THE TOOLS THAT REMAIN

After the Climate Bill Failure
John M. Broder, July 23, 2010 (NY Times)

THE POINT
Immediately following a caucus of Democratic Senators, Senate Majority Leader Harry Reid (D-Nev), Senator John Kerry (D-Mass) and White House Office of Energy & Climate Change Policy Director Carol Browner each made statements at a press conference held to announce the majority Democratic Party could not gather the filibuster-breaking 60 votes for anything but drastically scaled-back energy legislation.

In her statement about the pastiche "spill bill" the Democrats will bring this week (containing reforms for offshore oil drilling, support for natural gas-powered trucking, funding for building efficiency retrofits and funding for land and water conservation), Browner spoke to the White House’s failure to sustain more meaningful energy legislation with a coded remark. “We will continue to use our existing tools to address these problems,” she said.

The message was to those who would not back a bill containing (1) a national Renewable Electricity Standard (RES) requiring regulated U.S. utilities to obtain 20-to-25% of their power from New Energy sources by 2020 or 2025 and (2) a cap on U.S. greenhouse gas emissions (GhGs) and a market mechanism through which major emitters can achieve reductions cost-effectively.

The message was this: If Congress does not legislate GhG reductions, the Environmental Protection Agency (EPA) will use its legal authority under the Clean Air Act, upheld in a landmark 2007 Supreme Court decision, to make life miserable for the major emitters and the Department of Transportation (DOT) will use its authority over tailpipe emissions to impose demanding standards on carmakers and state regulators will act regionally to reinforce the federal actions.

How - and how effectively - the EPA can act is detailed in Reducing Greenhouse Gas Emissions in the United States; Using Existing Federal Authorities and State Action, from the World Resources Institute (WRI). Anticipating difficulty in the Senate for action on climate change, WRI’s report explains how EPA and state governments can use legal powers and state regulatory processes to impact the U.S. GhGs that are widely viewed by climate scientists as causative in the abnormally accelerated increase in the global average temperature.

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Browner’s code word is “tools.” It is used in the opening paragraph of the WRI report in exactly the same way: “Can the U.S. meet the Obama Administration’s Copenhagen commitment…using the regulatory tools already available to federal agencies, together with announced actions at the state level?”

The WRI report specifically addresses the potential of EPA and state regulator action to be effective enough to achieve the stated Obama administration goal of reducing U.S. emissions to 17% below the 2005 level by 2020. Can it?

According to the WRI, the answer is “it depends.” WRI proposes a Lackluster Scenario, a Middle-of-the-Road Scenario and a Go-Getter Scenario. A lackluster effort would achieve less of the reductions that are technically feasible. A middling effort would achieve reductions in the middle range of technical feasibility. An aggressive effort would likely put the nation on track to approach the Obama administration goals in the short-term, though the longer-term goal of an 83% reduction of GhGs from the 2005 level by 2050 cannot be achieved without legislatively instituting a cost for emitting.

Even before Browner’s coded threat, opponents of climate change action had introduced House and Senate legislation to alter the Clean Air Act so as to eliminate EPA’s authority.

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THE DETAILS
The Obama administration emissions reduction goals (17% below the 2005 level by 2020 and 83% below by 2050) were broadly formulated during the 2008 Presidential campaign but formalized for the infamous 2009 Copenhagen world summit.

3 reduction scenarios: (1) Lackluster scenario (lackluster effort at regulation and enforcement, less reductions than are technically feasible), (2) Middle-of-the-Road scenario (middling effort, middle range reductions), and (3) Go-Getter scenario (aggressive effort, reductions on track for 2020 goals).

Federal impacts on reductions depend on how aggressively existing regulatory authority is used to (1) control vehicle emissions and reduce vehicle miles traveled, (2) manage agricultural lands and forests, and/or (3) invest in New Energy and Energy Efficiency infrastructure. State impacts depend on the sustained commitment by governors and legislative leaders in the 25 states that have emissions-cutting regulations.

