Recycled/Recyclable
Printed on paper that contains
at least 50% recycled fiber
           Environmental Protection
           Agency

           The Climate i
           Voluntary Progi
           Greenhouse Gas

Sauce

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                    OFFICE OF AIR AND RADIATION

  THE  CLIMATE  is  RIGHT  FOR  ACTION
 VOLUNTARY PROGRAMS TO REDUCE GREENHOUSE GAS EMISSIONS

As part of" its ongoing effort to prevent air pollution, the United States Environmental
Protection Agency is expanding its voluntary programs. These programs bring significant
benefits in reduction of overall air pollution—and particularly in controlling greenhouse
gas emissions. This plan describes the voluntary air pollution prevention programs already
underway and provides a blueprint for future action.
In reviewing this blueprint for action, it is important to remember four key items:
 l.Air Pollution Prevention: EPA's programs described here reduce emissions of green-
   house gases such as carbon dioxide (CO2)  and methane (CH4), and they also  signifi-
   cantly reduce other types of air pollution, including sulfur dioxide (SO9)—a primary
   component of acid rain, and nitrogen  oxides (NOX)—a contributor to both acid rain
   and smog.
2. Sound Economics: EPA's voluntary greenhouse programs make sense independent of
   environmental concerns. The  actions described here are good ideas on economic
   grounds alone. Energy efficiency is indeed "no regrets."
3. Multiple Efforts: The voluntary efforts described here are but one component of the
   Federal government's activity in reducing the risk of climate change. The Department
   of Energy, Department of Agriculture,  and other U.S.  agencies have programs  under-
   way in this important effort.
4. Public/Private Partnerships: Most importantly, the success of EPA's voluntary programs
   depends upon widespread participation by U.S. companies  and citizens. Join EPA in
   these programs to prevent pollution—The Climate Is Right!


   "These program are the cornerstone to limiting greenhouse gas emissions—pairing
                 environmental protection and economic growth."

                        William K. Reillv, EPA Administrator

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CLIMATE CHANGE  IN  KIO
          At the United Nations Conference on Environment and
       Development (UNCED) in Rio de Janeiro, Brazil, the U.S.
       recently joined with 153 nations in signing the United Nations
       Framework Convention on Climate Change, which calls upon each
       signatory to mitigate climate change by limiting its emissions of
       greenhouse gases.
          The U.S. takes this commitment seriously—in fact, Senate
       ratification of the climate treaty on October 7th makes the U.S.
       the first industrialized nation to become a signatory. And the
       EPA is already translating this commitment into concrete action
       and measurable results. EPA's greenhouse programs pair the
       "green" of environmentalism with the "green" of profit to com-
       bat air pollution and stimulate economic growth, through the
       new environmentalism of voluntary corporate action.
          EPA's voluntary greenhouse programs consist of a series of
       initiatives modeled on successful programs already underway,
       such as Green Lights and the utility-sponsored "Golden
       Carrot™" Super-Efficient Refrigerator Program, which EPA
       helped develop.
          EPA envisions a rapid roll-out of these new programs.
       In fact, in the days following Rio EPA launched its next
                                           effort—Energy Star Computers—with leading manufacturers
                                           who represent ~35 percent of the domestic market for
                                           desktop computers.
                                               EPA's voluntary greenhouse programs are highlighted in U.S.
                                           Views on Global Climate Change, published by the Department of
                                           State prior to Rio. Also featured prominently in U.S. Views are: full
                                           implementation of the National Energy Strategy, which defines a
                                           new, more efficient energy path for the United States; the new
                                           transportation law which will greatly improve the efficiency of
                                           moving people and goods by autos, rapid transit, and other
                                           means; and the world's most stringent clean air legislation, which
                                           will also contribute to greenhouse emissions reduction. The strate-
                                           gy also emphasizes the role of cooperative action—technical and
                                           financial—with developing countries and countries with
                                           economies in transition. In Rio the U.S. challenged all countries
                                           to develop national action plans and pledged to issue the next
                                           publication of the U.S. national action strategy for climate change
                                           in January 1993. This U.S. strategy will include EPA's voluntary
                                           programs and other efforts.
GREENHOUSE
INITIATIVES
TIMELINE

Historical Milestones
January 1991:
Launched Green Lights
May 1991:
First Green Lights State
Government Partners
(California and Maryland)
September 1991:
Consortium for Energy
Efficiency (GEE) established
and incorporated
January 1992:
Green Lights Partner commit-
ments exceed 2 billion fta of
facility space

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       UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE
     OBJECTIVE
        The ultimate objective of this Convention and any related legal
        instruments that the Conference of the Parties may adopt is to
        achieve, in accordance with the relevant provisions of the
         Convention, stabilization of greenhouse gas concentrations in
         the atmosphere at a  level that would  prevent dangerous
          anthropogenic  interference with the climate system. Such  a
           level should be achieved within a time frame sufficient  to
            allow  ecosystems to adapt naturally  to climate change, to
            ensure that food production is not threatened and to enable
            economic development to proceed in a sustainable manner.

         ARTICLE 4: COMMITMENTS
                2. (a)Each of these Parties shall adopt national policies and
           take corresponding measures on the mitigation of climate change,
          by limiting its anthropogenic emissions of greenhouse gases and
         protecting and enhancing its greenhouse gas sinks and reservoirs.
        These policies and measures will demonstrate that developed coun-
                                            tries are taking the lead in modifying longer-term trends in
                                            anthropogenic emissions consistent with the objective of the
                                            Convention, recognizing that the return by the end of the pre-
                                            sent decade to earlier levels of anthropogenic emissions of car-
                                            bon dioxide and other greenhouse gases not controlled by the
                                             Montreal Protocol would contribute to such modification...
                                                 (b)In order to promote progress to this end, each of these
                                              Parties shall communicate, within six months of the entry into
                                               force of the Convention  for it and periodically thereafter, and
                                                in accordance with Article 12, detailed information on its poli-
                                                cies and measures referred to in subparagraph (a) above, as
                                                well as on its  resulting  projected anthropogenic emissions by
                                                sources and removals by sinks of greenhouse gases not con-
                                                trolled by the Montreal  Protocol for the period referred to in
                                                subparagraph (a), with the  aim of returning individually or
                                              jointly to their 1990 levels of these anthropogenic emissions
                                              of carbon dioxide and other greenhouse gases...
February 1992:
Chlorofluorocarbon (CFC)-
free refrigerator with
improved energy efficiency
developed
March 1992:
EPA/Chinese non-CFC insu-
lated refrigerator prototypes
developed
April 1992:
U.S. Views on Global Climate
Change published by U.S.
State Department
June 1992:
Earth Summit in Rio: United
Nations Framework Convention
on Climate Change signed
June 1992:
Energy Star Computers kick-
off—35% of market share
participating on 1st day!

