s Diesel Emissions Reduction Act
                        Program said that diesel-related programs could share information to
                        more efficiently award grants and to reduce duplication of agency efforts,
                        such as researching various emissions reduction technologies.

                        DOE, DOT, and EPA officials generally reported that they do not
                        collaborate on diesel emissions reduction activities with other federal


                        21
                          We have previously reported that, in general, agencies should focus their funding on
                        areas of greatest need. See GAO, 21st Century Challenge: Reexamining the Base of the
                        Federal Government, GAO-05-325SP (Washington, D.C.: February 2005).




                        Page 18                                                     GAO-12-261 Diesel Pollution
programs because they are unaware of the other programs that fund
these activities, including, in some cases, programs within their own
agencies. According to agency officials, this is due to the differing
purposes and goals of each program, which often do not directly relate to
reducing diesel emissions. However, we have previously reported that,
although federal programs have been designed for different purposes or
targeted for different population groups, coordination among programs
with related responsibilities is essential to efficiently and effectively meet
national concerns. 22 We reported that uncoordinated program efforts can
waste scarce funds, confuse and frustrate program customers, and limit
the overall effectiveness of the federal effort. A focus on results as
envisioned by the Government Performance and Results Act implies that
federal programs contributing to the same or similar results should be
closely coordinated to ensure that goals are consistent, and, as
appropriate, program efforts are mutually reinforcing. This means that
federal agencies are to look beyond their organizational boundaries and
coordinate with other agencies to ensure that their efforts are aligned.
Also, the Government Performance and Results Act Modernization Act of
2010 requires that agency strategic plans include a description of how the
agency is working with other agencies to, among other things, achieve its
goals and objectives.

In addition, we have previously reported that agencies face a range of
barriers in their efforts to collaborate. 23 To overcome such barriers and to
maximize the performance and results of federal programs that share
common outcomes, we have previously identified practices that can help
agencies enhance and sustain collaboration. 24 These practices include
agreeing on agency roles and responsibilities in the collaborative effort
and identifying and addressing needs by leveraging collective resources.
Further, we have reported that, to the extent that federal efforts are
fragmented across agency lines, developing crosscutting performance




22
  GAO, The Government Performance and Results Act: 1997 Governmentwide
Implementation Will Be Uneven, GAO/GGD-97-109 (Washington, D.C.: June 2, 1997).
23
  GAO, Managing For Results: Barriers to Interagency Coordination, GAO/GGD-00-106
(Washington, D.C.: Mar. 29, 2000).
24
 GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain
Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).




Page 19                                                   GAO-12-261 Diesel Pollution
              measures through interagency coordination could ease implementation
              burdens while strengthening efforts to develop best practices. 25


              Over time, EPA has issued more stringent emissions regulations for new
Conclusions   diesel engines and vehicles, but existing diesel trucks, buses,
              locomotives, ships, agriculture equipment, and construction equipment
              continue to emit harmful pollution. Because diesel engines are durable
              and energy efficient, it could take decades for these older diesel vehicles
              and equipment to fall out of use. As a result, federal agencies play an
              important role in accelerating the attrition of existing diesel engines and
              vehicles and the resulting reduction in diesel emissions. However, federal
              funding that reduces diesel emissions is fragmented across 14 programs
              that overlap in their activities, goals, and eligible recipients. Also, the
              effectiveness of this funding is unknown because agencies collect limited
              performance information related to these programs. Because DOT’s
              Federal Transit Administration has not developed performance measures
              for its goals related to environmental sustainability and economic
              competitiveness, the agency is unable to fully assess the performance of
              programs that contribute to these goals. In addition, agencies collect
              limited information on the results of the diesel emissions reduction
              activities they fund and do not have a baseline assessment of nationwide
              diesel emissions, which they could use to measure progress.

              Also, collaboration among the 14 programs that fund activities that reduce
              mobile source diesel emissions is essential to efficiently and effectively
              reduce diesel emissions. As the focus on results as envisioned by the
              Government Performance and Results Act implies, federal programs
              contributing to the same or similar results should be closely coordinated
              to ensure that goals are consistent, and, as appropriate, program efforts
              are mutually reinforcing. Agencies often face barriers in their efforts to
              collaborate, and some best practices for overcoming these barriers
              include identifying agency roles and responsibilities as well as identifying
              and leveraging collective resources. Further, when federal efforts are
              fragmented, this coordination can be achieved through collaboratively
              developing crosscutting performance measures. However, as we found,
              these 14 programs generally do not collaborate and collect limited
              information on the results of the activities they fund that reduce diesel



              25
               GAO/AIMD-97-146.




              Page 20                                             GAO-12-261 Diesel Pollution
                      emissions. Without collaboration and crosscutting performance
                      measures, agencies do not have needed information to assess the
                      effectiveness and efficiency of their programs or identify any unnecessary
                      duplication.


                      We are making two recommendations to help ensure effectiveness and
Recommendations for   accountability:
Executive Action
                      1. For transit grant programs, we recommend that the Secretary of
                         Transportation require the Administrator of the Federal Transit
                         Administration to develop quantifiable performance measures, a
                         leading practice based in Government Performance and Results Act
                         principles, for the agency’s environmental sustainability and economic
                         competitiveness strategic goals.

                      2. For federal funding that reduces diesel emissions, we recommend
                         that the Secretary of Energy, the Secretary of Transportation, and the
                         Administrator of the EPA, consistent with statutory obligations,
                         establish a strategy for collaboration among their grant and loan
                         programs in their activities that reduce mobile source diesel
                         emissions. This strategy should help the agencies

                          •     identify agency roles and responsibilities for activities that reduce
                                diesel emissions, including how a collaborative effort will be led;

                          •     identify and address any unnecessary duplication, as appropriate;

                          •     identify and leverage resources needed to support funding
                                activities that reduce diesel emissions;

                          •     assess baseline levels of diesel pollution and the contributors to
                                mobile source diesel emissions to help agencies target, within
                                their discretion, investments and, as appropriate, inform efforts to
                                measure program effectiveness; and

                          •     develop crosscutting performance measures, as appropriate, to
                                monitor the collective results of federal funding for activities that
                                reduce diesel emissions.

