Earlier this month Washington State’s Department of Ecology released its integrated climate response strategy, Preparing for a Changing Climate. The strategy again demonstrates that the state is a leader when it comes to preparing for climate change impacts (see also NRDC’s recent report examining climate preparedness in all 50 states).
What makes Washington a leader? Well, the political leadership is willing to address climate change impacts, and the scientific community is active and engaged and generates the information and data needed to make decisions on climate change adaptation actions. (None of this discussion, of course, should mean giving any less urgency to reducing greenhouse gas emissions in the first place). Remarkably, the state has made rough economic calculations for the cost of inaction—$10 billion by 2020 as a result of increased health costs, flooding and coastal destruction, forest fires, drought, and other impacts—and the benefits of ecosystem services from forests, wildlife, and other natural resources. For example, in 2006 recreational and commercial fishing supported more than 16,000 jobs and $540 million in personal income and outdoors recreation added nearly $3.1 billion to the economy.
Armed with this information, lawmakers, policymakers, and agency regulators can begin to make the critical decisions needed to adapt to climate change. As the state’s report notes, “Many options with low or no costs can be implemented today that will significantly improve our prosperity now and in the future. In other cases, the costs of preparing our natural and built environments to cope with the impacts of changing climate will be more substantial. Such costs are far less, however, than costs of inaction.”
Full textWith congressional action on climate change at a standstill, EPA’s new source performance standards (NSPSs) for greenhouse gases (GHGs) from new power plants should be applauded. As required by the Clean Air Act, the agency is doggedly moving forward to establish emission standards for GHGs, air pollutants that unquestionably endanger human health and welfare. EPA deserves praise for setting a strong standard and proposing it notwithstanding political heat. The glass is half-full.
While attention is properly focused on what EPA has accomplished, it is important not to lose sight of what could be better. One concern is the standard’s flexibility: it lets new power plants (presumably coal-fired) violate the standard now and catch up in the future (presumably through the installation of carbon capture and storage (CCS)). In the somewhat unlikely event that utilities take advantage of that flexibility, it could give coal-fired power continued and environmentally damaging new life. A second, and more fundamental concern, is EPA’s silence on existing power plants. Notwithstanding Clean Air Act requirements, the agency has indicated that it has “no plans” to establish emission guidelines on existing power plants, the largest single source of GHG emissions in the United States. The glass is half-empty. I hope the glass will fill once the next election is over.
The Glass is Half-Full
EPA’s proposed standard for new power plants sends a strong message that future investments in fossil fuels must take carbon emissions into account. The standard, which must reflect the “best system of emissions reduction” for the industrial category in question, is premised on the emissions achieved by a natural gas combined cycle power plant. It is noteworthy that EPA has created a general category for power plants that holds them all to the highest standard achievable. Had EPA set separate NSPSs for coal-, natural gas-, and oil-fired power plants, then each type of plant would have been required to reduce emissions only to the extent readily achievable in that category, rather than requiring all plants to achieve the highest standard possible for fossil-fuel power plants in general. In other words, coal-fired power plants, which generally emit about twice the level of GHGs per unit of energy produced, would have been allowed to emit at a higher level than more efficient natural gas plants.
Full textOn November 7 of last year, EPA sent the White House Office of Information and Regulatory Affairs (OIRA) a rather important proposed rule – one that will, in some way, limit greenhouse gas emissions from new power plants. The Greenhouse Gas New Source Performance Standard for Electric Generating Units for New Sources has now been at OIRA for 120 days – the maximum allowed by Executive Order.
Executive Order 12866 is pretty clear on the deadline for OIRA to return rules to the agencies:
“… within 90 calendar days after the date of submission … The review process may be extended (1) once by no more than 30 calendar days upon the written approval of the Director and (2) at the request of the agency head.”
With this rule, as with many rules that go beyond 90 days, neither OIRA nor the agency has issued any public notification announcing that a 30 day extension has been requested or granted. But I’ll still give them the benefit of the doubt and give them the full 120 days. That makes it today.
