DIESEL POLLUTION

Fragmented Federal 

Programs That 

Reduce Mobile Source 

Emissions Could Be 

Improved

Report to Congressional Committees

February 2012

GAO-12-261

United States Government Accountability Office

GAO
 United States Government Accountability Office 

Highlights of GAO-12-261, a report to 

congressional committees 

February 2012 

DIESEL POLLUTION

Fragmented Federal Programs That Reduce Mobile 

Source Emissions Could Be Improved 

Why GAO Did This Study 

Exhaust from diesel engines is a harmful 

form of air pollution. EPA has issued 

emissions standards for new diesel 

engines and vehicles, but older mobile 

sources of diesel emissions—such as 

trucks and buses—continue to emit 

harmful pollution. Programs at DOE, 

DOT, and EPA provide funding for 

activities that reduce diesel emissions, 

such as retrofitting existing diesel 

engines and vehicles. The existence of 

these programs at multiple agencies has 

raised questions about the potential for 

unnecessary duplication. In response to 

a mandate in the Diesel Emissions 

Reduction Act of 2010, GAO examined 

the (1) extent of duplication, overlap, 

fragmentation, or gaps, if any, among 

federal grant, rebate, and loan programs 

that address mobile source diesel 

emissions; (2) effectiveness of federal 

funding for activities that reduce mobile 

source diesel emissions; and (3) extent 

of collaboration among agencies that 

fund these activities. GAO analyzed 

program data, documents, and relevant 

laws and regulations and interviewed 

agency officials. GAO also reviewed 

three diesel-related tax expenditures. 

What GAO Recommends 

GAO recommends that DOT’s Federal 

Transit Administration develop 

performance measures for its two 

relevant strategic goals and that DOE, 

DOT, and EPA establish a strategy for 

collaboration among their programs that 

fund activities that reduce diesel 

emissions. DOE and EPA agreed with 

the relevant recommendation, and DOE 

questioned several findings. DOT 

questioned several findings and both 

recommendations and neither agreed nor 

disagreed with the recommendations. 

GAO continues to believe in the need for 

the performance measures and 

collaboration. 

What GAO Found 

Federal grant and loan funding for activities that reduce mobile source diesel 

emissions is fragmented across 14 programs at the Department of Energy 

(DOE), the Department of Transportation (DOT), and the Environmental 

Protection Agency (EPA). From fiscal years 2007 through 2011, the programs 

obligated at least $1.4 billion for activities that have the effect of reducing mobile 

source diesel emissions. The programs have varying goals and purposes; 

nevertheless, each program allows or requires a portion of its funding to support 

activities that reduce mobile source diesel emissions, such as replacing fleets of 

older diesel trucks or school buses with natural gas vehicles. In addition, each of 

the 14 programs overlaps with at least one other program in the specific activities 

they fund, the program goals, or the eligible recipients of funding. GAO also 

identified several instances of duplication where more than one program 

provided grant funding to the same recipient for the same type of activities. 

However, GAO was unable to determine whether unnecessary duplication exists 

because of limited information on program administrative costs, among other 

things. GAO did not find any gaps among the programs, such as mobile sources 

that are not eligible for funding. 

The effectiveness of federal funding for activities that reduce mobile source 

diesel emissions is unknown because agencies vary in the extent to which they 

have established performance measures. DOE and EPA have established 

performance measures for the strategic goals related to their programs that 

reduce mobile source diesel emissions. DOT has established such measures for 

two of its administrations—the Federal Aviation Administration and Federal 

Highway Administration—but has not established such measures for the Federal 

Transit Administration for two of the four strategic goals that link to its programs 

that fund diesel emissions reduction activities. Instead, agency officials said they 

collect information on the current condition of the nation’s transit fleet, among 

other things, to measure the performance of its programs. As GAO has 

previously reported, principles of good governance indicate that agencies should 

establish quantifiable performance measures to demonstrate how they intend to 

achieve their goals and measure the extent to which they have done so. In 

addition, 13 of the 14 programs have purposes other than decreasing diesel 

emissions, and diesel reductions are a side benefit of efforts to achieve these 

other goals. As a result, few programs collect diesel-related performance 

information. Incomplete performance information may limit the ability of agencies 

to assess the effectiveness of their programs and activities that reduce diesel 

emissions. 

The programs that fund activities that reduce diesel emissions generally do not 

collaborate because of the differing purposes and goals of each program, 

according to senior DOE, DOT, and EPA officials. The officials also were 

sometimes unaware of other programs that fund similar activities and said that 

any existing collaboration was on a case-by-case basis. GAO’s previous work 

has shown that although federal programs have been designed for different 

purposes, coordination among programs with related responsibilities is essential 

to efficiently and effectively meet national concerns. Further, without a 

coordinated approach, programs can waste scarce funds, confuse and frustrate 

program customers, and limit the overall effectiveness of the federal effort. 

View GAO-12-261. For more information, 

contact David Trimble at (202) 512-3841 or 

trimbled@gao.gov. 
Page i GAO-12-261 Diesel Pollution 

Letter 1 

Background 4

Federal Funding for Activities That Reduce Diesel Emissions Is 

Fragmented across 14 Programs 8

The Effectiveness of Federal Funding for Diesel Emissions 

Reduction Activities Is Unknown 14

Limited Collaboration May Hinder the Effectiveness of Federal 

Funding for Activities That Reduce Diesel Emissions 18

Conclusions 20

Recommendations for Executive Action 21

Agency Comments and Our Evaluation 21

Appendix I Objectives, Scope, and Methodology 27

Appendix II Additional Information on Federal Programs That Provide Grants or Loans 

for Mobile Source Diesel Emissions Reduction Activities 31

Appendix III Tax Expenditures Related to Mobile Source Diesel Emissions Reduction 

Activities 36

Appendix IV Strategic Goals and Establishment of Performance Measures Related to 

Programs That Fund Activities That Reduce Mobile Source Diesel 

Emissions 38

Appendix V Comments from the Environmental Protection Agency 40

Appendix VI Comments from the Department of Energy 41

Appendix VII Comments from the Department of Transportation 49

Contents
Page ii GAO-12-261 Diesel Pollution 

Appendix VIII GAO Contact and Staff Acknowledgments 53

Tables

Table 1 Estimated Federal Funds Obligated for Mobile Source 

Diesel Emissions Reduction Activities, by Agency and 

Program, Fiscal Years 2007-2011 10

Table 2 Overlapping Mobile Source Diesel Emissions Reduction 

Activities, Goals, and Eligible Recipients, by Agency and 

Program 12

Figures

Figure 1 Effective Dates of Major Nitrogen Oxide Emission Limits 

for Newly Manufactured Mobile Sources of Diesel 

Emissions, by Source 6

Figure 2 Effective Dates of Major Particulate Matter Emission 

Limits for Newly Manufactured Mobile Sources of Diesel 

Emissions, by Source 7

Abbreviations

DOE Department of Energy

DOT Department of Transportation

EPA Environmental Protection Agency

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Page 1 GAO-12-261 Diesel Pollution 

United States Government Accountability Office 

Washington, DC 20548

February 7, 2012

The Honorable Barbara Boxer

Chairman

The Honorable James M. Inhofe

Ranking Member

Committee on Environment and Public Works

United States Senate

The Honorable Fred Upton

Chairman 

The Honorable Henry A. Waxman

Ranking Member

Committee on Energy and Commerce

House of Representatives

Diesel engines play a vital role in public transportation, construction, 

agriculture, and shipping, largely because they are more durable and 

reliable than gasoline-powered engines, as well as 25 to 35 percent more 

energy efficient. However, exhaust from diesel engines is a more 

pervasive and harmful form of air pollution than exhaust from gasolinepowered engines. Diesel exhaust contains air pollutants such as nitrogen 

oxides and particulate matter, as well as other harmful substances that 

affect public health and the environment.1

 

1

Nitrogen oxides are regulated pollutants commonly known as NOx that, among other 

things, contribute to the formation of ozone. Particulate matter is an ubiquitous form of air 

pollution commonly referred to as soot. 

Since 1984, the Environmental 

Protection Agency (EPA) has implemented standards that have 

progressively lowered the maximum allowable amount of certain 

pollutants, including nitrogen oxides and particulate matter, from new 

diesel engines by more than 98 percent. However, the most stringent 

standards generally apply to diesel engines and vehicles built after 2007, 

and EPA estimates that more than 20 million mobile sources of diesel 

emissions built before 2007—13 million on-highway vehicles, 7 million 

 
 

Page 2 GAO-12-261 Diesel Pollution 

nonroad engines, and 47,000 locomotive and marine engines—continue 

to emit higher amounts of harmful pollutants than newer engines.2

Programs at the Department of Energy (DOE), the Department of 

Transportation (DOT), and EPA address mobile source diesel emissions 

by funding projects that, among other things, retrofit, rebuild, or replace 

existing diesel engines or vehicles; install devices that reduce idling of 

diesel engines; and convert diesel engines and vehicles to use cleaner 

fuels, such as natural gas or propane. The existence of these programs at 

multiple agencies has raised questions about the potential for 

unnecessary duplication. We have previously reported that fragmentation 

and overlap among government programs can lead to such duplication.3

Fragmentation occurs when more than one federal agency, or more than 

one organization within an agency, is involved in the same broad area of 

national need. Overlap occurs when multiple agencies and programs 

have similar goals, engage in similar activities or strategies to achieve 

them, or target similar beneficiaries. We have also reported that federal 

programs contributing to the same or similar outcomes should closely 

coordinate to improve their overall effectiveness.4

In response to a mandate in the Diesel Emissions Reduction Act of 2010, 

this report examines the (1) extent to which duplication, overlap, 

fragmentation, or gaps, if any, exist among federal grant, rebate, and loan 

programs that address mobile source diesel emissions; (2) effectiveness 

of federal funding for activities that reduce mobile source diesel 

emissions; and (3) extent to which collaboration takes place among 

agencies that fund activities that reduce mobile source diesel emissions.5

 

2

Nonroad engines are those used in machines, such as construction equipment, 

agricultural equipment, and airport service vehicles. Also, EPA does not maintain 

information on the number of mobile sources of diesel emissions built after 2007. 

3

GAO, Managing for Results: Using the Results Act to Address Mission Fragmentation 

and Program Overlap, GAO/AIMD-97-146 (Washington, D.C.: Aug. 29, 1997). For more 

information on fragmentation, overlap, and duplication in federal programs see GAO, 

Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011). 

4

GAO/AIMD-97-146. 

5

Pub. L. No. 111-364 § 3(a)-(b). 124 Stat. 4060 (2011). Additionally, in this report, we use 

the term “diesel emissions” when referring to both diesel emissions and diesel fuel use. 
 

Page 3 GAO-12-261 Diesel Pollution 

This report also provides information on tax expenditures that address 

mobile source diesel emissions.6

To address the first objective, we reviewed relevant statutes and 

regulations; conducted a literature review; analyzed agency documents; 

interviewed agency officials and industry stakeholders; and conducted 

Internet searches to identify grant, rebate, and loan programs that fund 

mobile source diesel emissions reduction activities. We then reviewed 

agency documents and conducted structured interviews of agency 

officials from each relevant DOE, DOT, and EPA program we identified. 