                      We provided a draft of this report to the Secretary of Energy, the
Agency Comments       Secretary of Transportation, and the Administrator of EPA for their review
and Our Evaluation    and comment. In its written comments, EPA stated that it agreed with our



                      Page 21                                                  GAO-12-261 Diesel Pollution
findings and relevant recommendation. EPA’s comments can be found in
appendix V.

In its comments, DOE questioned several of our findings but agreed with
our relevant recommendation. Specifically, DOE stated that our report
mischaracterizes the agency as having a statutory responsibility for diesel
emissions reductions. Our report does not contain such a statement.
Rather, it identifies 14 programs, including 3 DOE programs, that fund
activities with the effect of reducing diesel emissions and states that
programs with related responsibilities should coordinate their efforts. Our
report states that most of the programs we identified have other goals or
purposes and do not focus on diesel emissions reduction; nonetheless,
each of the programs does fund such activities. Our report also
recognizes the varying statutory requirements for each program and
recommends that the agencies establish a strategy for collaboration that
is consistent with their existing statutory obligations. DOE also stated that
our report mischaracterizes DOE as not collaborating with other
government agencies. Our report states that DOE collaborates with other
agencies on broad issues but does not collaborate on diesel-related
issues. In addition, DOE stated that our report mischaracterized the
agency as sharing redundant national goals with DOT and EPA. Our
report does not discuss DOE’s national goals, their relationship to those
of other agencies, or whether they are redundant. Rather, our report (1)
focuses on DOE programs that fund activities that result in diesel
emissions reductions and (2) demonstrates that these programs share
similar goals with DOT and EPA programs that fund the same activities.
Specifically, each of these programs shares some goals, such as
reducing emissions, increasing energy efficiency, and reducing fuel use.
DOE also provided technical comments, which we incorporated as
appropriate. DOE’s comments and our response can be found in
appendix VI.

DOT questioned several of this report’s key findings and its
recommendations. Specifically, DOT stated that we inaccurately
described the Federal Transit Administration’s programs as funding diesel
emissions reduction activities. Our report identifies activities that reduce
diesel emissions, including replacing existing diesel vehicles and
installing devices that reduce idling of diesel engines, and identifies six
Federal Transit Administration programs that fund these same activities.
In addition, DOT questioned the evidence underlying our finding of
fragmentation among the federal programs within our review. DOT stated
that we identified independent programs with varying objectives that, in
some cases, include similar activities. As we reported, fragmentation


Page 22                                              GAO-12-261 Diesel Pollution
occurs when more than one federal agency, or more than one
organization within an agency, is involved in the same broad area of
national need. Further, our report does not state that fragmentation
implies small, incomplete, or broken parts strewn across government, as
DOT’s comments state. Our report clearly identifies fragmentation,
overlap, and duplication among the 14 federal programs that fund diesel
emissions reduction activities. Consistent with our established definition
of fragmentation and our evidence, we stand by our finding that federal
grant and loan funding for activities that reduce diesel emissions is
fragmented across 14 programs.

DOT also questioned our finding that the effectiveness of federal funding
for diesel emissions reduction activities is unknown. DOT stated that we
could have used available air quality data from EPA to assess the
effectiveness of the programs we reviewed. We reviewed air quality data
from EPA and determined that it was not possible to establish a causal
link between the EPA data and the programs we reviewed. Moreover,
principles of good governance indicate that agencies that use scarce
federal resources should establish quantifiable performance measures for
use in administering their programs. This is particularly important when
multiple agencies engage in the same or similar activities, even if the
activities contribute to different goals. Related to this finding, DOT
questioned why the report does not include information that the Federal
Transit Administration provided on its contribution to air quality
improvement through replacing transit buses. We reviewed this
information and found that the numbers the Federal Transit
Administration provided were based on unverified assumptions and
estimates rather than actual data on the number of diesel buses replaced.
As such, the numbers were not reliable for the purposes of our report.

In several instances, DOT questioned our recommendation that the
Federal Transit Administration should develop quantifiable performance
measures for its environmental sustainability and economic
competitiveness strategic goals. DOT’s comments on this
recommendation reflect a misinterpretation of the recommendation.
Specifically, DOT incorrectly stated that our report recommended that the
Federal Transit Administration develop quantifiable performance
measures relating to diesel emissions reductions. Neither of our
recommendations called for DOT to establish such performance
measures. Instead, we recommended that (1) the Federal Transit
Administration develop performance measures for two of its agencywide
strategic goals and (2) DOE, DOT, and EPA establish a strategy for
collaboration on diesel emissions reduction activities that, among other


Page 23                                             GAO-12-261 Diesel Pollution
things, helps the agencies develop crosscutting performance measures,
as appropriate, to assess the collective results of federal funding for
activities that reduce diesel emissions. DOT also stated that it operates in
full compliance with the Government Performance and Results Act.
Specifically, DOT said that it has established outcome-focused
performance measures that are appropriate for its programs and mission
focus. Our report does not assess DOT's compliance with the
Government Performance and Results Act. Rather, it identifies the
Federal Transit Administration's strategic goals that relate to the agency's
relevant programs and states whether the Federal Transit Administration
has developed performance measures for these goals. Our report states
that principles of good governance indicate that agencies should establish
quantifiable performance measures to demonstrate how they intend to
achieve their goals and measure the extent to which they do so. Our
report also states that Government Performance and Results Act
requirements for agencies to set goals for program performance and to
measure results can serve as leading practices for lower levels within
federal agencies. We have clarified the report language and
recommendation to state that, on the basis of these leading practices, we
recommend the Federal Transit Administration establish performance
measures for the two agency-wide strategic goals of environmental
sustainability and economic competitiveness that relate to the programs
involving diesel emissions reduction activities. The Federal Transit
Administration provided no evidence that it has established performance
measures for these strategic goals. Importantly, the agency’s fiscal year
2012 budget justification that it submitted to Congress—the document
that Federal Transit Administration officials said contained the agency’s
goals and performance measures—did not include performance
measures for its environmental sustainability and economic
competitiveness strategic goals. We continue to believe that the Federal
Transit Administration should establish performance measures for these
goals.

