Recent congressional interest in U.S. energy policy has focused in part on ways through which the United States could secure more economical and reliable crude oil resources both domestically and internationally. Many forecasters identify petroleum refined from Canadian oil sands as one possible solution. Increased petroleum production from Canadian oil sands, however, is not without controversy, as many have expressed concern over the potential environmental impacts. These impacts may include increased water and natural gas use, disturbance of mined land, effects on wildlife and water quality, trans-boundary air pollution, and emissions of greenhouse gases (GHG) during extraction and processing. A number of key studies in recent literature have expressed findings that GHG emissions from the production of Canadian oil sands crudes may be higher than those of other crudes imported, refined, and consumed in the United States. The studies identify two main reasons for the increase: (1) oil sands are heavier and more viscous than lighter crude oil types on average, and thus require more energy- and resourceintensive activities to extract; and (2) oil sands are compositionally deficient in hydrogen, and have a higher carbon, sulfur, and heavy metal content than lighter crude oil types on average, and thus require more processing to yield consumable fuels.

The United States contributes funding to various international financial institutions to assist developing countries to address global climate change and other environmental concerns. Congress is responsible for several activities in this regard, including (1) authorizing periodic appropriations for U.S. financial contributions to the institutions, and (2) overseeing U.S. involvement in the programs. Issues of congressional interest include the overall development assistance strategy of the United States, U.S. leadership in global environmental and economic affairs, and U.S. commercial interests in trade and investment. This report provides an overview of one of the oldest international financial institutions for the environment-the Global Environment Facility (GEF)-and analyzes its structure, funding, and objectives in light of the many challenges within the contemporary landscape of global environmental finance. GEF is an independent and international financial organization that provides grants, promotes cooperation, and fosters actions in developing countries to protect the global environment. Established in 1991, it unites 182 member governments and partners with international institutions, nongovernmental organizations, and the private sector to assist developing countries with environmental projects related to six areas: biodiversity, climate change, international waters, the ozone layer, land degradation, and persistent organic pollutants. GEF receives funding from multiple donor countries-including the United States-and provides grants to cover the additional or "incremental" costs associated with transforming a project with national benefits into one with global environmental benefits. In this way, GEF funding is structured to "supplement" base project funding and provide for the environmental components in national development agendas. GEF partners with several international agencies, including the International Bank for Reconstruction and Development, the United Nations Development Program (UNDP), and the United Nations Environment Program (UNEP), among others, and is the primary fund administrator for four Rio (Earth Summit) Conventions, including the Convention on Biological Diversity (CBD), the United Nations Framework Convention on Climate Change (UNFCCC), the Stockholm Convention on Persistent Organic Pollutants (POPs), and the United Nations Convention to Combat Desertification (UNCCD). GEF also establishes operational guidance for international waters and ozone activities, the latter consistent with the Montreal Protocol on Substances that Deplete the Ozone Layer and its amendments. Since its inception, GEF has allocated $11.5 billion-supplemented by more than $57 billion in cofinancing-for more than 3,200 projects in over 165 countries. GEF is one mechanism in a larger network of international programs designed to address the global environment. Accordingly, its effectiveness depends on how the fund addresses programmatic issues, builds upon national investment plans, reacts to recent developments in the financial landscape, and responds to emerging opportunities. Critics contend that the existing system has had limited impact in addressing major environmental concerns-specifically climate change and tropical deforestation-and has been unsuccessful in delivering global transformational change. A desire to achieve more immediate impacts has led to a restructuring of the Multilateral Development Banks' (MDBs') role in environmental finance and the introduction of many new bilateral and multilateral funding initiatives. The future of GEF remains in the hands of the donor countries, including the United States, which can choose to broaden the mandate and/or strengthen its institutional arrangements or reduce and replace it by other bilateral or multilateral funding mechanisms.

