Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

Congressional research reportDec 3, 2009

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Executive Order 13514: Sustainability and

Greenhouse Gas Emissions Reduction

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Specialist in Energy Policy

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Specialist in Energy and Energy Infrastructure Policy

December 3, 2009

Congressional Research Service

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R40974

CRS Report for Congress

Prepared for Members and Committees of Congress

Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

Summary

On October 5, 2009, President Obama signed Executive Order 13514, Federal Leadership in

Environmental, Energy, and Economic Performance, to establish an integrated strategy towards

sustainability in the federal government and to make reduction of greenhouse gas (GHG)

emissions a priority for federal agencies. Executive Order 13514 (EO 13514) requires federal

agencies to set GHG emissions reduction targets, increase energy efficiency, reduce fleet

petroleum consumption 30% by 2020, conserve water, reduce waste, support sustainable

communities, and leverage federal purchasing power to promote environmentally-responsible

products and technologies.

Under the previous administration, EO 13423, Strengthening Federal Environmental, Energy and

Transportation Management, replaced five earlier executive orders addressing energy and

environmental management by federal agencies, established goals, practices, and reporting

requirements for environmental, energy, transportation performance, and accountability.

The terms “sustainability and sustainable” carried over from EO 13423 without a discussion of

the concepts or how the concepts apply outside of the federal government. Given that EO 13423

elevated “sustainable” to a high priority, discussion of the concept may promote better solutions.

The new EO 13514 does not revoke any provision of the previous EO 13423. It does establish

new goals and provisions, augments or expands many existing provisions, and extends some

dates for compliance. Much of Executive Order 13514 requires the agencies to examine the

environmental and social impacts of their mission, personnel, and logistical operations with

regard to sustainability.

EO 13514 requires federal agencies to assess and measure their GHG footprint and submit

emissions targets (within 90 days of the order). A requirement to weigh both “economic and

social benefits and costs” of these targets may require further clarification as value systems may

enter the solution evaluation process. Environmentally sustainable products and services are

required immediately for 95% of all new procurements. The new order adds a requirement to

reduce water use in federal industrial, landscaping, and agricultural applications by at least 20%

from 2010 levels. The new order also increases the energy efficiency levels required of new

building designs, and sets a target of zero net-energy consumption for new buildings by 2030.

EO 13514’s most significant new goal is reducing greenhouse gas emissions. Fossil fuel use

constitutes the federal government’s major source of GHG emissions. GHG emission-reduction

targets may require federal agency managers to weigh the potential impacts on their agency

missions, considering available technology and the timeframe needed for complying.

Conflicting priorities may emerge in implementing the goals of the new executive order.

Consideration of unintended consequences and their potential impacts on the priorities of other

agencies is likely to be an area of considerable focus.

Congressional Research Service

Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

Contents

Introduction...................................................................................................................................... 1

Summary of Executive Order 13514 and Comparison to Previous Orders ..................................... 2

Greenhouse Gas Emissions Reduction Goals ............................................................................ 2

Water Conservation ................................................................................................................... 3

Pollution Prevention and Waste Elimination ............................................................................. 4

High Performance Buildings ..................................................................................................... 4

Sustainable Acquisition Practices .............................................................................................. 5

Implementation and Management of Executive Order 13514 ......................................................... 7

Leveraging the Private Sector .......................................................................................................... 9

Policy Challenges and Considerations ............................................................................................. 9

Tables

Table 1. Executive Orders Comparison ........................................................................................... 6

Appendixes

Appendix. Executive Order 13423 ................................................................................................ 11

Contacts

Author Contact Information........................................................................................................... 12

Congressional Research Service

Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

Introduction

On October 5, 2009, President Obama signed Executive Order (EO) 13514, Federal Leadership

in Environmental, Energy, and Economic Performance, to establish an integrated strategy towards