Regarding our recommendation that DOE, DOT, and EPA establish a
strategy for collaboration among their programs that reduce mobile
source diesel emissions, DOT agreed that collaboration can be useful but
questioned its usefulness in this context. Specifically, DOT stated that the
report demonstrates no specific deficiency that has occurred due to the
existing level of collaboration. As our report states, DOE, DOT, and EPA
were generally unaware of other programs that fund activities that
decrease diesel emissions. Additionally, we reported that representatives
of several DOE and DOT programs were unaware of related programs
within their own agencies that fund the same underlying activities. Our


Page 24                                              GAO-12-261 Diesel Pollution
report also states that EPA officials said that enhanced collaboration
could improve the effectiveness of federal funding for activities that
reduce diesel emissions. In its comments, DOT stated that the report
does not offer evidence to support why establishing a strategy for
collaboration among entities that fund these activities should be a priority
use of federal resources. While the programs we reviewed have been
designed for different purposes, coordination among programs with
related responsibilities and that fund the same activities is essential to the
efficient and effective use of resources. Further, uncoordinated programs
can waste scarce funds and limit the overall effectiveness of federal
spending. We therefore continue to believe that our recommendation is
warranted.

DOT also stated that the report does not effectively demonstrate that our
recommended actions will produce cost-effective investments appropriate
for DOT that do not potentially duplicate efforts elsewhere in the
government. We believe it is entirely appropriate for the Federal Transit
Administration to establish performance measures for its goals and do not
see how this would duplicate other efforts within the government. We also
continue to believe that establishing a strategy for collaboration is an
appropriate investment that would help ensure the effectiveness and
accountability of federal funding for activities that reduce diesel
emissions. As we noted, such a strategy should help agencies identify
and address any unnecessary duplication.

Finally, DOT's comments emphasized its view that its programs focus on
their statutory mission of transit, whereas diesel emissions reduction is a
corollary benefit. Our report states that most of the programs we identified
have other goals or purposes and do not focus on diesel emissions
reduction; nonetheless, each of the programs does fund such activities.
Our report also recognizes the statutory requirements for each program
and recommends that the agencies establish a strategy for collaboration
that is consistent with existing statutory obligations. DOT’s comments can
be found in appendix VII.




Page 25                                               GAO-12-261 Diesel Pollution
We are sending copies of this report to the Secretaries of Energy and
Transportation, the Administrator of the EPA, appropriate congressional
committees, and other interested parties. In addition, this report is
available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me at (202) 512-3841 or trimbled@gao.gov. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made major contributions to this report
are listed in appendix VIII.




David C. Trimble
Director, Natural Resources and Environment




Page 26                                            GAO-12-261 Diesel Pollution
Appendix I: Objectives, Scope, and
              Appendix I: Objectives, Scope, and
              Methodology



Methodology

              This report examines the (1) extent to which duplication, overlap,
              fragmentation, or gaps, if any, exist among federal grant, rebate, and loan
              programs that address mobile source diesel emissions; (2) effectiveness
              of federal funding for activities that reduce mobile source diesel
              emissions; and (3) extent to which collaboration takes place among
              agencies that fund activities that reduce mobile source diesel emissions.

              To address the first objective, we identified federal grant, rebate, and loan
              programs that address mobile source diesel emissions, and reviewed
              information about each program to identify duplication, overlap,
              fragmentation, and gaps. To identify the programs that address diesel
              emissions, we (1) conducted a literature review of government reports,
              academic materials, legislation, transcripts, appropriations, trade and
              industry articles, and other relevant publications; (2) interviewed agency
              officials and relevant industry stakeholders; and (3) reviewed agency
              documents, including information about activities eligible for funding. For
              the literature review, we searched twenty databases and websites—
              Article First, Congressional Research Service, Congressional Budget
              Office, Inspectors General, Policyfile, ProQuest, Worldcat, National
              Technical Information Services, Wilson’s Applied Science and Technical
              Abstracts, and the Catalog of Federal Domestic Assistance, among
              others—for materials published in the last 10 years that may identify
              relevant federal grant, rebate, and loan programs. Next, we interviewed
              agency and relevant third-party officials and analyzed agency documents
              to determine if the programs our searches identified could provide funding
              for activities that reduce diesel emissions. For this review, we identified
              programs that fund activities that directly reduce diesel emissions and did
              not include programs that fund activities, such as research and
              development efforts, that have the potential to reduce diesel emissions in
              the future. We held these interviews and conducted these searches from
              June 2011 to September 2011.

              For each program we identified as reducing diesel emissions, we
              conducted structured interviews of agency officials and reviewed agency
              documents to determine the types of funding the program provides as
              well as its purpose, goals, eligible activities, and eligible applicants. We
              then compared each of these areas across the programs to identify areas
              of duplication, overlap, or fragmentation. We also compared eligible
              recipients under each program with available data on the sources of
              diesel emissions to identify any gaps among the programs, such as
              mobile sources of diesel emissions for which funding opportunities are not
              available. For the duplication, overlap, and fragmentation we found, we



              Page 27                                              GAO-12-261 Diesel Pollution
Appendix I: Objectives, Scope, and
Methodology




interviewed agency officials and relevant industry stakeholders to
determine its causes and impact.

