U.S.-China Cooperation:

Bilateral Clean Energy Programs Show Some Results but Should Enhance Their Performance Monitoring

GAO-16-669: Published: Jul 5, 2016. Publicly Released: Jul 5, 2016.

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Contact:

Kimberly Gianopoulos
(202) 512-8612
gianopoulosk@gao.gov

 

John Neumann
(202) 512-3841
neumannj@gao.gov

 

Office of Public Affairs
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What GAO Found

In fiscal years 2008–2015, U.S. agencies obligated a total of about $97 million for clean energy cooperation with China. Two-thirds of this money was obligated for three key programs (projects of which are depicted from left to right below):

  • Department of Energy (DOE) program, the U.S.-China Clean Energy Research Center (CERC), that has focused on research and development in clean coal, clean vehicles, and energy efficiency in buildings;
  • U.S. Trade and Development Agency (USTDA) program focused on export promotion through projects such as feasibility studies and trade missions; and
  • Department of State (State) program that includes information sharing and technology demonstration projects across various clean energy technologies.

Examples of Projects under Key U.S.-China Clean Energy Cooperation Programs

Examples of Projects under Key U.S.-China Clean Energy Cooperation Programs

The key programs have yielded some results and have performance monitoring tools but generally lack targets for their performance, making the significance of their progress unclear. Examples of the programs' results include: for CERC, as of the end of 2015, the launch of 15 products, such as software for enhancing energy efficiency of buildings; and for the USTDA program, through fiscal year 2015, about $230 million in U.S. exports from its clean energy projects. Based on performance monitoring principles in the GPRA Modernization Act of 2010, it is a leading practice for federal programs to link goals to performance measures with established targets. Without targets, it is unclear how results compare with intended performance and what improvements may be needed; this is particularly important as DOE and State officials are planning the next phases of their programs and USTDA emphasizes the role of data in program decisions.

DOE identified intellectual property (IP) risks CERC participants may face, such as participants not having a clear plan for protecting IP, and took steps to manage them. These steps included requiring agreements clarifying IP rights and providing training, in part to encourage participants to share IP created outside of CERC projects. DOE officials said this IP sharing is important for valuable research and development collaboration. CERC participants GAO spoke with reported no significant issues with DOE's management of IP risks but, nonetheless, have been reluctant to share IP. DOE officials acknowledged that participants face a tradeoff between the risks and benefits of sharing IP with Chinese participants and that it is appropriate for companies to assess risks for themselves.

Why GAO Did This Study

The United States and China lead the world in energy consumption, and both are investing in renewable resources and efforts to increase the efficiency of traditional fossil fuel sources in part to address climate change. In 2014, a congressional commission raised questions about bilateral cooperation between the United States and China on clean energy, including potential IP risks to U.S. participants involved in collaborative research projects.

GAO was asked to review government-led U.S.-China collaborative initiatives on clean energy. This report examines (1) how much funding U.S. agencies obligated for clean energy cooperation with China, (2) what is known about the results of key programs and the extent to which they follow leading practices in performance monitoring, and (3) the extent to which DOE managed risks that CERC participants may face. GAO analyzed funding data, reviewed documents and compiled reported results, interviewed agency officials and participants of key programs, and conducted site visits.

What GAO Recommends

GAO is making four recommendations to enhance performance monitoring, including that DOE, USTDA, and State each develop targets for program-level performance and track progress against them for the key programs GAO reviewed. The agencies agreed with GAO's recommendations and plan to take actions to address them.

For more information, contact Kimberly Gianopoulos at (202) 512-8612 or gianopoulosk@gao.gov, or John Neumann at (202) 512-3841 or neumannj@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: DOE concurred with GAO's recommendation and has taken steps to implement it since our report. For example, DOE created a standardized reporting template with performance measures for CERC partners to complete on a quarterly basis. DOE officials informed GAO that they are working to develop targets for those performance measures. We will continue to monitor DOE's progress in implementing this recommendation.

    Recommendation: To improve CERC's performance monitoring, the Secretary of Energy should ensure that for CERC's second phase the program creates targets and tracks progress against those targets in order to measure program performance.

    Agency Affected: Department of Energy

  2. Status: Open

    Comments: USTDA concurred with GAO's recommendation and has taken steps to implement it since our report. For example, USTDA revised its fiscal year 2016 through 2018 strategic plan to include an annual performance target for one of its two performance measures: the value of exports generated for every program dollar. We will continue to monitor USTDA's progress in developing an annual performance target for its performance measure on procurements awarded to small U.S. businesses.

    Recommendation: To improve the agency's performance monitoring, the Director of the U.S. Trade and Development Agency should develop and make public annual targets for the agency's performance measures.

    Agency Affected: U.S. Trade and Development Agency

  3. Status: Open

    Comments: USTDA concurred with GAO's recommendation. As of October 2016, USTDA had planned to review its internal goals for the East Asia Program, and other regional programs, and to begin to track progress against those goals. We will continue to monitor USTDA's progress in implementing this recommendation.

    Recommendation: To improve the East Asia Program's performance monitoring, the Director of the U.S. Trade and Development Agency should ensure that the East Asia Program sets targets for its performance measures and tracks progress against those measures.

    Agency Affected: U.S. Trade and Development Agency

  4. Status: Closed - Implemented

    Comments: State agreed with the findings in the GAO report and has taken steps to implement them. In response to GAO?s recommendation, as of April 2017, State had created program-level performance measures with associated targets and is tracking the program?s results against these targets semiannually.

    Recommendation: To improve the U.S.-China Climate Change Working Group's (CCWG) performance monitoring, the Secretary of State should ensure that CCWG develops measures and targets at the program level and tracks its performance against those measures and targets.

    Agency Affected: Department of State

 

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