This post was co-written by EDF's Peter Zalzal
The U.S. is poised to take an historic step this summer.
The U.S. Environmental Protection Agency (EPA) will finalize the Clean Power Plan, which will create our nation’s first-ever standards for carbon pollution from existing fossil fuel-fired power plants. These power plants account for almost 40 percent of U.S. carbon pollution, so these new standards are critical to mitigating climate change and protecting public health.
The proposed Clean Power Plan builds on a tradition of partnering with states to reduce air pollution and to protect public health and the environment. For each state, EPA has proposed an individualized carbon pollution goal that reflects the composition of the state’s power sector and its opportunities for cost-effective reductions. Each state will then have the opportunity to design a plan for meeting its goal that is tailored to its unique circumstances and priorities.
In designing these plans, states will have a critical opportunity to ensure that carbon pollution reductions are achieved in a way that delivers important public health protections for all Americans, especially environmental justice communities that bear a disproportionate share of ambient air pollution burdens.
States will also be able to leverage a full suite of cost-effective measures for carbon pollution reduction, including a variety of approaches highlighted in a recent report by the National Association of Clean Air Agencies, as well as energy efficiency measures that directly benefit consumers – including low-income households — by lowering their energy bills.
Our new EDF white paper examines how states can design plans that meet federal requirements using well-established regulatory emissions management tools and, at the same time, preserve the compliance flexibility needed to secure cost-effective pollution reduction.
A state would start by designing a plan that places responsibility for meeting the carbon pollution goals directly on entities that own or operate fossil-fuel fired power plants, as many states have already done in the context of other air pollutants. These source-specific standards could be designed to meet either rate-based state goals (requiring that facilities meet a particular level of carbon intensity per unit of generating output), or mass-based state goals (requiring that facilities obtain emission allowances for every ton of carbon dioxide they emit).
These standards would be incorporated into facility-level operating permits. They could also be designed to allow for cost-effective compliance flexibilities — including averaging and trading of emissions among facilities, and recognition of emission reductions from energy efficiency, use of renewable energy, or other measures that reduce pollution from regulated facilities.
Such an approach would allow states and power companies to decide which compliance strategies are most appropriate for regulated entities, and would complement other state policies supporting energy efficiency and renewable energy without requiring that those policies be incorporated into the state plan.
To maximize flexibility, our white paper identifies some common elements that would make state plans compatible with each other, enabling interstate trading of compliance instruments (for states that prefer to do so) without the need for complex negotiations about program design.
Our white paper also examines existing legal frameworks in several states and identifies ample legal authorities that could be used to implement the approach we describe.
For states that don’t submit their own plans to achieve the required emissions reductions, EPA will provide a federal plan for achieving the state’s carbon pollution goal. Having already designed similar plans for other air pollutants, EPA has the experience and the legal authority to design federal plans that promote flexible and cost-effective compliance.
Among the options for a federal plan, our paper describes the advantages of one that provides for a mass-based state emissions goal that is achieved through an emissions trading program – a time-tested approach that has been used successfully by both states and EPA across a variety of administrations to reduce other pollutants from the power sector.
A federal plan could also incorporate the same common elements we describe for state plans, enabling entities covered by the federal plan to more easily trade compliance instruments with entities in other states.
For each federal plan, EPA could work with the affected state to customize it by incorporating the state’s preferences on issues such as the allocation of emission allowances. Like our approach to state plans, this suggested approach for the federal plan would complement any current and future state policies to encourage clean energy, while preserving the ability of the states to change those policies over time.
Our white paper shows that the proposed Clean Power Plan is, at its core, a traditional emissions management program that can be implemented through well-established regulatory approaches mirroring other successful Clean Air Act programs.
Check out our white paper for more information on how both state and federal plans could achieve carbon pollution goals while providing maximum flexibility for compliance, all within existing legal frameworks.
Photo source: Moms Clean Air Force