What’s the Carbon Footprint of your bowl of cereal? General Mills, Kellogg’s Announce Policies to Reduce Supply Chain GHG Emissions

(Adaptation) Permanent link

On July 28, 2014, General Mills announced a new climate policy on its blog. Last week, Kellogg’s followed suit releasing its own climate policy.

The General Mills policy begins by noting scientific consensus that global warming should be limited to 2°C and highlighting the risks associated with climate change, which include potential reductions in crop yields and reduced water availability. The policy explains that “[w]hen coupled with a global population projected to reach 9 billion by 2050, the disequilibrium of natural resource supply and human demand for both food and fuel presents a real threat to global stability.” The policy states that General Mills recognizes the risks of climate change for both global food security and for the company’s raw material supplies.

General Mills has assessed its own GHG emissions and concludes that 92% of the GHG emissions associated with its own operations are “scope 3” emissions, meaning that they result from upstream activities that are outside the company’s direct control. Further, General Mills finds that nearly 66% of the company’s GHG emissions and 99% of its water use result from agricultural activities. General Mills’ Policy then announces a suite of mitigation and adaptation actions. With respect to adaptation, the Policy declares that General Mills will undertake measures to reduce GHG emissions across its supply chain including:

  • requiring suppliers to demonstrate improvements in environmental, social, and economic outcomes;
  • addressing emissions caused by land use change through sustainable sourcing efforts, with the aim to achieve zero net deforestation in high-risk regions by 2020; and
  • contribute to cross-industry efforts to reduce food waste.

With respect to adaptation General Mills commits to investing in proprietary breeding programs to develop climate-resilient crops and engage in a variety of measures to support adaptation by its agricultural suppliers. General Mills also commits to reporting its progress against the goals established in its climate policy.

Kellogg’s climate policy also highlights the key role of agricultural emissions, stating “[w]e recognize that upstream agriculture emissions are the single largest source of emissions in our value chain and will focus our efforts on achieving agricultural emissions reductions.” Kellogg’s specifically notes the company’s efforts to stop deforestation in its palm oil supply chain, its refusal to purchase soy from tropical deforested regions, and the use of recycled content in its cereal boxes.

Kellogg’s policy announces that by 2015 the company will define and disclose a total supply chain GHG emissions reduction target that includes agricultural emissions. In order to establish a baseline and GHG reduction target, Kellogg’s announces that it will require suppliers to measure and publicly disclose their GHG emissions and reduction targets. Kellogg’s also commits to establishing a climate change adaptation strategy, with particular attention to the needs of smallholders in the supply chain by December 2015. In addition, Kellogg’s seeks to enhance its commitment to stopping net deforestation in its supply chain by expanding its current palm oil policies to other crops in the supply chain that carry a high risk of deforestation, including packaging fiber, soy, and sugar cane.

Together, these two policies highlight the importance of agricultural emissions in global food supply chains. Because of their significant purchasing power, the actions of Kellogg’s and General Mills represent a potentially important step in reducing global agricultural GHG emissions and reducing supply chain vulnerabilities through adaptation to climate change. While both policies acknowledge the need for global action to limit warming to 2°C, both also demonstrate the key role that the private sector can play in reducing global GHG emissions even in the absence of an international agreement.

Posted by Margaret E. Peloso at 8/19/2014 5:03 PM

CEQ Declines to Issue NEPA Climate Change Guidance

(Litigation) Permanent link
Last week, the Council on Environmental Quality (“CEQ”) denied a 2008 petition authored by several environmental groups seeking rulemaking to include climate-specific provisions in CEQ’s NEPA regulations. CEQ denied the petition, finding that climate change already falls within the scope of impacts that are to be considered under NEPA. At the same time, there is litigation pending in the Ninth Circuit in which plaintiffs are seeking to establish that they have standing to bring a NEPA claim where the only alleged shortcoming in the environmental impact statement relates to the inadequate assessment of climate change impacts. Together, these developments highlight the increasingly important role of climate considerations under NEPA in future energy leasing and project development.

The International Center for Technology Assessment’s initial 2008 petition asked the CEQ to amend its NEPA regulations to clarify that they require the consideration of climate change in environmental evaluations under NEPA and to issue guidance on the same. While it did not amend the NEPA regulations, CEQ issued a draft guidance document on the consideration of climate change in NEPA evaluations in 2010 that was published for public comment but never finalized. CEQ took no further action on the petition until August 7, 2014, when it denied the petition.