The Administration is under tremendous political pressure over the rule, though the White House always maintains that OIRA’s actions are not based on politics. OIRA has hosted eight lobby meetings on this specific rule (12/15/11, 1/9/12, 2/1/12, 2/7/12, 2/7/12, 2/9/12, 2/13/12, 2/14/12). Nearly the entire Republican caucus in the House, plus 14 Democrats, sent OMB a letter two weeks ago opposing the rule.
Full textOn Feb. 28 and 29, the D.C. Circuit is scheduled to hear arguments on a suite of industry-led challenges to EPA-issued greenhouse gas rules. While attention has focused on industry’s challenge to EPA’s finding that greenhouse gases (GHGs) endanger the environment, industry’s challenge to the greenhouse gas permitting “tailoring” rule – a rule limiting the CAA’s application to only the largest GHG sources – is just as important, and just as interesting a battle. At issue is constitutional law’s most hard-fought doctrine in environmental litigation: standing to sue.
In its September 2011 brief, EPA contends that the Tailoring Rule is designed to alleviate the burden that the CAA would otherwise impose on a wide variety of stationary GHG sources. Because it is alleviating, not imposing, a burden, the Tailoring Rule does not create the “injury” that industry must demonstrate to have standing to sue. If the plaintiffs lack standing, then the court must dismiss industry’s challenge. The injection of standing into the case makes the tailoring litigation all the more interesting because, as a result, the court may have a strong basis for dismissing what is otherwise considered a robust legal challenge to the Tailoring Rule.
As an industry group argues in the Tailoring Rule case, Coalition for Responsible Regulation v. EPA, the agency’s rule raising the emission thresholds for Prevention of Significant Deterioration and Title V permits flatly contradicts the express language of the Clean Air Act. The Clean Air sets these thresholds at 250 and 100 tons per year, multiples lower than the Tailoring Rule’s regulatory thresholds of at least 75,000 tons per year. EPA argues that upping the thresholds was “necessary” to avoid “absurd results” that would otherwise flow from the administrative burdens created by low statutory thresholds, thresholds that could subject numerous small-scale sources, like restaurants and other small businesses, to CAA permitting requirements for the first time. (EPA has said that simply implementing GHG controls without the Tailoring Rule would theoretically require 230,000 new employees to handle the permitting). This is a good common sense argument, but many courts are reluctant to ignore a statute’s literal language. The courts may never reach the merits, however, if EPA succeeds in having the suit dismissed on standing grounds.
Full textThe Clean Air Act’s potential to address the nation’s greenhouse gas emissions is slowly being unveiled. EPA’s expected announcement of highly-anticipated new source performance standards for power plants by the end of January will reveal whether the agency has the political will to use its existing authority to re-shape the United States’ dependence upon high-carbon power. Section 111 of the Clean Air Act is a potentially potent tool. It arguably allows EPA to re-direct new investment away from heavily-polluting coal-fired power and toward less polluting alternatives. It also gives the agency the authority to address on-going emissions from existing power plants. Weaning the nation from its dependence on coal-fired power is essential to a new energy future. While EPA may fear the political storm generated by the prospect of change, it has the opportunity to begin a positive transformation to a more sustainable energy infrastructure.
The current rulemaking initiative arose out of a lawsuit brought by states and environmental groups, who argued that EPA was required to develop nationwide performance standards for greenhouse gas (GHG) emissions from new and existing stationary sources. In December 2010, EPA and the plaintiffs reached a settlement that required EPA to propose performance standards for power plants and for oil refineries. Although both rulemakings have been delayed, EPA sent proposed standards for new power plants to the White House Office of Management and Budget in November 2011, and now estimates that it will be authorized to release that proposed rule in late January.