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UFA'S  VOLUNTARY  GREENHOUSE  PROGRAMS-
A  NEW PERSPECTIVE
          While scientific uncertainty over the nature of climate change
       remains, the public is raising other important questions: "What can
       we do about climate change?" and "How much will it cost?"
          The success of programs implemented by EPA suggests not
       only that significant reductions of greenhouse gases are achiev-
       able at low cost—but that they can be profitable! EPA's voluntary
       greenhouse programs seek to strategically enhance the market.
       These programs provide mechanisms for improving energy effi-
       ciency, which leads to reduced fossil fuel use and lower carbon
       dioxide emissions, as well as capturing and using methane, a
       powerful greenhouse gas.
          This document describes EPA's voluntary greenhouse pro-
       grams for industry, state and local governments, and others with-
       in the energy and environmental community. The early assis-
       tance and involvement of these organizations is essential to the
       development and continuing success of EPA's greenhouse pro-
       grams. Public/private partnerships that increase the efficiency
       with which we use our resources can reduce greenhouse gas
       emissions and other air pollution, save consumers money, and
       increase the competitiveness of our businesses.
               VOLIWTARY GREEMIOUSE PROGRAMS
                  EPA envisions a rapid rollout of its voluntary greenhouse pro-
               grams, as illustrated by the timeline beginning on the previous page.
               Other events supporting the voluntary efforts are included in the
               timeline as well.
                        Green Lights
                        Corporate Purchasing
                        Energy Star
JBniL   Advisory C
                                ommittee
 /  /    Regulatory/
        Legal Support

        "Golden Carrot™"
                                 Consortium for
                                 Energy Efficiency

                                 New Technology

                                 Reports
X  Mass Purchases
                                                 Environmental
                                                 Best Practices
                                                 International
                                                 Cooperation
                                                                   Dates prior to July 1992 are historical; those following the fall of 1992 are
                                                                   subject to significant uncertainty and are included to provide a template
                                                                   for "EPA" s anticipated actions.
June 1992:
EPA Greenhouse Programs
Advisory Sub-Committee
selection begins
June 1992:
EPA testifies in Georgia hear-
ing on utility regulatory
reform
July 1992:
Utilities commit ~$30 million
in "Golden Carrot™"
Refrigerator incentives,
RFP issued
          July 1992:
          Brief Ohio Public Utility
          Commission
     July 1992:
     U.S.-Russian natural gas meet-
     ing in Moscow

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KEY  ELEMENTS  OF  EPA's VOLUNTARY GREEN  PROGRAMS
      1) Encourage corporate-wide purchasing frameworks so that energy
                 efficiency and full life cycle cost considerations
                 are incorporated up front. This helps to over-
                 come internal organizational barriers (for exam-
      ple, departments responsible for purchasing equipment would
      consider energy costs in their decisions—even when their
      department does not pay the electricity bills).
         "It takes not much imagination to see that environmental
           concern is not just a fad, but a serious trend. It will
             shape the future of our business, and to learn to
           understand it and shape it is really in our interest."
                         Stephan Schmidheiny
                 Business Council for Sustainable Development
                                       2) Identify energy-efficient products so that consumers can make
                                                 educated purchasing decisions. Unfortunately, the
                                                 lack of good information makes it difficult to
                                                 choose the most cost-effective products.
                                       3) Promote mass purchases of energy-efficient technologies in order
                                                 to improve economies of scale and reduce prices.
                                                 Once organizations begin to purchase efficient tech-
                                                 nologies, prices for these products often fall below
                                       their less energy-efficient alternatives.
                                       4) Encourage industry to commercialize more resource-efficient
                                              technologies by demonstrating that these products
                                              will sell. Clear  "market-pull" signals to manufacturers
                                              can help get products off the drawing board and onto
                                              store shelves.
August 1992:
Green Lights: over 600
participants
September 1992:
NBC program on Green
Lights airs
September 1992:
EPA develops initiative with
India for super-efficient, non-
CFC refrigerators
September 1992:
EPA/Chinese development
of non-CFC Lorenz Cycle
refrigerators
September 1992:
New super compressor
technology prototype for
home refrigerators

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       5) Promote sensible utility regulation and legal frameworks to
                 • encourage cost-effective investments in energy con-
                  servation and methane-recovery programs. Too
                  often, regulatory barriers prevent potential efficiency
                  investments and increase capital requirements.
       Ensuring that companies and consumers can indeed profit from
       wise use of resources—by improving energy efficiency or captur-
       ing and using methane for energy—leads to  a more productive
       and less polluting economy.
              "Innovative green programs such as Green Lights,
             Energy Star Computers, and the 'Golden Carrot™'
            Refrigerator Program are critical to achieving national
                 goals for reducing greenhouse gas emissions.
            Eamomicatty sound programs like these are absolutely
               necessary for achieving the environmental goals
                               of the 1990s."
                        Rafe Pomerance, Senior Associate
                            World Resources Institute
                                             6) Create Environmental Best Practices agreements to integrate
                                                       environmental considerations into the design and
                                                       planning of products and services. Placing environ-
                                                       mental concerns in a primary role can lead to well-
                                             designed products,  cost-effective manufacturing processes,
                                             and a wiser use of scarce natural resources (for example, cap-
                                             turing leaking methane from a variety of sources and using it
                                             for energy).
                                             7) Expand international markets for resource-efficient U.S.
                                                        technologies.  EPA, the Department of Energy
                                                        (DOE)  and the Department of Commerce are all
                                             working to promote resource- and energy-efficient U.S. tech-
                                             nologies worldwide  to create additional business opportunities
                                             for U.S. industry, while helping protect the global environment.
                                             EPA's voluntary greenhouse programs often create such oppor-
                                             tunities, many of which are described herein.
September 1992:
EPA manual for chiller refrig-
erant containment, conserva-
tion, and conversion for
developing countries
October 1992:
EPA/DOE Memorandum of
Understanding (MOU)
finalized
       ._A
October 1992:
Green Buildings—Variable
Speed Drives (VSDs) (air han-
dlers) corporate pilot pro-
gram launched
October 1992:
Energy Star Printers MOU
released
October 1992:
EPA promulgates incentive
regulations for energy
efficiency