In its denial of the petition, CEQ stated that additional NEPA regulation is not necessary because the NEPA regulations “already encompass the consideration of climate effects . . .” With respect to additional NEPA guidance, CEQ’s denial states that it is considering how to proceed with guidance in light of the comments it received on its 2010 draft guidance. The denial also highlights other climate-related activities CEQ has undertaken and notes that at the time CEQ does not think that climate-specific amendments to the NEPA regulations are the best use of its resources.

Since CEQ issued its denial, commenters have noted that while further rulemaking on climate change under NEPA may not be necessary, additional guidance from CEQ is needed. For example, in a blog post for the Columbia Center on Climate Change Law, Michael Gerard noted that a previous study by the Center showed that federal agencies vary widely in their consideration of climate change in the NEPA process and that additional guidance would be helpful to standardize practice across agencies.

On August 8th, the Department of Justice filed a motion to dismiss and memorandum in support thereof on CEQ’s behalf in International Center for Technology Assessment v. CEQ. The memorandum argues that Plaintiffs’ claim that CEQ has failed to respond in a timely manner to their petition is mooted by CEQ’s response to their petition on August 7, 2014.

Although CEQ denied the petition for climate-specific amendments to the NEPA regulations, CEQ clearly stated that climate change impacts should be considered under NEPA.  For several years, NEPA challenges based on climate impacts have been a key component of many environmental groups’ strategies, particularly when the challenged project involves energy development or transportation. Given the CEQ’s recent statements on climate change under NEPA, it seems likely that such challenges will continue into the future.

In Montana Environmental Information Center v. BLM—a challenge currently pending in the Ninth Circuit—environmental petitioners have recently asked the court to find that they have standing to pursue a NEPA claim that is based solely on alleged deficiencies in the climate change portion of the environmental assessment for the challenged project. Plaintiffs appeal the District Court’s holding that they do not have standing to bring climate challenges under NEPA because they have not alleged specific, localized harms arising from the alleged deficiency in the environmental assessment. While BLM initially opposed Plaintiffs’ standing, it reversed course and conceded that Plaintiffs standing to bring such a challenge in a June filing, adopting the analysis of the D.C. Circuit in its recent opinion in Wildearth Guardians. However, Plaintiffs’ standing continues to be opposed by defendant intervenors in the case.

While finding that a failure to consider climate change on its own was not sufficient to give rise to standing, the D.C. Circuit in Wildearth Guardians concluded that Plaintiffs’ alleged recreational and aesthetic injuries that would result from the challenged coal leasing were indeed sufficient to give rise to standing. Once standing was established based on recreational and aesthetic injuries, the D.C. Circuit concluded: “Appellants may challenge each of the alleged inadequacies in the FEIS because each constitutes a procedural injury connected to their members' recreational and aesthetic injuries.”1

In Montana Environmental Information Center, Plaintiffs have challenged BLM’s oil and gas leasing activities under NEPA, alleging that it failed to sufficiently consider climate change impacts. Plaintiffs argue that the Ninth Circuit should adopt the D.C. Circuit’s holding in Wildearth Guardians. However, unlike the plaintiffs in Wildearth Guardians, the Plaintiffs in the Ninth Circuit allege only climate change-based injuries.

Should the Ninth Circuit follow, and arguably expand upon, the holding of D.C. Circuit to find that plaintiffs have standing to bring NEPA challenges based solely on global climate change claims, this would be a potentially important development. If plaintiffs do not have to establish local injuries resulting from alleged deficiencies in the NEPA process before raising climate challenges, the bar to standing will be lowered, making NEPA climate challenges an even more important tool for those who seek to halt energy project development. However, it is important to note that NEPA does not require that agencies reach a particular outcome, but only that they have considered the potential impacts of a project. Therefore, the inclusion of climate change impacts in environmental impact statements or environmental assessments should be sufficient to withstand future NEPA challenges—though, it cannot forestall future litigation regarding the adequacy of such analyses.

1 738 F.3d 298, 308 (D.C. Cir. 2013).

