House of Representatives Energy and Commerce Committee Issues New Report Citing Problems with EPA’s Clean Power Plan

(Federal GHG regulations, Renewable Fuel Standards and Biofuels) Permanent link

On December 16, 2014, the Energy and Commerce Committee majority staff released a report highlighting what it considers to be the shortcomings with EPA’s Clean Power Plan. These criticisms highlight the ongoing divide over what actions the administration should take to regulate greenhouse gases.

As discussed in a previous post, EPA published a proposal this summer in the Federal Register to create GHG emission standards for existing power plants (the Clean Power Plan). The proposal is considered part of President Obama’s Climate Action Plan that he announced in June 2013.

In the proposal EPA invoked a rarely-used provision in the Clean Air Act, section 111(d), as the statutory authority under which it proposes to require states to meet mandatory carbon dioxide (CO2) targets. EPA is proposing to set individual state GHG reduction targets. The proposed rule includes an individual “interim goal” for each state to meet in 2020 and a “final goal” that states must meet beginning in 2030. These mandatory goals vary among the states and were calculated by EPA based on four building blocks: 

  1. Making coal-fired power plants more efficient;
  2. Using low-emitting natural gas combined cycle plants more where excess capacity is available;
  3. Using more zero- and low-emitting power sources such as renewables and nuclear; and
  4. Reducing electricity demand by using electricity more efficiently.

The proposal allows states latitude to determine how they will meet the regulatory goals. States have the option to use either the rate-based goal or to convert the rate-based goal to a mass-based goal. EPA has proposed that states adopt plans that incorporate a combination of “strategies” and noted that states “may work alone or in cooperation with other states to comply with the proposed rule.” The proposed rule requires that each state submit a plan for meeting these goals to EPA by June 30, 2016. Under the proposed rule, states could either submit individual plans or work together and submit a multi-state plan. The Clean Power Plan proposal is unique in that it involves actions “beyond the fenceline” of the regulated stationary sources. This aspect of the proposal has led many commentators to question whether the Clean Power Plan is actually federally enforceable under section 111(d) of the Clean Air Act.

This proposed rule is likely to have a significant effect on power plants, electric providers and consumers, and the total U.S. GHG emissions. As a result, it has drawn both criticism and support from a wide range of parties. A number of states, regulators, industry groups, and environmental organizations have provided comments to EPA about the substance of the Clean Power Plan. As discussed in this previous post, EPA granted a 45-day extension to the time period for the public to comment on the proposed rule. Comments finally closed on December 1, 2014, and the Agency is now in the process of reviewing comments. According to the Committee report, more than 1.4 million comments were submitted to EPA. President Obama has asked EPA to issue a final rule by June 2015. 

Committee Hearings
The Republican-led House Energy & Commerce Committee has been carefully tracking the Clean Power Plan since it was first released. The energy and power subcommittee first heard testimony regarding the proposal in June from EPA’s Acting Assistant Administrator for Air and Radiation, Janet McCabe. In July, the subcommittee also heard from the Federal Energy Regulatory Commission (FERC) Commissioners. In September, regulatory representatives from Texas, Montana, Arizona, Indiana, Rhode Island, Maryland, and Washington testified before the subcommittee in a third hearing titled, “State Perspectives: Questions Concerning EPA’s Proposed Clean Power Plan.”

The Committee has also released public announcements regarding studies on the potential costs of the Clean Power Plan. For example, the Committee highlighted a study by NERA Economics (“NERA”) that was critical of the costs associated with the Plan. Now, the Committee’s majority staff has released a report summarizing its finding from the hearings. In the accompanying press release, several Republican members of the Committee voiced their own concerns with the proposal. Much like the report itself, these criticisms centered around the rise in electric costs, the implications for federal and state relations, and questions about EPA’s legal authority to regulate in this manner under the language of the Clean Air Act.