“sustainability” in the federal government and to make reduction of “greenhouse gas” (GHG)

emissions a priority for federal agencies.1 The order requires federal agencies to set GHG

emissions reduction targets, increase energy efficiency, reduce fleet petroleum consumption,

conserve water, reduce waste, support sustainable communities, and leverage federal purchasing

power to promote environmentally-responsible products and technologies.2

The federal government represents the largest single consumer of energy in the U.S. economy,

occupying nearly half a million buildings, operating more than 600,000 vehicles, and purchasing

over $500 billion in goods and services annually.3 EO 13514 directs federal agencies to lead by

example in setting sustainability performance standards “to create a clean energy economy” in

order to increase the Nation’s prosperity, promote energy security, protect the interests of

taxpayers, and safeguard the health of the environment.4 Federal agencies must weigh both

economic and social benefits and costs in annual evaluations of project performance, expanding

projects with net benefits, and reassessing or discontinuing under-performing projects.5 These

evaluations must be transparent, with actions taken to comply with the Order disclosed on

publicly available federal websites. Military and related national security activities appear to be

exempted from the requirements of EO 13514.6

This report discusses the more significant provision of EO 13514. However, the concept of

“sustainability” is left for a separate report.

Executive Office of the President, “Federal Leadership in Environmental, Energy, and Economic Performance,” 74

Federal Register 52117, October 8, 2009.

Greenhouse gases are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur

hexafluoride.

The White House, Office of the Press Secretary, President Obama signs an Executive Order Focused on Federal

Leadership in Environmental, Energy, and Economic Performance, October 5, 2009, http://www.whitehouse.gov/

the_press_office/President-Obama-signs-an-Executive-Order-Focused-on-Federal-Leadership-in-EnvironmentalEnergy-and-Economic-Performance/.

As defined in EO 13514, “sustainability and sustainable” means to create and maintain conditions under which

humans and animals can exist in productive harmony, that permit fulfilling the social, economic, and other

requirements of present and future generations. As previously defined in EO 13423, ‘‘sustainable’’ means to create and

maintain conditions, under which humans and nature can exist in productive harmony, that permit fulfilling the social,

economic, and other requirements of present and future generations of Americans.

EO 13514 provides exemptions to national intelligence and law enforcement activities when necessary to protect their

unauthorized disclosure, and activities and facilities of agencies when it is in the interest of national security.

EO 13514 states: “To the maximum extent practicable, and without compromising national security, each agency

shall strive to comply with the purposes, goals, and implementation steps in this order.”

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Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

Summary of Executive Order 13514 and Comparison

to Previous Orders

EO 13514 establishes new goals and provisions, augments or expands many existing provisions,

and extends some dates for compliance. It does not revoke any provision of previous Executive

Orders.7

Previous administrations issued several executive orders addressing various energy and

environmental goals and practices of federal agencies. Specifically, EO 13423─Strengthening

Federal Environmental, Energy and Transportation Management (January 24, 2007)─replaced

five earlier executive orders addressing energy and environmental management by agencies of the

federal government, establishing goals, practices, and reporting requirements for environmental,

energy, transportation performance, and accountability.8 Refer to this report’s Appendix for a

summary of EO 13423 provisions.

The following sections summarize the major energy and environmental provisions and goals in

the new EO 13514. They also compare provisions and goals to previous environmental and

energy efficiency goals of EO 13423, with a summary provided in Table 1.

Greenhouse Gas Emissions Reduction Goals

EO 13514 now directs federal agencies to establish GHG percentage reduction targets for scope 1

(federally owned or controlled sources) and scope 2 (federally purchased or generated energy)

GHG emissions by FY2020. 9 Agencies must report their reduction targets to both the Chair of the

Council of Environmental Quality (CEQ) and to the Director of the Office of Management and

Budget (OMB Director).10 In establishing the target, the new order directs each agency to

consider reductions associated with

•

reduced energy intensity in buildings,

•

increased use of renewable energy,

•

implementing renewable energy projects on agency property, and

•

reduced use of fossil fuels in vehicles.11

Each agency also must develop and implement a Strategic Sustainability Performance Plan (SSP)

(within 240 days of the order). Thereafter, an annually updated plan is due. The SSP will establish

priorities for agency actions based on a lifecycle return on investment, as detailed in Section 8 of

Presidents of the United States may issue executive orders to manage the operations of the federal government.

Executive Order 13423, “Strengthening Federal Environmental, Energy and Transportation Management,” 72

Federal Register 3919-3923, February 5, 2007.

Reductions are relative to a FY2008 baseline. Scope 1 direct GHG emissions are defined in EO 13514 as being from

sources which are owned or controlled by the federal agency. Scope 2 direct GHG emissions are those resulting from

the generation of electricity, heat, or steam purchased by a federal agency.