In addition, we obtained and analyzed funding data from the Department
of Energy (DOE), the Department of Transportation (DOT), and the
Environmental Protection Agency (EPA) to determine the total amount of
federal funding for diesel emissions reduction projects from fiscal years
2007 through 2011. We selected fiscal years 2007 through 2011 as our
time period because, by 2007, EPA had issued emissions standards for
key on-road sources, such as heavy-duty trucks and buses, as well as a
rule requiring refiners to reduce the sulfur content—and therefore the
emissions—of certain diesel fuels. We obtained these data from DOE for
the Clean Cities, Energy Efficiency and Conservation Block Grant, and
State Energy programs; from DOT’s Federal Aviation Administration for
the Voluntary Airport Low Emissions program; from DOT’s Federal
Highway Administration for the Ferry Boat and State Infrastructure Banks
programs; from DOT’s Federal Transit Administration for the National
Fuel Cell Bus Technology Development and Transit Investments in
Greenhouse Gas Emissions Reduction programs; and from EPA for the
Diesel Emissions Reduction Act Program. However, DOT’s Federal
Transit Administration was unable to provide this data for the Bus and
Bus Facilities, Clean Fuels Grant, Congestion Mitigation and Air Quality
Improvement, Transit in Parks, and Urbanized Area Formula Grants
programs. 1 A Federal Transit Administration official said that because the
agency did not track which awards under these programs reduced diesel
emissions or diesel fuel use, it was unable to identify the amount of
funding each of these programs provided for activities that reduced diesel
emissions. The official said that the agency did not track these data
because statutory requirements do not call for such tracking. Instead, the
agency provided us access to its grants management database, from
which we estimated the amount of funding provided for diesel emissions
reduction projects for the Clean Fuels Grant, Congestion Mitigation and
Air Quality Improvement, and Transit in Parks programs, but we were
unable to estimate the amount of funding provided through the Bus and
Bus Facilities or Urbanized Area Formula Grants programs due to the
limited timeframes of our review. We reviewed documents about the
underlying databases that DOE, DOT, and EPA use to collect grant


1
 DOT’s Federal Highway Administration administers the Congestion Mitigation and Air
Quality Improvement program, but DOT’s Federal Transit Administration collects and
maintains grant data for the program.




Page 28                                                     GAO-12-261 Diesel Pollution
Appendix I: Objectives, Scope, and
Methodology




information and interviewed knowledgeable agency officials to assess the
reliability of the data for each program. We determined that the data
obtained from these agencies were sufficiently reliable for the purposes of
this report.

In addition, the Federal Transit Administration provided estimates of the
amount that its Bus and Bus Facilities, Clean Fuels Grant, Congestion
Mitigation and Air Quality Improvement, Transit in Parks, and Urbanized
Area Formula Grants programs awarded from fiscal years 2007 through
2011 for projects that reduced diesel emissions. The agency derived
these estimates by identifying obligations made under each of these five
programs from fiscal years 2007 through 2011 for purchasing
replacement transit vehicles. However, the agency does not consistently
collect information on the fuel-type of the vehicles it replaces; rather it
collects information on the intended purchase, by fuel-type, for all
obligations made in each grant by year and program. The Federal Transit
Administration provided this information to GAO; however, this
information does not accurately reflect the amount of funding provided for
replacement vehicles that reduced diesel emissions, and we did not
include the information in this report.

To address the second objective, we reviewed and analyzed agency
officials’ responses to structured interview questions on their program
goals and performance information. We also analyzed agency strategic
plans, budget documents, and other agency documentation containing
performance information. We reviewed relevant provisions of the
Government Performance and Results Act of 1993, as amended by the
Government Performance and Results Act Modernization Act of 2010, as
well as our prior work on performance measurement.

To address the third objective, we reviewed and analyzed agency
officials’ responses to structured interview questions on coordination with
other programs and assessment of diesel pollution. We also reviewed our
prior work on collaboration to compare these programs’ efforts with best
practices for federal programs. In addition, to identify tax expenditures
that provide incentives that address mobile source diesel emissions, we
reviewed tax expenditure lists produced by the U.S. Department of the
Treasury and the Joint Committee on Taxation; reports by the
Congressional Research Service, including the 2010 tax expenditure
compendium; and a DOE list of federal incentives related to alternative




Page 29                                             GAO-12-261 Diesel Pollution
Appendix I: Objectives, Scope, and
Methodology




fuels, vehicles, and air quality. 2 We also interviewed agency officials at
DOE, DOT, and EPA as well as industry stakeholders.

We conducted this performance audit from May 2011 to February 2012 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.




2
 The published lists report federal income tax expenditures and also include information
on excise tax revenue forgone for listed tax expenditures. The lists do not include
estimates for tax provisions that result in forgone excise tax only.




Page 30                                                       GAO-12-261 Diesel Pollution
Appendix II: Additional Information on Federal
                       Appendix II: Additional Information on Federal
                       Programs That Provide Grants or Loans for
                       Mobile Source Diesel Emissions Reduction
                       Activities
Programs That Provide Grants or Loans for Mobile
Source Diesel Emissions Reduction Activities
                       Clean Cities program. DOE’s Clean Cities program, administered by the
Department of Energy   Office of Energy Efficiency and Renewable Energy, is a government-
                       industry partnership that works to reduce America’s petroleum
                       consumption in the transportation sector. The program provides
                       competitive grants for projects that implement a range of energy-efficient
                       and advanced vehicle technologies, such as hybrids, electric vehicles,
                       plug-in electric hybrids, hydraulic hybrids, and compressed natural gas
                       vehicles, helping reduce petroleum consumption across the United
                       States. The program also supports refueling infrastructure for various
                       alternative fuel vehicles, as well as public education and training
                       initiatives.

                       Energy Efficiency and Conservation Block Grant program. The
                       Energy Efficiency and Conservation Block Grant program, administered
                       by DOE’s Office of Energy Efficiency and Renewable Energy, provides
                       funds through competitive and formula grants to states, territories,
                       federally-recognized Indian tribes, and local governments to develop and
                       implement projects to improve energy efficiency and reduce energy use
                       and fossil fuel emissions in their communities.

                       State Energy Program. The State Energy Program, administered by
                       DOE’s Office of Energy Efficiency and Renewable Energy, provides
                       technical and financial assistance to states through formula and
                       competitive grants. States may use such grants to develop, modify, and
                       implement approved state energy conservation plans.



Department of
Transportation
Federal Aviation       Voluntary Airport Low Emissions program. The Voluntary Airport Low
Administration         Emissions program provides funding to reduce airport ground emissions
                       at commercial service airports in areas failing to meet or maintain
                       National Ambient Air Quality Standards. Grant funding generally supports
                       projects such as electrification of airport gate systems, the incremental
                       cost of purchasing electric luggage carts, and purchasing airport shuttle
                       buses that use alternative fuels. The Federal Aviation Administration
                       considers applications for Voluntary Airport Low Emissions grants on a
                       case-by-case basis based on the project’s importance relative to other
                       eligible airport activities. The agency also considers each project’s cost
                       effectiveness and reductions in air emissions.