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Key findings:
(1) In the Go-Getter scenario, published studies suggest technically feasible GhG reductions could be achieved that approach the 2020 goal of 17% below the 2005 level.

(2) If federal and state actions are not aggressive, middle-of-the-road or lackluster reductions will result, falling far short of the 2020 goal.

(3) Post-2020 reductions depend on (1) whether aging power plants are retired and (2) how quickly there is a shift away from fossil fuels in transportation.

(4) All present U.S. federal and state authority will not impose reductions adequate to achieve the Intergovernmental Panel on Climate Change (IPCC)-established goals to prevent a 2-degree Celsius global temperature rise by 2050.

(5) To meet the Obama administration’s Copenhagen summit commitment, (a) agricultural and forest lands management could further impact 7% of U.S. emissions, (a) transportation sector planning could further impact 27% of U.S. emissions, and (c) policies take aging coal plants off line or require them to reduce mercury, sulfur dioxide, ozone and ash could further impact emissions significantly.

(6) Best federal regulatory tools: (a) mobile source and New Source Performance Standard provisions of the Clean Air Act (CAA) supervised by EPA; (b) Title VI of CCA requiring hydrofluorocarbon reductions, also an EPA authority; and (c) Department of Transportation (DOT) regulation of vehicle fuel efficiency. A significant portion of authority-imposed GhG cuts can come in non-energy sectors and may not increase fuel or power prices.

(7) For the U.S. to cut GhGs the 80-to-95% by 2050 that the IPCC has indicated is necessary to prevent a 2-degree global temperature rise and avoid the worst impacts of global climate change, Congressional action to impose a price on emissions will be necessary.

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Federal Actions, Sector by Sector
(1) Power Plants
(a) ~34% U.S. GhGs (2008)
(b) No current GhG reduction requirements
(c) DOE appliance efficiency standards and plant equipment efficiency standards. Lackluster saves 86 terawatt-hours (TWh) per year in 2030; Go-Getter saves 234 TWh per year in 2030
(d) Clean Air Act (CAA) section 111 New Source Performance Standards (NSPS). EPA can require “best demonstrated technology” (BDT) for new and modified existing sources if it causes or contributes “significantly to air pollution that may reasonably be anticipated to endanger public health and welfare.”
(e) BDT is determined by EPA through (a) technological feasibility, (b) cost, (c) lead-time, and (d) energy and non-air environmental impacts. BDT also applies to states. States must also consider the remaining useful life of existing units.
(f) EPA has ruled that states can use cap-and-trade programs or other measures to cut emissions from existing plants
(g) In 2011, Best Available Control Technology (BACT) will be required by EPA for major new and modified existing sources of greenhouse gas emissions (Title I, Part C of CAA). BACT is source-specific and can be more effective than NSPS.
(h) The Prevention of Significant Deterioration (PSD) pre-construction permitting program will apply to new sources that emit 100,000 tons of CO2e per year and existing sources that emit 75,000 tons per year.
(i) Federal Energy Efficiency (EE) investments in the 2009 Recovery Act are calculated in the WRI report. Future investments are not but could have “substantial downward pressure on emissions.”
(j) Pending non–GhG regulations (new coal ash disposal, fine particulate matter, sulfur dioxide ozone and other CAA regulations) are not included in WRI calculations.

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(2) Residential and Commercial Heating
(a) ~7% of U.S. emissions (2008)
(b) DOE appliance efficiency standards and equipment efficiency standards. All scenarios for residential and commercial appliances that combust fuel reduce natural gas 166 trillion British Thermal Units (TBtu) in 2020 and 347 TBtu in 2030, and could reduce oil demand by 2.3 TBtu in 2020 and 5.4 TBtu in 2030.
(c) Federal EE investments in the 2009 Recovery Act are calculated in the WRI report. Future investments are not but could have “substantial downward pressure on emissions.”
(d) Federal building code standards can significantly cut residential and commercial heating emissions but cannot be mandatory and are therefore not included in the WRI report.

