Article by Kyle Danish, Shelley Fidler, Kevin Gallagher, Megan Ceronsky and Tomás Carbonell
Commentary
Standing with CEOs of the major manufacturers, the White House announced plans for the next tranche of GHG emission and fuel economy standards for passenger vehicles, and first-time GHG standards for heavy-duty vehicles . . . Majority Leader Reid will caucus with committee chairmen during the week of June 7th to discuss whether and how to move the Kerry-Lieberman bill forward in 2010 . . . State Department Climate Envoy Todd Stern reaffirmed the U.S. commitment to the United Nations Framework Convention on Climate Change (UNFCCC) as a forum for treaty negotiations. Meanwhile, Costa Rican diplomat Christiana Figueres took over as Chair of the UNFCCC Secretariat . . . More maneuvering in advance of possibly imminent Senate consideration of the Murkowski bill: Senators Casey and Carper are discussing a bill that would retain EPA's authority to regulate GHG emissions, but remove the authority to regulate smaller stationary sources – an approach similar to that outlined in the Tailoring Rule.
Executive Branch
- White House Outlines Plans for Post-2016 Vehicle Emission and Fuel Economy Standards. At a White House event attended by CEOs of major manufacturers of light and heavy-duty vehicles, President Barack Obama announced that he would sign a Presidential memorandum directing the establishment of coordinated fuel economy and greenhouse gas (GHG) emission standards for light duty vehicles for model years 2017 through 2025. In addition, the Administration announced that it would establish similar standards for heavy duty vehicles, such as cargo trucks, for model years 2014 through 2018. The announcement did not specify the level of emission reductions that would be achieved through the new standards. The anticipated rulemakings would continue the approach adopted in the joint fuel economy and GHG emission standards issued by the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) in April 2010. Those standards fulfilled an agreement reached between the Administration, the State of California, and major automakers in May 2009, in which the Administration agreed to undertake the joint rulemaking in exchange for a commitment by California to refrain from enforcing its own state-level GHG emission standards. The Presidential memorandum is available at: http://carboncontrolnews.com/iwpfile.html?file=may2010%2Fccn05212010_memo.pdf .
- Stern: U.S. to Continue to Seek International Agreement on Climate Change. Special Envoy on Climate Change Todd Stern said that, despite the difficulty of achieving agreement among the parties to the United Nations Framework Convention on Climate Change (UNFCCC), the United Nations would remain the "central event" for international climate change negotiations because "no other organization has the credibility the UNFCCC enjoys with the international community." Stern also said that if talks break down in the UNFCCC, the United States would continue to pursue agreement through other avenues such as the Major Economies Forum. Referring to efforts to pass climate change legislation in the Senate, Stern said that it was "enormously important for our international and leverage" to enact "strong legislation." However, Stern said that he expected the United States to achieve positive results in this year's upcoming negotiations in Cancun, Mexico even if legislation is not passed.
Congress
- Reid to Convene Caucus on Climate Bill. Majority Leader Harry Reid (D-NV) announced, that he will meet with the relevant committee chairs during the week of June 7th to discuss how to move forward on the Kerry-Lieberman climate bill or a standalone energy bill. The following week, Maj. Leader Reid will convene the entire Democratic caucus to discuss these options. Maj. Leader Reid told reporters that: "What we're trying to do is get a Republican to help us. You know, without a Republican, we can't do much." In the meantime, Senators Kerry (D-MA) and Lieberman (I-CT) are continuing to meet with moderates from both parties to try to resolve their issues and gain their support. Sen. Lieberman described their efforts as "house-to-house combat."
- LeMieux Calls for Obama to Lead. Senator George LeMieux (R-FL) told reporters that President Obama would have to actively engage with the climate bill for it to move forward: "His leadership is going to be required on any of these issues that are left. He's not going to just be able to leave it to Congress. He's going to have to articulate what his views are, and press for them."