We conducted interviews about the program’s purpose, goals, eligible 

activities, target beneficiaries, and types of funding to identify areas of 

duplication, overlap, or fragmentation. We also compared the types of 

eligible recipients under each program with available data on the sources 

of diesel emissions to identify any gaps among the programs. In addition, 

we obtained and analyzed funding data from the three agencies to 

estimate the total amount of federal funding for diesel emissions reduction 

projects from fiscal years 2007 through 2011. We selected this period 

because, by 2007, EPA had issued emissions standards for key on-road 

sources, such as heavy-duty trucks and buses, as well as a rule requiring 

refiners to reduce the sulfur content of—and therefore emissions from—

certain diesel fuels. We reviewed documents about the underlying 

databases and interviewed knowledgeable agency officials to assess the 

reliability of the data for each program. We determined that the data 

obtained from these agencies were sufficiently reliable for the purposes of 

this report. To respond to the second and third objectives, we reviewed 

agency documents and conducted structured interviews with agency 

officials about program goals and performance, coordination with other 

programs, and assessments of diesel pollution, among other things. We 

then compared these programs’ efforts with best practices for federal 

programs that contribute to the same outcome. To identify these best 

practices, we reviewed our prior work as well as relevant statutes, 

including the Government Performance and Results Act of 1993 and the 

Government Performance and Results Act Modernization Act of 2010.7

 

6

Tax expenditures include exemptions and exclusions from taxation, deductions, credits, 

deferral of tax liability, and preferential tax rates. The revenue that the government forgoes 

in these instances may be viewed as spending channeled through the tax system. 

 A 

7

The Government Performance and Results Act Modernization Act of 2010, Pub. L. No. 

111-352, 124 Stat. 3866 (2011), amends the Government Performance and Results Act of 

1993, Pub. L. No. 103-62, 107 Stat. 285 (1993).
 

Page 4 GAO-12-261 Diesel Pollution 

more detailed description of our scope and methodology is presented in 

appendix I.

We conducted this performance audit from May 2011 to February 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

Under the Clean Air Act, EPA is responsible for setting National Ambient 

Air Quality Standards for certain pollutants considered harmful to public 

health and the environment. EPA has set these standards for six such 

pollutants, known as criteria air pollutants: carbon monoxide, nitrogen 

oxides, sulfur oxides, particulate matter, ozone, and lead.8

According to EPA documents, as of 2009, mobile diesel sources emitted 

about 47 percent (6.4 million tons) of the nation’s nitrogen oxides and 

about 16 percent (300,000 tons) of its particulate matter.

Diesel exhaust 

contains nitrogen oxides, particulate matter, and numerous other harmful 

chemicals. Exposure to nitrogen oxides can result in adverse respiratory 

effects, and nitrogen oxides contribute to the formation of ozone, which 

can cause respiratory illnesses, decreased lung function, and premature 

death. A large body of scientific evidence links exposure to particulate 

matter to serious health problems, including asthma, chronic bronchitis, 

heart attack, and premature death.

9

 

8

These standards are expressed as concentration limits in the ambient air averaged over 

a specific period—such as 1 hour or 8 hours—and compliance is determined through 

localized ground level monitoring.

EPA estimated 

that on-highway trucks and vehicles and nonroad sources, such as 

agriculture and construction equipment, contributed about 57 percent of 

these nitrogen oxide emissions and 58 percent of the particulate matter 

emissions, and marine and locomotive sources contributed the remaining 

9

Nondiesel mobile sources, industrial processes, and power plants, among other sources, 

generated the remaining nitrogen oxide emissions; fossil fuel combustion, dust, and 

agricultural activities, among other sources, generated the remaining particulate matter 

emissions. 

Background
 

Page 5 GAO-12-261 Diesel Pollution 

43 percent and 42 percent of such emissions, respectively, from diesel 

engines.

EPA has progressively implemented more stringent diesel emissions 

standards to lower the amount of key pollutants from mobile diesel 

sources since 1984.10

 

10EPA also sets standards for new or upgraded stationary sources of diesel emissions, 

such as engines used to generate electricity at power and manufacturing plants. In 2008, 

EPA estimated that more than 900,000 stationary diesel engines were in operation. 

For example, EPA regulations for heavy-duty 

highway diesel engines required a 98 percent reduction from 1988 

allowable levels of nitrogen oxide and particulate matter emissions for 

new engines built after 2009. The most recent emissions standards for 

construction and agricultural equipment began to take effect in 2008 and 

required a 95 percent reduction in nitrogen oxides and a 90 percent 

reduction in particulate matter from previous standards, which took effect 

in 2006 and 2007. In 2008, EPA issued its most recent regulations for 

new marine vessels and locomotives, which EPA expects will, by 2030, 

reduce nitrogen oxide emissions from the engines of these sources by 

about 80 percent and particulate matter emissions by about 90 percent 

compared to previous standards. Figures 1 and 2 show the effective 

dates of major reductions in allowable amounts of nitrogen oxide and 

particulate matter emissions from mobile diesel sources.
 

Page 6 GAO-12-261 Diesel Pollution 

Figure 1: Effective Dates of Major Nitrogen Oxide Emission Limits for Newly 

Manufactured Mobile Sources of Diesel Emissions, by Source

a

Grams per brake horsepower-hour is a measure of the grams of nitrogen oxides a vehicle or engine 

emits per the amount of energy the vehicle or engine uses during one hour. 

b

These emission limits apply to nonroad engines at or above 175 horsepower, such as a large 

bulldozer engine. EPA has also set nitrogen oxide emission standards for such engines below 50 

horsepower, such as small tractor engines, and engines between 50 and 175 horsepower, which took 

effect in 2006 and 2008, respectively. 
 

Page 7 GAO-12-261 Diesel Pollution 

Figure 2: Effective Dates of Major Particulate Matter Emission Limits for Newly 

Manufactured Mobile Sources of Diesel Emissions, by Source

a

Grams per brake horsepower-hour is a measure of the grams of particulate matter a vehicle or 

engine emits per the amount of energy the vehicle or engine uses during one hour. 

b

These emission limits apply to nonroad engines at or above 175 horsepower, such as a large 

bulldozer engine. EPA has also set particulate matter emission standards for such nonroad engines 

below 50 horsepower, such as small tractor engines, which took effect in 2000 and 2006. 

c

The 1998 emission limit in the figure applies to urban buses. EPA also set particulate matter 

standards for heavy-duty trucks that took effect in 1998, which limited emissions from these engines 

to 0.1 grams per brake horsepower-hour. 

Owners and operators of diesel engines can undertake a variety of 

activities to reduce diesel emissions, including retrofitting, rebuilding, or 

replacing existing diesel engines or vehicles; installing devices that 

reduce idling of diesel engines; and converting diesel engines and 

vehicles to use cleaner fuels. Retrofitting existing diesel engines generally 

involves the installation of emissions control devices, such as filters, on a 

vehicle’s tailpipe. Rebuilding components of existing diesel engines can 

return engines to their original emissions levels or involve the installation 

of new technology that produces lower levels of emissions. Replacing 
 

Page 8 GAO-12-261 Diesel Pollution 

existing diesel engines and vehicles with newer, lower emitting engines or 

vehicles can lead to significant emissions reductions, but because it is a 

costly option, it may be most appropriate for the oldest, most polluting 

vehicles. Devices that reduce idling of diesel engines generally allow a 

vehicle’s heat, air conditioning, and other electrical equipment to run 

without operation of the vehicle’s main engine. Converting diesel vehicles 

and engines to use cleaner fuels can also provide significant emissions 

reductions.

The Government Performance and Results Act, as amended, requires 

agencies to prepare annual performance plans that contain, among other 

things, a set of annual goals that establish the agencies’ intended 

performance and measures that can be used to assess progress toward 

achieving those goals. DOE, DOT, and EPA establish and organize these 

goals and performance measures at differing agency and administrative 

levels. Specifically, DOE and EPA establish strategic goals and 

performance measures for each goal as part of their agencywide 

performance plans. DOT establishes strategic goals as part of its 

agencywide strategic plan, but the agency’s administrations—the Federal 

Aviation Administration, Federal Highway Administration, and Federal 

Transit Administration, among others—generally establish their own 

performance measures for assessing their programs’ contributions to the 

department’s strategic goals.

Federal grant and loan funding for activities that reduce mobile source 

diesel emissions is fragmented across 14 programs at DOE, DOT, and 

EPA. Many of these programs generally target air pollution, but of the 14 

programs, one—EPA’s Diesel Emissions Reduction Act program—has a 

specific purpose of reducing mobile source diesel emissions. The 

remaining 13 programs focus on other goals or purposes, such as 

supporting energy efficiency projects or reducing petroleum use. 

Nevertheless, each of these programs allows or requires a portion of its 

funding to support activities that have the effect of reducing mobile source 

diesel emissions. For example, authorizing legislation for DOT’s 

Congestion Mitigation and Air Quality Improvement program directs grant 

recipients to give priority to certain activities, including retrofitting diesel 

engines and vehicles. The 14 programs provide funding through one or 

more mechanisms, including competitive grants, formula grants, and 

Federal Funding for 

Activities That 

Reduce Diesel 

Emissions Is 

Fragmented across 14 

Programs 
 

Page 9 GAO-12-261 Diesel Pollution 

loans.11 Specifically, 13 of the programs provide funding through 

competitive and formula grants, and 1 program—DOT’s State 

Infrastructure Banks program—provides loans.12

From fiscal years 2007 through 2011, these 14 programs obligated at 

least $1.4 billion for activities that have the effect of reducing mobile 

source diesel emissions.

We did not identify any 

gaps in the programs, such as mobile sources that are not eligible for 

funding. See appendix II for additional information about each program.

13 According to data from DOE, DOT, and EPA, 

the American Recovery and Reinvestment Act of 2009 provided about 

$870 million of this funding. The $1.4 billion amount is a lower bound 

because DOT could not determine the amount of grant and loan funding 

some of its programs have provided for projects that reduce mobile 

source diesel emissions. According to DOT officials, the agency does not 

track this information because statutory program requirements do not call 

for the agency to do so.14

 

11Competitive grant programs award funds for specific projects or activities based on 

eligibility and selection criteria as established by law or regulation, or on an administrative 

basis. Formula grant programs allocate funds to states or their subdivisions in accordance 

with a distribution formula prescribed in law or administrative regulation. Grant recipients 

may then allocate these funds to specific projects based on program eligibility guidelines. 

These activities that have the effect of reducing 

mobile source diesel emissions include replacing fleets of older diesel 

trucks or school buses with natural gas vehicles, installing particulate 

matter filters on construction equipment, and replacing diesel-powered 

12Under DOT's State Infrastructure Banks program, states may use allocated federal 

transportation funds to capitalize state infrastructure banks, which in turn provide loans 

and other nongrant financial assistance to eligible projects. 

13All dollar amounts in this report are in nominal dollars. 