Reporting is due within 90 days of the executive order’s issue.

Agencies must reduce the use of petroleum 30% for vehicle fleets of more than 20 vehicles. Executive Order 13415

extends by five years the date of required compliance to 2020.

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Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

the order. Along with the SSP, a percentage reduction target for scope 3 (federally contracted

actions) GHG emissions must be established and reported to the Chair of the CEQ and the

Director of OMB.12

Each agency head is to designate a “Senior Sustainability Officer” who will be accountable for

accomplishing the new EO 13514 goals. The order includes the key requirement for integrating

the SSP into the agency’s strategic planning and budget process, including the agency’s strategic

plan under section 3 of the Government Performance and Results Act of 1993 (GPRA).13

Within 15 months, each agency is to report a comprehensive inventory of scope 1, scope 2, and

scope 3 emissions to the CEQ Chair and the OMB Director.

EO 13423 had no specific GHG emission reduction target. Instead, that order set a goal to

improve energy efficiency, and reduce GHG emissions through a 30% reduction in “energy

intensity” by 2015.14 At least half of the renewable energy purchased annually for agency

consumption was required to come from new renewable energy sources, and these projects where

feasible were to be located on agency property.

General Comments: The new EO 13514 will require federal agencies to understand and measure

their GHG footprint before making recommendations about reducing the size of that footprint.

The requirement to weigh both economic and social benefits and costs may require further

clarification as value systems may enter the solution evaluation process. Federal contractors may

be required to sign up with a voluntary registry to report GHG emissions.

Water Conservation

EO 13514 increases goals for water use efficiency and management to reduce potable water

consumption by 2% annually through FY2020. 15 Federal agency industrial, landscaping, and

agricultural water consumption must be reduced 2% annually through FY2020.16 Water reuse

strategies and storm water management are part of these goals.

EO 13423 had set a goal for federal agencies to reduce water consumption intensity 16% by

FY2015 (relative to a FY2007 baseline) through life-cycle cost-effective measures.17 The

requirement incorporated the “Federal Leadership in High Performance and Sustainable

Buildings Memorandum of Understanding (2006)” to reduce potable water use.18

The Executive Order defines scope 3 GHG emissions as from sources not owned or directly controlled by a federal

agency but related to agency activities such as from vendor supply chains, delivery services, and employee travel and

commuting.

GPRA promotes federal program and agency accountability. 5 U.S.C. 306.

Reduction targets are relative to a FY2003 baseline.

Future reductions are equivalent to 26% relative to a 2007 base year. The Executive Order defines “Water

consumption intensity” as water consumption per square foot of building space.

Future reductions are equivalent to 20% relative to a 2010 base year.

Executive Order 13423 defines ‘‘life-cycle cost-effective’’ as the life-cycle costs of a product, project, or measure

estimated as equal to or less than the base case (i.e., current or standard practice or product).

In the Memorandum of Understanding, agencies agree to employ strategies to use a minimum of 20% less potable

water indoors, and reduce outdoor usage of potable water by a minimum of 50%. See Guiding Principles for Federal

Leadership in High Performance and Sustainable Buildings, http://www.fedcenter.gov/_kd/Items/actions.cfm?action=

(continued...)

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Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

General Comments: EO 13514 adds five years to the deadline for meeting the water efficiency

target. While estimates indicate that overall water use in the United States has been declining,19

water shortages in various regions show that continued improvement in water use efficiency can

be of benefit.20 The benefits of increasing energy efficiency are also apparent with almost half of

the 410 billion gallons of daily water use going to the thermoelectric production of power.21

Pollution Prevention and Waste Elimination

EO 13514 sets goals for pollution prevention and waste elimination that rely on measures to

reduce waste and pollutant generation before the effluents enter the waste stream. Agencies must

divert at least 50% of their construction demolition debris and 50% of other non-hazardous solid

waste from landfill disposal to recycling or recovery operations.22 Other pollution prevention

goals include pest management programs and controls for chemical uses and processes.

EO 13423 did not set any specific quantitative goals for pollution prevention or waste

elimination. It did direct agencies to reduce the quantity of toxic and hazardous chemicals and

materials acquired, used, and disposed of by the agency. It also called for the increased diversion

of solid waste, as appropriate, and directed agencies to conduct cost-effective waste prevention

and recycling programs at their facilities.