- Casey, Carper Considering Alternative EPA Legislation. According to Senate aides, Senators Bob Casey (D-PA) and Tom Carper (D-DE) are contemplating developing legislation that would exempt small GHG emission sources from EPA regulation under the Clean Air Act. The legislation would provide an alternative to more aggressive legislative proposals, such as the effort by Senator Murkowski (R-AK) to remove any EPA authority to regulate GHG emissions, and the one by Sen. Jay Rockefeller (D-WV), which would delay EPA regulation of all stationary sources of GHG emissions for two years. "I think it would be very helpful for folks who represent a state like mine as well as others to have an alternative available," Sen. Casey told reporters. Such legislation would also protect from legal challenge EPA's decision under the Tailoring Rule not to immediately regulate small emission sources.
Judicial
- Industry Coalition Files Challenge to EPA Reconsideration of Johnson Memorandum. The Clean Air Implementation Project, an association of companies in the petroleum, chemical, pharmaceutical, and glass sectors, filed a petition for review of EPA's March 2010 decision (the reconsideration of the "Johnson Memorandum") that the Clean Air Act's Prevention of Significant Deterioration (PSD) permitting requirements would apply to GHG emissions from stationary sources as soon as the agency's GHG emission standards for vehicles take effect. According to the plaintiffs, the petition, which was filed in the United States Court of Appeals for the District of Columbia Circuit, will argue that PSD requirements can only apply to pollutants for which EPA has established air quality criteria under the National Ambient Air Quality Standards program of the Clean Air Act. EPA has not established such air quality criteria for GHGs and has not announced plans to do so.
States and Cities
- New Mexico Agency Releases Draft Cap-and-Trade Rule. The New Mexico Environment Department released for public comment a draft GHG cap-and-trade rule as part of its participation in the Western Climate Initiative (WCI). The rule would allow trading in WCI markets only if the market is determined to be efficient and cost-effective. The trading program, which is scheduled to begin in January 2012, would apply to all facilities that emit greater than 25,000 tons of CO2. The WCI is a regional emission trading program originally comprised of seven Western states and four Canadian provinces. A number of member states have since indicated that they are unlikely to participate in the program during its first compliance period.
- MGGRA, RGGI, WCI Release Offsets White Paper. Declaring that they share a "common vision", the Midwest Regional Greenhouse Gas Reduction Accord, the Regional Greenhouse Gas Initiative (RGGI) and the WCI released a joint white paper on offset credits. The paper, titled "Ensuring Offset Quality: Design and Implementation Criteria for a High-Quality Offset Program," reviews key offset policy design and implementation principles aimed at ensuring the availability of high quality offsets in a GHG cap-and-trade program. Issues addressed include the additionality of the emission reduction, the process for verifying the reductions, and the transparency of the process. The white paper is available at http://www.rggi.org/docs/Three_Regions_Offsets_Whitepaper_05_17_10.pdf .
Industry and NGOs
- ABCE and We Can Lead Campaign Call on Senate to Pass Climate Legislation. Two business coalitions that favor federal action to mitigate climate change – American Businesses for Clean Energy (ABCE) and the We Can Lead campaign – issued a joint report claiming that 6,000 major American businesses now support the passage of climate change legislation. The report further states that, in 2009, the 6,000 businesses employed 3.5 million workers and generated $3.5 trillion in revenue. In a press release accompanying the report, ABCE said: "This unprecedented outpouring of business support for real leadership from the White House and U.S. Senate on clean energy and climate should be a wake-up call for elected officials in Washington. . . . What unites all of these businesses is a shared agreement on the wisdom of comprehensive clean energy legislation that will create jobs, unleash innovation and make our nation more secure, while cutting greenhouse gas emissions." The report is available online here .