14DOT’s Federal Transit Administration was unable to provide this information for the Bus 

and Bus Facilities program; Clean Fuels Grant program; Congestion Mitigation and Air 

Quality Improvement program, for which the Federal Transit Administration manages 

grant data; the Transit in Parks program; and the Urbanized Area Formula Grants 

program. According to agency officials, the agency does not track which grants fund 

projects that reduce diesel emissions, and agency officials said that they would have to 

perform a labor-intensive, time-consuming review—diverting limited resources at the 

critical end of the fiscal year period—to estimate the amount of program funding that has 

reduced diesel emissions. Instead, the agency provided us with access to its grants 

database, from which we estimated the amount of funding provided for diesel emissions 

reduction projects for the Clean Fuels Grant, Congestion Mitigation and Air Quality 

Improvement, and Transit in Parks programs, but we were unable to estimate the amount 

of funding provided through the Bus and Bus Facilities or Urbanized Area Formula Grants 

programs due to the time frame of our review. See appendix I for additional information. 
 

Page 10 GAO-12-261 Diesel Pollution 

airport luggage transporters with electric vehicles. As table 1 shows, 

some of the programs that support these activities have broad purposes, 

such as increasing energy efficiency in transportation, reducing petroleum 

consumption, or funding public transportation projects, and other 

programs have narrower purposes, such as reducing emissions at 

airports, constructing ferry boats and related facilities, or promoting 

alternative transportation systems in and around national parks.

Table 1: Estimated Federal Funds Obligated for Mobile Source Diesel Emissions Reduction Activities, by Agency and 

Program, Fiscal Years 2007-2011

Dollars in millions

Agency/program Purpose Grants Loans

DOE

Clean Cities program To advance the nation’s economic, environmental, and energy 

security by funding projects that reduce petroleum use in 

transportation

$305 — 

Energy Efficiency and Conservation 

Block Grant program

To support energy efficiency and conservation projects that reduce 

fossil fuel emissions and energy use and improve energy efficiency 

in the transportation and building sectors

256 — 

State Energy Program To support state development and implementation of strategies and 

goals that promote energy efficiency and conservation

11 — 

DOE total $572 — 

DOT

Federal Aviation Administration

Voluntary Airport Low Emissions 

program

To reduce airport ground vehicle and equipment emissions at 

airports in air quality nonattainment and maintenance areas

18 — 

Federal Highway Administration

Congestion Mitigation and Air Quality 

Improvement program

To support transportation projects that contribute to the attainment 

or maintenance of carbon monoxide, ozone, and particulate matter 

air quality standards and relieve congestion

178 — 

Ferry Boat Discretionary program To fund the construction of ferry boats and ferry terminal facilities 26 — 

State Infrastructure Banks program To facilitate state establishment of infrastructure banks to provide 

nongrant assistance for eligible transportation projects

— $6a

Federal Transit Administration

Bus and Bus Facilities program To replace, rehabilitate, and purchase buses and related 

equipment and construct or rehabilitate bus-related facilities

—b — 

Clean Fuels Grant program To assist achievement and maintenance of air quality standards by 

providing grants for clean fuel buses and facilities

17 — 

National Fuel Cell Bus Technology 

Development program

To develop commercially viable fuel cell bus technology and related 

infrastructure 

11 — 

Transit in Parks program To promote alternative transportation systems in and around 

national parks and other federal lands

—c — 
 

Page 11 GAO-12-261 Diesel Pollution 

Dollars in millions

Agency/program Purpose Grants Loans

Transit Investments for Greenhouse 

Gas and Energy Reduction program

To reduce energy consumption or greenhouse gas emissions of 

public transportation systems

96 — 

Urbanized Area Formula Grants 

program

To support capital projects, planning, transit enhancements, and 

certain operating costs for public transportation in urbanized areas

—b — 

DOT total $346d $6

EPA 

Diesel Emissions Reduction Act 

Program

To reduce emissions from existing diesel engines and vehicles 512 — 

Estimated total federal funding $1,430d $6

Source: GAO analysis of relevant laws and DOE, DOT, and EPA data and documents.

Notes: The American Recovery and Reinvestment Act of 2009 provided funding for DOE’s Clean 

Cities, Energy Efficiency and Conservation Block Grant, and State Energy programs; DOT’s Ferry 

Boat Discretionary, Transit Investments in Greenhouse Gas and Energy Reduction, and Urbanized 

Area Formula Grants programs; and EPA’s Diesel Emissions Reduction Act Program.

a

This amount is a lower bound because Federal Highway Administration officials do not obtain 

complete data from states on projects funded through the State Infrastructure Bank program. 

b

DOT was unable to provide information on the amount of funding this program awarded for projects 

that reduced mobile source diesel emissions. 

c

We were unable to identify any projects this program funded during fiscal years 2007-2011 that 

reduced mobile source diesel emissions. However, this program does allow its funding to support 

activities that reduce these emissions. 

d

This total is a lower bound because agencies were unable to determine the amount of funding that 

some of their programs provided for activities that reduce diesel emissions. 

As table 2 shows, each of the 14 relevant programs overlaps with at least 

one other program in the specific types of activities they fund, the 

program goals, or the eligible recipients of funding. For example, 6 of the 

14 programs share a broad goal of increasing energy efficiency, and local 

governments are eligible to receive grants under 10 of the programs. In 

addition, we found that 13 of the 14 programs fund activities that retrofit 

diesel engines or vehicles, and 11 programs fund activities that reduce 

diesel vehicle idling. We also identified the potential for overlap among 

these 11 programs and an excise tax exemption for certain vehicle idling 

reduction devices because the tax expenditure and the 11 programs all 

provide incentives to use idle reduction devices to reduce diesel 

emissions. Appendix III provides additional information on this and two 

other tax expenditures related to diesel emissions reductions.
 

Page 12 GAO-12-261 Diesel Pollution 

Table 2: Overlapping Mobile Source Diesel Emissions Reduction Activities, Goals, and Eligible Recipients, by Agency and 

Program 

 Activities Goals Eligible recipients 

Agency/program 

Retrofit vehicle or engine Rebuild vehicle or engine Replace vehicle or engine Reduce vehicle idling Use cleaner fuel Reduce emissions Reduce pollution in areas not meeting air

quality standards Increase energy efficiency Reduce fuel use State governments Local governments Land management agencies Transit agencies Federally recognized tribes Private or nonprofit organizations 

DOE 

Clean Cities ● ● ● ● ● ● ● ● ● ● ● ●

Energy Efficiency and 

Conservation Block Grant 

● ● ● ● ● ● ● ● ● ● 

State Energy Program ● ● ● ● ● ● ● ● 

DOT 

Federal Aviation 

Administration

 

Voluntary Airport Low 

Emissions 

● ● ● ● ● ● ● 

Federal Highway 

Administration

 

Congestion Mitigation and 

Air Quality Improvement 

● ● ● ● ● ● ● ● ● 

Ferry Boat Discretionary ● ● ● ● ● ● ●

State Infrastructure Banks ● ● ● ● ● ● 

Federal Transit 

Administration

 

Bus and Bus Facilities ● ● ● ● ● ● ● ● ● 

Clean Fuels Grant ● ● ● ● ● ● ● ● ● ● ● ● 

National Fuel Cell Bus 

Technology Development 

 ● ● ● ● ● ● ●

Transit in Parks ● ● ● ● ● ● ● ● ● ● ● ●

Transit Investments in 

Greenhouse Gas and 

Energy Reduction 

● ● ● ● ● ● ● ● ● ● ● 

Urbanized Area Formula 

Grants 

● ● ● ● ● ● ● ● ● 

EPA 

Diesel Emissions Reduction 

Act Program 

● ● ● ● ● ● ● ● ● ● ●

Source: GAO analysis of relevant laws and DOE, DOT, and EPA documents and interviews. 
 

Page 13 GAO-12-261 Diesel Pollution 

We also identified several instances of duplication where more than one 

program provided funding to the same recipient for the same type of 

activities. In one case, a state transportation agency received $5.4 million 

from DOT’s Transit Investments in Greenhouse Gas Emissions Reduction 

program to, among other things, upgrade 37 diesel buses to hybrid 

diesel-electric buses; $3.5 million from DOT’s Congestion Mitigation and 

Air Quality Improvement program to replace diesel buses with 4 hybrid 

diesel-electric buses; and $2.3 million from DOT’s Clean Fuels Grant 

program to replace 4 diesel buses with hybrid electric buses. In another 

case, a nonprofit organization received $1.1 million from EPA’s Diesel 

Emissions Reduction Act Program to install emission reduction and idle 

reduction technologies on 1,700 trucks as well as $5.6 million from a state 

infrastructure bank established under DOT’s program to equip trucks and 

truck fleets with emissions control and idle reduction devices.

Even with duplication among the programs, several factors make it 

difficult to precisely determine whether unnecessary duplication exists. 

First, when different programs fund the same diesel emissions reduction 

activities, it is not necessarily wasteful. For example, a transit agency 

could use funds from two different programs to replace two separate 

fleets of aging diesel buses. Second, grant recipients may leverage 

funding from more than one program to support the full cost of diesel 

emissions reduction projects. In some cases, grant recipients have used 

funding from multiple agencies, in addition to local matching funds, to 

support the cost of large projects that include multiple diesel emissions 

reduction activities. Third, agencies were often unable to provide 

information necessary to determine whether and to what extent 

unnecessary duplication exists among the programs. For example, 

several agencies reported that they do not track costs for administrative 

functions at the program level. Without information on these costs, it is 

difficult to determine whether and to what extent programs perform 

duplicative administrative functions that could be consolidated to provide 

grants and loans more efficiently.

The fragmentation, overlap, and duplication among these programs 

result, in part, from their legislative creation as separate programs with 

different purposes that fund a wide range of activities, some of which 

have the effect of reducing mobile source diesel emissions. We have 

previously reported that, as the federal government has responded over 

time to new needs and problems, many agencies have been given 
 

Page 14 GAO-12-261 Diesel Pollution 

responsibilities for addressing the same or similar national issues.15 Some 

of this shared responsibility was intended to recognize that addressing 

some issues from a national perspective would necessarily involve more 

than one agency or approach. However, the resulting fragmentation, 

overlap, and duplication may waste administrative resources and create 

an environment in which participants are not served as efficiently and 

effectively as possible. In addition, we have previously reported that 

fragmentation, overlap, and duplication suggest the need for further 

examination of programs to identify potential areas for improvement, 

realignment, consolidation, or elimination.16

The effectiveness of federal funding for activities that reduce mobile 

source diesel emissions is unknown because agencies vary in the extent 

to which they have established performance measures. In addition, few 

programs collect performance information on their diesel emissions 

reduction activities because 13 of the 14 programs that fund these 

activities have purposes other than reducing diesel emissions. This 

incomplete performance information may limit the ability of agencies to 

assess the effectiveness of their programs and activities that reduce 

diesel emissions.