Posted by Margaret E. Peloso at 8/14/2014 4:18 PM

EPA Extends Reporting Deadlines for the 2013 Renewable Fuel Standards

(Renewable Fuel Standards and Biofuels) Permanent link
On July 31, 2014, the U.S. Environmental Protection Agency (“EPA”) issued a Direct Final Rule extending the annual compliance and attest engagement reporting requirement deadlines for the 2013 Renewable Fuel Standards (“RFS”). Specifically, the rule states that annual compliance reports will be due 30 days after the publication of a final rule establishing the 2014 renewable fuel percentage standards for biofuel, biomass-based diesel, advanced biofuel and total renewable fuel. The attest engagement reports for the 2013 compliance period will not be due until 90 days following the rule’s publication.

Unless EPA receives adverse comments within 37 days of publication of the Direct Final Rule in the Federal Register, this extension will become effective on September 29, 2014.

Thursday’s rule marks the third time EPA has extended compliance deadlines for the 2013 RFS. EPA extended the original compliance demonstration deadline of February 28 on June 30, 2014. Then on June 6, 2014, EPA issued a rule extending the annual compliance and attest engagement reporting deadlines to September 30, 2014 and January 30, 2015, respectively.

The same reasoning has motivated each of the three extensions: according to EPA, the 2014 renewable fuel percentage standards must be finalized in advance of the deadlines for the 2013 compliance period, because the requirements set forth in the 2014 RFS may impact how obligated parties address their 2013 compliance requirements. For example, the 2014 targets may influence how many compliance credits a refiner chooses to carry forward.

In the July 31 rule, EPA notes that in November 2013, EPA received comments on the proposed 2014 RFS “reiterating the importance to obligated parties of knowing their RFS obligation for the 2014 RFS compliance period prior to the compliance demonstration deadline for the 2013 RFS compliance period.” Because the 2014 RFS has yet to be finalized, the deadlines had to be extended for a third time.

Although the rationale for the extension may have merit, critics fear that extending the deadline will allow EPA to indefinitely delay issuance of the 2014 RFS. The delay creates hardship for obligated parties who, despite not knowing what their precise obligations under the 2014 RFS will be, have to continue to make business decisions that will ultimately impact those obligations.

In issuing the 2013 RFS, EPA also missed its November 2012 deadline by several months. Monroe Energy, LLC challenged the 2013 standards, arguing that EPA had no authority to retroactively apply the standards to the entire compliance year. However, the D.C. circuit held that EPA’s failure to meet the statutory deadline did not mean the Agency had not forfeited its authority to act. Monroe Energy, LLC v. E.P.A., 750 F.3d 909 (D.C. Cir. 2014).

Posted by Lauren Sidner at 8/04/2014 11:46 AM

EPA Releases Guidance on post-UARG GHG Permitting

(Federal GHG regulations) Permanent link
Last week, EPA released a memorandum providing initial guidance on GHG permitting following the Supreme Court’s decision in UARG v. EPA. As explained in an earlier post, the UARG decision struck down the Triggering/Timing Rule and at least portions of the Tailoring Rule, holding that EPA does not have authority to subject facilities to permitting requirements under the Clean Air Act solely on the basis of their GHG emissions. However, the Court upheld EPA’s discretion to adopt rules to include GHGs in the permitting process for the so-called “anyway sources,” which are sources that are otherwise subject to PSD permitting for conventional air pollutants, but did not specify the threshold level of GHG emissions at which sources could be subject to permitting as “anyway sources.”

EPA’s memo notes that further action at the D.C. Circuit is required to either vacate or remand the portions of the Triggering and Tailoring Rules that are inconsistent with the Supreme Court’s decision. However, EPA acknowledges the need for guidance in the interim and sets forth that guidance in its memorandum. Consistent with the Supreme Court’s decision, the memo announces that EPA will no longer require PSD or Title V permits for sources that were subject to major source permitting solely on the basis of their GHG emissions. The memo also announces that EPA will no longer enforce provisions of EPA-approved Title V programs that subject such sources to permitting and that EPA will not continue to process new Title V or PSD permit applications for sources that were subject to permitting solely on the basis of their GHG emissions.

EPA’s memo also offers the Agency’s preliminary views on a number of other legal issues that were raised by the Supreme Court’s decision in UARG. First, EPA notes that because the Supreme Court did not invalidate the application of PSD permitting to “anyway sources,” it intends to continue to apply the best available control technology requirements to GHG emissions from these sources. While noting that the Supreme Court stated that EPA’s decision to subject GHGs above a threshold level at “anyway sources” to PSD permitting would need to be properly justified, the memo announces that EPA will continue to apply the existing threshold level of 75,000 tons per year CO2e but that this level may change depending on the outcome of further proceedings in the D.C. Circuit (where the successful UARG litigants can be expected to oppose anything short of complete vacatur of the Tailoring Rule and the reinitiation of rulemaking to establish “proper de minimis” thresholds), as well as EPA’s own consideration of whether the promulgation of a different threshold level is appropriate.