According to Committee Chairman Fred Upton, “It seems like the deeper we dig into this proposal, the more problems we uncover. . . . The administration is trying to push through an unprecedented plan that will fundamentally change the way we generate and consume electricity. And while EPA’s legal authority remains in question, the consequences for consumers and our economy are certain – higher prices, fewer jobs, and reduced reliability. A runaway regulatory train is barreling toward us, and we must do everything we can to stop it.”

Energy and Power Subcommittee Chairman Ed Whitfield was also critical of the Agency. According to the congressman, EPA had “not provided the true cost and consequences” of the proposal, and not “adequately explain[ing] how the Agency will address the myriad of legal and feasibility issues. . . . While we all agree that climate is changing, we simply cannot agree with this plan which will dramatically increase electricity costs, affect the reliability of the grid system, and will create additional obstacles to economic growth.”

Committee Report
The report reached five key conclusions:

1. There are fundamental legal questions about EPA’s authority to regulate in this area and, assuming such authority, the scope of that authority. The report concludes that “based on review of the legislative history, it does not appear that this rulemaking falls within ‘the four corners of 111(d).’ When corrected for technical drafting imperfections, as the U.S. Code revisions have done, EPA cannot regulate existing power plants under section 111(d) because these plants are already regulated as sources under section 112 [of the CAA].”

2. EPA’s plan would transform federal and state decision-making concerning the transmission and delivery of electric power in the United States. The report notes testimony from FERC Commissioners, who stated that states currently have exclusive jurisdiction over intrastate electricity matters. Under the Clean Power Plan, FERC Commissioner Clark testified that there could be a drastic change where states begin seeking EPA approval of a state’s overall regulation of the electric industry, rather than consulting EPA on a case-by-case basis.

3. Many of the key assumptions in EPA’s proposed “building blocks” are unrealistic. The report highlights testimony from state regulators, such as Montana Public Service Commission Commissioner Travis Kavulla who testified that “[t]hese four building blocks, as the EPA calls them, are in general already being used by states to varying degrees for a variety of purposes, including carbon reduction. Yet, the EPA essentially ignores the details of a state situation and instead applies a cookie cutter formula that uses sweeping regional or national assumptions about the degree to which each individual building block is achievable.”

4. The proposal would not be workable for potentially many states because of a host of implementation challenges. The report notes that the Plan could significantly increase electric costs, threaten electric reliability, and did not give states sufficient time to implement the changes. Texas Commissioner Anderson testified that, “We build transmission faster than about anywhere in the country, but it’s still a 5-year – it is 5 or 6 year from inception to it being energized. A combined cycle power plant takes anywhere from – and this is not counting permitting – it takes anywhere from 20 – from 24 months to 36 months.”

5. The accelerated timeline for completing the rulemaking appears inadequate to respond fully to all substantive comments. The report notes that “[t]o date, more than 1.4 million comments have been submitted, including thousands of pages of substantive comments on the proposal.” This raises questions about EPA’s ability to truly review and consider all of these comments before promulgating a final rule next year.

These concerns are not unique or new. Each of these complaints has been previously raised by commentators and those commenting on the rule. These concerns do, however, highlight the differences in opinion on the likely impacts of the Clean Power Plan, as well as the ongoing struggles that the administration is likely to face as it tries to limit domestic GHG emissions. While some businesses and environmental groups have praised EPA for trying to take on climate change, a number of states, industry groups, and members of Congress are pushing back.

On the international stage, the administration has promised to make aggressive cuts to U.S. emissions in the upcoming years. The U.S. just entered a joint agreement with China to combat GHG emissions. Under this agreement, the U.S. “intends to achieve an economy-wide target of reducing its emissions by 26%-28% below its 2005 level in 2025 and to make best efforts to reduce its emissions by 28%.” The U.S. is also part of a group of almost 200 nations that will make commitments to limit their emissions as part of an anticipated U.N. agreement next December in Paris. In order to meet those goals, the administration will need to institute domestic policies like the Clean Power Plan. This recent Committee report is another indication of the legal and political push-back that the administration will likely face if it moves forward with the Clean Power Plan as written.