- CERP Voices Concern Over Omission of Project-Level REDD Crediting From Kerry-Lieberman Bill. The Coalition for Emission Reduction Projects (CERP), a diverse association of proponents of offset projects, sent a letter thanking Senators Kerry and Lieberman for incorporating in the American Power Act (APA) the domestic offsets provisions developed by Sen. Debbie Stabenow (D-MI). The letter expressed concern, however, that the APA lacks a mechanism for crediting emission reductions from projects to Reduce Emissions from Deforestation and Forest Degradation (REDD) except in countries or states with nationwide or statewide deforestation baselines. The letter warns that the omission of any crediting against individual, project-level baselines "is a significant departure from the design offset provisions in previous climate bills" that "will lead not only to higher compliance costs, but also to increased deforestation." The letter is available at: http://www.uscerp.org/assets/attachments/CERP%20thank%20you%20letter%20to%20Kerry%20Lieberman%20re%20Stabenow%20provisions%20in%20KL%205.19.2010.pdf .
- IETA Critiques Market Oversight Provisions of Kerry-Lieberman Bill. The International Emissions Trading Association (IETA), an association of financial institutions and businesses that are active in GHG emissions markets, issued a statement arguing that restrictive market oversight provisions of the Kerry-Lieberman bill would make GHG markets less efficient and interfere with the ability of regulated industries to manage their financial risks. Among other things, the Kerry-Lieberman bill would allow the Commodity Futures Trading Commission to determine which entities (apart from entities subject to allowance surrender obligations) could participate in GHG trading, and would also require all trades and derivatives involving greenhouse gas instruments to be executed on exchanges and cleared by centralized clearinghouses. Henry Derwent, president of IETA, said that GHG derivatives are "risk management contracts" that are "an essential element of a functioning emissions market."
Studies and Reports
- National Academies Release Climate Reports. The National Academies released America's Climate Choices, three peer-reviewed reports on climate change that were requested by Congress. The reports provide consensus views of expert panels appointed by the National Academies. (The reports are available at: http://americasclimatechoices.org/ .)
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- The report on climate science concludes that a strong, credible body of scientific evidence from multiple lines of research shows that climate change is occurring, is caused largely by human activities, and poses significant risks for a broad range of human and natural systems.
- The report on mitigation finds that national-scale response efforts are "urgently needed," and recommends that the U.S. establish an economy-wide carbon pricing system that avoids free allowances or exemptions. The report further recommends immediate implementation of complementary policies to capture near-term opportunities to reduce emissions such as energy efficiency, demand management, accelerated retirement of emissions-intensive infrastructure, and deployment of low-emission energy sources, as well as R&D investment in new emission reduction technologies.
- The report on adaptation notes that U.S. climate change impacts already in evidence include more frequent and intense heat waves, changes in precipitation, and reductions in sea ice. The report calls for a national adaptation strategy to provide state and local authorities with technical and scientific resources, incentives to begin adaptation planning, and guidance for efforts to respond to impacts that span multiple jurisdictions.
- Study Projects Job Growth from Kerry-Lieberman. An analysis of the Kerry-Lieberman bill released by the non-partisan Peterson Institute for International Economics projected that if enacted, the APA would generate an average of 203,000 new jobs annually above business as usual between 2011 and 2020. The researchers also project that the legislation would: (1) reduce U.S. imported oil purchases by $51-$93 billion annually, and through price effects, reduce oil producer revenues by $263-$463 billion annually by 2030; (2) reduce U.S. GHG emissions by 17 percent below 2005 levels by 2020; and (3) increase nuclear energy's share of U.S. generation from 8 to 14 percent and renewable energy's share from 8 to 16 percent by 2030, with over half of U.S. electricity derived from low carbon sources by 2030. The analysis used the Energy Information Administration's National Energy Modeling System, and is available at: http://www.iie.com/publications/interstitial.cfm?ResearchID=1574 .
International
- Christiana Figueres To Replace Yvo De Boer as Head of UNFCCC. United Nations Secretary-General Ban-Ki Moon has selected Christiana Figueres as the next Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC). The selection has been confirmed by the UNFCCC Bureau. Figueres is a Costa Rican diplomat with extensive involvement in climate change issues. She has previously headed Costa Rica's climate change delegation, served on the Executive Board of the Clean Development Mechanism and acted as an advisor to several private entities. Figueres will take over for out-going UNFCCC Secretary Yvo De Boer in July.
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