Second, EPA acknowledges the need for Regional offices to consult with state and local governments regarding sources that have already received PSD and Title V permits based solely on their level of GHG emissions. The memorandum says that EPA will provide further details in the future regarding its views on the status of facilities that were already subject to PSD permitting based solely on their GHG emissions but that “our general thinking at this time is that it may be appropriate to ultimately remove GHG BACT limitations from such permits and to convert such permits into minor source permits . . . .” With respect to Title V permits, the memo also encourages EPA’s regional offices to confer with state, local, and tribal permitting authorities to determine whether there is flexibility under the relevant state or local laws to determine that sources subject to Title V solely due to GHG emissions are no longer required to obtain permits. EPA also recommends that sources that have already been issued Title V permits but would not be required to have them under UARG consult with the relevant permitting authority to determine appropriate next steps.

The memo also notes that EPA anticipates that it will need to revise the federal PSD and Title V permitting regulations to make them consistent with the Supreme Court’s decision. This will then require that states modify their SIPs to incorporate these changes.  A mandate to do so may emerge from pending litigation in the D.C. Circuit, in Texas v. EPA. As discussed in an earlier post, the D.C. Circuit upheld EPA’s authority to issue FIPs for GHG permitting, including the one issued in Texas. However, the D.C. Circuit subsequently decided to withhold its order pending the outcome of UARG v. EPA in the Supreme Court. Because the FIPs at issue in Texas v. EPA were based on the Triggering and Timing Rules, which have been invalidated by the Supreme Court’s decision in UARG, it is possible that that D.C. Circuit will revisit this issue soon.

In sum, the EPA’s memo announces the suspension of permitting at the federal level for sources that would have been subject to Title V or PSD permitting based solely on their GHG emissions. However, the memo highlights the complexity associated with unraveling the portion of the Tailoring Rule that was invalidated by the Supreme Court in state and local permitting programs and permits that have already been issued.

Posted by Margaret E. Peloso at 7/29/2014 11:13 AM

Federal Agency Measures to Promote Information Sharing in President Obama’s Climate Adaptation Announcement

(Adaptation) Permanent link
Last week’s post on President Obama’s announcement of Climate Adaptation Assistance Programs noted that there were a number of measures in the President’s announcement focused on the facilitation of adaptation information sharing. This post highlights some of these measures.

Department of the Interior Federal-Tribal Climate Resilience Partnership: The Department of the Interior has launched a Tribal Climate Resilience Program. The Program has two components: provision of grants to help tribes build adaptive capacity and support for information-sharing activities. Grants under the Program are to be awarded in four categories (1) development and delivery of climate adaptation training, (2) adaptation planning, vulnerability assessments and monitoring; (3) capacity building for travel support through training; and (4) travel support for participation in ocean and coastal planning. The Program will also offer funding to tribes, consortia, and organizations to develop science-based information and tools to enable adaptive resource management.

USGS 3-D Elevation Partnership: The USGS is undertaking a $13.1 million initiative to develop advanced 3-dimensional mapping of the United States. The 3-D Elevation Partnership is intended to bring together federal agencies, academia, corporate entities, states, tribes, and communities to develop advanced 3-dimensional mapping data for the United States. Data and related tools developed under the Partnership will be used for flood risk management, water resource planning, and mitigation of coastal erosion and storm surge impacts.

EPA Green Infrastructure Collaborative: EPA announced a Green Infrastructure Collaborative to improve stormwater management. Under the Collaborative, EPA is working with other federal agencies, NGOs, and private sector entities to form a broad-based network of organizations interested in promoting green infrastructure. The purpose of the Collaborative is to help communities more easily implement green infrastructure as a way to reduce storm water flows. Green infrastructure and other storm water management measures will be particularly important for climate change adaptation in regions of the country that are expected to experience more intense rainfall events in the future.

Seven federal agencies, including HUD, DOT, DOI, and DOD have signed on to participate and will facilitate green infrastructure by (1) providing technical assistance and on-the-ground support for the creation of integrated green storm water management and hazard mitigation plans; (2) recognizing innovative projects; (3) working with states to integrate ecosystems and transportation planning; (4) incorporating green infrastructure practices into agency facilities or lands; (5) emphasizing connections to green infrastructure in existing federal grant programs; (6) distilling and broadly disseminating best practices and lessons learned from existing federal grant programs.