Posted by Corinne Snow at 12/18/2014 1:28 PM

EPA’s Clean Power Plan Receives Support from Businesses and Economic Study by Environmental Group

(Renewable Fuel Standards and Biofuels) Permanent link
On November 19, 2014, the Natural Resources Defense Council (“NRDC”) released an issue brief, finding that the power sector and its customers could save nearly $2 billion in 2020 and $6.4 billion in 2030 while meeting the EPA’s carbon reduction targets. According to the brief, greater reliance on renewable sources of energy and on using energy more efficiently could result in substantial savings. Two weeks later, a group of more than 200 companies sent a letter to the President in support of EPA’s proposed Clean Power Plan.  The list of businesses includes household names and Fortune 500 companies such as Kellogg’s, Starbucks, Ikea, Nike, and Mars. It also included a large number of clean energy or environmentally-oriented businesses.  Notably, the list does not include any major energy companies or electric providers.

Cost Studies
The NRDC issue brief identifies what it considers to be “two central shortcomings” in the Clean Power Plan’s calculations: “First, EPA overestimated the cost of deploying increased amounts of energy efficiency by nearly double current projections.” For example, NRDC believes that EPA overestimated the cost of compliance with the Clean Power Plan. “Second, the agency used outdated cost and performance estimates for renewable electricity generation that were nearly 50 percent more expensive than current experience shows.” NRDC used what it characterized as a “simplified supply curve” to determine energy efficiency savings. 

NRDC claims that using more accurate and up-to-date data reveals that the Clean Power Plan will produce net benefits of up to $50 billion in 2020 and up to $84 billion in 2030. According to NRDC, these benefits will exceed EPA’s estimates by $9 billion in benefits in 2020, and an additional $15 billion in benefits for 2030. NRDC’s figures also include the health and environmental benefits that NRDC believes the Plan will create. NRDC reports that the energy efficiency savings in 2030 could total 140 terawatt-hours more beyond what EPA had projected, and that renewable generation could be 171 terawatt-hours higher than EPA’s projections.  NRDC also criticizes EPA for failing to make “even deeper carbon reductions at a much lower cost than its projections suggested were attainable.”

The NRDC issue brief runs counter to reports from other organizations, such as the one released earlier this year by NERA Economics. As discussed in this previous post, the NERA study found that the total costs of EPA’s Clean Power Plan Proposal could total $366 billion or more over a 15-year period. While the NERA report found that the Clean Power Plan Proposal would cause electricity rates to increase an average of 12% to 17% nationwide, a separate report by the Analysis Group indicated that over time, programs to control carbon emissions from the electricity sector can achieve long-term benefits of lower electricity bills and overall economic benefits to the states. Yet another analysis by the Electric Reliability Council of Texas (“ERCOT”) concluded that “[t]he Clean Power Plan will also result in increased energy costs for consumers in the ERCOT region by up to 20% in 2020, without accounting for the costs of transmission upgrades, procurement of additional ancillary services, energy efficiency investments, capital costs of new capacity, and other costs associated with the retirement or decreased operation of coal-fired capacity in ERCOT.” As these studies demonstrate, the predicted impacts of the Clean Power Plan vary widely between reports.

Letter From Businesses
Like the NRDC brief, the letter from more than 200 businesses also applauds the Clean Power Plan’s emphasis on energy efficiency and renewable energy. The letter cites a 2012 study by Ceres, Calvert Investments, and the World Wildlife Fund, which found that 60% of Fortune 100 and Global 100 companies have set a renewable energy goal, a greenhouse gas reduction goal, or both. While the NRDC study focused on trying to quantify the cost of EPA’s proposal in economic terms, the letter emphasizes the general impact that climate chance would have on businesses. According to these businesses, “tackling climate change is one of America’s greatest economic opportunities of the 21st century.” The letter also concludes by stating that “climate change poses real financial risks and substantial economic opportunities and we must act now.”

