Climate 411

How Companies Set Internal Prices on Carbon

By EDF Blogs / Published: December 12, 2016
By Jonathan Camuzeaux and Elizabeth Medford

Despite the uncertainty created by the recent election, companies around the globe are demonstrating a commitment to keeping climate change in check. More than 300 American companies signed an open letter to President-elect Trump urging him not to abandon the Paris agreement. Others are acting on their own to reduce emissions in their daily operations, by setting an internal price on carbon.

The number of companies incorporating an internal carbon price into their business and investment decisions has reached new heights, a recent CDP report shows, with an increase of 23 percent over last year. The more than 1,200 companies that are currently using an internal carbon price (or are planning to within two years) are using them to determine which investments will be profitable and which will involve significant risk in the future, as carbon pricing programs are implemented around the world. Sometimes, they also use them to reach emissions reduction goals.

Not all carbon prices are created equal, and companies differ in how they set their specific price. Here’s a look at some of these methods:

Incorporating Carbon Prices from Existing Policies

 Some companies set their carbon price based on policies in the countries where they operate. For example, companies with operations in the European Union might decide to use a carbon price equal to that of the European Union Emissions Trading System (EU ETS) allowances, and those operating in the Northeastern United States might adopt the carbon price that results from the Regional Greenhouse Gas Initiative market.

ConocoPhillips, for example, focuses its internal carbon pricing practices on operations in countries with existing or imminent greenhouse gas (GHG) regulation. As a result, its carbon price ranges from $6-38 per metric ton depending on the country. For operations in countries without existing or imminent GHG regulation, projects costing $150 million or greater, or that results in 25,000 or more metric tons of carbon dioxide equivalent, must undergo a sensitivity analysis that includes carbon costs.

Using Self-Imposed Carbon Fees

Others take a more aggressive approach by setting a self-imposed carbon fee on energy use. This involves setting a fee on either units of carbon dioxide generated or a proxy measurement like energy use. These programs also often include a plan for using the fees such as investment in clean energy or energy efficiency measures. This can be an effective method for incentivizing more efficient operations.

Microsoft, for example, designed its own system to account for the price of its carbon emissions. The company pledged to make its operations carbon neutral in 2012 and does so through a “carbon fee,” which is calculated based on the costs of offsetting the company’s emissions through clean energy and efficiency initiatives. Each business group within Microsoft is responsible for paying the fee depending on how much energy it uses. Microsoft collects the fees in a “central carbon fee fund” used to subsidize investments in energy efficiency, green power, and carbon offsets projects. Still, by limiting carbon fees to operational activities, Microsoft has yet to address a large chunk of their emissions.

Setting Internal Carbon Prices to Reach Emissions Reduction Targets

 Other companies set an internal carbon price based on their self-adopted GHG emissions targets. This involves determining an emissions reduction goal and then back-calculating a carbon price that will ensure the company achieves its goal by the target date. This method is a broader approach focused more on significantly reducing emissions while also mitigating the potential future risk of carbon pricing policies.

Novartis, a Swiss-based global healthcare company, uses a carbon price of $100/tCO2 and cites potential climate change impacts as a motivator. The company has its own greenhouse gas emissions target, which it is using to cut emissions to half of its 2010 levels by 2030. These internal policies mean that Novartis, which is included in the European Union’s Emissions Trading Scheme (EU ETS), has been able to sell surplus allowances and thus far avoid an increase in operating costs.

Where we go from here

 While these internal carbon pricing activities are welcome – and we hope they continue – they are not sufficient to reduce greenhouse gases to the degree our nation or world requires. Like these forward thinking companies, nations around the world, including the United States, need to consider the costs of inaction, including the climate-related costs, to avoid short-sighted investments. Ultimately, we will need public policies that put a limit and a price on carbon throughout the economy.

The spread of internal carbon pricing could signal greater support for carbon pricing by governments. But companies can do more: the ultimate test of a company’s convictions and commitment to carbon pricing might be their willingness to advocate for well-designed, ambitious policies that achieve the reductions we need.

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Groundbreaking Study Shows New Coal Plants are Uneconomic in 97 Percent of US Counties

By EDF Blogs / Published: December 8, 2016

By: Ferit Ucar

At Environmental Defense Fund (EDF), we understand that market forces can drive either a healthy environment – or harmful pollution. I recently wrote about how generating electricity often creates pollution, which comes with environmental and health costs that are usually not paid for by the polluters. That’s why EDF works to identify and correct market failures, like the failure to understand – as well as account for – all of the costs pollution imposes on society.

The Energy Institute at the University of Texas at Austin (UT) just released a useful tool in that pursuit: a studythat aims to capture the full cost of new electric power generation – including environmental and public health costs – on a county-by-county basis in the United States. The study evolves traditional ways of estimating new generation costs by 1) incorporating pollution costs, and 2) breaking data down to the county level.

The results show economics are leading the U.S. to a cleaner energy economy, in which there is no role for new coal plants. Let’s break it down.

Enhancing the levelized cost method

The Levelized Cost Of Electricity (LCOE) method is commonly used to compute the costs of different power sources – including fossil fuels and renewables – on a comparable basis. The LCOE, expressed on a dollar per kilowatt-hour (kWh) basis, is the estimated amount of money it takes for a particular electricity generation technology to produce a kWh of electricity over its expected lifetime.