We will not know the full picture of how aggressively EPA plans to use its Section 111 authority to shape the future of fossil fuel use in the electricity sector until EPA actually publishes all of the rules. In the meantime, however, the following is a guide to the issues at stake. The first critical issue is the recent decision to proceed with new source rules and delay proposals for existing sources. Critical issues for the new source rules are whether they will force a switch away from coal and whether the agency will allow facilities flexibility in meeting the new standards, through mechanisms such as emissions trading.
Full textCross-posted from Real Climate Economics.
Economic analysis has become increasingly central to the climate policy debate, but the models and assumptions of climate economics often lag far behind the latest developments in this fast-moving field. That’s why Elizabeth Stanton and I have written Climate Economics: The State of the Art, an in-depth review of new developments in climate economics and science since the Stern Review (2006) and the Intergovernmental Panel on Climate Change’s Fourth Assessment Report (2007), with more than 500 citations to the recent research literature.
We begin with a survey of climate science that is potentially relevant to economic analysis, including uncertainties in climate dynamics, the role of black carbon, temperature thresholds for irreversible losses, a new understanding of climate impacts on agriculture, and projections that temperatures could remain near their historical peak for centuries or millennia after greenhouse gas concentrations start declining.
We then focus on innovations in the economic theory and analysis of climate change, including new approaches to uncertainty that build on Weitzman’s “dismal theorem,” which shows the marginal benefit of emission reduction can be infinite. We also cover new developments in the longstanding debate about discount rates and intergenerational economic analysis, and the problems of international equity, which are central to climate negotiations but barely visible in the economics literature.
Full textCross-posted from ThinkProgress Green.
Rep. Ralph Hall (R-TX) has asked the Energy Information Administration to evaluate an unrealistically harsh and unsophisticated clean energy standard, designed to represent the Republicans’ worst nightmare: every electricity retailer in the country (some of them quite small) must meet a relatively high and rising standard for low-carbon energy, starting very soon, with no trading between companies, banking of excess credits, or other flexibility mechanisms that would soften the blow.
Even the Republican nightmare doesn’t look as bad as one might have suspected: according to the EIA analysis, it achieves a rapid reduction in carbon dioxide emissions, while causing electricity prices to rise by less than one percent per year, and lowering GDP per capita in 2035, the end of the study period, all the way from (watch closely or you’ll miss this) $65,848 to $65,658 – a reduction of less than 0.3 percent, in a national income nearly twice as high as today’s. Employment is slightly higher, as a result of this standard, from the mid-2020’s onward.
In the light of day, no one would allow this nightmare version of a clean energy standard to be adopted. Trading of clean energy credits between companies would almost certainly be included in any real standard. The goal, after all, is to reduce nationwide emissions as cheaply as possible, not to impose burdens on each and every company regardless of size or situation. The large reduction in costs that can result from trading is well established in economic theory, and confirmed by the experience of sulfur emissions trading under the Clean Air Act, among other cases. If some companies can reduce emissions more inexpensively than others, it makes perfect sense to let them sell credits to others; the same amount of emission reduction occurs, but at much lower cost than under the rigid plan that troubles Ralph Hall. This, by the way, is perfectly orthodox free market economics, of a sort that Republicans, once upon a time, used to swear by.
Full textThis post was written by Member Scholars Kirsten Engel, William Funk, and Joseph Tomain, and Policy Analyst Wayland Radin.
The President’s recently announced American Jobs Act would be partially funded by repealing oil and gas subsidies, including subsidies in the forms of tax credits and exemptions. Eliminating these unnecessary and harmful subsidies would be a long overdue step toward sound climate and energy policies. Oil and gas subsidies cost American taxpayers billions of dollars every year, but have long since ceased to serve any clear policy goal. Rather, they inflate the profits of an industry that is already highly profitable.