                       Page 31                                            GAO-12-261 Diesel Pollution
                  Appendix II: Additional Information on Federal
                  Programs That Provide Grants or Loans for
                  Mobile Source Diesel Emissions Reduction
                  Activities




Federal Highway   Congestion Mitigation and Air Quality Improvement program. Jointly
Administration    administered by Federal Highway Administration and the Federal Transit
                  Administration, the Congestion Mitigation and Air Quality Improvement
                  program provides grants to state departments of transportation,
                  metropolitan planning organizations, and transit agencies for a variety of
                  transportation projects in areas that do not meet or have previously failed
                  to meet federal air quality standards. The program distributes funding
                  through a statutory formula primarily based on population in areas of
                  certain air quality status. The Safe, Accountable, Flexible, and Efficient
                  Transportation Equity Act: A Legacy for Users of 2005 expanded the
                  focus of eligible projects under the program, placing more priority on
                  diesel engine retrofits and cost-effective emission reduction and
                  congestion mitigation projects that also provide air quality benefits.

                  Ferry Boat Discretionary program. The Intermodal Surface
                  Transportation Efficiency Act of 1991 amended a predecessor ferry
                  program, resulting in this program to construct ferry boats and ferry
                  terminal facilities. Eligible projects include both ferry boats carrying
                  passengers only and those carrying cars and passengers. In general,
                  ferry boats and facilities must be publicly owned or operated, and the
                  ferry facilities must provide connections on a public road, which has not
                  been designated part of the interstate system. The program provides
                  administrative consideration of whether the project will result in a useable
                  facility; what other benefits exist; whether other funds, either state or
                  local, are committed to the project; and whether the project has received
                  program funds in the past.

                  State Infrastructure Bank program. The State Infrastructure Bank
                  program provides the opportunity to all 50 states, Puerto Rico, the District
                  of Columbia, American Samoa, Guam, the Virgin Islands, and the
                  Commonwealth of the Northern Mariana Islands to establish
                  transportation revolving loan funds. States may capitalize their revolving
                  loan funds with federal highway funding, and states could offer a range of
                  loans and credit options, such as low-interest loans, loan guarantees, or
                  loans requiring repayment of interest-only in early years and delayed
                  repayment of the loan’s principal. For example, through a revolving fund,
                  states could lend money to public or private sponsors of transportation
                  projects, project-based or general revenues (such as tolls or dedicated
                  taxes) could be used to repay loans with interest, and the repayments
                  would replenish the fund so that new loans could be supported.




                  Page 32                                              GAO-12-261 Diesel Pollution
                  Appendix II: Additional Information on Federal
                  Programs That Provide Grants or Loans for
                  Mobile Source Diesel Emissions Reduction
                  Activities




Federal Transit   Bus and Bus Related Equipment and Facilities program. DOT’s Bus
Administration    and Bus Facilities program provides capital assistance for new and
                  replacement buses, related equipment, and related facilities for expansion
                  and maintenance purposes. The projects funded by this program are
                  generally determined by Congress. Funds can be provided only to state
                  and local governmental authorities. The purpose of the program is to
                  replace, rehabilitate, and purchase buses and bus-related facilities in
                  support of FTA’s goal of developing a transportation system that (1)
                  maximizes the safe, secure, and efficient mobility of individuals; (2)
                  minimizes environmental impacts; and (3) minimizes transportation-
                  related fuel consumption and reliance on foreign oil.

                  Clean Fuels Grant program. This program provides competitive grants
                  to assist areas in achieving or maintaining the National Ambient Air
                  Quality Standards for ozone and carbon monoxide and to support
                  emerging clean fuel and advanced propulsion technologies for transit
                  buses and markets for those technologies. Eligible projects under the
                  program include (1) purchasing or leasing clean fuel buses, including
                  buses that employ a lightweight composite primary structure and vans for
                  use in revenue service; (2) constructing or leasing clean fuel bus facilities
                  or electrical recharging facilities and related equipment; and (3)
                  purchasing clean fuel, biodiesel, hybrid electric, or zero emissions
                  technology buses that exhibit equivalent or superior emissions reductions
                  to existing clean fuel or hybrid electric technologies.

                  National Fuel Cell Bus Technology Development program. This
                  program is a research, development, and demonstration competitive
                  grant program established to facilitate the development of fuel cell bus
                  technology and related infrastructure. The Federal Transit Administration
                  may award grants for this purpose to up to three geographically diverse
                  nonprofit organizations. The goals of the program are to (1) facilitate the
                  development of commercially viable fuel cell bus technologies, (2)
                  significantly improve transit bus fuel efficiency and reduce petroleum
                  consumption, (3) reduce transit bus emissions, (4) establish a globally
                  competitive U.S. industry for fuel cell bus technologies, and (5) increase
                  public acceptance of the fuel cell vehicles.

                  Paul S. Sarbanes Transit in Parks program. The Transit in Parks
                  program was established to address the challenge of increasing vehicle
                  congestion in and around our national parks and other federal lands by
                  providing competitive grants for capital and planning expenses for new or
                  existing alternative transportation systems in the vicinity of federally
                  owned or managed recreation areas. According to program documents,


                  Page 33                                              GAO-12-261 Diesel Pollution
Appendix II: Additional Information on Federal
Programs That Provide Grants or Loans for
Mobile Source Diesel Emissions Reduction
Activities




alternative transportation includes transportation by bus, rail, or any other
publicly available means of transportation and includes sightseeing
service. It also includes nonmotorized transportation systems such as
pedestrian and bicycle trails. The program seeks to conserve natural,
historical, and cultural resources; reduce congestion and pollution;
improve visitor mobility and accessibility; enhance visitor experience; and
ensure access to all, including persons with disabilities.