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(3) Transport vehicle sector
(a) ~29% of U.S. emissions (2008)
(b) Most effective vehicle efficiency standards, vehicle emissions standards, and fuels efficiency requirements.
(c) The 2007 Energy Act vehicle efficiency standard increase to 35 mpg for 2020 is calculated in business-as-usual (BAU) emissions.
(d) The May 2010 DOT National Highway Traffic Safety Administration (NHTSA) Corporate Average Fuel Efficiency (CAFE) standards for 2012–2016 and DOT/EPA vehicle emissions standards (under Title II of CCA) will will cut GhGs.
(e) Further improvements in fuel efficiency through 2030: 204 grams per mile (or 40 mpg) in the Lackluster Scenario and 86 grams per mile in the Go-Getter Scenario.
(f) Light Duty vehicles: The WRI report assumes a 51 mpg CAFE standard, air conditioning efficiency improvements, HFC emissions reductions, a 30% market penetration rate for battery electric vehicles (BEVs) and a 17% market penetration for plug-in hybrid electric vehicles (PHEVs).
(g) Medium- and heavy-duty vehicles: For Lackluster, a 2.5% fuel efficiency improvement per year from 2014 to 2019 and a 0.75% per year rate of fuel efficiency improvement from 2020 to 2030. For Middle-of-the-road, 4.9% and 1.5%; For Go-Getter, 5.6% and 1%.
(h) For tractor-trailers, fuel economy can be doubled in 2017.
(i) For off-highway mobile sources (3% of total U.S. emissions and 10% of all vehicle emissions), new standards can cut emissions 0.9% (Lackluster), 1.8% (Middle-of-the- Road), and 2.4% (Go-Getter). New equipment and engines can cut emissions 2.4% per year from 2015 to 2030.
(j) FAA operational improvements in the air traffic control system (according the EPA) can cut emissions 0.7% to 1.4% per year, which amounts to a 10-to-20% reduction in 2030. The FAA sees operational improvements closer to 0.17% to 0.4% per year and they are the ones who will implement whatever changes there will be.
(k) FAA-imposed aircraft standards are not expected to alter the scenarios.
(l) Internationally-regulated marine vessel emissions reductions were not included.
(m) EPA’s Renewable fuel standard (RFS), or a low carbon fuel standard, as currently designed, is not expected to cut emissions.

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(4) Industrial emissions
(a) ~15% of U.S. emissions (2008)
(b) See BDT and BACT for power plants (above)
(c) EPA expects significant impacts from industrial combustion and process efficiency as in combined heat and power (CHP).
(d) Cement kilns emissions efficiencies are the same as other industrial source emissions.

(5) Hydrofluorocarbons (HFCs)
(a) ~2% of U.S. emissions (2008)
(b) Will grow rapidly if unregulated
(c) EPA CAA authority can ramp HFCs down to 85% below the 2005 level by 2030.

(6) Methane emissions from landfills
(a) ~2% of U.S. emissions (2008)
(b) New Source Performance Standards (NSPS) for landfills (section 111 of CAA) can obtain a 44% cut (Lackluster), a $5 per ton reduction cost, a 74% cut (Middle-of-the-Road), a $5 per ton reduction cost, or a 74% cut (Go-Getter), $61 per ton reduction cost.

(7) Methane emissions from coal mines
(a) ~1% of U.S. emissions (2008)
(b) EPA’s CAA Section 111 New Source Performance Standards (NSPS) is the authority governing coal mines. See BDT and BACT above.
(c) WRI assumes an 86% potential emissions reduction from coal mines and assumes $5, $20, and $61 costs per ton of CO2e.