Agencies that fund activities that reduce mobile source diesel emissions 

have established performance measures for their strategic goals to 

varying degrees. DOE and EPA have established performance measures 

for the strategic goals related to their programs that reduce mobile source 

diesel emissions. For example, EPA monitors progress toward its 

strategic goal of reducing greenhouse gas emissions and developing 

adaptation strategies to protect and improve air quality by measuring, 

among other things, the tons of mobile source emissions its programs 

reduce. DOT has established such performance measures for two of its 

administrations—the Federal Aviation Administration and Federal 

Highway Administration—but has not established such measures for the 

Federal Transit Administration for two of the four strategic goals that link 

to its programs that fund diesel emissions reduction activities. Appendix 

 

15GAO/AIMD-97-146 and GAO, Agencies’ Annual Performance Plans Under the Results 

Act: An Assessment Guide to Facilitate Congressional Decisionmaking, 

GAO/GGD/AIMD-10.1.18 (Washington, D.C.: February 1998). 

16GAO/AIMD-97-146. 

The Effectiveness of 

Federal Funding for 

Diesel Emissions 

Reduction Activities 

Is Unknown
 

Page 15 GAO-12-261 Diesel Pollution 

IV provides additional information on these agencies’ strategic goals and 

performance measures related to programs that reduce mobile source 

diesel emissions.

The Government Performance and Results Act, as amended, generally 

requires agencies to provide a basis for comparing actual results with 

established goals, and as such, federal departments and agencies are to 

comply with Government Performance and Results Act requirements. As 

we have previously reported, Government Performance and Results Act 

requirements also can serve as leading practices at lower levels within 

federal agencies, such as individual divisions, programs, or initiatives.17

We have also reported that principles of good governance indicate that 

agencies should establish quantifiable performance measures to 

demonstrate how they intend to achieve their goals and measure the 

extent to which they have done so.18 The Federal Transit Administration 

has not established performance measures for its goals of (1) 

environmental sustainability—that is, advancing environmentally 

sustainable policies and investments that reduce carbon and other 

harmful emissions from transportation sources—and (2) economic 

competitiveness—that is, promoting transportation policies and 

investments that bring lasting and equitable economic benefits to the 

nation and its citizens. Agency officials said they generally collect 

information on the current condition of the nation’s transit fleet, the use of 

public transportation, and transit fleet compliance with the Americans with 

Disabilities Act to measure the performance of the agency’s transit 

programs.19

At the program level, limited performance information is available about 

the results of activities that reduce mobile source diesel emissions. The 

14 programs that fund activities that reduce diesel emissions currently 

However, this information will not enable the agency to 

determine the extent to which it has met its goals related to environmental 

sustainability and economic competitiveness.

 

17See GAO, Environmental Justice: EPA Needs to Take Additional Actions to Help Ensure 

Effective Implementation, GAO-12-77 (Washington, D.C.: Oct. 6, 2011).

18See GAO/GGD/AIMD-10.1.18 and GAO, The Results Act: An Evaluator’s Guide to 

Assessing Agency Annual Performance Plans, GAO/GGD-10.1.20 (Washington, D.C.: 

April 1998). 

19Americans with Disabilities Act of 1990. Pub. L. No. 101-336, 104 Stat. 327, codified as 

amended at 42 U.S.C. §§ 12101 et seq.
 

Page 16 GAO-12-261 Diesel Pollution 

collect performance information on their diesel emissions reduction 

activities to varying degrees. According to agency documents and 

officials, EPA’s Diesel Emissions Reduction Act Program collects 

performance information on the amount and type of diesel emissions 

reductions each project achieves; DOE’s three programs collect some 

emissions reduction information but do not quantitatively collect diesel 

emissions reduction information; three of DOT’s programs collect some 

performance information related to diesel emissions reductions; and the 

remaining seven DOT programs do not collect performance information 

related to diesel emissions. This variation in the amount of diesel-related

performance information programs collect occurs partially because 13 of 

the 14 programs that fund these activities have purposes other than 

reducing diesel emissions, such as supporting energy efficiency projects 

or reducing petroleum use. However, without information on the results of 

the programs’ activities that reduce mobile source diesel emissions, the 

overall effectiveness of federal grant and loan funding for activities that 

reduce diesel emissions cannot be determined.

EPA. EPA’s Diesel Emissions Reduction Act Program collects information 

on the number of diesel engines it replaces, retrofits, and rebuilds as well 

as information on the estimated tons of particulate matter, nitrogen oxide, 

carbon dioxide, carbon monoxide, and hydrocarbon emissions it reduces. 

According to agency documents, in fiscal year 2008—the most recent 

year for which data were reported—the program reduced approximately 

46,000 tons of nitrogen oxide emissions and 2,200 tons of particulate 

matter emissions.20

DOE. DOE’s Clean Cities program collects information on reductions in 

gasoline and diesel fuel use that the program achieves to measure 

progress toward its program goal of reducing national petroleum use by 

2.5 billion gallons by 2020. DOE’s Energy Efficiency and Conservation 

Block Grant and State Energy programs estimate emissions reductions 

that result from program activities, but neither of these programs 

separately tracks diesel emissions from other emissions reductions.

EPA documents show that the cost for these 

emissions reductions ranged from $400 to $2,000 per ton of nitrogen 

oxide emissions reduced and from $9,000 to $27,700 per ton of 

particulate matter emissions reduced.

 

20EPA calculated these emissions reduction figures in tons of emissions reduced over the 

lifetime of each project funded. Also, EPA collects information on emissions reductions but 

has not reported data more current than fiscal year 2008. 
 

Page 17 GAO-12-261 Diesel Pollution 

DOT’s Federal Aviation Administration. The Federal Aviation 

Administration’s Voluntary Airport Low Emissions program collects 

information on the total amount of criteria pollutant emissions each project 

will reduce, but it does not currently track reductions in diesel emissions.

DOT’s Federal Highway Administration. The Federal Highway 

Administration’s Congestion Mitigation and Air Quality Improvement 

program collects information from grant recipients on the type and 

quantity of emissions reduced through each project the program funds. 

However, the program does not review or compile this information at the 

national level. The Ferry Boat Discretionary and State Infrastructure 

Banks programs do not collect performance information related to diesel 

emissions reductions.

DOT’s Federal Transit Administration. The Federal Transit 

Administration’s Transit Investments for Greenhouse Gas and Energy 

Reduction program obtains information from grant applicants on the 

amount of energy use and greenhouse gas emissions each project is to 

reduce, but the program does not separately track reductions in diesel 

energy use or diesel emissions. The remaining five Federal Transit 

Administration programs that fund diesel emissions reduction activities—

Bus and Bus Facilities, Clean Fuels Grant, National Fuel Cell Bus 

Technology Development, Transit in Parks, and Urbanized Area Formula 

Grants—do not collect performance information related to diesel 

emissions reductions.

Efforts to measure the effects of programs that decrease diesel emissions 

are also hindered by the absence of a baseline assessment of nationwide 

diesel emissions from which agencies could measure progress. EPA has 

assessed national levels of nitrogen oxide and particulate matter pollution 

from some mobile diesel sources, including highway vehicles and some 

nonroad equipment, and DOT maintains data on the number of diesel 

transit vehicles currently in use. However, no agency has 

comprehensively assessed existing diesel pollution to identify the most 

significant mobile sources of diesel emissions and the specific areas that 

face the greatest health risks from diesel pollution. Without a more 

comprehensive assessment, agencies cannot identify and target, within 

their discretion, funding toward specific sectors or geographic areas of 
 

Page 18 GAO-12-261 Diesel Pollution 

greatest need.21 Agencies generally provide funds to recipients based on 

criteria that may derive from law, agency discretion, or a combination 

thereof. Under some programs, agencies allocate funding based on 

statutory formulas or criteria. For example, DOT’s Urbanized Area 

Formula Grants program uses a statutory formula to allocate funds on the

basis of population and population density. EPA’s Diesel Emissions 

Reduction Act program awards funds competitively but, based on 

statutory criteria, must prioritize projects that maximize health benefits, 

are the most cost-effective, and serve areas with poor air quality, among 

other factors. Under other programs, agencies have some discretion in 

awarding funds. These agencies generally consider applicant eligibility 

and other relevant factors, but this does not include consideration of 

which areas face the greatest diesel-related health risks.

The federal programs that fund activities that have the effect of reducing 

mobile source diesel emissions generally do not collaborate. According to 

DOE, DOT, and EPA officials, the three agencies consult on broad 

issues, such as to discuss available technologies or emissions standards, 

but these efforts do not involve collaboration on diesel-related issues. 

Moreover, officials from most of the 14 programs reported that any 

collaboration across the programs occurs on an informal, case-by-case 

basis. For example, officials from EPA’s Diesel Emissions Reduction Act 

Program said they may contact officials from the Federal Highway 

Administration’s Congestion Mitigation and Air Quality Improvement 

program to discuss a specific emissions reduction technology or project 

that appears in a grant application but that they do not collaborate with 

officials from this program on a regular basis. Also, some program 

officials reported that enhanced collaboration could improve the 

effectiveness of federal funding for activities that reduce diesel emissions. 

For example, officials from EPA’s Diesel Emissions Reduction Act 

Program said that diesel-related programs could share information to 

more efficiently award grants and to reduce duplication of agency efforts, 

such as researching various emissions reduction technologies.

DOE, DOT, and EPA officials generally reported that they do not 

collaborate on diesel emissions reduction activities with other federal 

 

21We have previously reported that, in general, agencies should focus their funding on 

areas of greatest need. See GAO, 21st Century Challenge: Reexamining the Base of the 

Federal Government, GAO-05-325SP (Washington, D.C.: February 2005).

Limited Collaboration 

May Hinder the 

Effectiveness of 

Federal Funding for 

Activities That 

Reduce Diesel 

Emissions
 

Page 19 GAO-12-261 Diesel Pollution 

programs because they are unaware of the other programs that fund 

these activities, including, in some cases, programs within their own 

agencies. According to agency officials, this is due to the differing 

purposes and goals of each program, which often do not directly relate to 

reducing diesel emissions. However, we have previously reported that, 

although federal programs have been designed for different purposes or 

targeted for different population groups, coordination among programs 

with related responsibilities is essential to efficiently and effectively meet 

national concerns.22

In addition, we have previously reported that agencies face a range of 

barriers in their efforts to collaborate.

We reported that uncoordinated program efforts can 

waste scarce funds, confuse and frustrate program customers, and limit 

the overall effectiveness of the federal effort. A focus on results as 

envisioned by the Government Performance and Results Act implies that 

federal programs contributing to the same or similar results should be 

closely coordinated to ensure that goals are consistent, and, as 

appropriate, program efforts are mutually reinforcing. This means that 

federal agencies are to look beyond their organizational boundaries and 

coordinate with other agencies to ensure that their efforts are aligned. 

Also, the Government Performance and Results Act Modernization Act of 

2010 requires that agency strategic plans include a description of how the 

agency is working with other agencies to, among other things, achieve its 

goals and objectives.

23 To overcome such barriers and to 

maximize the performance and results of federal programs that share 

common outcomes, we have previously identified practices that can help 

agencies enhance and sustain collaboration.24

 

22GAO, The Government Performance and Results Act: 1997 Governmentwide 

Implementation Will Be Uneven, 

These practices include 

agreeing on agency roles and responsibilities in the collaborative effort 

and identifying and addressing needs by leveraging collective resources. 

Further, we have reported that, to the extent that federal efforts are 

fragmented across agency lines, developing crosscutting performance 

GAO/GGD-97-109 (Washington, D.C.: June 2, 1997).