Climate change policies at both the national and international levels have traditionally focused on measures to mitigate greenhouse gas (GHG) emissions and to adapt to the actual or anticipated impacts of changes in the climate. As a participant in several international agreements on climate change, the United States has joined with other nations to express concern about climate change. However, in the absence of a national climate change policy, some recent technological advances and hypotheses, generally referred to as "geoengineering" technologies, have created alternatives to these traditional approaches. If deployed, these new technologies could modify the Earth's climate on a large scale. Moreover, these new technologies may become available to foreign governments and entities in the private sector to use unilaterally-without authorization from the United States government or an international treaty-as was done in the summer of 2012 when an American citizen conducted an ocean fertilization experiment off the coast of Canada. The term "geoengineering" describes this array of technologies that aim, through large-scale and deliberate modifications of the Earth's energy balance, to reduce temperatures and counteract anthropogenic climate change. Most of these technologies are at the conceptual and research stages, and their effectiveness at reducing global temperatures has yet to be proven. Moreover, very few studies have been published that document the cost, environmental effects, sociopolitical impacts, and legal implications of geoengineering. If geoengineering technologies were to be deployed, they are expected to have the potential to cause significant transboundary effects. In general, geoengineering technologies are categorized as either a carbon dioxide removal (CDR) method or a solar radiation management (SRM) method. CDR methods address the warming effects of greenhouse gases by removing carbon dioxide (CO2) from the atmosphere. CDR methods include ocean fertilization, and carbon capture and sequestration. SRM methods address climate change by increasing the reflectivity of the Earth's atmosphere or surface. Aerosol injection and space-based reflectors are examples of SRM methods. SRM methods do not remove greenhouse gases from the atmosphere, but can be deployed faster with relatively immediate global cooling results compared to CDR methods. To date, there is limited federal involvement in, or oversight of, geoengineering. However, some states as well as some federal agencies, notably the Environmental Protection Agency, Department of Energy, Department of Agriculture, and the Department of Defense, have taken actions related to geoengineering research or projects. At the international level, there is no international agreement or organization governing the full spectrum of possible geoengineering activities. Nevertheless, provisions of many international agreements, including those relating to climate change, maritime pollution, and air pollution, would likely inform the types of geoengineering activities that state parties to these agreements might choose to pursue. In 2010, the Convention on Biological Diversity adopted provisions calling for member parties to abstain from geoengineering unless the parties have fully considered the risks and impacts of those activities on biodiversity. With the possibility that geoengineering technologies may be developed and that climate change will remain an issue of global concern, policymakers may determine whether geoengineering warrants attention at either the federal or international level. If so, policymakers will also need to consider whether geoengineering can be effectively addressed by amendments to existing laws and international agreements or, alternatively, whether new laws and international treaties would need to be developed.

If constructed, the Keystone XL pipeline would transport crude oil (e.g., synthetic crude oil or diluted bitumen) derived from oil sands in Alberta, Canada to destinations in the United States. Because the pipeline crosses an international border, it requires a Presidential Permit that is issued by the Department of State (DOS). The permit decision rests on a "national interest" determination, a term not defined in the authorizing Executive Orders. DOS states that it has "significant discretion" in the factors it examines in this determination. Key events related to the Presidential Permit include: September 19, 2008: TransCanada submitted an application for a Presidential Permit for its Keystone XL pipeline. November 10, 2011: DOS announced it needed additional information concerning alternative pipeline routes through the Nebraska Sandhills. January 18, 2012: In response to a legislative mandate in P.L. 112-78, DOS, with the President's consent, announced its denial of the Keystone XL permit. May 4, 2012: TransCanada submitted a revised permit application to DOS. Although some groups have opposed previous oil pipeline permits, opposition to the Keystone XL proposal has generated substantially more interest among environmental stakeholders. Pipeline opponents are not a monolithic group: some raise concerns about potential local impacts, such as oil spills or extraction impacts in Canada; some argue the pipeline would have national energy and climate change policy implications. A number of key studies indicate that oil sands crude has a higher greenhouse gas (GHG) emissions intensity than many other forms of crude oil. The primary reason for the higher intensity: oil sands are heavy oils with a high viscosity, requiring more energy- and resource intensive activities to extract. However, analytical results vary due to different modeling assumptions. Moreover, industry stakeholders point out that many analyses indicate that GHG emissions from oil sands crude oil are comparable to other heavy crudes, some of which are produced and/or consumed in the United States. Because of oil sands' increased emissions intensity, further oil sands development runs counter to some stakeholders' energy and climate change policy objectives. These objectives may vary based on differing views concerning the severity of climate change risk and/or the need for significant mitigation efforts. Opponents worry that oil sands crude oil will account for a greater percentage of U.S. oil consumption over time, making GHG emissions reduction more difficult. On the other hand, neither issuance of a Presidential Permit nor increased oil sands development would preclude the implementation of energy/climate policies that would support less carbon intensive fuels or energy efficiency improvements. A primary local/regional environmental concern of any oil pipeline is the risk of a spill. Environmental groups have argued that both the pipeline's operating parameters and the material being transported imposes an increased risk of spill. Industry stakeholders have been critical of these assertions. To examine the concerns, Congress included provisions in P.L. 112-90 requiring a review of current oil pipeline regulations and a risk analysis of oil sands crude. Opponents of the Keystone XL pipeline and oil sands development often highlight the environmental impacts that pertain to the region in which the oil sands resources are extracted. Potential impacts include, among others, land disturbance and water resource issues. In general, these local/regional impacts from Canadian oil sands development may not directly affect public health or the environment in the United States. Within the context of a Presidential Permit, the mechanism to consider local Canadian impacts is unclear.