Article by Kyle W. Danish, Shelley N. Fidler, Andrea Hudson Campbell and Kevin M. Gallagher
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Commentary
Phased and confused? The European Union member governments are currently stalemated on approval of an ambitious program for Phase III of the European Union Emissions Trading System. As proposed, Phase III would start in 2013 and would aim to achieve at least at 20% reduction from 1990 emission levels by 2020. Opposition is coming from a number of Eastern European governments and Italy, which are balking at the tough targets, and – in particular – the shift to 100% auctioning of allowances for the power sector. Proponents are eager to reach an agreement between the EU Council and the EU Parliament by mid-December, so that the EU can assert a lead-by-example role at the UN talks in Copenhagen . . . Clean Air Act-based regulation of GHG emissions? Republican candidate for President John McCain would not go there, says a top campaign advisor . . . By contrast, an association of state environmental regulators wants to go there – and wants to go there today. The National Association of Clean Air Agencies is calling for EPA to start the process of setting GHG emission standards for major stationary sources.
Presidential Politics
- As President, Sen. McCain Would Not Regulate CO2 Under the CAA. Top campaign advisor Douglas Holtz-Eakin stated that Sen. John McCain (R-AZ) would not seek to regulate GHG emissions under the Clean Air Act (CAA), saying that the existing statute is "not the right tool for this problem." Rather, he said that Sen. McCain would urge Congress to quickly enact a federal cap-and-trade program to address GHG emissions. The top energy and environmental advisor for Democratic presidential candidate Sen. Barack Obama (D-IL) previously made clear that Senator Obama also prefers a Congressionally-enacted cap-and-trade program, but he indicated that an Obama Administration would start a rulemaking process under the CAA to regulate CO2 emissions if Congress does not enact such a program within 18 months.
States and Cities
- State, Local Air Regulators to Endorse Use of CAA to Regulate GHGs. The National Association of Clean Air Agencies (NACAA), a group representing state and local air pollution regulatory agencies, is preparing a report that will recommend that EPA move forward with rulemakings under the Clean Air Act to limit CO2 emissions. NACAA Executive Director Bill Becker said that EPA should take a regulatory approach to CO2 even if Congress adopts cap-and-trade or other climate legislation. The NACAA report will recommend the use of the New Source Performance Standards (NSPS) program, which would set technology-based emission limits for stationary sources of CO2. NACAA also is expected to recommend use of the Prevention of Significant Deterioration (PSD) program, which would require stationary sources to install new emission control technology if they make facility modifications that increase emissions.
- Oregon Governor Releases Climate Plan; Oregon Environment Regulator Issues GHG Reporting Requirements. Oregon Governor Ted Kulongoski released a wide-ranging energy plan designed to reduce the state's GHG emissions. The Governor's plan calls for the state to reduce emissions by joining the Western Climate Initiative, a regional GHG cap-and-trade program currently under development; by adopting a $5,000 tax credit for plug-in electric hybrid and all-electric vehicles; and through other programs aimed at renewable energy production, energy efficiency, and alternative transportation. The plan would establish long-term goals of building only zero-emission buildings by 2030 and reducing vehicle miles traveled statewide. In other Oregon action, the state Environmental Quality Commission promulgated rules that will require major GHG emitters to report GHG emissions. The rule will require all industrial and waste sector sources permitted by the state Department of Environmental Quality (DEQ) that emit 2,500 tons or more of GHGs to report those emissions to the DEQ. The reporting requirement will go into effect in January 2009.
- CARB Proposes GHG Emission Thresholds For Industrial, Commercial, Residential Projects. The California Air Resources Board (CARB) proposed guidelines for local agencies to use in determining whether industrial, commercial, and residential projects have significant GHG impacts and should be subject to regulation under the California Environmental Quality Act (CEQA), the state's version of the federal National Environmental Policy Act (NEPA). The proposed guidelines would cover emissions from projects that collectively account for approximately 30 percent of the state's GHG emissions. The guidelines would subject to emission-mitigation planning under CEQA any industrial project that emit at least 7,000 tons per year of CO2-equivalent GHGs, a threshold that CARB expects to affect 90 percent of all industrial projects. The non-binding CARB proposals will serve as guidelines for local agencies implementing the CEQA.
