Federal

The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
 

Distribution of Allowances under the Clean Power Plan

Distribution of Allowances under the Clean Power Plan

February 2016

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In August 2015, the U.S. Environmental Protection Agency (EPA) finalized the Clean Power Plan for existing power plants. Under the rule, states can implement a mass-based or rate-based compliance plan to reduce greenhouse gas emissions from the power sector. States choosing a mass-based approach must also decide how to allocate emission allowances. This fact sheet provides an overview of how allowances could be distributed under a mass-based approach and the policy objectives achieved by their distribution.

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Energy Efficiency under the Clean Power Plan

Energy Efficiency under the Clean Power Plan

February 2016

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Energy efficiency programs are in wide use, whether administered by state governments, city governments, or utilities. Because energy efficiency is often a low-cost means for reducing power sector emissions, the U.S. Environmental Protection Agency (EPA) expects it will be broadly used to comply with the Clean Power Plan, which sets greenhouse gas standards for existing power plants. This fact sheet compares the treatment of energy efficiency under two types of Clean Power Plan compliance approaches: rate-based
or mass-based emission standards.

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Market Oversight Under the Clean Power Plan

Market Oversight under the Clean Power Plan

February 2016

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Carbon markets, like other commodities markets, require provisions to ensure that the market functions effectively and is not manipulated by some participants. Regulators conduct oversight to ensure that buyers can procure carbon credits when needed at a price that reflects the cost of reducing emissions and buyers’ risk tolerance. By making sure that buyers only pay a fair and transparent price, regulators help protect consumers from overpaying for cleaner electricity. This fact sheet investigates the options and implications
of potential market oversight provisions that might be useful as states consider implementing the Clean Power Plan.

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Tracking Systems in the Clean Power Plan

Tracking Systems in the Clean Power Plan

February 2016

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Tracking systems provide the foundation for a smoothly operating trading market. They are used by market participants to track the use, trading, banking, and retirement of tradable assets. In trading programs under the Clean Power Plan, tracking systems will be used to track emission reduction credits (ERCs) in rate-based programs and allowances in mass-based programs.

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Bob Perciasepe's statement on C2ES ranking among top think tanks

Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions

 
January 28, 2016
 
The Center for Climate and Energy Solutions (C2ES) is honored to be recognized once again as one of the world’s leading think tanks.
 
We learned today that we ranked fifth among environment policy think tanks in the 2015 University of Pennsylvania’s Global Go To Think Tank Index, based on a worldwide survey of more than 4,600 scholars, public and private donors, policymakers, and journalists from 143 countries.
 
C2ES’s consistently high ranking is a tribute to our unique ability to bring together diverse stakeholders – business leaders, city and state officials, federal policymakers, and international climate negotiators – to achieve practical, commonsense solutions to our climate and energy challenges.
 
I congratulate and thank our outstanding staff, partners, and supporters who have helped C2ES achieve and maintain our success through the years.

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Contact Laura Rehrmann at rehrmannl@c2es.org

About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address the challenges of energy and climate change. Learn more at www.c2es.org.

Rate-Based Compliance Under the Clean Power Plan

Rate-Based Compliance Under the Clean Power Plan

January 2016

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The Clean Power Plan gives states the option to comply via either a rate-based or a mass-based approach. Ten states currently operate mass-based greenhouse gas reduction programs, and many more participate in mass-based programs to reduce other pollutants (e.g., sulfur dioxide) that are administered by the U.S. Environmental Protection Agency.
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Nations need to agree to reduce aviation emissions

Image courtesy International Civil Aviation Organization (ICAO)

The new Paris Agreement provides a broad global framework to strengthen efforts to address climate change. Now, governments are working toward another agreement on a critical issue Paris doesn’t directly address – reducing greenhouse gas emissions from aviation.