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EPA  VOLUNTARY  GREEN PROGRAMS EXPLAINED
   1. CORPORATE PURCHASING STRATEGIES

      Flagship Program: Green Lights
         EPA's Green Lights Program is changing the way that compa-
      nies light their offices and factories across the United States.
      Lighting accounts for over 20 percent of total U.S. electricity
      consumption and was responsible for 120 million metric tons of
      carbon emissions in 1990. Available technology can reduce the
      electricity used for lighting 50-70 percent. These efficient tech-
      nologies also provide excellent investment opportunities—in
      fact, a typical lighting upgrade yields an internal rate of return of
      20-30 percent—a payback of about 3-4 years.
         Green Lights provides companies and governments with a
      framework for seizing these efficiency opportunities. Through
      Green Lights, organizations make a corporate-wide decision to
      invest in energy-efficient lighting, thus giving individual build-
                                      GREEN LIGHTS UPGRADES SURPASS
                                      ESTIMATES OF TECHNICAL POTENTIAL
                                      When EPA launched Green Lights in  early 1991, published
                                      engineering calculations estimated the largest possible light-
                                      ing electricity savings to be 25-54 percent. Many of the first
                                      lighting upgrades completed under Green Lights exceed
                                      these estimates of "maximum technical potential."
                                      The Gillette Company

                                      Santa Monica, GA

                                      50,000 ft2

                                      61%
                                      Energy Savings

                                      37% IRR*
                                Lavergne, TN

                                125,000ft2

                                54%
                                Energy Savings

                                72% IRR
                        Jantzen

                        Vancouver, WA

                        45,000 ft2

                        71%
                        Energy Savings

                        36% IRR
                                                               *internal rate of return (IRR)
                                                               Source: Green Lights Upgrade Reports.
October 1992:
Green Lights has over 3 bil-
lion ft2 committed
November 1992:
GEE executive director hired
November 1992:
Appalachian Coalbed
Methane Environmental and
Economic Benefits Study
released
November 1992:
EPA publishes Conservation
Verification Protocol
November 1992:
EPA report on the economic
and environmental benefits
of natural gas generation
released

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        ing managers nationwide a mandate to pursue the optimal
        lighting designs.
           By signing a partnership agreement with EPA, Green Lights
        participants commit to survey and upgrade 90 percent of all
        domestic facilities with the most energy-efficient lighting systems
        that are profitable, within 5 years of signing the agreement.
           As of September 30, 1992, Green Lights participants num-
        ber 651, including 296 corporate Partners, 24 state and local
        government Partners, 42 utilities, 195 lighting manufacturers,
        55 lighting management companies, and 40 Endorsers. These
        organizations have committed over 2.8 billion square feet of
        facility space to the program, over 3 percent of the national
        total—far exceeding the leasable office space in the metropoli-
        tan areas of New York City, Los Angeles, Chicago, San
        Francisco, Washington DC, Philadelphia, and Dallas.
                                               GREEN LIGHTS TODAY & TOMORROW
                                               Estimates include the Green Lights Program as well as other promising
                                               DOE and utility programs to promote energy-efficient lighting.
                                               Green Lights Today: 1992
                                               2.8 billion
                                               square feet committed
                                               Expected From These
                                               Commi tments—
                                               Green Lights Tomorrow: 2000
                                               24-60 billion
                                               square feet committed
                                               Expected From These
                                               Commitments—
                                               12.4 BkWh/yr Energy Savings     104 - 226 BkWh/yr Energy Savings
                                               2.3 MMT Avoided
                                               Carbon Emissions

                                               67,500 Metric Tons
                                               Avoided SO2 Emissions*

                                               28,700 Metric Tons
                                               Avoided NOX Emissions

                                               $870 Million Reduced
                                               Electricity Bills**
                                               22 - 55 MMT Avoided
                                               Carbon Emissions
                                               1.3 MMT
                                               Avoided SO2 Emissions*

                                               600,000 Metric Tons
                                               Avoided NOX Emissions

                                               $7 -15.8 Billion Reduced
                                               Electricity Bills**
                                                                             Source: EPA and U.S. Views on Global Climate Change, calculated using the follow-
                                                                             ing emissions factors: 1992 Carbon = .186 MMT/BkWh; 2000 Carbon = .243
                                                                             MMT/BkWh; SO2 = 5.8g/kWh; NOX = 2.5g/kWh.
                                                                             * As a result of the Clean Air Act, these reductions may lead to SO2 allowance cred-
                                                                             its, worth an estimated $300-10007ton, rather than actual emissions reductions.
                                                                             ** At 7.0 cents/kWh.
November 1992:
National Association
of Regulatory Utility
Commissioners endorse-
ment of EPA Energy Star
Computers program
November 1992:
Issue final rule reducing land-
fill methane emissions
November 1992:
Green Lights Partners adver-
tising co-op places ads in
major business magazines
November 1992:
Agreement for Energy Star
Fax Boards
November 1992:
Launch outreach program on
methane energy recovery
from landfills to industry/
states/municipalities/utilities

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        Future Corporate Purchasing Programs

        Following the flagship Green Lights Program, EPA is plan-
        ning the introduction of similar programs, targeting the fol-
        lowing technical opportunities:

           Industrial Motors
           Buildings Technologies
           Commercial Cooking
           Better Refrigerants
           Industrial Electrolytics

        As technologies evolve and market conditions change, EPA will modify
        and expand this list.
           EPA helps to get the Green Lights job done with technical
       support from start to finish, including: state-of-the-art software
       to assist in upgrade  decision-making; information on financing
       energy-efficient lighting through a large national data base;
       "consumer reports" of lighting products through the National
                                           Lighting Product Information Program; and networking
                                           through lighting manufacturers, lighting management compa-
                                           nies, and utilities. EPA also provides opportunities for public
                                           recognition, including public-service advertisements, news arti-
                                           cles, marketing materials, broadcast specials, and videotapes.

