This post first appeared today in the National Journal Energy & Environment Experts blog.
As with many aspects of climate policy, there is some truth to the arguments on both sides of the debate over how federal legislation should treat state action and EPA Clean Air Act (CAA) authority. The answer is less about who is right or wrong and more about appropriately balancing the strengths and weaknesses brought to the table by states and the federal government. Both have important roles to play in a strong federal climate and clean energy program.
The federal government took the opportunity on April Fool’s Day to show the world the United States is not joking about its commitment to reducing greenhouse gas (GHG) emissions. The U.S. EPA and U.S. DOT have jointly produced a standard that will reduce CO2 emissions by 1 billion metric tons over the lifetime of vehicles covered and on average save consumers around $3,000 in fuel costs over the life of each vehicle purchased in 2016. The new rule requires the corporate average fuel economy (CAFE) for new passenger cars and light-duty trucks to be 35.5 miles per gallon by 2016. It will also limit carbon dioxide emitted from those vehicles to 250 grams per mile on average. The vehicle emissions rule shows how one policy can achieve multiple goals – reduce our dependence on foreign oil and reduce our nation’s GHG emissions.
The implementation of this regulation is a nod to complementary policies that combat climate change. As an organization that has long pushed for a comprehensive market-based mechanism, we are acutely aware of the importance of pricing carbon. However, putting a modest price on carbon, by itself, would not significantly reduce greenhouse gas emissions from this sector. For example, EPA’s analysis of the House-passed climate and energy bill found that the bill would cause the price of a gallon of gasoline to only rise by $0.13 in 2015, $0.25 in 2030, and $0.69 in 2050. The rule finalized Thursday addresses this problem directly by setting an increasingly more stringent standard for reducing GHG emissions but allowing vehicle manufacturers the flexibility to find the most cost-effective technologies to achieve those standards.
In evaluating regulations like these, one important factor to consider is coverage. The new vehicle rule covers over 60 percent of greenhouse gas emissions from the transportation sector. Other sources of emissions in transportation such as aviation, ships, and heavy-duty trucks will require additional actions (see our paper on aviation and marine transportation). EPA has announced its intent to propose GHG standards for heavy duty trucks in June of this year.
Another important factor to consider when evaluating regulations is cost. In order to meet the new standards, vehicle manufacturers will have to make fuel efficiency (as opposed to increased engine horsepower) one of their primary areas of focus for research and development. In doing so, future vehicles will cost more than they would without this rule. However, fuel savings over time will more than make up for that additional upfront cost.
The program is estimated to conserve 1.8 billion barrels of oil over the lifetime of vehicles covered under the rule. Reducing our overall oil consumption can reduce our reliance on foreign oil, which can translate into cost savings. A study by the U.S. EPA and the Oak Ridge National Laboratory estimated that a reduction of U.S. imported oil results in a total energy security benefit of $12.38 per barrel of oil, in part by reducing defense spending. Co-benefits like these are an important part of determining the worthiness of a policy. In the case of the new vehicle rule, the U.S. has taken a big step towards reducing its oil dependency and increasing its energy security.
Nick Nigro is a Solutions Fellow
This post also appears on the National Journal Energy & Environment Experts Blog.
With Thursday’s floor statement by Senator Murkowski (R-Alaska) announcing her joint resolution to override EPA’s endangerment finding, we were introduced to a new term to add to our lexicon – a disapproval resolution. If like me, you only had a vague recollection that Congress had given itself the ability to override any new federal regulation, some quick research was in order.
The recent announcement by EPA, declaring that greenhouse gases are a danger to public health and welfare, should not come as a surprise to anyone. EPA has made it clear that it would respond to what the science demanded and to what the Supreme Court (Mass v. EPA) mandated.
The endangerment finding, by itself, does not regulate any sources, but it lays the necessary foundation for future EPA regulations. The likely first one will be the recently proposed light duty vehicle and engine rule which is scheduled to be finalized in March 2010.
But EPA’s future actions are best viewed in the broader context of other activities also aimed at reducing greenhouse gas emissions. State and regional partnerships have stepped up to the plate over the past several years and now 23 states either have or are developing programs to regulate greenhouse gas emissions. In addition, several recent court decisions (see for example, Conn. v. AEP) have opened the door for common law nuisance claims against firms emitting greenhouse gas emissions.
