Transcript Climate Policy and Law

Climate Policy and Law
Bob Wyman
October 27, 2011
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How Tough Will This Be?
Year
US Population
Per Capita
Emissions
GDP
Total
Emissions
2050
420 Million
(projected)
2.4 Tons (to
meet target)
?
1 Billion Tons
(BT)
2005 (Base)
303 Million
20.3 Tons
$ 14 Trillion
6 BT
1910
92 Million
10.9 Tons
$ 572 Billion
1 BT
1887
45 Million
2.4 Tons
$ 147 Billion
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Now You Have Our Attention!
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Coffee - "We see a significant risk to our supply chain in the future,
and we are a company that relies completely and solely on this one
product, called the arabica coffee bean," Hanna said. "And if that's
not around anymore, our company doesn't exist in its current format
anymore." (Jim Hanna, Starbuck’s Environmental Impact Director)
Chocolate – International Center for Tropical Agriculture: climate
change poses a significant threat to cocoa in West Africa (Ghana and
Ivory Coast, responsible for more than half of the world’s chocolate
And Wine?
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Some obvious (but often neglected) points
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This is not traditional pollution control; it is transforming our energy
and transportation systems
A carbon price signal is not enough
Infrastructure gaps are material
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Technology and resource gaps are material
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Example – energy storage limitations, biofeedstocks, CCS
Regulatory barriers to investment are material
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Example – transmission lines
Examples – California Environmental Quality Act (CEQA), National
Environmental Policy Act (NEPA), Endangered Species Act (ESA)
substantially delay, increase project costs and often stop even new, lowcarbon investment (e.g., cogeneration increases local emissions despite
reducing regional emissions)
Case-by-case Clean Air Act BACT program will hinder, not accelerate,
desired investment
A national (and regional) strategic energy investment plan should
clear the way for desired investment
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Land Use Intensity of Energy Choices
Source: The Nature
Conservancy
(McDonald et al),
“Energy Sprawl or
Energy Efficiency:
Climate Policy
Impacts on Natural
Habitat for the
United States of
America”
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Congress
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State of the Law - Overview
COMMON
LAW
NUISANCE
PROCEDURAL
ENVTL REVIEW
STATUTES
PERMIT
PROGRAMS
CT v AEP – X (US)
COMER
KIVALINA
NEPA
CEQA
ESA
CAA PSD/BACT
STATE PROGRAMS
REGULATORY
PROGRAMS
EPA MOTOR VEHICLE REG
CAA §111 (NSPS)
AB32/WCI
RGGI
degree of (legislative or regulatory) action on GHGs
little or no action
very specific action
displacement?
partial yes – Sup Ct
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Slides 7-9 reprinted w/ permission of Arnold & Porter & Columbia Law School Center for Climate Change Law (Michael B. Gerrard)
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EPA
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US Supreme Court (Mass v. EPA, April 2007)
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GHGs are “air pollutants” under federal Clean Air Act
EPA must determine whether GHGs from new motor vehicles cause or
contribute to air pollution that may reasonably be anticipated to endanger
public health and welfare
December 7, 2009 – EPA finds that current and projected
concentrations of 6 GHGs threaten public health and welfare.
April 1, 2010 – EPA finalizes light duty vehicle regulation.
January 2, 2011 – earliest date that a compliant 2012 model year
vehicle may be sold in the US (date as of GHGs are considered
“regulated pollutants” under Clean Air Act).
January 2, 2011 – “trigger” date for EPA and state application of “Best
Available Control Technology” (BACT) to “major” stationary sources in
US.
May 13, 2010 – EPA finalizes “tailoring” rule redefining “major”
stationary source thresholds.
December 21, 2010 – EPA signs settlement agreements in power and
refining lawsuits committing to develop GHG performance standards
– DELAYED?
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Potential Sources of EPA GHG Authority
Endangerment Finding Required
NAAQS
(§§ 108-10)
NSPS
(§ 111)
NESHAPS
(§ 112)
Int’l Endangerment
(§§ 115)
US emissions cause or contribute to air
pollution reasonably anticipated to
endanger foreign public health or welfare
Foreign country reciprocity required
SIP tools available (fees, marketable
permits, auctions)
“Regulated Pollutant” Requirements
PSD
(§§ 165,169)
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Potential Sources of EPA GHG Authority
Endangerment Finding Required
NAAQS
(§§ 108-10)
NSPS
(§ 111)
NESHAPS
(§ 112)
Int’l Endangerment
(§§ 115)
US emissions cause or contribute to air
pollution reasonably anticipated to
endanger foreign public health or welfare
Possible Paths Forward
Foreign country reciprocity required
SIP tools available (fees, marketable
permits, auctions)
“Regulated Pollutant” Requirements
PSD
(§§ 165,169)
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Types of Market Programs
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Cap and trade/allowance-based
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Averaging/performance-based
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Sources average to a performance standard and must make up any
shortfall by purchasing credits
Credits/debits generated automatically by reference to credit line
Performance standard can be periodically adjusted, if necessary
Examples: lead phase-out from gasoline, low carbon fuel standard, EPA
recreational marine engine standards
Discrete emission reductions (Offsets)
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Sources must surrender allowances for their emissions
Traded commodity is certified in advance
Examples: acid rain program, EU ETS, RECLAIM, AB32 cap and trade
Requires case-by-case certification
Credits generated for surplus reductions relative to baseline
Examples: ERCs, Clean Development Mechanism (CDM)
Emissions Charges and Financial Vehicles
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Examples: carbon tax, clean air investment fund (e.g., AQIP)
Encourages demand-side reductions
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CLOSED
TECHNOLOGY
MARKETS
low-carbon
fuel
standard
OPEN
MARKET
CA AB32
Electric power
generators (via utility
auction)
Refineries
Strategic
technologies
Internal
Trading and
Averaging
Only
motor
vehicle
standards
2013
Glass Plants
Cement Plants
Other heavy industry,
landfills, etc.
renewable
electricity
standard
(33% by
2020)
2015 Fuels
+
OFFSETS
(8% max)
NO
TRADING
+
CAP AND
TRADE:
•85% emissions
•600 facilities
•2-3% annual
decline
SB 375 – Sustainable
Communities Strategies
Trading & Banking
Reserve Auction (4%)
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Source: Sweeney/Weyant Draft Analysis of Measures to Meet the
Requirements of California’s Assembly Bill 32
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