Posted by Corinne Snow at 12/17/2014 2:45 PM

Climate Change Prominent in the Fish & Wildlife Service’s Decision to Protect the Red Knot Shorebird

(Climate Change Science) Permanent link
The U.S. Fish and Wildlife Service released its final rule on December 11, 2014, designating the rufa subspecies of the red knot (Calidris canutus rufa), a small migratory shorebird, as threatened under the Endangered Species Act (ESA). The rufa red knot is particularly well-known for the exceptional range of some of its migratory routes, with birds traveling up to 18,000 miles annually. From the bird’s breeding grounds in the Canadian Arctic, rufa red knots migrate to wintering grounds in the southeastern and Gulf of Mexico regions of the United States, northern Brazil, and the part-Chilean and part-Argentinian archipelago at the southern-most tip of South America known as Tierra del Fuego.

Of particular interest in the Service’s listing decision was its focus on how climate change is harming several aspects of the bird’s nesting, feeding, and migration behaviors, both in the Arctic and in stopover and wintering locations half a world away from the snowy tundra:
  1. Habitat loss from rising sea levels and subsequent development. As the rufa red knots make their way between nesting and wintering grounds, they use key staging and stopover areas to rest and feed in preparation for the next legs of their journey. The shorebirds use tidal mudflats, salt marshes, peat banks, and other exposed intertidal areas where they feed on mollusks, marine worms, horseshoe crab eggs, and other prey. With sea levels rising, the Service projected that coastal communities will continue to build seawalls, jetties, and other “hardened” structures to stabilize and protect shorelines and coastal development. The loss of this foraging habitat impairs the birds’ ability to build up the energy stores they need for their long migrations.

  2. Habitat loss from Arctic warming. The rufa red knot nests in the Canadian Arctic tundra.  The Service found that warming Arctic temperatures make these breeding grounds shrubbier and less suitable for shorebirds. The Service also found that Arctic warming affects the snow conditions, food sources, and predator controls that nesting birds need to raise chicks in the Arctic. For example, the Service noted that warm temperatures are causing insects to hatch earlier, and rufa red knot chicks may miss the peak window for feeding and rapid growth before their first southward migration.

  3. Climate-driven mismatches between the bird’s arrival time at migratory stopover locations and the peak availability of food. The rufa red knot generally times its migration to coincide with specific food sources at its stopover and refueling locations. The Service cited Delaware Bay and its horseshoe crab eggs as an example of climate change leading to timing mismatches in some years.  In one scenario, warmer coastal waters may cause horseshoe crabs to lay their eggs earlier, before the arrival of the rufa red knot.  In a different scenario, more intense and frequent coastal storms may cause the crabs to lay their eggs after the red knots have departed. The Service also found that ocean acidification and warming interferes with another food source, mussels and clams. Ocean acidification affects clams’ and mussels’ ability to form shells, and warming water affects their geographic distribution and spawning periods during times when the red knots rely on them as a food source.

  4. Potential increases in predation in the Arctic breeding grounds. The Service noted that Arctic predators—such as falcons, owls, jaegers, foxes, and wolves—typically prey on rodents, but that during years of small rodent populations, they turn to prey on rufa red knot eggs and chicks. Although the Service emphasized that this natural cycle is not a threat to the bird, the disruption of this cycle from climate change is. The Service explained that warmer temperatures and changes in vegetation have, in some areas, led to the collapse of rodent populations, which has then shifted pressure onto the rufa red knot eggs and chicks.
In discussing its rule, the Service adopted the Intergovernmental Panel on Climate Change (IPCC) definition of “climate change.” Under that definition, climate change means the long-term changes in climate measures (such as temperature and precipitation), whether due to natural variability, human activity, or both. The Service also credited IPCC’s conclusions that the warming of the global climate system is both unequivocal and accelerating, with temperatures in the Arctic increasing about twice as fast as in middle latitudes. The Service also discussed how some of these harms to the bird are attributable to potential changes in storm and weather patterns.