Transit Investments in Greenhouse Gas and Energy Reduction
program. The American Recovery and Reinvestment Act of 2009
authorized the Transit Investments in Greenhouse Gas and Energy
Reduction program, and the program received funding through fiscal year
2011. The program did not receive funding for fiscal year 2012 in the
relevant appropriations act. 1 This program provides competitive grants to
assist public transportation agencies in implementing strategies for
reducing greenhouse gas emissions and energy use in transit
operations. Eligible applicants under the program include public
transportation agencies, federally recognized tribes, and state
departments of transportation. Two types of projects are eligible for
funding under the Transit Investments in Greenhouse Gas and Energy
Reduction program: capital investments that assist in reducing the energy
consumption of a transit agency and capital investments that reduce
greenhouse gas emissions of a transit agency. For purposes of the
Transit Investments in Greenhouse Gas and Energy Reduction program,
energy consumption is defined as energy purchased directly by the public
transportation agency. Examples of energy include diesel fuel,
compressed natural gas, and electricity purchased from power plants.
Emissions are defined as those emitted directly by the assets of the
public transportation agency.

Urbanized Area Formula Grants program. This program provides
grants to urbanized areas and to states for public transportation capital
projects and operating assistance for equipment and facilities in
urbanized areas and for transportation-related planning. 2 The program
allocates funds based on a multitiered formula, which separates urban
areas with populations under 200,000 from those with populations of


1
 See H.R. Rep. No. 112-284, at 305 (Conf. Rep.).
2
 An urbanized area is an area with a population of 50,000 or more that is designated as
such in the 2000 Census by the U.S. Department of Commerce, Bureau of the Census.




Page 34                                                       GAO-12-261 Diesel Pollution
                    Appendix II: Additional Information on Federal
                    Programs That Provide Grants or Loans for
                    Mobile Source Diesel Emissions Reduction
                    Activities




                    200,000 or more. Funds are first apportioned based on a formula
                    provided in law to designated recipients (typically metropolitan planning
                    organizations or a state or regional authority responsible for capital
                    projects and for financing and directly providing public transportation).
                    Designated recipients allocate the apportionment among eligible transit
                    service providers in the urbanized area. Eligible uses of program funds
                    include planning, design, and evaluation of transit projects and capital
                    investments in bus-related activities, such as replacement, overhaul, and
                    rebuilding of buses.


                    Diesel Emissions Reduction Act Program. This program provides
Environmental       grant funding to reduce emissions from existing diesel engines through
Protection Agency   engine retrofits, rebuilds, and replacements; switching to cleaner fuels;
                    and other strategies. The program offers funding through four
                    subprograms:

                        •     the National Clean Diesel Funding Assistance Program awards
                              competitive grants for projects implementing EPA verified and
                              certified diesel emissions reduction technologies,

                        •     the National Clean Diesel Emerging Technologies Program
                              awards competitive grants for projects that develop and evaluate
                              emerging diesel emissions reduction technologies,

                        •     the SmartWay Clean Diesel Finance Program awards competitive
                              grants to establish low-cost revolving loans or other innovative
                              financing programs that help fleets reduce diesel emissions, and

                        •     the State Clean Diesel Grant Program allocates funds to
                              participating states to implement grant and loan programs for
                              clean diesel projects.




                    Page 35                                              GAO-12-261 Diesel Pollution
Appendix III: Tax Expenditures Related to
                       Appendix III: Tax Expenditures Related to
                       Mobile Source Diesel Emissions Reduction
                       Activities


Mobile Source Diesel Emissions Reduction
Activities
                       This tax expenditure excludes certain idling reduction devices from the
Excise Tax             federal excise tax. Under federal excise tax law, heavy truck, trailer, and
Exemption for Idling   tractor parts sold separately from the vehicle generally are subject to a 12
                       percent retail tax. The Energy Improvement and Extension Act of 2008
Reduction Devices      excludes qualified idling reduction devices from the federal retail tax on
                       vehicle parts. EPA, in consultation with the Secretaries for the DOT and
                       DOE, maintains a list of devices approved for the tax exemption. An idle
                       reduction device is generally a device or system that provides services,
                       such as heat, air conditioning, or electricity, to the vehicle or equipment
                       without the use of the main drive engine while the vehicle or equipment is
                       temporarily parked or remains stationary, hence reducing unnecessary
                       idling of the vehicle or equipment. No estimate of forgone federal tax
                       revenue for this excise tax provision is available because the Department
                       of the Treasury reports estimates only for income tax expenditures and
                       does not report estimates for tax provisions that result in forgone excise
                       tax only.


                       This tax expenditure provides an income tax credit as well as an excise
Biodiesel and Small    tax credit for the production and use of biodiesel. 1 The use of biodiesel
Agri-biodiesel         instead of conventional diesel fuel significantly reduces particulate matter
Producer Tax Credits   and hydrocarbon emissions. The biodiesel fuels income tax credit is the
                       sum of three credits: (1) the biodiesel mixture credit, which provides $1
                       for each gallon of biodiesel and agri-biodiesel used by the taxpayer in the
                       production of a qualified biodiesel mixture; (2) the biodiesel credit, which
                       is $1 per gallon for each gallon of unblended biodiesel and agri-biodiesel
                       when used as a fuel or sold at retail; and (3) the small agri-biodiesel
                       producer credit, which is 10 cents per gallon for up to 15 million gallons of
                       agri-biodiesel produced by small producers. The biodiesel excise tax
                       credit provides a tax credit of $1 for each gallon of biodiesel or agri-
                       biodiesel a taxpayer used to produce a biodiesel mixture for sale or use in
                       a trade or business. Renewable diesel fuel is eligible for both the income
                       tax credit and excise tax credit at a rate of $1 per gallon. According to
                       Department of the Treasury estimates, in fiscal year 2010, the biodiesel
                       income tax credits resulted in $20 million in forgone federal income tax
                       revenue, and the biodiesel excise tax credit resulted in $490 million in
                       forgone federal excise tax revenue.


                       1
                        Biodiesel fuel is an alternative to petroleum-based transportation fuel. U.S. biodiesel is
                       made from soybeans and other plant oils, such as cottonseed and canola; animal fats,
                       such as beef tallow, pork lard, and poultry fat; and recycled cooking oils.