Both the judicial and executive branches of our government have answered the call and have begun to actively address concerns about climate change. Now is the time for Congress to take control and pass comprehensive clean energy and climate legislation. A broad consensus exists that comprehensive legislation would be far more cost effective than leaving the field to individual states, EPA or the judiciary. The path forward in the Senate won’t be easy, but it certainly is necessary.
Despite the recent hue and cry over hacked e-mails, the overwhelming scientific evidence supports the link between greenhouse gas emissions and climate change. Yes, there are certainly aspects of some of the recently exposed e-mails that suggest scientists themselves can act peevishly toward one another and more substantively, that better guidelines for making data available and transparent might be useful. But let there be no mistake, the compelling evidence from multiple data sets and from multiple lines of research hasn’t changed. The words of a recent report by the US Global Change Research Program resound loud and clear, “global warming is unequivocal and primarily human induced.”
The case for Senate action is also unequivocal.
Steve Seidel is Vice President, Policy Analysis
The menu of policy options for reducing greenhouse gas emissions and tackling climate change is pretty lengthy, and the portions offered are quite substantial. Congress now has to make the choice of which regulatory option to order, and as we saw in last week’s hearings at the Senate Environment and Public Works Committee, they are open to recommendations. One interaction on Thursday between Senator Arlen Specter (D-PA) and Fred Krupp, President of the Environmental Defense Fund, highlighted the need to pick a single, effective strategy to tackle climate change and not overstuff our economy with duplicative regulations. The exchange focused on whether the EPA should continue to proceed with regulations through the Clean Air Act’s New Source Review (NSR) program even if a comprehensive climate change program is enacted.
Given existing requirements, regulation of greenhouse gases under any provisions of the Clean Air Act will trigger NSR. Under NSR rules, the construction of new stationary sources and major modifications of existing ones must be permitted to ensure that they will not contribute to significant deterioration of air quality. While NSR has long been used to regulate traditional air pollutants, when it comes to feeding an appetite for climate change regulation, NSR doesn’t really hit the spot. NSR is rather inflexible, costly to implement, and results in relatively limited emission reductions. Given the difficulty in developing standards for the large number of sources that emit greenhouse gases and the need to provide incentives for technological change in order to achieve deep reductions over time, new source review simply isn't the right recipe for our current needs.
This chef’s recommendation: a well-designed cap-and-trade program that is aggressive enough to yield needed reductions in greenhouse gas emissions while spurring the technological innovations we need to make those reductions and grow our economy. Enactment of a cap-and-trade program means we can send back duplicative programs like NSR and still be satisfied.
Sure, we’ll need complementary policies that work in a coordinated fashion with a cap-and-trade program. These side dishes of the cap-and-trade meal are targeted programs that are designed to enhance cap-and-trade’s impacts without getting in the way of the functioning of the primary program. A comprehensive climate bill can work just fine without NSR.
Michael Tubman is the Congressional Affairs Fellow
EPA has proposed what many are calling the Agency’s first major step down the road to regulating greenhouse gas emissions from stationary sources. The newly proposed “tailoring” rule applies to requirements for major new or expanded sources and to permits for stationary sources, but does so in a carefully targeted manner. It’s the right place for EPA to start.
It’s critical to understand both what the proposal does and doesn’t do, and why EPA needed to begin here.
Contrary to some press accounts, the proposed rule does not impose new control requirements on all large stationary sources. Best available control technologies would be required only of new stationary sources that emit over 25,000 tons per year or major modifications to existing sources that increase emissions by 10,000-25,000 tons per year – a range EPA sought comment on. If yours is not one of the estimated 400 major new or modified facilities each year, you do not face any (new or old) control requirements limiting greenhouse gas emissions.
The proposal also requires that EPA (and states) include greenhouse gas emissions in the permits of roughly 14,000 facilities that emit more than 25,000 tons per year of these pollutants. These permits do not impose any new controls on any source; they simply incorporate into a permit EPA’s new mandatory reporting requirements.