23GAO, Managing For Results: Barriers to Interagency Coordination, GAO/GGD-00-106

(Washington, D.C.: Mar. 29, 2000). 

24GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005). 
 

Page 20 GAO-12-261 Diesel Pollution 

measures through interagency coordination could ease implementation 

burdens while strengthening efforts to develop best practices.25

Over time, EPA has issued more stringent emissions regulations for new 

diesel engines and vehicles, but existing diesel trucks, buses, 

locomotives, ships, agriculture equipment, and construction equipment 

continue to emit harmful pollution. Because diesel engines are durable 

and energy efficient, it could take decades for these older diesel vehicles 

and equipment to fall out of use. As a result, federal agencies play an 

important role in accelerating the attrition of existing diesel engines and 

vehicles and the resulting reduction in diesel emissions. However, federal 

funding that reduces diesel emissions is fragmented across 14 programs 

that overlap in their activities, goals, and eligible recipients. Also, the 

effectiveness of this funding is unknown because agencies collect limited 

performance information related to these programs. Because DOT’s 

Federal Transit Administration has not developed performance measures 

for its goals related to environmental sustainability and economic 

competitiveness, the agency is unable to fully assess the performance of 

programs that contribute to these goals. In addition, agencies collect 

limited information on the results of the diesel emissions reduction 

activities they fund and do not have a baseline assessment of nationwide 

diesel emissions, which they could use to measure progress.

Also, collaboration among the 14 programs that fund activities that reduce 

mobile source diesel emissions is essential to efficiently and effectively 

reduce diesel emissions. As the focus on results as envisioned by the 

Government Performance and Results Act implies, federal programs 

contributing to the same or similar results should be closely coordinated 

to ensure that goals are consistent, and, as appropriate, program efforts 

are mutually reinforcing. Agencies often face barriers in their efforts to 

collaborate, and some best practices for overcoming these barriers 

include identifying agency roles and responsibilities as well as identifying 

and leveraging collective resources. Further, when federal efforts are 

fragmented, this coordination can be achieved through collaboratively 

developing crosscutting performance measures. However, as we found, 

these 14 programs generally do not collaborate and collect limited 

information on the results of the activities they fund that reduce diesel 

 

25GAO/AIMD-97-146. 

Conclusions
 

Page 21 GAO-12-261 Diesel Pollution 

emissions. Without collaboration and crosscutting performance 

measures, agencies do not have needed information to assess the 

effectiveness and efficiency of their programs or identify any unnecessary 

duplication.

We are making two recommendations to help ensure effectiveness and 

accountability:

1. For transit grant programs, we recommend that the Secretary of 

Transportation require the Administrator of the Federal Transit 

Administration to develop quantifiable performance measures, a 

leading practice based in Government Performance and Results Act

principles, for the agency’s environmental sustainability and economic 

competitiveness strategic goals.

2. For federal funding that reduces diesel emissions, we recommend 

that the Secretary of Energy, the Secretary of Transportation, and the 

Administrator of the EPA, consistent with statutory obligations, 

establish a strategy for collaboration among their grant and loan 

programs in their activities that reduce mobile source diesel 

emissions. This strategy should help the agencies

• identify agency roles and responsibilities for activities that reduce 

diesel emissions, including how a collaborative effort will be led;

• identify and address any unnecessary duplication, as appropriate;

• identify and leverage resources needed to support funding 

activities that reduce diesel emissions;

• assess baseline levels of diesel pollution and the contributors to 

mobile source diesel emissions to help agencies target, within 

their discretion, investments and, as appropriate, inform efforts to 

measure program effectiveness; and

• develop crosscutting performance measures, as appropriate, to 

monitor the collective results of federal funding for activities that 

reduce diesel emissions.

We provided a draft of this report to the Secretary of Energy, the 

Secretary of Transportation, and the Administrator of EPA for their review 

and comment. In its written comments, EPA stated that it agreed with our 

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 22 GAO-12-261 Diesel Pollution 

findings and relevant recommendation. EPA’s comments can be found in 

appendix V.

In its comments, DOE questioned several of our findings but agreed with 

our relevant recommendation. Specifically, DOE stated that our report

mischaracterizes the agency as having a statutory responsibility for diesel 

emissions reductions. Our report does not contain such a statement. 

Rather, it identifies 14 programs, including 3 DOE programs, that fund 

activities with the effect of reducing diesel emissions and states that 

programs with related responsibilities should coordinate their efforts. Our 

report states that most of the programs we identified have other goals or 

purposes and do not focus on diesel emissions reduction; nonetheless, 

each of the programs does fund such activities. Our report also 

recognizes the varying statutory requirements for each program and 

recommends that the agencies establish a strategy for collaboration that 

is consistent with their existing statutory obligations. DOE also stated that 

our report mischaracterizes DOE as not collaborating with other 

government agencies. Our report states that DOE collaborates with other 

agencies on broad issues but does not collaborate on diesel-related 

issues. In addition, DOE stated that our report mischaracterized the 

agency as sharing redundant national goals with DOT and EPA. Our 

report does not discuss DOE’s national goals, their relationship to those 

of other agencies, or whether they are redundant. Rather, our report (1) 

focuses on DOE programs that fund activities that result in diesel 

emissions reductions and (2) demonstrates that these programs share 

similar goals with DOT and EPA programs that fund the same activities. 

Specifically, each of these programs shares some goals, such as 

reducing emissions, increasing energy efficiency, and reducing fuel use. 

DOE also provided technical comments, which we incorporated as 

appropriate. DOE’s comments and our response can be found in 

appendix VI.

DOT questioned several of this report’s key findings and its

recommendations. Specifically, DOT stated that we inaccurately 

described the Federal Transit Administration’s programs as funding diesel 

emissions reduction activities. Our report identifies activities that reduce 

diesel emissions, including replacing existing diesel vehicles and 

installing devices that reduce idling of diesel engines, and identifies six 

Federal Transit Administration programs that fund these same activities. 

In addition, DOT questioned the evidence underlying our finding of 

fragmentation among the federal programs within our review. DOT stated 

that we identified independent programs with varying objectives that, in 

some cases, include similar activities. As we reported, fragmentation 
 

Page 23 GAO-12-261 Diesel Pollution 

occurs when more than one federal agency, or more than one 

organization within an agency, is involved in the same broad area of 

national need. Further, our report does not state that fragmentation 

implies small, incomplete, or broken parts strewn across government, as 

DOT’s comments state. Our report clearly identifies fragmentation, 

overlap, and duplication among the 14 federal programs that fund diesel 

emissions reduction activities. Consistent with our established definition 

of fragmentation and our evidence, we stand by our finding that federal 

grant and loan funding for activities that reduce diesel emissions is 

fragmented across 14 programs.

DOT also questioned our finding that the effectiveness of federal funding 

for diesel emissions reduction activities is unknown. DOT stated that we 

could have used available air quality data from EPA to assess the 

effectiveness of the programs we reviewed. We reviewed air quality data 

from EPA and determined that it was not possible to establish a causal 

link between the EPA data and the programs we reviewed. Moreover, 

principles of good governance indicate that agencies that use scarce 

federal resources should establish quantifiable performance measures for 

use in administering their programs. This is particularly important when 

multiple agencies engage in the same or similar activities, even if the 

activities contribute to different goals. Related to this finding, DOT 

questioned why the report does not include information that the Federal 

Transit Administration provided on its contribution to air quality 

improvement through replacing transit buses. We reviewed this 

information and found that the numbers the Federal Transit 

Administration provided were based on unverified assumptions and 

estimates rather than actual data on the number of diesel buses replaced.

As such, the numbers were not reliable for the purposes of our report.

In several instances, DOT questioned our recommendation that the 

Federal Transit Administration should develop quantifiable performance 

measures for its environmental sustainability and economic 

competitiveness strategic goals. DOT’s comments on this 

recommendation reflect a misinterpretation of the recommendation. 

Specifically, DOT incorrectly stated that our report recommended that the 

Federal Transit Administration develop quantifiable performance 

measures relating to diesel emissions reductions. Neither of our 

recommendations called for DOT to establish such performance 

measures. Instead, we recommended that (1) the Federal Transit 

Administration develop performance measures for two of its agencywide 

strategic goals and (2) DOE, DOT, and EPA establish a strategy for 

collaboration on diesel emissions reduction activities that, among other 
 

Page 24 GAO-12-261 Diesel Pollution 

things, helps the agencies develop crosscutting performance measures, 

as appropriate, to assess the collective results of federal funding for 

activities that reduce diesel emissions. DOT also stated that it operates in 

full compliance with the Government Performance and Results Act. 

Specifically, DOT said that it has established outcome-focused 

performance measures that are appropriate for its programs and mission 

focus. Our report does not assess DOT's compliance with the 

Government Performance and Results Act. Rather, it identifies the 

Federal Transit Administration's strategic goals that relate to the agency's 

relevant programs and states whether the Federal Transit Administration 

has developed performance measures for these goals. Our report states 

that principles of good governance indicate that agencies should establish 

quantifiable performance measures to demonstrate how they intend to 

achieve their goals and measure the extent to which they do so. Our 

report also states that Government Performance and Results Act 

requirements for agencies to set goals for program performance and to 

measure results can serve as leading practices for lower levels within 

federal agencies. We have clarified the report language and 

recommendation to state that, on the basis of these leading practices, we 

recommend the Federal Transit Administration establish performance 

measures for the two agency-wide strategic goals of environmental 

sustainability and economic competitiveness that relate to the programs 

involving diesel emissions reduction activities. The Federal Transit 

Administration provided no evidence that it has established performance 

measures for these strategic goals. Importantly, the agency’s fiscal year 

2012 budget justification that it submitted to Congress—the document 

that Federal Transit Administration officials said contained the agency’s 

goals and performance measures—did not include performance 

measures for its environmental sustainability and economic 

competitiveness strategic goals. We continue to believe that the Federal 

Transit Administration should establish performance measures for these 

goals.

Regarding our recommendation that DOE, DOT, and EPA establish a 

strategy for collaboration among their programs that reduce mobile 

source diesel emissions, DOT agreed that collaboration can be useful but 

questioned its usefulness in this context. Specifically, DOT stated that the 

report demonstrates no specific deficiency that has occurred due to the 

existing level of collaboration. As our report states, DOE, DOT, and EPA 

were generally unaware of other programs that fund activities that 

decrease diesel emissions. Additionally, we reported that representatives 

of several DOE and DOT programs were unaware of related programs 

within their own agencies that fund the same underlying activities. Our
 

Page 25 GAO-12-261 Diesel Pollution 

report also states that EPA officials said that enhanced collaboration 

could improve the effectiveness of federal funding for activities that 

reduce diesel emissions. In its comments, DOT stated that the report 

does not offer evidence to support why establishing a strategy for 

collaboration among entities that fund these activities should be a priority 

use of federal resources. While the programs we reviewed have been 

designed for different purposes, coordination among programs with 

related responsibilities and that fund the same activities is essential to the 

efficient and effective use of resources. Further, uncoordinated programs 

can waste scarce funds and limit the overall effectiveness of federal 

spending. We therefore continue to believe that our recommendation is 

warranted.