High Performance Buildings

EO 13514 directs that the design of all planned new federal buildings beginning in 2020 achieve

zero net-energy use by 2030.23 Existing buildings must reduce their consumption of energy, water,

and materials, and identify alternatives to renovation. It encourages cost-effective, innovative

strategies to minimize water and energy consumption, for example, reflective or vegetated roofs.

Rehabilitation of federally owned, historic buildings should employ “best practices” and

technologies to promote long-term viability. The new order also gives priority to the developing

site selection procedures to site federal buildings in sustainable locations.24

EO 13423 had required new construction and major renovation of agency buildings comply with

the Guiding Principles for Federal Leadership in High Performance and Sustainable Buildings

established in the Federal Leadership in High Performance and Sustainable Buildings

Memorandum of Understanding. 25 At least 15% of each agency’s existing federal capital asset

(...continued)

Show&item_id=4713&destination=ShowItem.

U.S. Geological Survey, United States Using Less Water than 35 Years Ago, November 15, 2009,

http://www.sciencedaily.com/releases/2009/11/091106120807.htm (U.S. Geologic Survey, 2009).

David Gutierrez, At Least 36 U.S. States Face Water Shortage, Natural News, April 15, 2008,

http://www.alternet.org/water/82378/.

U.S. Geologic Survey, 2009.

Excludes diversion to a waste-to-energy facility.

A “zero net-energy” building is defined in the Executive Order as an economically viable building, designed and

constructed to require a greatly reduced quantity of energy to operate, with the balance of energy needs being met from

sources of energy which do not produce GHGs and thus results in no net emissions of GHGs.

Based on criteria in section 10(b) of EO 13514.

Specific energy reduction targets for new construction and renovations were included in the Memorandum, calling

(continued...)

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Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

building inventory had to incorporate the sustainable practices in the Guiding Principles by the

end of FY2015.

General Comments: The new order takes the next step by raising the bar on energy efficiency to

aim for zero net-energy buildings. To achieve this goal in new buildings, it may be necessary to

incorporate solar photovoltaic (and other technologies) into windows and other aspects of

building design. Life-cycle considerations may require modular design of both internal and

external components to ensure that these features will continue to be productive (or enable

improvements) over the useful life of such buildings. To ensure full functionality and safety for

public buildings, new standards may be required which consider human comfort and productivity

levels in zero net-energy building environments.

Sustainable Acquisition Practices

EO 13514 requires sustainable acquisition practices to ensure that 95% of new contracts for

products and services, including task and delivery orders (but excluding weapons systems) be

•

energy-efficient (i.e., Energy Star or Federal Energy Management Program

(FEMP) designated criteria),

•

water-efficient,

•

biobased,26

•

environmentally-preferable (i.e., Electronic Product Environmental Assessment

Tool (EPEAT) certified),

•

non-ozone depleting,

•

contain recycled content, and

•

non-toxic or less-toxic alternatives.

Sustainable practices promote the procurement of Energy Star or FEMP-designated electronic

equipment (ensuring a procurement preference for EPEAT-registered electronic products), and the

implementation of “best management practices” for energy-efficient servers and federal data

centers. Disposal of excess or surplus electronics must employ environmentally sound practices.

All agency electronic products are to enable power management, duplex printing, or other energy

efficient or environmentally preferable features.

EO 13423 stated that agency acquisition of goods had to use sustainable environmental practices,

including the acquisition of biobased, environmentally preferable, energy-efficient, waterefficient, and recycled content goods. Paper used by agencies was required to have at least 30%

post-consumer fiber content. At least 95% of electronic products had to satisfy the requirements

for EPEAT registered equipment, and computers and monitors had to include Energy Star

(...continued)

for new buildings to be 30% more cost efficient than a pre-2003 baseline.

Biobased products may be defined as “a product determined by the [U.S. Department of Agriculture] Secretary to be

a commercial or industrial product (other than food or feed) that is composed, in whole or in significant part, of

biological products or renewable domestic agricultural materials (including plant, animal, and marine materials) or

forestry materials.” See http://www.biorenew.iastate.edu/resources/frequently-asked-questions/biobased-products.html.

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Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

features. It also directed agencies to implement policies that extended the useful life of agency

electronic equipment and used environmentally sound practices to dispose of electronic

equipment at the end of its useful life.