The Service’s consideration of climate change effects on Arctic species is not new or unusual.  For example, when the Service listed the polar bear as threatened in 2008, it focused heavily on climate change and the loss of sea ice habitat. The Service’s cited effects from climate change on the rufa red knot, however, are not nearly so localized as those that faced the polar bear. Indeed, as the final rule demonstrates, the breadth of the Service’s effects inquiry for climate change reaches across large swathes of the species range and migratory routes.

The rufa red knot listing may signify an emerging shift toward the Service’s comfort in making climate-based listing decisions. One indication is how differently the Service portrayed the use of climate change effects surrounding its 2008 polar bear listing decision. At that time, the Service prominently emphasized in Frequently Asked Questions that the ESA was not an effective tool to regulate climate change or to set climate change policy. In similar Questions and Answers for the rufa red knot, the Service provides no similar acknowledgement. This could signify the Service’s belief that given the ubiquity of climate change discussions in the public arena, a climate-based listing decision no longer requires a policy explanation.

Although the rufa red knot listing decision may be notable for its extensive consideration of climate change effects on several aspects of the bird’s nesting, feeding, and migration behaviors, it seems unlikely that the Service would shy away from climate-driven effects even if they were not quite as dramatic. The public is unlikely to have to wait long to see whether this is true and whether climate-driven listings are now part of the Service’s ordinary course of business. The Monarch butterfly, the white-tailed ptarmigan, the Bicknell’s thrush, and a host of other species with particular threats from climate change are at various stages of the listing process before the agency, and we will soon see how significant a shift is underway.

Posted by Brandon Tuck at 12/16/2014 2:25 PM

The Lima Accord: Almost 200 Nations Reach Modest Climate Change Agreement at the United Nation Convention in Peru

(Federal GHG regulations, International, Climate Change Science) Permanent link

As discussed in this previous post, the annual United Nations Framework Convention on Climate Change (“UNFCCC”) summit kicked off on December 1, 2014, in Lima, Peru. After two weeks of negotiations, on Sunday, December 14, the parties reached a modest agreement (“the Lima Accord”) to address climate change in which all parties agreed for the first time to reduce their greenhouse gas (“GHG”) emissions.

The summit included the 20th session of the Conference of the Parties (“COP 20”) and the 10th session of the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (“CMP 10”). Representatives from almost 200 nations spent just over two weeks hammering out a new international climate change deal in anticipation of next year’s meetings in Paris. Each of the parties would then create a nationally determined contribution outlining its plans to address climate change.

The UNFCCC is an environmental treaty that was created at the United Nations Conference on Environment and Development in 1992 to stabilize GHG concentrations in the atmosphere at a level that would prevent “dangerous anthropogenic interference” with the climate system. In more concrete terms, this means working to prevent the global temperature from rising by two degrees Celsius. Since 1992, the Parties have been meeting annually at COPs to assess the treaty’s progress in addressing climate change.

Beginning in the 1990s, the Parties negotiated the Kyoto Protocol to establish legally binding obligations for nations to reduce their GHG emissions. In 1997, the Parties to the Protocol agreed to reduce greenhouse gas emissions. In 2012, however, some of the major players, including the U.S., China, and India, refused to ratify amendments to the Kyoto Protocol to impose legally enforceable limits on emissions. There are now 195 Parties to the Convention and 192 Parties to the Kyoto Protocol.

Troubled Negotiations
As many commentators predicted, there was divide between richer, developed nations, and poorer, developing nations in how to structure an agreement to reduce GHG emissions. In the past, poorer nations have not agreed to cut their own emissions. During this year’s summit, wealthier nations, like the U.S., wanted an agreement under which developing nations would also agree to cut their own emissions in the next few years. For their part, developing nations wanted financial assistance to cope with the likely impacts of climate change, and to make the modifications necessary to run a low-carbon economy.