                                        2. PRODUCT IDENTIFICATION STRATEGIES

                                           Flagship Program: Energy Star Computers

                                               The EPA Energy Star Computer program is helping to cre-
                                           ate a market for energy-efficient desktop computers, by provid-
                                           ing a clear market incentive for manufacturers to improve the
                                                'EPA should be amgratulatedforits
                                                  creative and inspired solution."
                                                             Info World
November 1992:

Mobile Methane Monitor
transferred to Russia
November 1992:

Kick-off Federal Green Lights
Program
December 1992:

EPA Residential Heating and
Cooling Report released
December 1992:

Launch voluntary program
on methane emission reduc-
tions from natural gas systems
December 1992:

Initiate Animal Waste
Demonstration Project

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       efficiency of their products and an effective mechanism for
       consumers to make informed purchasing decisions.
           Currently, computer systems consume 5 percent of all com-
       mercial electricity—and this number could grow to 10 percent
       by the year 2000. Research suggests that 30-40 percent of all
       computers are left on at night and over weekends, and that
       even during the day computers are active less than 20 percent
       of the time. This provides a clear opportunity for dramatic
       reductions in energy use, costs, and greenhouse gas emissions.
           Manufacturers who sign the EPA Energy Star Computers
       program agreement will introduce personal computers that
       automatically "power-down" when they are not being used. This
       feature was pioneered for use in portable applications, and
       could cut the energy used by personal computers in half—at
       no additional cost!
           The EPA Energy Star logo will be used to identify machines
                                             capable of "powering-down," so that consumers and businesses
                                             know that they can save money and cut air pollution when they
                                             purchase this equipment.
                                                The EPA Energy Star Computers program was developed
                                             with industry leaders and launched June 17, 1992. Current partic-
                                             ipants in Energy Star Computers make 40 percent of all personal
                                             computers and workstations sold in the U.S., and EPA is expand-
                                             ing the program to include other manufacturers. As of
                                             September 1992, participating manufacturers include:
                                             • Acer America
                                             • Apple Computer
                                             • Compaq Computer
                                             • Digital Equipment
                                             • EMPaC International
                                             • Hewlett-Packard
                                               • Hyundai Electronics America
                                               •IBM
                                               •NCR
                                               • Silicon Graphics
                                               • Smith Corona
                                               • Zenith Data Systems
December 1992:
Green Lights Residential
Program announced
December 1992:
GEE Board of Trustees
instated
December 1992:
1,000 Green Lights upgrades
underway
December 1992:
1992 EPA/Sweden discuss
incorporation of Energy Star
Computers guidelines into
Swedish strategy
December 1992:
"Golden Carrot™"
Refrigerator finalists
announced

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       Future Energy Star Product Identification
       Programs

       Following the flagship Energy Star Computers program, EPA is
       planning the introduction of similar programs in conjunction
       with the DOE appliance standards program, targeting the fol-
       lowing technical opportunities:

          Low-flow Showerheads
          Residential Room Air Conditioning
          Residential Cooking Equipment
          Residential Space Conditioning and Shell Improvements
          Miscellaneous Residential and Commercial End-Uses
       As technologies evolve and market conditions change, EPA will modify and
       expand this list.
            3. MASS PURCHASING STRATEGIES

               Flagship Program: Green Buildings—Variable Speed Drives

                  EPA's Green Buildings initiative will stimulate the market
               for highly efficient heating, ventilation, air conditioning
               (HVAC), and water heating technologies. The program's first
               technology target will be variable speed motor drives for ven-
               tilation systems.
                  Every year, roughly 50,000 air handling motor drives are
               purchased to move air through buildings and factories. Of
               these, less than 20 percent have fans capable of operating at
               variable speeds—that is, adjusting their power based on the
               needs of the building occupants at any particular time or
                               ~T~~J^~ ^
                               - •!Bi*a*\
                                SMSS**
Winter 1993:

Voluntary Green Programs
Advisory Sub-Committee
meets
Winter 1993:

Green Buildings - Ventilation
launched
Winter 1993:

Green Industrial Motors
launched
Winter 1993:

Energy Star Low-flow
Showerhead Program
launched
Winter 1993:

Coalbed methane recovery
and use case studies

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       THE EXPLODING MARKET FOR ENERGY
       EFFICIENCY
       Energy efficiency is BIG business. Sales for efficient products
       targeted by these four flagship greenhouse programs alone are
       expected to total $53 billion by the end of the decade—compa-
       rable to the entire domestic paper producing industry.
       Sales of Efficient Products ($ million)
                                Historical        Projected
                            1985      1990     19
       Lighting1
       Personal Computers
       Variable Speed
       Motor Drives
       for Ventilation
       Refrigerators2
       * Negligible
       1 Includes only compact fluorescents, T-8 lamps, and electronic ballasts.
       2 Efficient refrigerators are defined to be < 700 kWh/yr, the level of the
       1993 DOE standard.
       Source: EPA estimates derived from Electric Power Research Institute,
       International Data Corporation, manufacturers, and Bureau of the Census data.
1985
*
*
*
*
1990
340
3,400
50
*
1995
2,000
25,000
115
4,200
2000
10,000
37,000
400
5,200
                                             any particular weather circumstance. Most fans either oper-
                                             ate continuously at one speed regardless of building needs
                                             or use less efficient mechanical means to control air flow.
                                             Furthermore, fans are usually oversized in order to meet
                                             demands under the most extreme conditions (i.e. the
                                             hottest hour of the hottest day), with an additional margin
                                             of safety.
                                                Variable speed drives (VSDs) have been demonstrated in
                                             the HVAC marketplace for over 10 years and are capable of
                                             reducing electricity consumed for air handling by 40 percent
                                             or more. Why is VSD market share so small? According to
                                             manufacturers, the answer is simple: first cost. Even though
                                             the payback is only 1-3 years, most consumers have been
                                             unwilling to make the initially higher investment for the more
                                             efficient—and money saving—products.
Winter 1993:
Identify Russian natural gas
pilot projects
Winter 1993:
Clean Air Act (CAA)
Amendment Utility Energy
Savings Evaluation Project
begins
Winter 1993:
"Golden Carrot™" Heat
Pump launched
Winter 1993:
Green Lease MOU released
Winter 1993:
General Services
Administration procurement
guidelines for Energy Star
Computer products
                                                                                                                                                11