The Paris Agreement, negotiated under the United Nations Framework Convention on Climate Change (UNFCCC), ties together national efforts pledged by more than 180 countries to limit or reduce their own emissions. However, international aviation is inherently a cross-border activity, and a global approach to reducing emissions from aviation is being negotiated separately under the International Civil Aviation Organization (ICAO). A new sector-wide agreement is expected this October.

Emissions from the aviation sector comprised 2 percent of global emissions in 2013, but that share is set to expand rapidly by 2050 without policy interventions. In 2010, the aviation industry carried 2.4 billion passengers and 40 million metric tons of goods. By 2050, that could grow to 16 billion passengers and 400 million metric tons of goods.

Comments of the Center for Climate and Energy Solutions on Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units; Proposed Rule

Comments of the Center for Climate and Energy Solutions on Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units; Proposed Rule

United States Environmental Protection Agency

(80 Fed. Reg. No. 205 (October 23, 2015))

Docket ID No. EPA–HQ–OAR–2015–0199; FRL 9930–67– OAR

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This document constitutes the comments of the Center for Climate and Energy Solutions (C2ES) on the proposed federal plan requirements for greenhouse gas (GHG) emissions from electric utility generating units under the Clean Power Plan, proposed by the U.S. Environmental Protection Agency (EPA) and published in the Federal Register on October 23, 2015. C2ES is an independent, nonprofit, nonpartisan organization dedicated to advancing practical and effective policies and actions to address our global climate change and energy challenges. As such, the views expressed here are those of C2ES alone and do not necessarily reflect the views of members of the C2ES Business Environmental Leadership Council (BELC). In addition, the comments made in this document pertain to existing sources in the specific sector addressed by the Proposal and may not be appropriate for other industrial sectors or for new electric utility generating units.

Overarching Comments

C2ES believes a nationwide, economy-wide market based policy would be the most efficient and effective way to reduce GHG emissions by harnessing market forces to spur clean energy innovation, development and deployment. However, enactment of federal legislation that would establish a comprehensive market-based policy to reduce GHG emissions is not likely in the near-term. Given the urgency of addressing the rising risks that climate change poses to U.S. economic, environmental, and security interests, and the inability of Congress to establish our preferred approach of a nationwide price on carbon, C2ES believes EPA, as it implements the Clean Power Plan, should rely upon market-based approaches. Acting now will provide environmental benefits now and in the future, economic growth, and the opportunity for US companies to lead development of innovative technologies for which global demand is rapidly increasing.

The proposed federal plan requirements are an important component of the Clean Power Plan as they establish a framework for what may constitute a federal implementation plan in the event a state does not submit an adequate state implementation plan. The requirements are important as they may also serve as model rules offering guidance to states on possible provisions of an adequate state implementation plan.

C2ES supports the proposed federal plan requirements based on several key characteristics of the proposal.

  • Market-based mechanisms to reduce carbon emissions are encouraged: The proposed federal plan requirements are market based and offer two market approaches, rate-based and mass-based trading. The inclusion of these market approaches in the proposal guides and facilitates the use of market-based policies by states. Moreover, the proposal retains flexibility for states to create markets that are responsive to specific state needs as well enact ancillary policies to achieve additional policy objectives.
  • The Clean Power Plan could serve as a stepping-stone to a comprehensive, national program: In offering the proposed federal plan requirements as model rules, EPA is moving individual state actions toward a broader, nationwide program. The proposal could facilitate the development of market-based policies in more states and could thereby provide additional experience, learning opportunities, and frameworks necessary to ultimately develop a successful national program.
  • EPA-defined model provisions encourage interstate consistency: Model provisions for topics such as tracking systems and what evaluation, measurement, and verification (EM&V) protocols to use to track efficiency measures will help states meet the deadline for their plans and could promote consistency across states. Such consistency could facilitate interoperability and the creation of a large, liquid market that reduces compliance costs for all participants.