A group of countries including India, China, Saudi Arabia, that referred to themselves as the Like-Minded Countries, emerged. This group wanted poorer or developing nations to be subject to more lenient emissions requirements than the wealthier nations proposed. They also objected to the idea of outside monitoring and verification of each country’s plan before a deal is signed in Paris next year. The Like-Minded Countries want rich countries’ determined contribution plans to include concrete financial pledges to help the developing nations pay for climate change adaptation and switching to low-carbon technology.

The tensions between these two groups threatened to break down the negotiations entirely. Although the agreement was previously scheduled to be released on Friday at noon, the parties continued to negotiate through the weekend, and the agreement was not completed until the wee hours on Sunday morning.

Details of the Agreement
According to early reports, in order to get every country to agree to the deal, the Lima Accord does not include legally binding requirements that any of the parties cut their emissions by any particular amount. Instead, each of the parties agreed to pass domestic laws to decrease emissions. According to the agreement, this “reflects the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances.” The Accord also specifically notes that the “least developed countries and small island developing States may communicate information on strategies, plans and actions for low greenhouse gas emission development reflecting their special circumstances in the context of intended nationally determined contributions.” The secretariat will publish by October 1, 2015, each nation’s contribution on the UNFCCC website in order to provide information and transparency. By November 1, 2015, the secretariat will also publish a report on the aggregate effect of these contributions.

Critics warn that without an enforcement mechanism, it is unlikely that the Lima Accord will achieve the reductions in GHG emissions necessary to prevent rises in global temperatures. The Lima Accord itself notes that there is still a significant gap between the “aggregate effect of Parties’ mitigation pledges in terms of global annual emissions of greenhouse gases by 2020 and aggregate emission pathways consistent with having a likely chance of holding the increase in global average temperature below 2°C or 1.5°C above pre-industrial levels.” More optimistic commentators have suggested that soft incentives, like peer-pressure and naming-and-shaming countries who do not commit to meaningful climate change plans, will help meet global goals even absent an enforcement mechanism.

Posted by Corinne Snow at 12/15/2014 3:40 PM

EPA Region 9 Climate Change Adaptation Implementation Plan

(Adaptation, Climate Change Science) Permanent link

After completing a draft Climate Change Adaptation Plan in February 2013, EPA directed the ten Regional Offices to develop implementation plans to build on the Agency-wide plan and improve the resilience and adaptive capacity of each region. In May 2014, EPA Region 9 finalized its Climate Change Adaptation Implementation Plan (“Region 9 Plan”). 

The Region 9 Plan identifies the communities, populations, and habitats within Region 9 that are most vulnerable to climate change and the priority actions Region 9 will take to address those vulnerabilities. The Region 9 Plan identifies numerous planned actions, including program-specific actions for the Region’s Air, Water, National Environmental Policy Act review, Pesticides, Waste, and Superfund Programs. Three key objectives underlie most of the priority actions identified. These three objectives are: (1) integrating climate change considerations into Region 9’s everyday work; (2) addressing the most severe potential impacts of climate change within the Region; and (3) improving the resilience of the Region’s most vulnerable populations and geographic regions. 

In order to better integrate climate change considerations into everyday work, Region 9 plans to provide training opportunities and other resources to its staff and state, tribal, and local partners to improve their understanding of climate change vulnerabilities within the Region. Region 9 also plans to incorporate the consideration of climate change impacts and adaptation measures into funding mechanisms, such as grants and contracts. 

A number of the priority actions are designed to address three of the most severe potential impacts, relative to EPA’s mission: (1) decreased water availability due to drought and loss of snow pack; (2) flooding due to more extreme weather events and sea level rise; and (3) degradation of coral reefs due to ocean acidification and bleaching. 

Several other priority actions are intended to improve the resilience of the Region’s most vulnerable populations and geographic regions. Among the groups most vulnerable to climate change impacts are Indian Tribes. The Region 9 Plan identifies Hawaii, the United States Pacific Island territories, the California coast, and the San Francisco Bay/Sacramento-San Joaquin Bay Delta Estuary as being particularly vulnerable to sea level rise and extreme weather events. 