Table 1. Executive Orders Comparison

Goals

EO 13423 (Previous)

EO 13514 (New)

Greenhouse Gas

Emissions Reduction

Goals

Improved energy efficiency and

reduced GHG through 30%

reduction in energy intensity by

2015, relative to a FY2003 baseline

(GHG reduction targets not

specified )

Establishes a percentage reduction target for

agency-wide reduction of scope 1 and scope 2

GHG emissions by FY2020 (relative to a

FY2008 baseline)

Required at least one-half of annual

renewable energy purchases to

come from new renewable energy

sources, with projects located on

agency property where feasible

Establishes a separate percentage reduction

target for scope 3 GHG emissions

Scope 1 sources are federal agency owned

or controlled.

Scope 2 sources result from the

generated electricity, heat, or steam

purchased by a federal agency.

Scope 3 GHG sources result from vendor

supply chains, delivery services, and

employee travel and commuting

Directs agencies to develop, implement, and

annually update a Strategic Sustainability

Performance Plan (SSP) to prioritize agency

actions based on a lifecycle return on

investment

Water Conservation

Reduced water consumption

intensity 16% by 2015, relative to a

FY2007 baseline through life-cycle

cost-effective measures

Reduces potable water consumption intensity

by 2% annually through FY2020 relative to a

2007 base year (for 26% total reduction)

Reduces industrial, landscaping, and

agricultural water consumption by 2% annually

through FY2020 relative to a 2010 base year

(for 20% total reduction)

Expands upon EO 13423 goals with the new

goal for water reduction for federal industrial,

landscaping, and agricultural uses

Adds five years to the deadline for meeting the

water efficiency target

Pollution Prevention

and Waste

Elimination

Directed reduction of toxic and

hazardous chemicals and materials

acquired, used, or disposed of by

the agency, but set no specific

quantitative reduction goals

Directed increased diversion of

solid waste, and cost-effective waste

prevention and recycling programs

maintained in agency facilities as

appropriate

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Reduces federal generation of waste and

pollutants before they enter the waste stream

Diverts at least 50% of non-hazardous solid

waste and at least 50% of construction and

demolition materials and debris from landfills

to recycling or recovery operations, excluding

diversion to a waste-to-energy facility

Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

Goals

High Performance

Buildings

EO 13423 (Previous)

EO 13514 (New)

Directed new federal buildings and

major renovations of existing

federal buildings to comply with

“Guiding Principles for Federal

Leadership in High Performance and

Sustainable Buildings”

Design all new federal buildings are to achieve

zero net-energy use by 2030

Encourages cost-effective, innovative strategies

to minimize water and energy consumption

Reduces existing federal buildings consumption

of energy, water, and materials, and identify

alternatives to renovation

Rehabilitated federally-owned historic buildings

should employ “best practices” and

technologies to promote the long-term

viability of the buildings

Sustainable

Acquisition Practices

Directed acquisition of goods is to

use sustainable environmental

practices, including the acquisition

of biobased, environmentally

preferable, energy-efficient, waterefficient, and recycled content

goods

Acquisition practices must ensure that 95% of

new contract actions for products and services

are

•

energy efficient

•

water efficient

•

biobased

•

environmentally preferable

•

non-ozone depleting

•

contain recycled content

•

non-toxic/less-toxic alternatives

Includes all task and delivery orders but

excludes weapons systems

Refers to

Energy Star products

Federal Energy Management Program

(FEMP)

Electronic Product Environmental Assessment

Tool (EPEAT)

Implementation and Management of Executive

Order 13514

EO 13514 creates an implementation team and a management structure to coordinate federal

agencies activities that is similar in structure and make-up to the management and reporting

structures created previously by EO 13423. While the new order continues to afford federal

agencies flexibility in making recommendations to meet the goals, it should guide the agencies as

to the types of actions they can consider and hold them accountable for meeting the requirements.

Strategic Sustainability Performance Plan and the Steering Committee

EO 13514 establishes an interagency committee composed of the Federal Environment Executive

and agency Senior Sustainability Officers to advise the CEQ Chair and the OMB Director on the

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Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

implementation of the order and to facilitate implementation of each agency’s SSP. The Steering

Committee will also determine what federal actions are appropriate to achieve the order’s policy

goals.