Approach

EPA has invited comment on whether to finalize a single approach (i.e., either a mass? or rate?based approach) for a federal plan. While choosing a single approach that creates a large, liquid market would reduce compliance costs for all participants and a mass-based approach would likely be administratively simpler to implement, states should be allowed to maintain the flexibility to implement rate-based programs as under the final rule establishing the Clean Power Plan. If a federal implementation plan is necessary for a state, EPA should maintain the flexibility to implement either approach as warranted by the specific circumstances of that state.

Tracking Systems

C2ES believes states should have the flexibility to use existing systems or a new, EPA-administered tracking system. However, it would be in the best interest of the state and market if the tracking system were interoperable with the national market. Interoperability of tracking systems allow the credible and transparent tracking of assets across state lines, thereby facilitating a larger market which reduces compliance costs for all participants. Existing tracking systems provide insights for the Clean Power Plan. Please see the attached C2ES brief on tracking for more information.

Allocation

The allocation of allowances in a mass-based program is a significant policy decision. Allowances represent a significant source of value and can be used to compensate firms or individuals affected by climate change policy or to raise funds for other socially desirable policy objectives. The basic allocation decision involves whether to freely allocate or auction some or all emission allowances. And further, if freely allocated, to whom and how to distribute, and if to auction allowances, the type of auction and how to distribute the revenues. Please see the attached C2ES brief on allocation policies for more information.

Market Oversight

Carbon markets, like other commoditites markets, require provisions to ensure that the market functions effectively, is efficient and liquid, and is not manipulated by some participants.  A carbon market can best achieve its environmnental aim if it is well designed and functions efficiently from the beginning.  A well-designed policy should include effective means to prevent excessively high prices, extreme volatility, and market manipulation – the action by an individual or small group of individuals to alter the price of a good for their own advantage – which is best achieved through effective policy and market design.

Statement of Bob Perciasepe on the 2016 State of the Union Address

Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions

January 12, 2016

On the State of the Union address:

President Obama is right when he says we have a huge opportunity to accelerate our efforts to transition to a clean energy future.

We saw unprecedented momentum last year with the completion of the Clean Power Plan and a landmark global agreement in Paris. Our job now is to build on this foundation going forward.

At home, many states are working hard on strategies to implement the Clean Power Plan, and we’re encouraged to see so many of them exploring efficient market-based approaches. Internationally, we must flesh out the details of the Paris agreement to ensure that countries are held accountable and ramp up their efforts over time. On both fronts, strong leadership from business will be critical.

Americans increasingly understand both the risks and the opportunities presented by climate change. The investments and innovation that help us generate clean power and protect our communities from extreme weather and other climate impacts also help build a more sustainable economy. 

C2ES is committed to continue working with policymakers, business leaders and other stakeholders to forge common ground and commonsense climate solutions.

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Contact: Laura Rehrmann, rehrmannl@c2es.org or 703-516-0621

About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address the challenges of energy and climate change. Learn more at www.c2es.org.

Reducing Carbon Dioxide Emissions From Aircraft

How significant a source of emissions is air travel?

Aircraft are a rapidly growing emissions source within the transportation sector, which is second only to the power sector as a source of U.S. carbon dioxide emissions. In 2013, aircraft were responsible for about 3 percent of total U.S. carbon dioxide emissions and nearly 9 percent of carbon dioxide emissions from the U.S. transportation sector. Commercial air travel accounted for most of the aircraft carbon dioxide emissions, with military and general aviation making up the rest.

From 1990 to 2013, U.S. carbon dioxide emissions from domestic commercial flights grew 4 percent. Recent studies estimate that U.S. aircraft emissions will increase substantially in the next 20 years. Moreover, airplanes remain the single largest source of carbon dioxide emissions within the U.S. transportation sector that is not yet subject to greenhouse gas regulations.

U.S. aviation is part of the increasingly interconnected global aviation sector, which makes up about 2 percent of global carbon dioxide emissions but is one of the fastest growing sources. From 1990 to 2010, global aircraft carbon dioxide emissions grew about 40 percent. If global aviation were a country, it would rank as the seventh largest carbon dioxide emitter, and U.S. aircraft emissions are 29 percent of all global aircraft emissions. Absent new policies, global aircraft emissions are projected to triple by 2050.