DOT also stated that the report does not effectively demonstrate that our 

recommended actions will produce cost-effective investments appropriate 

for DOT that do not potentially duplicate efforts elsewhere in the 

government. We believe it is entirely appropriate for the Federal Transit 

Administration to establish performance measures for its goals and do not 

see how this would duplicate other efforts within the government. We also 

continue to believe that establishing a strategy for collaboration is an 

appropriate investment that would help ensure the effectiveness and 

accountability of federal funding for activities that reduce diesel 

emissions. As we noted, such a strategy should help agencies identify 

and address any unnecessary duplication. 

Finally, DOT's comments emphasized its view that its programs focus on 

their statutory mission of transit, whereas diesel emissions reduction is a 

corollary benefit. Our report states that most of the programs we identified 

have other goals or purposes and do not focus on diesel emissions 

reduction; nonetheless, each of the programs does fund such activities. 

Our report also recognizes the statutory requirements for each program 

and recommends that the agencies establish a strategy for collaboration 

that is consistent with existing statutory obligations. DOT’s comments can 

be found in appendix VII.
 

Page 26 GAO-12-261 Diesel Pollution 

We are sending copies of this report to the Secretaries of Energy and 

Transportation, the Administrator of the EPA, appropriate congressional 

committees, and other interested parties. In addition, this report is

available at no charge on the GAO website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-3841 or trimbled@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made major contributions to this report 

are listed in appendix VIII.

David C. Trimble

Director, Natural Resources and Environment
Appendix I: Objectives, Scope, and 

Methodology

Page 27 GAO-12-261 Diesel Pollution 

This report examines the (1) extent to which duplication, overlap, 

fragmentation, or gaps, if any, exist among federal grant, rebate, and loan 

programs that address mobile source diesel emissions; (2) effectiveness 

of federal funding for activities that reduce mobile source diesel 

emissions; and (3) extent to which collaboration takes place among 

agencies that fund activities that reduce mobile source diesel emissions.

To address the first objective, we identified federal grant, rebate, and loan 

programs that address mobile source diesel emissions, and reviewed 

information about each program to identify duplication, overlap, 

fragmentation, and gaps. To identify the programs that address diesel 

emissions, we (1) conducted a literature review of government reports, 

academic materials, legislation, transcripts, appropriations, trade and 

industry articles, and other relevant publications; (2) interviewed agency 

officials and relevant industry stakeholders; and (3) reviewed agency 

documents, including information about activities eligible for funding. For 

the literature review, we searched twenty databases and websites—

Article First, Congressional Research Service, Congressional Budget 

Office, Inspectors General, Policyfile, ProQuest, Worldcat, National 

Technical Information Services, Wilson’s Applied Science and Technical 

Abstracts, and the Catalog of Federal Domestic Assistance, among 

others—for materials published in the last 10 years that may identify 

relevant federal grant, rebate, and loan programs. Next, we interviewed 

agency and relevant third-party officials and analyzed agency documents 

to determine if the programs our searches identified could provide funding 

for activities that reduce diesel emissions. For this review, we identified 

programs that fund activities that directly reduce diesel emissions and did 

not include programs that fund activities, such as research and 

development efforts, that have the potential to reduce diesel emissions in 

the future. We held these interviews and conducted these searches from 

June 2011 to September 2011.

For each program we identified as reducing diesel emissions, we 

conducted structured interviews of agency officials and reviewed agency 

documents to determine the types of funding the program provides as 

well as its purpose, goals, eligible activities, and eligible applicants. We 

then compared each of these areas across the programs to identify areas 

of duplication, overlap, or fragmentation. We also compared eligible 

recipients under each program with available data on the sources of 

diesel emissions to identify any gaps among the programs, such as 

mobile sources of diesel emissions for which funding opportunities are not 

available. For the duplication, overlap, and fragmentation we found, we 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 28 GAO-12-261 Diesel Pollution 

interviewed agency officials and relevant industry stakeholders to 

determine its causes and impact.

In addition, we obtained and analyzed funding data from the Department 

of Energy (DOE), the Department of Transportation (DOT), and the 

Environmental Protection Agency (EPA) to determine the total amount of 

federal funding for diesel emissions reduction projects from fiscal years 

2007 through 2011. We selected fiscal years 2007 through 2011 as our 

time period because, by 2007, EPA had issued emissions standards for 

key on-road sources, such as heavy-duty trucks and buses, as well as a 

rule requiring refiners to reduce the sulfur content—and therefore the 

emissions—of certain diesel fuels. We obtained these data from DOE for 

the Clean Cities, Energy Efficiency and Conservation Block Grant, and 

State Energy programs; from DOT’s Federal Aviation Administration for 

the Voluntary Airport Low Emissions program; from DOT’s Federal 

Highway Administration for the Ferry Boat and State Infrastructure Banks 

programs; from DOT’s Federal Transit Administration for the National 

Fuel Cell Bus Technology Development and Transit Investments in 

Greenhouse Gas Emissions Reduction programs; and from EPA for the 

Diesel Emissions Reduction Act Program. However, DOT’s Federal 

Transit Administration was unable to provide this data for the Bus and 

Bus Facilities, Clean Fuels Grant, Congestion Mitigation and Air Quality 

Improvement, Transit in Parks, and Urbanized Area Formula Grants 

programs.1

 

1

DOT’s Federal Highway Administration administers the Congestion Mitigation and Air 

Quality Improvement program, but DOT’s Federal Transit Administration collects and 

maintains grant data for the program. 

 A Federal Transit Administration official said that because the 

agency did not track which awards under these programs reduced diesel 

emissions or diesel fuel use, it was unable to identify the amount of 

funding each of these programs provided for activities that reduced diesel 

emissions. The official said that the agency did not track these data 

because statutory requirements do not call for such tracking. Instead, the 

agency provided us access to its grants management database, from 

which we estimated the amount of funding provided for diesel emissions 

reduction projects for the Clean Fuels Grant, Congestion Mitigation and 

Air Quality Improvement, and Transit in Parks programs, but we were 

unable to estimate the amount of funding provided through the Bus and

Bus Facilities or Urbanized Area Formula Grants programs due to the 

limited timeframes of our review. We reviewed documents about the 

underlying databases that DOE, DOT, and EPA use to collect grant 
Appendix I: Objectives, Scope, and 

Methodology

Page 29 GAO-12-261 Diesel Pollution 

information and interviewed knowledgeable agency officials to assess the 

reliability of the data for each program. We determined that the data 

obtained from these agencies were sufficiently reliable for the purposes of 

this report.

In addition, the Federal Transit Administration provided estimates of the 

amount that its Bus and Bus Facilities, Clean Fuels Grant, Congestion 

Mitigation and Air Quality Improvement, Transit in Parks, and Urbanized 

Area Formula Grants programs awarded from fiscal years 2007 through 

2011 for projects that reduced diesel emissions. The agency derived 

these estimates by identifying obligations made under each of these five 

programs from fiscal years 2007 through 2011 for purchasing 

replacement transit vehicles. However, the agency does not consistently 

collect information on the fuel-type of the vehicles it replaces; rather it 

collects information on the intended purchase, by fuel-type, for all 

obligations made in each grant by year and program. The Federal Transit 

Administration provided this information to GAO; however, this 

information does not accurately reflect the amount of funding provided for 

replacement vehicles that reduced diesel emissions, and we did not 

include the information in this report.

To address the second objective, we reviewed and analyzed agency 

officials’ responses to structured interview questions on their program 

goals and performance information. We also analyzed agency strategic 

plans, budget documents, and other agency documentation containing 

performance information. We reviewed relevant provisions of the 

Government Performance and Results Act of 1993, as amended by the 

Government Performance and Results Act Modernization Act of 2010, as 

well as our prior work on performance measurement.

To address the third objective, we reviewed and analyzed agency 

officials’ responses to structured interview questions on coordination with 

other programs and assessment of diesel pollution. We also reviewed our 

prior work on collaboration to compare these programs’ efforts with best 

practices for federal programs. In addition, to identify tax expenditures 

that provide incentives that address mobile source diesel emissions, we 

reviewed tax expenditure lists produced by the U.S. Department of the 

Treasury and the Joint Committee on Taxation; reports by the 

Congressional Research Service, including the 2010 tax expenditure 

compendium; and a DOE list of federal incentives related to alternative 
Appendix I: Objectives, Scope, and 

Methodology

Page 30 GAO-12-261 Diesel Pollution 

fuels, vehicles, and air quality.2

We conducted this performance audit from May 2011 to February 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

We also interviewed agency officials at 

DOE, DOT, and EPA as well as industry stakeholders.

 

2

The published lists report federal income tax expenditures and also include information 

on excise tax revenue forgone for listed tax expenditures. The lists do not include 

estimates for tax provisions that result in forgone excise tax only. 
Appendix II: Additional Information on Federal 

Programs That Provide Grants or Loans for 

Mobile Source Diesel Emissions Reduction 

Activities 

Page 31 GAO-12-261 Diesel Pollution 

Clean Cities program. DOE’s Clean Cities program, administered by the 

Office of Energy Efficiency and Renewable Energy, is a governmentindustry partnership that works to reduce America’s petroleum 

consumption in the transportation sector. The program provides 

competitive grants for projects that implement a range of energy-efficient 

and advanced vehicle technologies, such as hybrids, electric vehicles, 

plug-in electric hybrids, hydraulic hybrids, and compressed natural gas 

vehicles, helping reduce petroleum consumption across the United 

States. The program also supports refueling infrastructure for various 

alternative fuel vehicles, as well as public education and training 

initiatives.

Energy Efficiency and Conservation Block Grant program. The 

Energy Efficiency and Conservation Block Grant program, administered 

by DOE’s Office of Energy Efficiency and Renewable Energy, provides 

funds through competitive and formula grants to states, territories, 

federally-recognized Indian tribes, and local governments to develop and 

implement projects to improve energy efficiency and reduce energy use 

and fossil fuel emissions in their communities.

State Energy Program. The State Energy Program, administered by 

DOE’s Office of Energy Efficiency and Renewable Energy, provides 

technical and financial assistance to states through formula and 

competitive grants. States may use such grants to develop, modify, and 

implement approved state energy conservation plans.

Voluntary Airport Low Emissions program. The Voluntary Airport Low 

Emissions program provides funding to reduce airport ground emissions 

at commercial service airports in areas failing to meet or maintain 

National Ambient Air Quality Standards. Grant funding generally supports 

projects such as electrification of airport gate systems, the incremental 

cost of purchasing electric luggage carts, and purchasing airport shuttle 

buses that use alternative fuels. The Federal Aviation Administration 

considers applications for Voluntary Airport Low Emissions grants on a 

case-by-case basis based on the project’s importance relative to other 

eligible airport activities. The agency also considers each project’s cost 

effectiveness and reductions in air emissions.