Each agency’s SSP will be subject to the OMB Director’s approval. The SSP is to identify the

activities, policies, plans, procedures, and practices of the agency that are relevant to the

implementation of the order. Specific agency goals, schedules, milestones, and quantifiable

metrics are to be developed. These should consider environmental measures as well as economic

and social benefits and costs in evaluating projects and activities based on a lifecycle return on

investment. The SSP should also evaluate climate change risks and vulnerabilities of the agency’s

operations and mission in both the “short and long term.”

Greenhouse Gas Accounting and Reporting

EO 13514 directs the Department of Energy (DOE) (through FEMP) in coordination with the

Environmental Protection Agency (EPA), the General Services Administration (GSA), the

Departments of Commerce, Defense, and the Interior, and other federal agencies to develop

recommendations for reporting and procedures for accounting GHG emissions. The

recommendations and procedures are due for submission to the CEQ Chair and OMB Director

within 180 days of the date of the order. The order emphasizes accuracy and consistency in

quantifying and accounting for GHG emissions from all scope 1, 2, and 3 sources. If significant

changes in agency missions render the initial baseline information unsuitable as a benchmark, the

order permits choosing an alternative to the FY2008 baseline. Recommendation must consider

past federal agency efforts to reduce GHG emissions.

Guidance for Federal Fleet Management

EO 13514 directs DOE to coordinate with the General Services Administration and issue

guidance on federal fleet management within 180 days of the order. The guidance must address

the acquisition of alternative fuel vehicles, the use of alternative fuels with the goal of improving

fleet fuel economy, and the reduction of fleet petroleum use 30% by 2020. The guidance must

consider electric vehicles for appropriate functions.

Recommendations for Vendor and Contractor Emissions

EO 13514 directs GSA to coordinate with EPA and the Department of Defense to provide

recommendations on working with the federal vendor and contracting community to reduce scope

3 emissions.27 These are emissions derived from the supply of products and services to the federal

government. The recommendations should consider the potential impacts on the procurement

process, and on the federal vendor and contracting community.

Reporting is due within 180 days of the order.

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Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

Leveraging the Private Sector

Federal agencies may consider various market-based solutions in making sustainability

improvements. Using the private sector in this way can help federal agencies meet the goals of

EO 13514 while conserving financial resources to meet their primary missions. Two widely used

contracts ─ Energy Savings Performance Contracts (ESPCs) and Utility Energy Savings

Contracts (UESCs) ─ provide federal agencies with the means of improving energy efficiency

through private sector financing.

Under an ESPC, a private-sector energy services company (ESCO) develops and installs energy

improvements such as energy efficient lighting or heating, ventilation and air conditioning

systems (HVAC).28 The federal agency then repays the ESCO for the capital expenditure over a

maximum of 25-year period from resultant energy savings. EPSCs, in particular, have gained

widespread use throughout the federal sector. Federal agencies have invested approximately $2.3

billion through ESPCs, with more than 460 contracts awarded in 47 states.29 ESPCs come with an

incentive that allows facility managers to apply the cash benefit of energy savings to other

improvements or programs.

The Congressional Budget Office’s (CBO) view of ESPCs is that they impose a future financial

obligation on the federal government. CBO began scoring ESPCs as mandatory spending,

coinciding with the expiration of the 1990 Budget Enforcement Act pay-as-you-go (PAYGO)

rules.30 The CBO scoring reflects how ESPCs create future commitments to appropriations. The

Government Accountability Office (GAO) finds that the benefits of ESPCs could be achieved

using upfront funds (that is, fully funded in advance) and with lower financing costs, but agencies

generally do not receive sufficient funds upfront for doing so and see ESPCs as a necessary

supplement to upfront funding in order to achieve the longer-term energy savings benefits.31

UESCs can accomplish the energy efficiency improvements similar to ESPCs.32 With a UESC, a

utility finances the costs of capital improvements and recovers its investment over the contract

term from the customer’s utility rates. The utility benefits by reducing its customer’s demand for

energy, thus increasing its spare capacity for periods when energy demands peak. Unlike ESPCs,

however, there are no statutory requirements that an agency realize savings from reduced energy

consumption. Facility managers, however, can stipulate terms for energy cost savings.