 

Figure 1: 2013 U.S. carbon dioxide emission, by sector and transportation source

The transportation sector is responsible for more than one-third of U.S. carbon dioxide emissions. Aircraft are responsible for nearly 9 percent of U.S. transportation sector carbon dioxide emissions.

Source: U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2013 (Washington, DC: U.S. Environmental Protection Agency, 2015), http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2015-Main-Text.pdf.

What is the status of regulation?

In 2012, the DC District Court ruled that the U.S. Environmental Protection Agency (EPA) is required under the Clean Air Act to determine whether greenhouse gas emissions from aircraft cause or contribute to air pollution, which may reasonably be anticipated to endanger public health or welfare. An endangerment finding would trigger regulation under the Clean Air Act.

On June 10, 2015, EPA issued its proposed endangerment finding for greenhouse gas emissions from aircraft under section 231 of the Clean Air Act. The proposed finding builds on the previous 2009 endangerment finding for light-duty vehicles and found greenhouse gas emissions from aircraft engines used in certain types of aircraft are responsible for contributing to climate change, which threatens public health and welfare. Covered aircraft are those subject to international carbon dioxide emission standards, subsonic jet aircraft — ranging from smaller jet aircraft such as the Cessna Citation II to larger jet aircraft such as the Boeing 747 — and subsonic turboprop aircraft — e.g., Bombardier Q400. The proposed endangerment finding will receive public comment before a final endangerment finding may be issued. The final endangerment finding itself would not impose any restrictions on aircraft. It is however a necessary step in determining whether EPA must regulate greenhouse gas emissions from aircraft.

How does EPA action fit with global action?

Unlike stationary sources, such as power plants, and many mobile sources, such as cars, aircraft frequently travel between jurisdictions with different environmental laws and standards. As such, the United Nations' International Civil Aviation Organization (ICAO) serves as a global forum to develop policies and standards for the global industry, including a comprehensive set of measures to address greenhouse gas emissions.

In 2010, industry’s goal of carbon neutral growth from 2020 onwards was formally adopted by ICAO. Within the sector, the key pathways to reduce emissions are improvements in aircraft technology, improvements in operations and infrastructure, and further use of aviation biofuels.
 
In addition, ICAO agreed at its 38th Assembly in 2013 to develop a Global Market-Based Mechanism (GMBM) that allows emission reductions occurring outside the aviation sector to be used to meet its goals. The GMBM will be up for adoption at the 39th ICAO Assembly in September 2016, to take effect from 2020 onwards. A Global Market Based Mechanism Task Force is currently working to establish the technical details of how the market mechanism will function.
 
Traditionally, both the EPA and the Federal Aviation Administration (FAA) have worked within the ICAO process to establish international emission standards and related requirements for other pollutants. Under this approach, international emission standards are first adopted by ICAO, and EPA subsequently initiates rulemaking under section 231 of the Clean Air Act to establish domestic standards equivalent to international standards where appropriate. Both EPA and FAA expect to take a similar approach in promulgating future domestic aircraft greenhouse gas standards for covered aircraft.

What are the next steps?

EPA issued an advanced noticed of proposed rulemaking at the same time as the proposed endangerment finding. The notice solicits comments on a variety of issues related to setting an international carbon dioxide standard for aircraft, including whether such standards should apply to in-production aircraft or new aircraft type designs, the appropriate effective date for a potential international carbon dioxide standard, as well as the appropriate stringency level. However, it does not impose any standards or regulatory requirements at this time.

EPA’s endangerment finding and advanced notice of proposed rulemaking lay the groundwork for U.S. adoption of international emission standards. Once ICAO adopts emission standards for covered aircraft in 2016, EPA is expected to begin rulemaking under section 231 of the Clean Air Act to establish domestic aircraft engine emission standards for covered aircraft that are of at least equivalent stringency as the international emission standards.

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