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          Through a mass purchase, however, it is possible to reduce
       the risk to manufacturers to invest more heavily in VSD produc-
       tion. A group buy will signal that VSDs are no longer a "niche
       product"—that it is time to gear up to larger product lines in
       order to meet a large and growing demand. This drives down
       prices—in fact, it is reasonable to believe that large markets
       enhanced by EPA's Green Buildings program and other utility
       rebate initiatives will make the first cost of the most efficient
       products comparable  to the first cost of the least efficient ones.
        Future Mass Purchasing Programs

        Following the flagship VSD mass purchase, EPA is planning
        the introduction of similar programs, targeting the following
        technical opportunities:

          Green Buildings Technologies
          Solar Thermal Water Heaters
          Amorphous Core Transformers
        As technologies evolve and market conditions change, EPA will modify and
        expand this list.
                                       4.  STRATEGIES TO ENCOURAGE
                                           COMMERCIALIZATION OF RESOURCE-
                                           EFFICIENT TECHNOLOGIES

                                           Flagship Program: "Golden Carrot™" Super-Efficient
                                           Refrigerator Program
                                              Appliance manufacturers often report that it is technically
                                           possible to produce more energy-efficient products. From a
                                           business standpoint, however, investing in this production has
                                           often appeared unwise, since  the most efficient products cur-
                                           rently on store shelves are not purchased in large quantities.
                                           Why invest in the next generation?
                                              The "Golden Carrot™" is why. By aggregating a large pool
                                           of appliance rebate money, utilities are giving appliance manu-
                                           facturers a financial incentive—the most powerful market sig-
                                           nal they can send—to make the most energy-efficient appli-
                                           ances possible.
                                              The flagship "Golden Carrot™"  appliance is the refrigera-
                                           tor. Refrigerators consume 20 percent of all residential electric-
Winter 1993:

Launch commercial rooftop
air conditioning "Golden
Carrot™" initiative
Winter 1993:

Launch Animal Waste
Outreach Program to
states/livestock producers/
rural electric coops
Spring 1993:

VSD for air handlers
group buy
Amorphous core transformer
group buy
Spring 1993:

Launch outreach program on
"Nega-allowances"

-------
          'This utility consortium deserves U^i praise for an initia-
         tive that is pro-energy efficiency, pro-environment, and pro-
         economy. . .It will provide utilities with a low-cost conservation
           option to help meet growth in electricity demand. It will
           benefit industry by enhancing the market for innovative
           technologies and increasing American competitiveness."
             William K.  Reilly, EPA Administrator, in response to the public
              announcement of the Super-Efficient Refrigerator Program
       ity. On average, refrigerators consume ~1,200 kilowatt hours
       per year (kWh/yr) of electricity. The best widely-available
       model on the market now uses ~800 kWh/yr, and the 1993
       DOE refrigerator performance standard is ~700 kWh/yr. The
       "Golden Carrot™" Super-Efficient Refrigerator Program is
       focusing manufacturer research and development toward ener-
       gy efficiency in a manner never before seen for refrigerators,
                                             and will lead to the introduction of units 25-50 percent more
                                             energy-efficient than the 1993 DOE performance standards.
                                                Under the program, which EPA helped develop with utilities
                                             and others, utilities have pooled almost $30 million in rebate
                                             incentives to the refrigerator manufacturer that can produce the
                                             superior product. The manufacturer that can build the largest
                                             number of the most efficient, chlorofluorocarbon (CFC)-free
                                             refrigerators the quickest and cheapest wins the contract. The
                                             environmentally superior product will be available to consumers
                                             at a utility-subsidized price beginning in 1994 or 1995. The
                                             "Golden Carrot™" Super-Efficient Refrigerator Program will ulti-
                                             mately save consumers $240-480 million in annual electricity pay-
                                             ments. This translates into annual electric bill savings of 10 per-
                                             cent to 35 percent for an average household.
                                                Utilities usually create individual, uncoordinated incentive
                                             programs with unpredictable life spans. The "Golden Carrot™"
                                             coordinates and aggregates utility incentives in a long-term
                                             strategy that allows manufacturers to plan ahead. The result
                                             is a more rational investment strategy than before, that leads to
Spring 1993:
"Golden Carrot™"
Refrigerator prototypes
available
Spring 1993:
Launch key state programs in
coal mine methane
recovery
Summer 1993:
Debut of Energy Star logo on
computer equipment
Summer 1993:
"Golden Carrot™"
Refrigerator winning manu-
facturer announced
Summer 1993:
Energy Star logo available for
windows, insulation, and
other building products
                                                                                                                                                 13

-------
       more efficient products at a lower price than would otherwise
       be the case. Ultimately this translates into healthier corporate
       bottom lines, lower consumer costs, and significantly reduced
       carbon dioxide emissions and other air pollution from electric-
       ity generation.


        Future Programs to Encourage
         Commercialization of Resource-Efficient
         Technobgies

        The Consortium for Energy Efficiency (GEE) has been estab-
        lished by utilities, EPA, and several environmental groups to
        roll out future "Golden Carrot™" programs for other promis-
        ing technologies. EPA and utility members are advising GEE
        staff in new program areas, including:

          Advanced Heat Pumps
          Residential Central Air Conditioning
          Clothes Washers
          Clothes Dryers
        As technologies evolve and market conditions change, EPA and CEE will
        modify and expand this list.
                                        5. REGULATORY AM) LEGAL
                                           SUPPORT STRATEGIES

                                           Flagship Program: Utility Reform

                                              For too long, utility regulation has encouraged investments in
                                           power plants and discouraged investment in efficiency. In fact,
                                           utilities and their stockholders have lost money when they con-
                                           serve electricity. At the same time, ratepayers have been con-
                                           cerned about whether real savings are actually occurring. The
                                           result has been an inefficient mix of resources, inflated costs, and
                                           unwarranted air pollution.
                                              On the other hand, where utility regulations allow it, utilities
                                           often find that it is more cost-effective to invest in energy efficien-
                                           cy than supply. This investment in energy efficiency—or demand-
                                           side management (DSM)—complements EPA's voluntary pro-
                                           grams and other efforts to increase energy efficiency.
                                              A movement is underway nationwide, supported in the National
                                           Energy Strategy (NES), to level the playing field and encourage eco-
                                           nomically justifiable investments in energy efficiency. The basic
                                           premise is that utilities should be able to make as much money on
Summer 1993:

Conservation and Renewables
Incentive Allowance Program
begins
Summer 1993:

Washer/Dryer "Golden
Carrot™" launched
Summer 1993:

EPA/European Community
(EC) meeting to discuss
Energy Star Computers-—
Europe
Summer 1993:

Green Buildings - Cooling
launched
Fall 1993:

HCFC-free energy-efficient
air conditioner prototype
developed

-------
       energy saved as energy sold when savings are properly verified. This
       philosophy was formally embraced in the 1990 Clean Air Act (CAA)
       Amendments. The Act provides incentives for utilities to reduce
       compliance costs through the use of renewable energy and energy
       efficiency, where:

       The state regulatory authority... has established rates and charges which
       ensure that the net income of such electric utility after implementation of
       specific cost-effective energy conservation measures is at least as high as
       such net income would  have  been if the energy conservation measures
       had not been implemented.
           "We need to reform the rate-makingpmcess so that saving
              energy is more profitable to utilities than setting it."

                                  Ron Eachus
         Chairman, Oregon Public Utility Commission Chair, Energy Conservation
           Committee, National Association of Regulatory Utility Commissioners
                                                  While EPA recognizes that each state will need to develop
                                               its own very specific utility regulations, in general the Agency
                                               encourages inclusion of three broad principles:
                                               •   Eliminating the incentive to sell electricity by separating (or
                                                  "decoupling") profits from sales
                                               •   Creating an incentive to save electricity—accomplished
                                                  through programs in which utilities and their stockholders can
                                                  actually profit from successful investments in conservation
                                               •   Verifying energy efficiency measures to ensure that actual
                                                  energy savings are realized
                                                  As of July 1991, at least one dozen states have  adopted com-
                                               prehensive regulatory mechanisms to encourage  conservation.
                                               EPA will publish final rules on the CAA incentives and guidance
                                               on verifying conservation in the fall of 1992. EPA, DOE, and
                                               other Federal agencies are working across the U.S. to encourage
                                               the implementation of regulations that will benefit ratepayers
                                               and stockholders and prevent pollution. These regulatory
                                               changes, by encouraging an increase in DSM investment in
                                               energy efficiency, will strengthen EPA's voluntary programs.
Fall 1993:
Green Lights has over 1 bil-
lion ft2 of upgrades underway
Fall 1993:
Launch national certification
program for architects and
lighting consultants
Fall 1993:
"Golden Carrot™" residential
central air conditioner
program launched
Fall 1993:
Five additional VA mines
recovering methane
(total =11)
Winter 1994:
Mass market debut of
"Golden Carrot™" rooftop air
conditioners
                                                                                                                                                      15

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       Flagship Program: Methane Recovery at Coal Mines
           Methane, a significant greenhouse gas, can be recovered
       from coal mines and used for energy instead of being wasted
       and released into the atmosphere. A variety of proven technolo-
       gies are available to recover and use this waste gas, but prospects
       are hampered by legal and regulatory barriers. Some of the
       principal barriers include legal questions about who owns the
       gas released by coal mining, the unwillingness of utilities and
       pipelines to buy the electricity or gas produced by these facili-
       ties, and the existence of regulatory frameworks that discourage
       the use of the recovered gas. These barriers can be addressed
       through legislative actions at the state or Federal level, incentive
       programs, and outreach to coal mines, operators, utilities,
       pipeline companies,  states, and municipalities.
           EPA has been working with the U.S. coal industry to identify
       the barriers to methane recovery and assist in their removal.
       The key focus of current  activities is the Appalachian region,
       which has the largest potential for methane recovery and could
       most benefit from actions to address ownership issues and
                                                  "These voluntary programs exemplify how we
                                                     can achieve environmental protection,
                                                economic growth,  and energy security. As such,
                                                  they represent a new environmentalism that
                                                    is broader, cleaner, and even profitable."
                                                                William G. Rosenberg
                                                     EPA Assistant Administrator for Air and Radiation
                                            remove other hurdles. EPA has efforts underway to ensure that
                                            the full benefits of methane recovery at coal mines—in terms of
                                            environmental protection, employment, and revenues—are rec-
                                            ognized by coal mine operators, as well as by states and other
                                            Federal agencies.
                                               EPA's activities to expand the recovery of methane from
                                            coal mines also have a major international component. U.S.
                                            companies lead the world in the development of technologies
                                            to recover and use methane from coal seams. Thus, there are
Winter 1994:
Energy Star logo debut on
residential cooking
appliances
Winter 1994:
Energy Star Room Air
Conditioner Program
launched
Winter 1994:
Green Buildings - Water and
Space Heating launched
Winter 1994:
    of potential for reducing
methane from landfills
achieved
Spring 1994:
Solar thermal water heater
group-buy

-------
       many opportunities for U.S. companies to export technologies
       and develop international joint venture projects. EPA is facilitat-
       ing such projects through the preparation of resource assess-
       ments and investment opportunity analysis, the creation of
       international technology transfer centers, and the organization
       of seminars, workshops, and conferences on coalbed methane
       that showcase the achievements of U.S. companies. EPA plans to
       continue these efforts in several countries—including the
       People's Republic of China, Russia, Ukraine, Poland,  and the
       Czech and Slovak Federal Republic. As a result, U.S. coal and
       gas companies will have additional business opportunities in
       coalbed methane and methane emissions from the world's coal
       mines will be reduced.