Policy Challenges and Considerations

Much of EO 13514 requires federal agencies to examine the environmental and social impacts of

their mission, personnel and logistical operations with regard to sustainability. The definition of

Congress enacted Legislation authorizing energy savings performance contracts (ESPCs) in 1992, and the

Department of Energy (DOE) promulgated regulations for their use in 1995. Congress made ESPC authority permanent

in 2007. See 42 U.S.C. § 8287.

U.S DOE, Federal Energy Management Program, http://www1.eere.energy.gov/femp/financing/espcs.html

P.L. 101-508 as codified in 2 U.S.C. § 902.

U.S. Government Accountability Office, Energy Savings Performance Contracts Offer Benefits, but Vigilance is

Needed to Protect Government Interests, GAO-05-340, June 2005, http://www.gao.gov/new.items/d05340.pdf.

10 U.S.C. § 2913.

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Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

sustainability carries over from EO 13423, without discussion of how the private sector views or

generally implements the concept.33 Given that the order has elevated sustainability to a high

priority, a broader discussion would help clarify the concept and possibly promote better policy

solutions.

Reducing greenhouse gas emissions is EO 13514’s most significant requirement. Energy

consumption, and thereby fossil fuels use, is arguably involved in almost every aspect and

activity of all federal agencies. In establishing targets for reducing GHG emissions, agencies may

need to weigh the potential impacts on their missions while also considering whether advances in

technology are likely over the timeframe of compliance.

The requirement for federal agencies to reduce scope 3 GHG emissions could have many

implications, including the evaluation of telecommuting as an imperative for many federal

employees to reduce gasoline consumption. Upgrading security for computer-based systems and

adding equipment for communications could be major considerations on the cost side.

This latest energy- and environment-related executive order requires federal agencies to

recommend how they will achieve mandatory goals, but CEQ and OMB must approve and decide

the federal actions that agencies may actually employ. CEQ and OMB may become arbiters of

these recommendations, weighing the mission and criticality of agency activities, as solutions

deemed appropriate in some circumstances may not be appropriate for others.

Conflicts between priorities can emerge. For example, if more electricity is required to charge

hybrid and electric vehicles and that electricity comes from traditional steam-electric power

plants, water consumption could increase thus making water-use goals less achievable.34

Increased coal use to generate the electricity could exacerbate GHG emissions. Such potential

conflicts and possible impacts on the priorities of other agencies are likely to be taken up by the

Steering Committee. The development of a process for resolving such issues is likely be an area

of considerable focus.

The United Nations World Commission on Environment and Development’s 1987 report, Our Common Future,

defines sustainability as “meeting the needs of the present without compromising the ability of future generations to

meet their own needs.”

American Chemical Society , Thirsty Hybrid And Electric Cars Could Triple Demands On Scarce Water Resources,

March 11, 2008, http://www.sciencedaily.com/releases/2008/03/080310094555.htm.

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Appendix. Executive Order 13423

In signing Executive Order (EO) 13423, Strengthening Federal Environmental, Energy and

Transportation Management, President George W. Bush revoked five earlier executive orders

affecting federal agencies’ energy and environmental management. Section 11 of the order

consolidated and strengthened the five executive orders and two memorandums of understanding

(MOU) and established new and updated goals, practices, and reporting requirements for

environmental, energy, and transportation performance and accountability.36 In some cases, the

Bush order put in place replacement energy and environmental efficiency goals for previous goals

with target dates that had passed.

EO 13423 also implemented and supplemented provisions of the 2005 Energy Policy Act

(EPACT; P.L. 110-140) dealing with energy and environmental management by federal agencies.

The combination of EPACT (Title I, Part A) and EO 13423 defined the energy efficiency

objectives for federal agencies under the Bush Administration. EO 13423 directed all federal

agencies to improve energy efficiency and reduce greenhouse gas emissions through reductions in

energy intensity (3% annually through the end of FY2015, and 30% by the end of FY2015,

relative to each agency’s baseline energy use in FY2003). Agencies scored progress in reaching

building energy-efficiency goals in terms of reductions in energy consumption versus gross

building area. For the energy reduction goals of EPACT, EO 13423 excluded some inherently

inefficient industrial types of buildings were from this scoring.