In addition to the above general objectives, the Region 9 Plan also lists five specific adaptation goals on which it will focus over the coming year:  

  • Implementing the Region 9 Coral Reef Strategy to increase coral reef climate change resiliency;
  • Organizing at least one roundtable discussion with key stakeholders, including federal and state agencies, to discuss ways to coordinate efforts to improve climate change resilience;
  • Providing a forum for discussion of climate change adaptation issues, information sharing, and training at the Region 9 Regional Tribal Operations Committee Meetings;
  • Supporting its state counterparts in their climate change adaptation efforts in a variety of ways; and
  • Providing training to Region 9 staff on climate change adaptation and incorporating climate change into the Region’s programs.
Posted by Lauren Sidner at 12/12/2014 1:36 PM

Not Standing PAT: India Pursues a Market-Based Solution to Enhance Efficiency and Reduce Emissions

(International) Permanent link
After November’s historic agreement between United States and China, and the ongoing United Nations conference in Lima, Peru, the next major question in international climate negotiations concerns India’s commitment to reducing its greenhouse gas (GHG) emissions. India is the world’s third largest emitter, but has hesitated to accept mandatory reductions, concerned that such policies would hinder economic growth. However, the Indian government recently launched an innovative program, known as Perform Achieve and Trade (PAT), which is intended to enhance energy efficiency and also has potential to reduce emissions. This post describes the program’s design and evaluates key issues related to its implementation.

PAT is a market-based emissions trading system administered by India’s Bureau of Energy Efficiency (BEE). However, PAT differs from previous trading schemes by specifying energy targets that are intensity-based rather than imposing absolute caps on emissions. In crafting the program, BEE studied EPA regulations designed to combat acid rain, and a British program that allows energy-intensive sectors to receive tax breaks if they accept expanding energy efficiency targets.

In more concrete terms, PAT sets mandatory energy efficiency targets for 478 facilities in eight industries: thermal power, iron and steel, aluminum, cement, chlor-alkali, pulp and paper, and textiles. Together, these industries accounted for about 36 percent of India’s 2010 fossil fuel consumption. A facility becomes regulated under PAT if it exceeds an annual energy consumption threshold for its specific sector, based on the annual average of energy consumed per unit of production from April 2007 to March 2010. Then, each facility receives a “specific energy consumption” target compared to its baseline SEC. During the first PAT cycle (2012 – 2015), covered facilities are asked to conserve 6.6 million tons of oil equivalent and reduce emissions by 23 million tons of CO2 equivalent. The average reduction target across all facilities is about 4 percent; sector-specific targets fall between 1 and 8 percent.

Covered facilities that fulfill and exceed their targets will be eligible to sell energy savings certificates representing energy surplus to those that failed to meet their targets. They can also bank certificates for use in the next PAT cycle. By purchasing certificates, companies are able to satisfy their compliance obligations and avoid fines and other penalties. Before the program began, BEE issued guidelines for trading the certificates on regulated exchanges. To enhance market liquidity, the government will auction some certificates ex ante and distribute free certificates to others. In April 2015, the auditors will return to the plants to determine which of them met their targets. BEE will begin issuing certificates shortly thereafter. The exchanges are expected to open next August and the certificates will be traded until November.

Key questions about the program include: How many companies will meet their targets? How much will the certificates cost? How much trading will actually occur? While complete answers may not be known until the auditors return next spring, initial reports are promising. By March 2013, 217 of the 478 plants reported meeting their targets—one year ahead of schedule—and about 60 more plants appear to be on the track to meet the targets. In addition, BEE has announced that total energy consumption from the plants fell by about 4 million tons of oil equivalent from 2013 to 2014. That said, the first cycle was designed to start conservatively, setting efficiency goals that many plants already expected to meet due to competitive pressures. During the next three-year cycle, PAT will feature more stringent targets and will expand to cover smaller industrial plants and more sectors, including refining, petrochemicals, railroads, and electricity distribution. But if PAT proves to be successful in the long-run, other developing nations seeking to curb GHG emissions while still promoting growth could adopt similar schemes.