        Future Programs for Regulatory and
        Legal Support
        Following the flagship Utility Regulatory Reform and Coalbed
        Methane programs, EPA is planning the introduction of similar
        programs, targeting the following opportunities:

          Landfill Methane Recovery
          Tire Inflation
        As technologies evolve and market conditions change, EPA will modify and
        expand this list.
                                        6. ENVIRONMENTAL BEST PRACTICES
                                           STRATEGIES
                                           Flagship Program: Green Nylon Manufacturing
                                              The United States produces about one-third of the world's
                                           nylon in a manufacturing process that releases the greenhouse gas
                                           nitrous oxide (N2O).
                                              Nitrous oxide emissions can be reduced during the manu-
                                           facturing process through the addition of a reductive furnace to
                                           adipic acid plants, the factories used in the production of nylon.
                                           This technology, which recycles nitrous oxide and saves energy
                                           and raw materials, is being developed now and is expected to be
                                           fully commercialized by mid-decade.
                                              EPA is working with major U.S. nylon manufacturers to
                                           expand the use of these reductive furnaces. By incorporating
                                           environmental concerns into design and manufacturing process-
                                           es, EPA and nylon manufacturers are leading the way toward a
                                           more environmentally sound—and more competitive—economy.
Spring 1994:

Energy Star logo on most per-
sonal computers and printers
sold
Spring 1994:

Green Commercial Cooking
launched
Summer 1994:

42 State Partners in Green
Lights
Summer 1994:

CEE/EC Summit on "Golden
Carrot™" opportunities for
Europe
Summer 1994:

Launch Energy Star program
for large consumer
appliances
                                                                                                                                           17

-------
       Future Programs for Environmental Best
       Practices
       Following the flagship Green Nylon Manufacturing program,
       EPA is planning the introduction of similar programs, targeting
       the following opportunities:
         Livestock Waste Lagoon Methane Recovery
         Livestock Dietary Strategies
       As technologies evolve and market conditions change, EPA will modify and
       expand this list.

    7. STRATEGIES TO EXPAND INTERNATIONAL
       MARKETS
       Flagship Program: Natural Gas Pipelines in Russia
           EPA's experience in its voluntary programs often points
       naturally to international opportunities, many of which are
       mentioned in this document. For example, EPA's natural gas
       experience in the U.S. led to an initiative in Russia, the largest
       natural gas producer in the world. Current estimates suggest
       that about 5 percent of the gas produced in the former
                                           U.S.S.R—approximately 25 Teragrams (Tg) of methane—is
                                           released into the atmosphere. EPA and Russian gas specialists
                                           are working together to reduce leakage of this greenhouse  gas
                                           to 2 percent by adopting existing and profitable Western tech-
                                           nology and work practices.
                                              EPA and GAZPROM (the Russian Gas Association) have
                                           established a working group of experts from both countries
                                           and are developing projects to increase the efficiency of the
                                           natural gas system in Russia. Projects will be chosen from sev-
                                           eral areas, including: enhanced field maintenance; upstream
                                           refining of gas; leak detection and mapping; pipeline con-
                                           struction and rehabilitation; compressor upgrades; power
                                           generation; and improved measurement and  control devices.
                                           The Russian Natural Gas Pipeline project expects to transfer a
                                           mobile methane monitor to Russia in late 1992, and identify
                                           pilot projects early in 1993.
                                              The Russian Natural Gas Pipeline project could reduce
                                           methane emissions 15 Tg,  the equivalent of 90  million  metric
                                           tons of carbon—while providing additional capital resources
                                           for new economic development projects in Russia, and creating
                                           further export and investment opportunities for U.S. industry.
Summer 1994:
Expert panel updates CAA
Amendment Conservation
Verification Protocol
Fall 1994:
EPA helps Brazil produce
high-efficiency compressors
Fall 1994:
Green Buildings Partners
commit 1 billion ft2
Winter 1995:
Phase T utilities can earn
"reduced utilization" conser-
vation credit
Winter 1995:
Mass market debut of
"Golden Carrot™"
washer/dryers

-------
THE  CLIMATE  is  RIGHT  FOR ACTION
          As we move forward at EPA, it becomes increasingly obvious
       that environmentalists and business leaders are often pursuing
       the same goals. Only by incorporating environmental concerns
       can economies truly prosper; only by taking advantage of eco-
       nomic forces can environmental protection goals be realized.
       Through the voluntary programs to reduce greenhouse gases,
       EPA and its private-sector partners seek to do both—by embrac-
       ing sound, cost-effective pollution reduction opportunities and
       enhancing natural market forces to save energy, reduce pollu-
       tion, and mitigate the risk of climate change. In fact,  EPA's
       greenhouse programs, along with other U.S. actions, have the
       potential to significantly reduce greenhouse gas emissions.
                                              'We came to Rio with an action plan on climate change
                                           ...My administration published a detailed program ofspedfe
                                            measures that the U.S. was prepared to undertake to address
                                            climate change... Let us join in translating the words spoken
                                                 here into concrete action to protect the planet."
                                                             President George Bush
                                                        June 12, 1992, Rio de Janeiro, Brazil
Winter 1995:
~1 million homes
insulated/heated with Energy
Star products
Winter 1995:
Green Gas Partners commit
30% of natural gas transmis-
sion and distribution
Winter 1995:
All states remove legal barri-
ers hindering methane recov-
ery at mines
Spring 1995:
EPA Energy Star logo debut
on room air conditioners
Spring 1995:
Mass market debut of
"Golden Carrot™" heat
pumps
                                                                                                                                     19

-------
IMPACT OF EPA GREEN PROGRAMS ON U.S. GREENHOUSE GAS EMISSIONS
         1800
 C/3
 a
 o
         1700
W  ^ 1600
 +-»   a;
     U
 OJ
 fl
 O
 5-H

U
     H   1500
          1400
          1300
          1200
                           1990
                          2000
                        Projected
                        Baseline
                          2000
                       Projected
                       with Green
                    Programs (low)
                          2000
                       Projected
                      with Green
                   Programs  (high)
 Note: Green Programs benefits calculation includes additional complementary demand side management programs.
     These estimates do not include the other parts of the U.S. Action Plan, e.g., the National Energy Strategy, Clean Air Act, Forests for the Future, and others.
Spring 1995:

Mass market debut of
"Golden Carrot™"
Refrigerators
Spring 1995:

Green Buildings Partners
commit 2 billion ft2
Spring 1995:

Major swine producers
recover methane from
animal wastes
Spring 1995:

Mass market debut of
"Golden Carrot™"
heat pumps
Summer 1995:

Chinese market
super-efficient
non-CFC refrigerator

-------
       U.S. ACTIONS TO CURB CARBON DIOXIDE EMISSIONS
       U.S. Views on Global Climate Change, Department of State, April 1992
Action/Description
Demand-Side Management
(DSM) /Green Lights
- Commercial/Industrial
- Residential
DSM/Green Computers
DSM/Green Industrial Motors
DSM/Green Buildings (HVAC)
"Golden Carrot™" Refrigerators
Residential Clothes Washers
Residential Clothes Dryers
Low-flow Showerheads
Solar Thermal Water Heaters
Advanced Heat Pumps
Appliance Standards
Potential
Technical
Improvement


65%
75%
57%
30%
53%
57%
96%
65%
58%
70%
20%
n/a
Year 2000
Market
Penetration


25%-62%
27%
65%
16%
17%
3%
3%
3%
11%
2%'-3%2
n/a
n/a
Electric
Energy
Savings
(BkWh)


81-203
23.4
26.3
39.5
41.9
3.0
1.3
1.2
10.2
4.8
1.8
22.2
Year 2000
Carbon
Reduction
(MMT C)


17.0-50.1
4.9
5.5
8.3
8.8
0.6
0.3
0.3
3.4
1.4
2.5
4.7
       1 Homes with gas heaters
       2 Homes with electric heaters
Summer 1995:

Mass market debut of
"Golden Carrot™" central
air conditioners
Summer 1995:

Energy Star-bearing low-flow
showerheads approach 5%
penetration
Summer 1995:

Five additional Appalachian
mines recovering methane
(total 16)
Fall 1995:

Launch Energy Star
program for small consumer
appliances
Fall 1995:

Green Commercial Cooking -
15 national restaurant chains
commit
                                                                                                                                              21

-------
       U.S. ACTIONS TO CUEB CARBON DIOXIDE EMISSIONS
        U.S. Views on Global Climate Change, Department of State, April 1992 (continued)
Action/Description
Residential Space Heating
-New
-Old
Residential Central Air Conditioning
Residential Room Air Conditioning
Residential Cooking
Commercial Cooking
Industrial Electrolytics
Amorphous Core Transformers
Miscellaneous Residential
and Commercial End Uses
Better Refrigerants
Tire Inflation, Auto Inspection
and Maintenance, etc.
1991 Transportation Act
Potential
Technical
Improvement

20%
10%
29%
19%
8%
20%
20%
70%

13%
5%

n/a
n/a
Year 2000
Market
Penetration

8%
10%
40%
40%
40%
30%
13%
25%

40%
80%


n/a
Electric
Energy
Savings
(BkWh)


2.4
9.6
1.2
1.2
1.8
1.8
9.0

15.0
8.2

n/a
n/a
Year 2000
Carbon
Reduction
(MMT C)


0.5
2.0
0.3
0.3
0.4
0.4
1.9

3.1
1.8

3.0
4.0
       Subtotals: Gross Additional Carbon Actions

       1 Homes with gas heaters
       2 Homes with electric heaters
                                                                 306-429
                                                              75-108
1996:

India markets super-efficient
non-CFC refrigerator
1996:

Green Buildings Partners
reach 4 billion ft2
1996:

Green Lights Partners
upgrading 10 billion ft2
1996:

500,000 solar thermal water
heaters installed nationwide
1996:

Utilities installing amorphous
core transformers approach
10% of total

-------
         ACTIONS TO CURB CARBON DIOXIDE EMISSIONS—SUBTOTALS
                                              Electric
                                              Energy
                                              Savings (BkWh)
                            Year 2000
                            Carbon Reduction
                            (MMTC)1
Gross Additional Carbon Actions
Less:
National Energy
Strategy Integrated
Resource Planning
Consumer Response to Lower Prices 2
306-429

-116
-38
75-108

-24
-8
         Additional Carbon Actions
         (Net of NES and Consumer Response)  152-275          43-76
         Plus:
         Actions in President Bush's NES Proposals
         — Efficiency Improvements and Integrated Resource Planning
         — Natural Gas Regulatory Reform
         — Expanded Use of Biofuels
         — R&D for Renewables, Transportation, and Energy Efficiency
         — Provide Framework for Additional
              Actions (previous pages)          128              45
                                                     ACTIONS TO CURB METHANE AND
                                                     NITROUS OXIDE EMISSIONS
                                                              Year 2000
                                                              Carbon Equivalent
                                                              Reductions (MMT C)'
Methane
Methane Capture/Landfills
Methane Capture/Livestock
Waste Lagoons
Methane Capture/Coal Mines
Livestock Dietary Program
Total Methane Reduction
Nitrous Oxide
Green Nylon Program
Total Other Gases
@CH4GWP=11
19
3
0-3
3
25-28

8-12
33-40
@CH4 GWP = 22
39
7
0-6
6
52-58

8-12
60-70
                                                     Total Greenhouse Gas Emissions
                                                     Reductions (Carbon and Other)
                                                              125-170
                                                      152-200
         Total Carbon Reductions
          281-402
87-121
1 Reductions are in millions of metric tons of carbon equivalent in the year 2000. These
projections are sensitive to assumptions regarding energy prices, economic growth, and
technology penetration over the next decade. Further projections will change as the
actions list is updated, as events affecting the energy markets and the economy unfold,
and as the effects of current actions are seen.
         Carbon Sinks                                          5-9
         — "America the Beautiful" and Other Forestry Programs

         1 Reductions are in millions of metric tons of carbon equivalent in the year 2000. These pro-
         jections are sensitive to assumptions regarding energy prices, economic growth, and technolo-
         gy penetration over the next decade. Future projections will change as the actions list is updat-
         ed, as events affecting the energy markets and the economy unfold, and as the effects of cur-
         rent actions are seen.
         2 This value (12% to 20% of the electricity savings) is included as an adjustment for increases
         in demand for energy services that will result as the introduction of these efficient technolo-
         gies lower consumer costs. The actual "rebound" effect may vary significantly from this value.
1997:

Energy-efficient heating, vent-
illation, air conditioning
(HVAC) technologies installa-
tions in 5% of nation's space
1997:

50 million Americans cook
with improved efficiency
products
        1998:

        Green Motors penetrates 10%
        U.S. market
                  1998:

                  Energy-efficient room air
                  conditioners hit 20%
                  of market
1998:

"Golden Carrot™" heat
pumps cut electric bills $70
million
                                                                                                                                                                              23

-------