                       Page 36                                                          GAO-12-261 Diesel Pollution
                       Appendix III: Tax Expenditures Related to
                       Mobile Source Diesel Emissions Reduction
                       Activities




                       A claim for credit or refund may be made for the nontaxable use of a
Diesel Fuel Emulsion   diesel-water fuel emulsion—a mixture of diesel, water, and additives—
Tax Credit             and for undyed diesel fuel used to produce a diesel-water fuel emulsion.
                       The presence of water in the emulsion reduces both nitrogen oxide and
                       particulate matter emissions from the diesel fuel. The claim rate for
                       nontaxable use of a diesel-water fuel emulsion taxed at 19.8 cents per
                       gallon is 19.7 cents (if exported, the claim rate is 19.8 cents). The
                       following are the nontaxable uses for a diesel-water fuel emulsion for
                       which a credit or refund may be allowable to an ultimate purchaser: on a
                       farm for farming purposes; off-highway business use; export; in a
                       qualified local bus; in a school bus; other than as fuel in the propulsion
                       engine of a train or diesel-powered highway vehicle, but not off-highway
                       use; exclusive use by a qualified blood collector organization; in a
                       highway vehicle owned by the United States that is not used on a
                       highway; exclusive use by a nonprofit educational organization; exclusive
                       use by a state, political subdivision of a state, or the District of Columbia;
                       and in an aircraft or vehicle owned by an aircraft museum. No estimate of
                       forgone federal tax revenue for this excise tax provision is available
                       because the Department of the Treasury reports estimates only for
                       income tax expenditures and does not report estimates for tax provisions
                       that result in forgone excise tax only.




                       Page 37                                               GAO-12-261 Diesel Pollution
Appendix IV: Strategic Goals and
                                     Appendix IV: Strategic Goals and
                                     Establishment of Performance Measures
                                     Related to Programs That Fund Activities That


Establishment of Performance Measures
                                     Reduce Mobile Source Diesel Emissions




Related to Programs That Fund Activities
That Reduce Mobile Source Diesel Emissions
                                                                         Performance
Agency                Strategic goal                                  measure established   Related programs
DOE                   To catalyze the timely, material, and                                 Clean Cities program
                      efficient transformation of the nation’s
                                                                                            Energy Efficiency and
                      energy system and secure U.S. leadership
                                                                                Yes         Conservation Block Grant
                      in clean energy technologies
                                                                                            program
                                                                                            State Energy Program
DOT
   Federal Aviation   To advance environmentally sustainable                    Yes
   Administration     policies and investments that reduce
                      carbon and other harmful emissions from
                      transportation sources
                      To ensure the United States proactively                   Yes
                      maintains its critical transportation
                      infrastructure in a state of good repair                                  Voluntary Airport Low
                      To improve public health and safety by                    Yes              Emissions program
                      reducing transportation-related fatalities
                      and injuries
                      To promote transportation policies and                    Yes
                      investments that bring lasting and
                      equitable economic benefits to the nation
                      and its citizens
   Federal Highway    To advance environmentally sustainable                                Congestion Mitigation and Air
   Administration     policies and investments that reduce                                  Quality Improvement
                      carbon and other harmful emissions from                   Yes         program
                      transportation sources
                                                                                            Ferry Boat Discretionary
                                                                                            program
                      To ensure the United States proactively                   Yes         Ferry Boat Discretionary
                      maintains its critical transportation                                 program
                      infrastructure in a state of good repair
                      To foster livable communities through                                 Congestion Mitigation and Air
                      place-based policies and programs that                                Quality Improvement
                      increase transportation choices and                       Yes         program
                      access to transportation services
                                                                                            Ferry Boat Discretionary
                                                                                            program
                      To improve public health and safety by                                Congestion Mitigation and Air
                      reducing transportation-related fatalities                            Quality Improvement
                      and injuries                                              Yes         program
                                                                                            Ferry Boat Discretionary
                                                                                            program
                      To promote transportation policies and                    Yes         Ferry Boat Discretionary
                      investments that bring lasting and                                    program
                      equitable economic benefits to the nation
                      and its citizens




                                     Page 38                                                  GAO-12-261 Diesel Pollution
                                    Appendix IV: Strategic Goals and
                                    Establishment of Performance Measures
                                    Related to Programs That Fund Activities That
                                    Reduce Mobile Source Diesel Emissions




                                                                                   Performance
Agency               Strategic goal                                             measure established   Related programs
   Federal Transit   To advance environmentally sustainable                                           Transit in Parks program
   Administration    policies and investments that reduce
                                                                                           No
                     carbon and other harmful emissions from
                     transportation sources
                     To foster livable communities through                                            Bus and Bus Facilities
                     place-based policies and programs that                                           program
                     increase transportation choices and                                              Clean Fuels Grant program
                     access to transportation services                                     Yes
                                                                                                      Transit in Parks program
                                                                                                      Urbanized Area Formula
                                                                                                      Grants program
                     To improve public health and safety by                                           Bus and Bus Facilities
                     reducing transportation-related fatalities                                       program
                     and injuries                                                                     Clean Fuels Grant program
                                                                                           Yes
                                                                                                      Transit in Parks program
                                                                                                      Urbanized Area Formula
                                                                                                      Grants program
                     To promote transportation policies and                                           Bus and Bus Facilities
                     investments that bring lasting and                                               program
                     equitable economic benefits to the nation                                        Clean Fuels Grant program
                     and its citizens                                                      No
                                                                                                      Transit in Parks program
                                                                                                      Urbanized Area Formula
                                                                                                      Grants program
EPA                  To reduce greenhouse gas emissions and                                           Diesel Emissions Reduction
                     develop adaptation strategies to address                                         Act Program
                                                                                           Yes
                     climate change, and protect and improve
                     air quality
                                    Source: GAO analysis of DOE, DOT, and EPA documents.




                                    Page 39                                                             GAO-12-261 Diesel Pollution
Appendix V: Comments from the
             Appendix V: Comments from the
             Environmental Protection Agency



Environmental Protection Agency




             Page 40                           GAO-12-261 Diesel Pollution
Appendix VI: Comments from the
             Appendix VI: Comments from the Department
             of Energy



Department of Energy




             Page 41                                     GAO-12-261 Diesel Pollution
Appendix VI: Comments from the Department
of Energy




Page 42                                     GAO-12-261 Diesel Pollution
                 Appendix VI: Comments from the Department
                 of Energy




See comment 1.