CDC Guidance on Assessing Health Vulnerabilities Due to Climate Change: The CDC released a report titled Assessing Health Vulnerability to Climate Change: A Guide for Health Departments. The Report provides guidance to state health departments regarding the assessment of climate change vulnerabilities. The Report provides important information to the states by presenting both a framework for vulnerability assessment and an example from a case study related to heat exposure in Georgia.

Posted by Margaret E. Peloso at 7/25/2014 2:32 PM

President Obama’s Announcement on Climate Adaptation Assistance: Disaster Resilience

(Adaptation) Permanent link
Yesterday, President Obama announced a broad series of programs that are aimed to help state, local, and tribal governments prepare for and adapt to the impacts of climate change. These actions span a range of federal agencies and are designed to improve available information to adapt to climate change and create incentives for state and local governments to adopt measures that will decrease their exposure to climate hazards. This post focuses on two of the measures in President Obama’s announcement related to natural disaster resilience.

National Disaster Resilience Competition
President Obama provided additional details on the National Disaster Resilience Competition, which will make $1 billion in competitive funds available to communities that have been struck by natural disasters in recent years. The program emphasizes the finding of the National Climate Assessment that extreme weather events in the United States are becoming more severe and that when combined with sea level rise and current development patterns, these weather events can impact the health and safety of entire communities. Because of these increasing hazards, the primary goal of the National Disaster Resilience Competition is to develop examples of disaster recovery that incorporate projection of future climate risks and apply principles of resilience in project design.

The Competition will be run by the Department of Housing and Urban Development and will last for one year. The Competition will consist of two phases. In the first phase, applicants for the Competition will participate in a risk assessment and planning process where they will be able to receive funding and technical assistance to develop “data-driven and community-led approaches to recover from [] disasters.” The second phase consists of a design and implementation process where HUD will award implementation grants to winning projects.

All areas that were subject to a presidentially declared disaster in 2011, 2012, or 2013 will be eligible to apply for the Competition. HUD has determined that there are 67 eligible applicants from 48 of the 50 States, Puerto Rico, and Washington, D.C.

FEMA Multi-Hazard Mitigation Planning
President Obama also announced that FEMA will release new guidance for State Hazard Mitigation Plans that will direct states to consider how climate change will impact the probability of future natural hazard events. According to the President’s announcement, this new guidance will help States identify and encourage the adoption of measures that reduce vulnerability to future natural disasters. Among the measures specifically identified in the President’s announcement were relocating homes and businesses to reduce flooding risks from sea level rise and increased storm intensity and rebuilding to higher standards.

While FEMA has not yet completed a draft of its guidelines, they would mark a significant departure from past hazard planning activities. Under the current regulations, states are to consider “information on previous occurrences of hazard events, as well as the probability of future hazard events, . . .” but there is no express requirement that states consider the possibility that the frequency of hazard events may change in the future as a result of climate change. This is the case even if a state adopts an enhanced mitigation plan, which entitles it to a larger share of federal funding for activities carried out under the Hazard Mitigation Grant Program. If states address severe repetitive loss properties in their plan, they can also receive additional federal funds under the severe repetitive loss and flood mitigation assistance programs.

If a state fails to submit a Hazard Mitigation Plan, it is not eligible for an increased Federal Share when funds are released under the Stafford Act for future natural disaster events. As a result, states have financial incentives to submit Hazard Mitigation Plans. Therefore, changes to the FEMA guidance could play a significant role in incorporating future climate change into state and local planning.

Together, these measures highlight the important role that disaster recovery and resilience play in discussions about climate change adaptation. In many ways, this makes sense because adaptation actions that increase the ability to withstand and recover from natural disasters are “no regrets” strategies. That is, even in the absence of changes in hurricane frequencies or sea level rise, coastal communities will still experience hurricanes and flooding in the future. Therefore, measures focused on disaster recovery and resilience will be beneficial even if projected climate-driven changes do not occur.