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(8) Emissions from natural gas systems
(a) ~2% of U.S. emissions (2008)
(b) EPA’s CAA Section 111 New Source Performance Standards (NSPS) is the authority and can require equipment changes and upgrades, changes in operational practices, and direct inspection and maintenance.
(c) EPA sees reductions of 9% (Lackluster), 14% Middle-of-the-Road) and 27% (Go-Getter) in 2030 ($5, $20, and $61 costs per ton of CO2e).

(9) Nitric acid and adipic acid
(a) Nitric acid (HNO3) is primarily used as a feedstock for synthetic fertilizer and is used in the production of adipic acid and explosives.
(b) Adipic acid (C6H10O4) is used in the production of nylon and as a food flavor enhancer.
(c) The manufacture generates nitrous oxide (N2O)
(d) N2O is 298 worse a GhG as CO2 over 100 years
(e) N2O is < 0.5% of U.S. emissions (2008)
(f) EPA’s CAA Section 111 New Source Performance Standards (NSPS) is the authority
(g) All 3 scenarios produce a 96% cut in C6H10O4 emissions and an 89% cut in HNO3 emissions ($5, $20, and $61 costs per ton of CO2e).

(10) Agriculture, forestry and land-use emssions
(a) ~7% of U.S. emissions (2008)
(c) The Forest Service (in the Department of Agriculture) can increase carbon sequestration on federal forest lands
(c) The Bureau of Land Management (in the Department of Interior) can increase carbon sequestration on public lands
(d) The Department of Agriculture can drive farmland management practices
(e) WRI was not able to calculate agriculture, forestry and land use emissions reductions for use in the report

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State Actions
States are pursuing a wide range of GhG mitigation policies (cap and trade, EE, RES, smart-growth planning, low-carbon fuel standard, utility regulatory policy reform, transit-oriented development, etc.)

WRI considered 3 top-down frameworks:
(1) Lackluster: Reductions from state statutes only.
(2) Middle-of-the-Road: Reductions from state statutes and existing executive orders.
(3) Go-Getter: Reductions from state statutes, executive orders, and regional cap-and-trade programs. This combination of regulations is considered a reasonable proxy for ~40% of U.S. emissions.

The WRI assumptions are based on anticipated state regulatory actions through 2030.

The WRI report concludes with an extensive discussion detailing its methods and delineating the uncertainties in its projections.

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QUOTES
- Jonathan Lash, President, WRI: “The study highlights both the need to pass climate legislation and the importance of preserving existing authorities…[I]t very clear that current efforts by Congress to curb U.S. E.P.A. authority will undermine U.S. competitiveness in a clean energy world economy, block control of dangerous pollutants, and put the U.S. at odds with its allies…Robust federal regulatory action and strong state leadership, combined with significant political will, are the needed ingredients to achieve significant reductions using existing authorities. The study also highlights that cap-and-trade legislation is needed to drive longer-term reductions and provide investors with the certainty they will need to transform the U.S. economy and add jobs.”

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- Nicholas Bianco, WRI senior associate, study co-author: “Without federal climate legislation that locks in longer-term economy-wide reductions, the longer-term picture is unclear…A long-term declining cap on emissions, creating a robust carbon price, is still very much needed.”

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- From the report: "WRI’S analysis of potential greenhouse gas emissions reductions by federal and state governments suggests a range of potential outcomes is possible. On the federal level, whether reductions are achieved at the lower end or upper end of the range…depends on the extent to which the Obama Administration and subsequent administrations use existing regulatory authority to go after reductions shown to be technically possible in the literature…On the state level, whether reductions are realized at the lower or upper end of the range…depends similarly on the continued resolve by governors and legislative leaders in the 25 states counted as having taken actions. The findings set out here represent an assessment of what is possible given available inputs for some key sectors. It does not include potential emissions reductions achievable through federal policies to reduce vehicle miles traveled, management of agricultural lands and forests, new federal investments in areas such as energy efficiency, renewable energy infrastructure, or other areas that could yield reductions, nor new federal legislation of any kind…"