EO 13423 (Section 2f) mandated specific energy reduction targets for new construction and

renovations. Further, it directed federal agencies to meet objectives set in the Federal Leadership

in High Performance and Sustainable Buildings Memorandum of Understanding (“Sustainable

Buildings MOU”).37 The Sustainable Buildings MOU called for new buildings to be 30% more

cost efficient than industry standards, and for buildings undergoing major renovations to be 20%

more cost efficient than a pre-renovation, 2003 baseline. The order also encouraged federal

agencies to incorporate sustainable practices into projects underway, and sell or dispose of

unneeded assets.38

The revoked EO 13123 had directed improvements in building energy efficiency, promoted the

use of renewable energy, and set goals for reduction of greenhouse gas (GHG) emissions

associated with energy use in buildings, among other energy-related requirements. In contrast,

Bush’s EO 13423 had no specific GHG reduction target. However, Section 2.a of EO 13423 did

The President, “Strengthening Federal Environmental, Energy, and Transportation Management,” 72 Federal

Specifically, Section 11 of EO13423 revokes the following prior executive orders: EO13101, Greening the

Government Through Waste Prevention, Recycling, and Federal Acquisition (September 14, 1998), EO13123,

Greening the Government Through Efficient Energy Management (June 3, 1999), EO13134, Developing and

Promoting Biobased Products and Bioenergy (August 12, 1999), EO13148, Greening the Government Through

Leadership in Environmental Management (April 21, 2000), and EO13149, Greening the Government Through

Federal Fleet and Transportation Efficiency (April 21, 2000). See “Fact Sheet, Executive Order 13423, Strengthening

Federal Environmental, Energy and Transportation Management,” Office of the Federal Environmental Executive at

http://ofee.gov/eo/EO_13423FactSheet.pdf.

The Sustainable Building MOU is available at http://www.fedcenter.gov/_kd/Items/actions.cfm?action=Show&

item_id=4713&destination=ShowItem (accessed on November 17, 2008).

Office of Management and Budget, Instructions for Implementing Executive Order 13423, March 29, 2007, p. 25,

http://www.whitehouse.gov/omb/memoranda/2007.html.

Congressional Research Service

Executive Order 13514: Sustainability and Greenhouse Gas Emissions Reduction

include the goal of cutting GHG emissions by federal agencies through reductions in the energy

intensity of agency operations, but does not specify a GHG reduction target.

EPACT only credited electricity from renewable energy sources in meeting federal purchase

requirements. EO 13423 required that at least half of the EPACT renewable energy requirement

comes from new (put in service after January 1, 1999) renewable energy sources. Agencies could

also use new non-electric renewable energy sources to meet the requirement for new renewable

energy. (Examples of non-electric renewable energy include thermal energy from solar ventilation

pre-heat systems, solar heating and cooling systems, solar water heating, ground source heat

pumps, biomass heating and cooling, thermal uses of geothermal and ocean resources.) However,

these non-electric renewable energy sources could not apply toward meeting the EPACT

renewable electricity requirement.39 In meeting EPACT’s energy-intensity reduction goals

(Btu/gsf), agency credits for renewable energy purchases started to phase out in FY2008 and

reduce to zero by FY2011.

Finally, EO 13423 required each federal agency to annually report to the President. The Office of

Management and Budget (OMB) provided general reporting guidance in Circular No. A-11

(Section 55, Information on Energy Use, Costs, and Efficiency). A 2008 DOE memorandum

provided detailed reporting guidance in to federal agency energy coordinators.40

Author Contact Information

(name redacted)

Specialist in Energy Policy

[redacted]@crs.loc.gov, 7-....

(name redacted)

Specialist in Energy and Energy Infrastructure

Policy

[redacted]@crs.loc.gov, 7-....

U.S. Department of Energy, Energy Efficiency and Renewable Energy, Renewable Energy Requirement Guidance

for EPACT and Executive Order 13423, January 28, 2008, p. 5, http://www1.eere.energy.gov/femp/pdfs/

epact05_fedrenewenergyguid.pdf.

Letter from Richard Kidd, Program Manager, Federal Energy Management Program, Office of Energy Efficiency

and Renewable Energy, to Federal Agency Energy Coordinators, Reporting Guidance for FY2008 Annual Report on

Federal Government Energy Management, September 8, 2008, http://www1.eere.energy.gov/femp/about/

reporting_guidance.html.

Congressional Research Service

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