However, it is important to recognize that disaster recovery and resilience is really only part of the conversation. According to the National Climate Assessment, over 5,790 square miles of land and $1 trillion in property and structures are at risk from 2 feet of sea level rise—an amount that is possible by 2050. Sea level rise will be experienced as a gradual inundation of the coast, rather than an episodic event like hurricane-driven storm surge. Therefore, while disaster reduction and preparedness measures are a necessary element of facilitating climate change adaptation, alone they will not be sufficient, as States require tools and assistance to address the gradual, long-term consequences of sea level rise and other broader climate shifts. Some of the measures in President Obama’s announcement that focus on these resources will be the subject of our next post.

Posted by Margaret E. Peloso at 7/17/2014 5:00 PM

New Report Concludes States can Structure Implementation of EPA’s Clean Power Plan to Reduce Electricity Bills

(Federal GHG regulations) Permanent link
A new report by the Analysis Group highlights the important role that states will play in determining the ultimate costs and benefits to consumers resulting from the implementation of EPA’s Clean Power Plan. EPA’s proposed rule, published in the Federal Register on June 18, 2014, establishes greenhouse gas (GHG) emission limitations for existing power plants by setting state-specific GHG emission rates in terms of pounds CO2/net MWh of generation from all affected electricity generation units. In a departure from typical Clean Air Act rulemaking, which imposes control requirements directly at the source, EPA proposed to impose GHG emission limitations at the state level and granted states considerable flexibility in selecting the measures to be used to achieve compliance. Among the alternatives EPA says states may consider are limitations on the number of hours of operation for certain types of power plants, promotion of energy efficiency and renewable energy, and the creation of cap-and-trade programs.

The Analysis Group Report evaluates the ability of states to limit the impacts of the Clean Power Plan on consumer electricity rates. It concludes that, over time, programs to control CO2 emissions from the electricity sector can achieve long-term benefits of lower electricity bills and overall economic benefits to the states, while suggesting that the specific elements of a particular state’s program will be important in achieving such long-term benefits.

The findings of the Analysis Group are largely based upon its evaluation of experience with the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program operating in 9 states in the Northeast and MidAtlantic. According to the Analysis Group, two particularly important features of RGGI that result in net consumer benefits are the fact that the participating states have elected to auction off all carbon allowances—meaning that the produce significant revenues for the states—and the way in which these revenues have been reinvested to produce consumer savings. Since 2008, the auction of RGGI allowances has produced $1.4 billion for participating states. The Analysis Group finds that most of these proceeds have been used to invest in energy efficiency programs and rebates on consumer electricity bills and that these measures have offset the modest increase in electricity prices caused by RGGI and “led to a myriad of positive economic spillover effects.” Looking at the costs of RGGI in each participating state, the Analysis Group further concludes that the level of economic benefits for each dollar of auction revenue generated was highest in states with the greatest level of reinvestment in renewable energy.

Overall, the Analysis Group expects that consumer electricity rates will increase in the short-run as they reflect compliance costs associated with EPA’s Clean Power Plan. However the inclusion of energy efficiency measures in state plans may more than offset initial price increases, resulting in lower overall electricity bills over time. This conclusion is consistent with EPA’s cost-benefit analysis conducted for the proposed rule.

The Report also examines the ability of states to protect low-income consumers from the impacts of increased electricity prices that may result from implementation of state plans. The Report concludes that states will be able to apply traditional ratemaking practices to “help them allocate costs related to CO2 compliance in a fair and equitable way among customer classes” and that there are a variety of low-income assistance approaches that can be used to reduce the impact of implementation of the proposed standards on the electricity bills of low income consumers.

While the Analysis Group report concludes that well-designed state programs under the Clean Power Plan can deliver long-term economic benefits, it also notes that the design of particular state programs will have a significant impact on the magnitude and distribution of costs and benefits that result. Further, the Analysis Group report focuses on the use of cap-and-trade as a mechanism to promote efficient outcomes. While acknowledging that states may choose other compliance mechanisms, it is not clear how the findings from analysis of the RGGI program would be generalizable to non-cap-and-trade approaches.

Finally, further evaluation of the combination of tools considered by the Analysis Group report for specific states would be beneficial. For example, the Report points to cap-and-trade schemes as a way to achieve efficient GHG reductions but also looks to the role of utility regulators to allocate any rate increases that may be necessary. However, there may be cases where the geographic reach of these two functions is not the same—for example the RGGI states are members of New England ISO, NY ISO, and PJM. Because the geography of these utility markets does not match the geographic scope of RGGI, it is not clear how the ISO and cap-and-trade system can be made to work together to minimize impacts on consumers.

Posted by Margaret E. Peloso at 7/15/2014 4:00 PM

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