Article by Kyle W. Danish, Shelley N. Fidler, Andrea Hudson Campbell and Kevin M. Gallagher
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Commentary
With election day approaching speculation is growing about what to expect in 2009 on climate change if an economy-wide cap-and-trade program proves infeasible to enact. Will there be "green" stimulus funding in the form of incentives for renewables, green buildings, biofuels, and alternative fuel vehicles? Will Congress pass other regulatory measures in the near term, such as a federal renewable portfolio standard, an energy efficiency resource standard, or efficiency standards for buildings and appliances? Will EPA make its endangerment finding and get to work on emission standards – and, if so, on what timetable? Will Congress decide that a cap-and-trade program only for the electric power sector is somehow an easier lift, and a means of resolving the regulatory disarray following the demise of the Clean Air Interstate Rule? . . . How to make use of EPA's endangerment finding could be a particularly contested area. One idea in circulation, first raised a key environment/energy advisor to Barack Obama, is to direct EPA to make the finding and get to work on regulations only if Congress has not enacted a climate program within 18 months. Some NGOs, however, are pushing for EPA to start acting as soon as possible to promulgate regulations covering the largest sources of emissions.
Congress
- Senate Environment Committee Drafting Report on Regulating GHGs Under the CAA. The Senate Environment and Public Works Committee is preparing to release a report based on a Sept. 23, 2008, hearing at which witnesses testified that the Clean Air Act (CAA) offers reasonable options for regulating GHGs. The report is intended to guide the next President in making a decision regarding whether to use the existing statute to regulate CO2 and other GHG emissions.
States and Cities
- New Jersey Energy Plan Focuses on Renewables. New Jersey Governor Jon Corzine (D) released an energy master plan intended to significantly reduce the state's GHG emissions in coming decades. The plan establishes a goal of generating 30 percent of the state's electricity from renewable sources by 2020 – an increase from the 22.5 percent mandated for that year under the state's current renewable portfolio standard. The additional renewable generation will come primarily from increases in biomass, onshore and offshore wind, and solar energy sources. The plan also recommends that the state promote energy efficiency, smart grid technologies, and cogeneration.
- Working Group Recommends GHG Reporting by 2011 For Midwestern States. A working group of the Midwestern Greenhouse Gas Reduction Accord (Accord) adopted recommendations that would require power plants located in states participating in the regional cap-and-trade program to monitor and report their GHG emissions beginning in 2011. The recommendations will be submitted to the Accord Advisory Group, a group of legislators and stakeholders that is developing final recommendations for the design of the trading program. Accord member states include Illinois, Iowa, Kansas, Michigan, Minnesota, Wisconsin and the Canadian province of Manitoba; Indiana, Ohio, South Dakota, and Ontario are participating as observers.
Industry
- Dynegy to Disclose Climate Risks in SEC Filings. New York State Attorney General Andrew Cuomo (D) announced that an agreement had been reached with Dynegy under which the Houston-based utility will disclose in its 10-K filings with the Securities and Exchange Commission (SEC) risks associated with present and future climate regulations, legislation, and litigation. Dynegy also will disclose its emissions, projected emission increases from new coal-fired power plants, and corporate strategies for reducing or offsetting emissions. Attorney General Cuomo entered into a similar agreement with Xcel Energy in August. Negotiations with AES Corp., Dominion Resources, and Peabody Energy over disclosure requirements are ongoing.
Emissions Trading
- NASDAQ Announces Market for Emission Contracts. The NASDAQ OMX Group announced the creation of a new commodities market for trading in emission contracts. As part of its purchase of OMX AB, a Swedish exchange and technology group, NASDAQ also acquired Nord Pool, a Norwegian power exchange that already trades in CO2 contracts in the European Union's Emissions Trading Scheme (EU ETS) and the United Nation's Clean Development Mechanism. The chairman of the new unit said that it would develop standardized products for both the European and United States markets.
International
- EU Ministers Call for GHG Limits for Developing Nations. Environment ministers from the European Union called on developing nations to accept emissions targets of 15-30 percent below business-as-usual levels under a successor treaty to the Kyoto Protocol. The ministers' proposal did not provide a timetable for the proposed reductions. The proposed targets would not be mandatory, but would require developing nations to take measurable steps toward meeting the targets. The Kyoto Protocol, which expires in 2012, does not subject developing nations to emissions targets, although they can participate in reducing GHG emissions through the Protocol's Joint Implementation and Clean Development Mechanism features.
- China, Denmark Agree to Pursue Global Climate Agreement at 2009 Copenhagen Talks. Danish Prime Minister Anders Fogh Rasmussen announced an agreement between Denmark and China to pursue "the common goal" of reaching final agreement on a global climate treaty at the negotiations to take place in Copenhagen, Denmark in December 2009. In announcing the agreement, Prime Minister Rasmussen suggested that the Chinese commitment would encourage other nations to sign on to a future climate treaty.
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