Federal energy subsidies are criticized as wasteful government spending by politicians on both sides of the aisle. But not all energy subsidies are wasteful. When properly targeted, federal subsidies can achieve social benefits that elude the free market, such as a clean environment. Subsidies and tax credits can even the playing field where some industries receive a free ride due to unaccounted for externalities, like environmental pollution. Subsidies can also provide a boost to fledgling markets impeded by large start-up costs. Indeed, subsidies greatly assisted the U.S. oil and gas industry in its nascent stages. The truth, however, is that the oil and gas industry no longer needs them and their continued existence hampers an industry we need much more: clean and renewable forms of energy.
The substitution of renewable forms of domestically produced energy for oil and gas would serve several socially desirable goals. First, it would strengthen our national security by making us less reliant on oil from foreign regimes that are shaky or hostile. Second, it would reduce our carbon footprint and take a step in the right direction on climate change. Third, it would position the United States as a technological leader in what is becoming an increasingly important worldwide renewables market, only temporarily stalled by world financial conditions. At the same time, the market for renewable energy still struggles, so it is appropriate for it to receive support in the form of state and federal subsidies. A study by the Environmental Law Institute found that renewable energy (wind, solar, hydro, wave, and geothermal), received a total of only $12.2 billion in federal subsidies from 2002 to 2008. During that same time period fossil fuels received $70.2 billion in direct federal subsidies, many of which took the form of tax-breaks for foreign oil production (and that number didn’t count a penny for certain indirect subsidies, like massive federal spending on roads, which facilitate oil use).
Full textNothing attracts attacks in politics quite like a show of weakness. That’s obviously how energy industry lobbyists read President Obama’s recent retreat on ozone standards. So now that the Administration has demonstrated its willingness – you might even call it eagerness – to cave in on much needed environmental regulation, it’s no surprise that polluting industries are of a mind to press their luck.
How else to explain a request to the Environmental Protection Agency from the American Petroleum Institute – that’s the oil and natural gas industry trade group – to delay until late 2013 forthcoming regulations on refineries, including landmark greenhouse gas regulations.
The current plan is for those rules to be finalized at the end of this year.
To review the bidding on this, the greenhouse gas regs are the first to emerge from EPA after a long and brutal battle that involved eight years of Bush Administration intransigence, even in the face of a Supreme Court ruling that all but ordered the Administration to go ahead and regulate greenhouse gases. The Bush effort pretty much spanned the industry playbook. On the campaign trail in 2000, compassionate conservative George W. Bush said he’d regulate carbon dioxide to combat climate change. Once elected, he reneged, and took the view that climate change needed much, much, much more study. Years of study, in fact. Of course, when the scientists weighed in, the Bush team worked to suppress their expert opinion that climate change was real, man-made, and happening now.
Finally, the Administration ended up before the Supreme Court, which, despite its conservative majority, concluded that the Administration’s arguments on why it shouldn’t regulate greenhouse gases were just so much hot, CO2-laden air. Still, President Bush managed to leave town without making any progress toward regulation.
Full textAmy Sinden and Lena Pons explained in this space on Friday morning how the White House’s fuel economy deal with the auto industry bypassed the rulemaking process and the agency experts charged with determining the “maximum feasible” standard under the law. Late Friday, Rep. Darrell Issa, chair of the House Oversight and Government Reform Committee, joined the fray, promising an investigation of the process. (And we didn’t even know he was a reader of CPRBlog!)
Chairman Issa’s notion that the deal between the White House and automakers was too stringent is absurd, of course. But his stated concern about “the agreement’s lack of transparency, the failure to conduct an open rulemaking process” is absolutely correct.
There’s not much room for doubt that Mr. Issa’s real interest here is in weakening the fuel economy standards, and the administrative process argument is just the tool at hand.
But there’s a lesson here for the White House: By circumventing the rulemaking process in favor of a backroom deal, the Administration left itself vulnerable to Issa and others who will seize on any procedural failing to try to block progress on fuel economy standards. You follow the administrative process because you’re vulnerable to a challenge if you don’t. The irony is that the White House thought getting a deal with the automakers was exactly what they needed to make the plan a done deal. Darrell Issa is going to try to make the opposite the reality.
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