See comment 2.




See comment 3.




See comment 4.




                 Page 43                                     GAO-12-261 Diesel Pollution
                 Appendix VI: Comments from the Department
                 of Energy




See comment 4.




See comment 1.




See comment 5.




                 Page 44                                     GAO-12-261 Diesel Pollution
                 Appendix VI: Comments from the Department
                 of Energy




See comment 5.




See comment 3.




See comment 6.




                 Page 45                                     GAO-12-261 Diesel Pollution
                 Appendix VI: Comments from the Department
                 of Energy




See comment 6.



See comment 3.




See comment 7.




                 Page 46                                     GAO-12-261 Diesel Pollution
               Appendix VI: Comments from the Department
               of Energy




               The following are GAO’s comments to the Department of Energy’s letter
               dated January 26, 2012.


               1. We agree that the DOE programs identified in this report fund projects
GAO Comments   that have a secondary effect of reducing diesel emissions. As our report
               states, these programs fund activities, such as retrofitting, rebuilding, or
               replacing existing diesel engines or vehicles, which have the effect of
               reducing diesel emissions. Our report also states that these programs
               generally focus on goals or purposes that do not directly relate to
               reducing diesel emissions. We did not modify our report based on this
               comment.

               2. Our report does not evaluate whether DOE programs have established
               performance measures specific to mobile source diesel emissions
               reductions. Rather, this report states that DOE has established
               performance measures for the agency’s strategic goals that relate to its
               programs that fund diesel emissions reduction activities. We did not
               modify our report based on this comment.

               3. Our report recognizes that DOE, DOT, and EPA consult on broad
               issues and states that the programs at these agencies that fund diesel
               emissions reduction activities generally do not collaborate. We did not
               review any collaboration that occurs among programs other than the 14
               identified in our report or is not specifically related to diesel emissions
               reductions because this was outside the scope of our review. We did not
               modify our report based on this comment.

               4. We disagree with DOE’s statement that there is not fragmentation or
               overlap among the 14 programs identified in our report. As our report
               states, fragmentation occurs when more than one federal agency, or
               more than one organization within an agency, is involved in the same
               broad area of national need. We found that the 14 programs that fund
               activities that have the effect of reducing diesel emissions are involved in
               the same area of national need. Our report states that overlap occurs
               when multiple agencies and programs have similar goals, engage in
               similar activities or strategies to achieve them, or target similar
               beneficiaries. As our report shows, each of the 14 programs shares goals,
               activities, or beneficiaries with at least one other program. In addition, we
               agree with DOE’s statement that it does not have a quantifiable goal
               associated with reducing diesel emissions. As we reported, DOE’s 3
               programs that fund diesel emissions reduction activities share one or
               more broad goals, such as reducing emissions, increasing energy


               Page 47                                              GAO-12-261 Diesel Pollution
Appendix VI: Comments from the Department
of Energy




efficiency, and reducing fuel use, with the other 11 programs that fund
these activities. We did not modify our report based on this comment.

5. We revised our report to note that DOE does not quantitatively collect
information on diesel emissions reductions. We also noted that the three
DOE programs collect some information related to diesel emissions
reductions. For example, our report states that DOE’s Clean Cities
program collects information on reductions in gasoline and diesel fuel
use, and the agency’s Energy Efficiency and Conservation Block Grant
and State Energy programs estimate emissions reductions that result
from program activities. Further, we continue to believe that without
information on the results of programs’ activities that reduce mobile
source emissions, the overall effectiveness of federal grant and loan
funding for activities that reduce diesel emissions cannot be determined.

6. We do not state that the secondary effect of reducing diesel emissions
is a DOE responsibility. As our report shows, each of the 3 DOE
programs we identified as funding diesel emissions reduction activities
has responsibilities related to those of the other 11 programs within our
review because they fund similar activities and have similar goals,
including increasing energy efficiency and reducing fuel use. We continue
to believe, as we state in our report, that coordination among programs
with related responsibilities is essential to efficiently and effectively meet
national concerns. Further, our report states that the DOE programs
within our review focus on purposes other than reducing diesel emissions
and lists the specific purpose for each DOE program. We did not modify
our report based on this comment.

7. We believe this report sufficiently acknowledges the impact of the
American Recovery and Reinvestment Act of 2009 on funding for
activities that reduce diesel emissions. Our report states that the
American Recovery and Reinvestment Act provided $870 million of the
$1.4 billion that DOE, DOT, and EPA programs provided for activities that
reduced mobile source diesel emissions from fiscal years 2007 through
2011. We did not modify our report based on this comment.




Page 48                                               GAO-12-261 Diesel Pollution
Appendix VII: Comments from the
             Appendix VII: Comments from the Department
             of Transportation



Department of Transportation




             Page 49                                      GAO-12-261 Diesel Pollution
Appendix VII: Comments from the Department
of Transportation




Page 50                                      GAO-12-261 Diesel Pollution
Appendix VII: Comments from the Department
of Transportation




Page 51                                      GAO-12-261 Diesel Pollution
Appendix VII: Comments from the Department
of Transportation




Page 52                                      GAO-12-261 Diesel Pollution
Appendix VIII: GAO Contact and Staff
                  Appendix VIII: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  David C. Trimble, (202) 512-3841 or trimbled@gao.gov
GAO Contact
                  In addition to the individual named above, Michael Hix, Assistant Director;
Staff             Jennifer Beveridge; Colleen Candrl; Elizabeth Curda; Cindy Gilbert;
Acknowledgments   Kristin Hughes; Joah Iannotta; Terence Lam; Zina Merritt; Ray Sendejas;
                  MaryLynn Sergent; Tina Sherman; Ben Shouse; Kiki Theodoropoulos;
                  and Sam Wilson made key contributions to this report.




(361299)
                  Page 53                                             GAO-12-261 Diesel Pollution
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