Appendix II: Additional Information on Federal 

Programs That Provide Grants or Loans for Mobile 

Source Diesel Emissions Reduction Activities 

Department of Energy

Department of 

Transportation

Federal Aviation 

Administration
Appendix II: Additional Information on Federal 

Programs That Provide Grants or Loans for 

Mobile Source Diesel Emissions Reduction 

Activities 

Page 32 GAO-12-261 Diesel Pollution 

Congestion Mitigation and Air Quality Improvement program. Jointly 

administered by Federal Highway Administration and the Federal Transit 

Administration, the Congestion Mitigation and Air Quality Improvement 

program provides grants to state departments of transportation, 

metropolitan planning organizations, and transit agencies for a variety of 

transportation projects in areas that do not meet or have previously failed 

to meet federal air quality standards. The program distributes funding 

through a statutory formula primarily based on population in areas of 

certain air quality status. The Safe, Accountable, Flexible, and Efficient 

Transportation Equity Act: A Legacy for Users of 2005 expanded the 

focus of eligible projects under the program, placing more priority on 

diesel engine retrofits and cost-effective emission reduction and 

congestion mitigation projects that also provide air quality benefits.

Ferry Boat Discretionary program. The Intermodal Surface 

Transportation Efficiency Act of 1991 amended a predecessor ferry 

program, resulting in this program to construct ferry boats and ferry 

terminal facilities. Eligible projects include both ferry boats carrying 

passengers only and those carrying cars and passengers. In general, 

ferry boats and facilities must be publicly owned or operated, and the 

ferry facilities must provide connections on a public road, which has not 

been designated part of the interstate system. The program provides 

administrative consideration of whether the project will result in a useable 

facility; what other benefits exist; whether other funds, either state or 

local, are committed to the project; and whether the project has received 

program funds in the past.

State Infrastructure Bank program. The State Infrastructure Bank 

program provides the opportunity to all 50 states, Puerto Rico, the District 

of Columbia, American Samoa, Guam, the Virgin Islands, and the 

Commonwealth of the Northern Mariana Islands to establish 

transportation revolving loan funds. States may capitalize their revolving 

loan funds with federal highway funding, and states could offer a range of 

loans and credit options, such as low-interest loans, loan guarantees, or 

loans requiring repayment of interest-only in early years and delayed 

repayment of the loan’s principal. For example, through a revolving fund, 

states could lend money to public or private sponsors of transportation 

projects, project-based or general revenues (such as tolls or dedicated 

taxes) could be used to repay loans with interest, and the repayments 

would replenish the fund so that new loans could be supported.

Federal Highway 

Administration
Appendix II: Additional Information on Federal 

Programs That Provide Grants or Loans for 

Mobile Source Diesel Emissions Reduction 

Activities 

Page 33 GAO-12-261 Diesel Pollution 

Bus and Bus Related Equipment and Facilities program. DOT’s Bus 

and Bus Facilities program provides capital assistance for new and 

replacement buses, related equipment, and related facilities for expansion 

and maintenance purposes. The projects funded by this program are 

generally determined by Congress. Funds can be provided only to state 

and local governmental authorities. The purpose of the program is to 

replace, rehabilitate, and purchase buses and bus-related facilities in 

support of FTA’s goal of developing a transportation system that (1)

maximizes the safe, secure, and efficient mobility of individuals; (2) 

minimizes environmental impacts; and (3) minimizes transportationrelated fuel consumption and reliance on foreign oil.

Clean Fuels Grant program. This program provides competitive grants 

to assist areas in achieving or maintaining the National Ambient Air 

Quality Standards for ozone and carbon monoxide and to support 

emerging clean fuel and advanced propulsion technologies for transit 

buses and markets for those technologies. Eligible projects under the 

program include (1) purchasing or leasing clean fuel buses, including 

buses that employ a lightweight composite primary structure and vans for 

use in revenue service; (2) constructing or leasing clean fuel bus facilities 

or electrical recharging facilities and related equipment; and (3) 

purchasing clean fuel, biodiesel, hybrid electric, or zero emissions 

technology buses that exhibit equivalent or superior emissions reductions 

to existing clean fuel or hybrid electric technologies.

National Fuel Cell Bus Technology Development program. This 

program is a research, development, and demonstration competitive 

grant program established to facilitate the development of fuel cell bus 

technology and related infrastructure. The Federal Transit Administration 

may award grants for this purpose to up to three geographically diverse 

nonprofit organizations. The goals of the program are to (1) facilitate the 

development of commercially viable fuel cell bus technologies, (2) 

significantly improve transit bus fuel efficiency and reduce petroleum 

consumption, (3) reduce transit bus emissions, (4) establish a globally 

competitive U.S. industry for fuel cell bus technologies, and (5) increase 

public acceptance of the fuel cell vehicles.

Paul S. Sarbanes Transit in Parks program. The Transit in Parks 

program was established to address the challenge of increasing vehicle 

congestion in and around our national parks and other federal lands by 

providing competitive grants for capital and planning expenses for new or

existing alternative transportation systems in the vicinity of federally 

owned or managed recreation areas. According to program documents, 

Federal Transit 

Administration
Appendix II: Additional Information on Federal 

Programs That Provide Grants or Loans for 

Mobile Source Diesel Emissions Reduction 

Activities 

Page 34 GAO-12-261 Diesel Pollution 

alternative transportation includes transportation by bus, rail, or any other 

publicly available means of transportation and includes sightseeing 

service. It also includes nonmotorized transportation systems such as 

pedestrian and bicycle trails. The program seeks to conserve natural, 

historical, and cultural resources; reduce congestion and pollution; 

improve visitor mobility and accessibility; enhance visitor experience; and 

ensure access to all, including persons with disabilities.

Transit Investments in Greenhouse Gas and Energy Reduction 

program. The American Recovery and Reinvestment Act of 2009 

authorized the Transit Investments in Greenhouse Gas and Energy 

Reduction program, and the program received funding through fiscal year 

2011. The program did not receive funding for fiscal year 2012 in the 

relevant appropriations act.1

Urbanized Area Formula Grants program. This program provides 

grants to urbanized areas and to states for public transportation capital 

projects and operating assistance for equipment and facilities in 

urbanized areas and for transportation-related planning.

This program provides competitive grants to 

assist public transportation agencies in implementing strategies for 

reducing greenhouse gas emissions and energy use in transit 

operations. Eligible applicants under the program include public 

transportation agencies, federally recognized tribes, and state 

departments of transportation. Two types of projects are eligible for 

funding under the Transit Investments in Greenhouse Gas and Energy 

Reduction program: capital investments that assist in reducing the energy 

consumption of a transit agency and capital investments that reduce 

greenhouse gas emissions of a transit agency. For purposes of the 

Transit Investments in Greenhouse Gas and Energy Reduction program, 

energy consumption is defined as energy purchased directly by the public 

transportation agency. Examples of energy include diesel fuel, 

compressed natural gas, and electricity purchased from power plants. 

Emissions are defined as those emitted directly by the assets of the 

public transportation agency.

2

 

1

See H.R. Rep. No. 112-284, at 305 (Conf. Rep.). 

The program 

allocates funds based on a multitiered formula, which separates urban 

areas with populations under 200,000 from those with populations of 

2

An urbanized area is an area with a population of 50,000 or more that is designated as 

such in the 2000 Census by the U.S. Department of Commerce, Bureau of the Census. 
Appendix II: Additional Information on Federal 

Programs That Provide Grants or Loans for 

Mobile Source Diesel Emissions Reduction 

Activities 

Page 35 GAO-12-261 Diesel Pollution 

200,000 or more. Funds are first apportioned based on a formula 

provided in law to designated recipients (typically metropolitan planning 

organizations or a state or regional authority responsible for capital 

projects and for financing and directly providing public transportation). 

Designated recipients allocate the apportionment among eligible transit 

service providers in the urbanized area. Eligible uses of program funds 

include planning, design, and evaluation of transit projects and capital 

investments in bus-related activities, such as replacement, overhaul, and 

rebuilding of buses.

Diesel Emissions Reduction Act Program. This program provides 

grant funding to reduce emissions from existing diesel engines through 

engine retrofits, rebuilds, and replacements; switching to cleaner fuels; 

and other strategies. The program offers funding through four 

subprograms:

• the National Clean Diesel Funding Assistance Program awards 

competitive grants for projects implementing EPA verified and 

certified diesel emissions reduction technologies,

• the National Clean Diesel Emerging Technologies Program 

awards competitive grants for projects that develop and evaluate 

emerging diesel emissions reduction technologies,

• the SmartWay Clean Diesel Finance Program awards competitive 

grants to establish low-cost revolving loans or other innovative 

financing programs that help fleets reduce diesel emissions, and

• the State Clean Diesel Grant Program allocates funds to 

participating states to implement grant and loan programs for 

clean diesel projects.

Environmental 

Protection Agency
Appendix III: Tax Expenditures Related to 

Mobile Source Diesel Emissions Reduction 

Activities 

Page 36 GAO-12-261 Diesel Pollution 

This tax expenditure excludes certain idling reduction devices from the 

federal excise tax. Under federal excise tax law, heavy truck, trailer, and 

tractor parts sold separately from the vehicle generally are subject to a 12 

percent retail tax. The Energy Improvement and Extension Act of 2008 

excludes qualified idling reduction devices from the federal retail tax on 

vehicle parts. EPA, in consultation with the Secretaries for the DOT and 

DOE, maintains a list of devices approved for the tax exemption. An idle 

reduction device is generally a device or system that provides services, 

such as heat, air conditioning, or electricity, to the vehicle or equipment 

without the use of the main drive engine while the vehicle or equipment is 

temporarily parked or remains stationary, hence reducing unnecessary 

idling of the vehicle or equipment. No estimate of forgone federal tax 

revenue for this excise tax provision is available because the Department 

of the Treasury reports estimates only for income tax expenditures and 

does not report estimates for tax provisions that result in forgone excise 

tax only.

This tax expenditure provides an income tax credit as well as an excise 

tax credit for the production and use of biodiesel.1

 

1

Biodiesel fuel is an alternative to petroleum-based transportation fuel. U.S. biodiesel is 

made from soybeans and other plant oils, such as cottonseed and canola; animal fats, 

such as beef tallow, pork lard, and poultry fat; and recycled cooking oils.

The use of biodiesel 

instead of conventional diesel fuel significantly reduces particulate matter 

and hydrocarbon emissions. The biodiesel fuels income tax credit is the 

sum of three credits: (1) the biodiesel mixture credit, which provides $1 

for each gallon of biodiesel and agri-biodiesel used by the taxpayer in the 

production of a qualified biodiesel mixture; (2) the biodiesel credit, which 

is $1 per gallon for each gallon of unblended biodiesel and agri-biodiesel 

when used as a fuel or sold at retail; and (3) the small agri-biodiesel 

producer credit, which is 10 cents per gallon for up to 15 million gallons of 

agri-biodiesel produced by small producers. The biodiesel excise tax 

credit provides a tax credit of $1 for each gallon of biodiesel or agribiodiesel a taxpayer used to produce a biodiesel mixture for sale or use in 

a trade or business. Renewable diesel fuel is eligible for both the income 

tax credit and excise tax credit at a rate of $1 per gallon. According to 

Department of the Treasury estimates, in fiscal year 2010, the biodiesel 

income tax credits resulted in $20 million in forgone federal income tax 

revenue, and the biodiesel excise tax credit resulted in $490 million in 

forgone federal excise tax revenue.