- Delaware Regulators Approve Final RGGI Rules. The Delaware Department of Natural Resources and Environmental Control (DNREC) approved final rules for participating in the Regional Greenhouse Gas Initiative (RGGI), a regional CO2 cap-and-trade program for the power sector, which covers ten northeastern states. The rules pave the way for Delwarae to participate in the second RGGI allowance auction on December 17. While other RGGI member states chose to auction 100 percent of emission allowances, the Delaware rules will auction only 60 percent in the first year of the program with the remaining allowances distributed for free to power plants based on their 2000-2002 average annual emissions. The auction percentage will increase by eight percent annually until 2014.
Studies and Reports
- WRI Calls for Flexibility for Power Plants that Install CCS Technology. In a report incorporating input from more than 80 geologists, engineers, policymakers and other climate change experts, the World Resources Institute (WRI) called on the federal government to provide a measure of flexibility to encourage facilities to install carbon capture and sequestration (CCS) technology on a larger scale. The non-governmental environmental think tank said that CCS could eliminate between 15 and 50 percent of GHG emissions and therefore is needed to make a significant impact on climate change. The report contains dozens of recommendations with regard to deployment of CCS technology, including flexible standards for new CO2 pipelines and CCS monitoring techniques. WRI called for the prioritization of CCS sites and projects with the lowest risk of leakage and recommended that the U.S. to build between 5 and 10 at-scale demonstration CCS projects, with government subsidies in the near-term. The report is available at: http://pdf.wri.org/ccs_guidelines.pdf.
International
- UK Government Establishes World's First Carbon Footprint Standard. The United Kingdom Department for Environment, Food and Rural Affairs, in partnership with the Carbon Trust and the British Standards Institute, launched the first governmental standard for a "carbon footprint." The standard, Publicly Available Specification (PAS) 2050, is aimed at reducing consumer confusion in the voluntary "eco-labeling" market. PAS 2050 will govern how producers calculate a product's carbon footprint, addressing issues from raw materials to manufacturing and production. The standard is voluntary, but many large corporations have already accepted the labeling scheme.
- Japan Promulgates Final Rules for Voluntary Emissions Trading Program. Japan's Global Warming Prevention Headquarters (GWPH) adopted final rules that will govern a voluntary domestic GHG cap-and-trade program. Under the program, participants will set voluntary emission goals and trade emissions credits amongst themselves based on those targets. Participants will have discretion to set emission goals; however, the rules state that targets should not deviate significantly from targets established in the Japanese Business Federation's voluntary greenhouse gas emission reduction program. Members of Japan's electric utility and steel industries have committed to participate in the program. The Japanese government considers the program to be a potential model for a trading program to be included in the successor treaty to the Kyoto Protocol.
- Australian Climate Official Recommends Per-Capita Targets for International Climate Treaty. Ross Garnaut, the Australian government's chief climate change advisor and author of the Australian government's report on climate change, recommended that the successor treaty to the Kyoto Protocol incorporate GHG emission targets for participating countries based on per-capita emissions. A per-capita approach to emissions targets would allow large developing nations, such as China and India, to continue economic growth, and would require the majority of reductions from large developed nations, in particular the United States. Negotiations on a successor treaty to the Kyoto Protocol, which expires in 2012, are currently underway; the aim is to reach agreement on major terms of a new treaty at the December 2009 conference of the parties in Copenhagen, Denmark.
- EU Council Adds Aviation Sector to EU-ETS. The European Union (EU) Council passed legislation that will incorporate the aviation sector into the EU Emissions Trading Scheme (ETS). The new rules will require all airline carriers taking off or landing in the EU to participate in the ETS, including carriers owned by companies not based in European Union countries. Beginning in 2012, aviation emissions will be capped at 97 percent of average annual emissions from 2004-2006. The cap will fall to 95 percent in 2013, when the EU ETS begins its third phase. While the proposed rules for the third phase of the trading program would auction 100 percent of emission allowances to other regulated industries, the aviation rules allocate 85 percent of allowances to regulated airlines for free after 2012.
- 40 Major Cities Make Commitment to Combat Climate Change. At a conference in Tokyo, Japan, forty of the world's largest cities committed to fight global climate change. The conference was a meeting of the C40, a climate initiative of major cities from around the world. Each of the participants, including Beijing, London, New Delhi, New York, and Toronto, will choose from among 13 different action areas to reduce GHG emissions. The cities will study methods for implementing the action areas and will meet in May 2009 in Seoul, South Korea to agree on concrete steps for reducing emissions.
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