Posted by Jordan Rodriguez at 12/11/2014 11:30 AM

EPA’s Office of Air and Radiation Climate Change Adaptation Implementation Plan

(Adaptation, Climate Change Science) Permanent link
On June 26, 2014, EPA’s Office of Air and Radiation (“OAR”) released its Climate Change Adaptation Implementation Plan (“OAR Plan”). The OAR Plan builds on EPA’s agency-wide Climate Change Adaptation plan and complements implementation plans issued by the other National Environmental Program Offices and Regional Offices. For more information about the implementation plan issued by EPA’s Office of Water, please see this previous post.

The OAR Plan begins with a Programmatic Vulnerability Assessment, which evaluates how climate change could potentially impact OAR’s mission and programs. OAR’s programs and policies relate to a wide array of areas, including pollution prevention and energy efficiency, indoor and outdoor air quality, stratospheric ozone, industrial air pollution, and radiation protection. Climate change could potentially complicate OAR’s efforts in each of these areas, but the OAR Plan identifies some of the areas where the potential impact seems most probable or severe. Some examples are as follows:
  1. Tropospheric Ozone: Studies suggest climate change could increase tropospheric ozone levels over broad areas of the country. This, in turn, would increase the public health burden associated with the pollution and make attaining the ozone National Ambient Air Quality Standards (“NAAQS”) more difficult.
  2. Particulate Matter: Evidence suggests that climate change could increase the frequency and intensity of wildfires, which, in turn, could lead to an increase in ambient particulate matter (“PM”) levels. Increased PM levels would increase the public health burden associated with the pollution and make attaining the PM NAAQS more difficult.
  3. Indoor Air Quality: Climate change may worsen indoor environmental problems. Climate change is expected to increase the frequency and intensity of flooding and storms, which could, in turn, contribute to building deterioration and increased exposure to mold, emissions from building materials, outdoor environmental pollutants, and other contaminants.
OAR evaluated these and other vulnerabilities to develop a list of actions it must take to ensure that its programs and operations remain effective under future climatic conditions. These priority actions fall into three general categories.

The first category of priority actions is outreach and education. OAR’s outreach and educational efforts will involve work both within the Agency and with external stakeholders to better inform citizens and at-risk populations of the potential impacts of climate change on air quality. They also include updating existing guidance documents and outreach tools to incorporate climate change adaptation strategies. OAR intends to achieve this first category of priority actions in the short-term.

The second category is research and collaboration, through which OAR seeks to better understand the effects of climate change on OAR programs. For example, OAR plans to work with the environmental research community to improve its understanding of the interaction of climate change and atmospheric deposition of pollutants. It also plans to study the effects of climate change on the implementation of ozone-depleting substances phase-outs. This second category of actions is designed to guide and inform potential future actions.

The third category of priority actions is modelling and analysis. In particular, the OAR Plan explains that overtime OAR will incorporate scientific projections of climate change into existing analytical tools relied on for regulatory purposes. For example, OAR will eventually incorporate the latest research on climate change impacts on ozone and PM levels into the models used in developing and implementing the ozone and PM NAAQS. Similarly, OAR intends to incorporate costs associated with climate change and adaptation into its economic modelling.

Although the vulnerabilities and priority actions identified in the OAR Plan are specific to OAR programs, certain Agency-wide priorities, including partnerships with Indian tribes and support of especially vulnerable populations and places, will guide OAR’s efforts. As such, OAR will place importance on the adaptive capacities of Indian tribes; vulnerable populations, such as children, elderly, and minorities; and vulnerable locations, such as low-lying coastal areas.

Throughout the OAR Plan, OAR notes that integrating climate change adaptation planning into its programs, policies, and operations will occur gradually, and its plan for doing so will evolve over time. OAR’s vulnerability assessment, for example, will adapt and improve as the science on climate change impacts advances.

Posted by Lauren Sidner at 12/10/2014 4:25 PM

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