Appendix III: Tax Expenditures Related to 

Mobile Source Diesel Emissions Reduction 

Activities 

Excise Tax 

Exemption for Idling 

Reduction Devices

Biodiesel and Small 

Agri-biodiesel 

Producer Tax Credits
Appendix III: Tax Expenditures Related to 

Mobile Source Diesel Emissions Reduction 

Activities 

Page 37 GAO-12-261 Diesel Pollution 

A claim for credit or refund may be made for the nontaxable use of a 

diesel-water fuel emulsion—a mixture of diesel, water, and additives—

and for undyed diesel fuel used to produce a diesel-water fuel emulsion. 

The presence of water in the emulsion reduces both nitrogen oxide and 

particulate matter emissions from the diesel fuel. The claim rate for 

nontaxable use of a diesel-water fuel emulsion taxed at 19.8 cents per 

gallon is 19.7 cents (if exported, the claim rate is 19.8 cents). The 

following are the nontaxable uses for a diesel-water fuel emulsion for 

which a credit or refund may be allowable to an ultimate purchaser: on a 

farm for farming purposes; off-highway business use; export; in a 

qualified local bus; in a school bus; other than as fuel in the propulsion 

engine of a train or diesel-powered highway vehicle, but not off-highway 

use; exclusive use by a qualified blood collector organization; in a 

highway vehicle owned by the United States that is not used on a 

highway; exclusive use by a nonprofit educational organization; exclusive 

use by a state, political subdivision of a state, or the District of Columbia; 

and in an aircraft or vehicle owned by an aircraft museum. No estimate of 

forgone federal tax revenue for this excise tax provision is available 

because the Department of the Treasury reports estimates only for 

income tax expenditures and does not report estimates for tax provisions 

that result in forgone excise tax only.

Diesel Fuel Emulsion 

Tax Credit
Appendix IV: Strategic Goals and 

Establishment of Performance Measures 

Related to Programs That Fund Activities That 

Reduce Mobile Source Diesel Emissions 

Page 38 GAO-12-261 Diesel Pollution 

Agency Strategic goal

Performance 

measure established Related programs

DOE To catalyze the timely, material, and 

efficient transformation of the nation’s 

energy system and secure U.S. leadership 

in clean energy technologies Yes

Clean Cities program

Energy Efficiency and 

Conservation Block Grant 

program

State Energy Program

DOT

Federal Aviation 

Administration

To advance environmentally sustainable 

policies and investments that reduce 

carbon and other harmful emissions from 

transportation sources 

Yes

Voluntary Airport Low 

Emissions program

To ensure the United States proactively 

maintains its critical transportation 

infrastructure in a state of good repair 

Yes

To improve public health and safety by 

reducing transportation-related fatalities 

and injuries 

Yes

To promote transportation policies and 

investments that bring lasting and 

equitable economic benefits to the nation 

and its citizens 

Yes

Federal Highway 

Administration

To advance environmentally sustainable 

policies and investments that reduce 

carbon and other harmful emissions from 

transportation sources 

Yes

Congestion Mitigation and Air 

Quality Improvement 

program

Ferry Boat Discretionary 

program

To ensure the United States proactively 

maintains its critical transportation 

infrastructure in a state of good repair

Yes Ferry Boat Discretionary 

program

To foster livable communities through 

place-based policies and programs that 

increase transportation choices and 

access to transportation services 

Yes

Congestion Mitigation and Air 

Quality Improvement 

program

Ferry Boat Discretionary 

program

To improve public health and safety by 

reducing transportation-related fatalities 

and injuries Yes

Congestion Mitigation and Air 

Quality Improvement 

program

Ferry Boat Discretionary 

program

To promote transportation policies and 

investments that bring lasting and 

equitable economic benefits to the nation 

and its citizens 

Yes Ferry Boat Discretionary 

program

Appendix IV: Strategic Goals and 

Establishment of Performance Measures 

Related to Programs That Fund Activities 

That Reduce Mobile Source Diesel Emissions
Appendix IV: Strategic Goals and 

Establishment of Performance Measures 

Related to Programs That Fund Activities That 

Reduce Mobile Source Diesel Emissions 

Page 39 GAO-12-261 Diesel Pollution 

Agency Strategic goal

Performance 

measure established Related programs

Federal Transit 

Administration

To advance environmentally sustainable 

policies and investments that reduce 

carbon and other harmful emissions from 

transportation sources 

No

Transit in Parks program

To foster livable communities through 

place-based policies and programs that 

increase transportation choices and 

access to transportation services Yes

Bus and Bus Facilities 

program

Clean Fuels Grant program

Transit in Parks program

Urbanized Area Formula 

Grants program

To improve public health and safety by 

reducing transportation-related fatalities 

and injuries

Yes

Bus and Bus Facilities 

program

Clean Fuels Grant program

Transit in Parks program

Urbanized Area Formula 

Grants program

To promote transportation policies and 

investments that bring lasting and 

equitable economic benefits to the nation 

and its citizens No

Bus and Bus Facilities 

program

Clean Fuels Grant program

Transit in Parks program

Urbanized Area Formula 

Grants program

EPA To reduce greenhouse gas emissions and 

develop adaptation strategies to address 

climate change, and protect and improve 

air quality

Yes

Diesel Emissions Reduction 

Act Program

Source: GAO analysis of DOE, DOT, and EPA documents.
Appendix V: Comments from the 

Environmental Protection Agency

Page 40 GAO-12-261 Diesel Pollution 

Appendix V: Comments from the 

Environmental Protection Agency
Appendix VI: Comments from the Department 

of Energy

Page 41 GAO-12-261 Diesel Pollution 

Appendix VI: Comments from the 

Department of Energy
Appendix VI: Comments from the Department 

of Energy

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

of Energy

Page 43 GAO-12-261 Diesel Pollution 

See comment 4.

See comment 3.

See comment 2.

See comment 1.
Appendix VI: Comments from the Department 

of Energy

Page 44 GAO-12-261 Diesel Pollution 

See comment 5.

See comment 1.

See comment 4.
Appendix VI: Comments from the Department 

of Energy

Page 45 GAO-12-261 Diesel Pollution 

See comment 6.

See comment 3.

See comment 5.
Appendix VI: Comments from the Department 

of Energy

Page 46 GAO-12-261 Diesel Pollution 

See comment 7.

See comment 3.

See comment 6.
Appendix VI: Comments from the Department 

of Energy

Page 47 GAO-12-261 Diesel Pollution 

The following are GAO’s comments to the Department of Energy’s letter 

dated January 26, 2012.

1. We agree that the DOE programs identified in this report fund projects 

that have a secondary effect of reducing diesel emissions. As our report 

states, these programs fund activities, such as retrofitting, rebuilding, or 

replacing existing diesel engines or vehicles, which have the effect of 

reducing diesel emissions. Our report also states that these programs 

generally focus on goals or purposes that do not directly relate to 

reducing diesel emissions. We did not modify our report based on this 

comment.

2. Our report does not evaluate whether DOE programs have established 

performance measures specific to mobile source diesel emissions 

reductions. Rather, this report states that DOE has established 

performance measures for the agency’s strategic goals that relate to its 

programs that fund diesel emissions reduction activities. We did not 

modify our report based on this comment.

3. Our report recognizes that DOE, DOT, and EPA consult on broad 

issues and states that the programs at these agencies that fund diesel 

emissions reduction activities generally do not collaborate. We did not 

review any collaboration that occurs among programs other than the 14 

identified in our report or is not specifically related to diesel emissions 

reductions because this was outside the scope of our review. We did not 

modify our report based on this comment.

4. We disagree with DOE’s statement that there is not fragmentation or 

overlap among the 14 programs identified in our report. As our report 

states, fragmentation occurs when more than one federal agency, or 

more than one organization within an agency, is involved in the same 

broad area of national need. We found that the 14 programs that fund 

activities that have the effect of reducing diesel emissions are involved in 

the same area of national need. Our report states that overlap occurs 

when multiple agencies and programs have similar goals, engage in 

similar activities or strategies to achieve them, or target similar 

beneficiaries. As our report shows, each of the 14 programs shares goals, 

activities, or beneficiaries with at least one other program. In addition, we 

agree with DOE’s statement that it does not have a quantifiable goal 

associated with reducing diesel emissions. As we reported, DOE’s 3 

programs that fund diesel emissions reduction activities share one or 

more broad goals, such as reducing emissions, increasing energy 

GAO Comments
Appendix VI: Comments from the Department 

of Energy

Page 48 GAO-12-261 Diesel Pollution 

efficiency, and reducing fuel use, with the other 11 programs that fund 

these activities. We did not modify our report based on this comment.

5. We revised our report to note that DOE does not quantitatively collect 

information on diesel emissions reductions. We also noted that the three

DOE programs collect some information related to diesel emissions 

reductions. For example, our report states that DOE’s Clean Cities 

program collects information on reductions in gasoline and diesel fuel 

use, and the agency’s Energy Efficiency and Conservation Block Grant 

and State Energy programs estimate emissions reductions that result 

from program activities. Further, we continue to believe that without 

information on the results of programs’ activities that reduce mobile 

source emissions, the overall effectiveness of federal grant and loan 

funding for activities that reduce diesel emissions cannot be determined.

6. We do not state that the secondary effect of reducing diesel emissions 

is a DOE responsibility. As our report shows, each of the 3 DOE 

programs we identified as funding diesel emissions reduction activities 

has responsibilities related to those of the other 11 programs within our 

review because they fund similar activities and have similar goals, 

including increasing energy efficiency and reducing fuel use. We continue 

to believe, as we state in our report, that coordination among programs 

with related responsibilities is essential to efficiently and effectively meet 

national concerns. Further, our report states that the DOE programs 

within our review focus on purposes other than reducing diesel emissions 

and lists the specific purpose for each DOE program. We did not modify 

our report based on this comment.

7. We believe this report sufficiently acknowledges the impact of the 

American Recovery and Reinvestment Act of 2009 on funding for 

activities that reduce diesel emissions. Our report states that the 

American Recovery and Reinvestment Act provided $870 million of the 

$1.4 billion that DOE, DOT, and EPA programs provided for activities that 

reduced mobile source diesel emissions from fiscal years 2007 through 

2011. We did not modify our report based on this comment.
Appendix VII: Comments from the Department 

of Transportation

Page 49 GAO-12-261 Diesel Pollution 

Appendix VII: Comments from the 

Department of Transportation 
Appendix VII: Comments from the Department 

of Transportation

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

of Transportation

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

of Transportation

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

Acknowledgments

Page 53 GAO-12-261 Diesel Pollution 

David C. Trimble, (202) 512-3841 or trimbled@gao.gov

In addition to the individual named above, Michael Hix, Assistant Director; 

Jennifer Beveridge; Colleen Candrl; Elizabeth Curda; Cindy Gilbert; 

Kristin Hughes; Joah Iannotta; Terence Lam; Zina Merritt; Ray Sendejas; 

MaryLynn Sergent; Tina Sherman; Ben Shouse; Kiki Theodoropoulos; 

and Sam Wilson made key contributions to this report.

Appendix VIII: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments

(361299)
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