In its conventional form, the LCOE method does not take into account environmental and public health costs – costs external to electricity generation but caused by it. It also does not show the variation in costs of building and operating identical power plants across different geographies. The study provides an improved method that addresses these limitations. The study also factors in siting challenges – like water availability and access to fuel – that prevent certain plant types from being built in a given county.

The UT study presents results in a map format, which facilitates cost comparisons by fuel source, technology, and location. The study team released interactive maps that show the cheapest technology by county, as well as calculators that enable users to compare costs for different scenarios.

Key findings

The following U.S. map shows the least-cost technology when factoring in siting limitations, and environmental and public health costs. The key displays the number of counties in which each power technology is the least-cost option.

map-1

The analysis shows:

  • Wind is the least-cost option in the most number of counties.
  • Coal plants are never the least-cost option.
  • Natural gas combined cycle (NGCC) plants are the least-cost option in counties where the wind isn’t as strong.
  • Utility-scale solar photovoltaic (PV) plants are the least-cost option in counties where it’s particularly sunny and/or there is a lack of cooling water availability, which is needed for thermal generation like coal.
  • When a county faces siting challenges that prevent other technologies from being built, residential solar PV plants (like rooftop solar) are the least-cost option. Put another way, rooftop solar is a viable option in every county; other power sources are not.

If you remove the environmental and public health costs from the analysis, the map looks different:

map-2

Even without accounting for the environmental and public health costs, wind remains the least-cost option in over 1,000 counties – that’s about one third of U.S. counties. And solar appears on the map nearly five times as much as coal.

Caveats

Although the study presents an improved way to measure the costs of electricity generation, we should acknowledge its limitations. It does not:

  • Remove the subsidies received by coal and natural gas during the exploration and extraction process, which effectively make fossil-fuel plants appear less costly than they actually are.
  • Account for the uncertainty of future fuel prices and capacity factors for fossil fuel and nuclear plants.
  • Demonstrate the environmental and public health benefits of retiring an existing fossil-fuel plant. As the study states, if emission rates from existing (rather than new) power plants were used, the public health costs would, on average, be 10 times higher.
  • Factor in the costs associated with managing the variability in wind and solar’s generation output.
  • Model the implications of the federal Production Tax Credits and Investment Tax Credits for renewable generation technologies, as well as subsidies at the state or local level, which affect investment decisions. (The calculators do allow changes to capital cost assumptions; so therefore, these could be factored in).
  • Consider economic factors other than cost – like revenue – that also affect investment decisions.
  • Account for the high-level environmental damage risks associated with electricity generation from nuclear, natural gas, and coal as a result of incidents like Chernobyl and Fukushima, Aliso Canyon, and Dan River coal ash spill that cause massive, long-term, acute, and dispersed chronic harm.

    The Energy Institute study clearly shows the economic viability of wind and increasing prospects for solar.

The Energy Institute study clearly shows the economic viability of wind and increasing prospects for solar. Moreover, it provides policymakers and the public with important information on the full cost of electricity for new power sources – including the environmental and public health costs such as asthma attacks, premature death, and lung damage resulting from fossil-fuel pollution.

When pollution costs are accounted for, as the UT study shows, coal power plants are not the lowest-cost electricity generation technology anywhere. Even without including environmental and health costs and renewables subsidies, and despite the fact extraction of coal remains subsidized, new coal plants are still not economic in 97 percent of U.S. counties. As we work to fix outdated rules, we know that market forces are helping to clear the way for clean energy progress and cleaner air.

This post originally appeared on our Energy Exchange blog.

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What Do the 2016 Elections Mean for the Clean Power Plan?

By Tomas Carbonell / Published: November 21, 2016

President-Elect Trump has repeatedly claimed that climate change is a “hoax,” and has appointed notorious climate denier Myron Ebell to run the transition team for the Environmental Protection Agency (EPA). During the campaign, Trump advocated for “scrapping” the Clean Power Plan – the nation’s first limits on harmful climate pollution from existing power plants, which are among the United States’ very largest sources of these contaminants.

Lost in this campaign rhetoric was the reality that states and companies across the country are already making cost-effective investments in transformative clean energy technologies that are rapidly reducing emissions of climate pollution across the power sector. These investments are helping deliver a more reliable and affordable electricity grid, yielding tremendous public health benefits by reducing emissions of soot and smog-forming pollutants, and driving job growth in communities around the country.

The Clean Power Plan builds on all of these trends and helps ensure they will continue for years to come, but the Trump Administration will be hard pressed to stop the progress underway in its tracks.

If Trump does try to roll back the Clean Power Plan, he will find himself on the wrong side of history, the law, and public opinion. The Clean Power Plan is firmly rooted in our nation’s clean air laws, and there are millions of Americans across the country – along with a broad and diverse coalition of states, cities, businesses, faith organizations, consumer advocates, and other leaders – who support these protections and will fight to preserve them.

cpp_supportmap_600Large Majorities of Americans Support the Clean Power Plan.

Donald Trump did not get elected with a mandate to dismantle important climate protections supported by large majorities of Americans. Poll after poll shows that Americans all across this country — in red and blue states alike — broadly support clean air, clean energy, and climate progress. This includes strong, diverse support for the Clean Power Plan, even in states currently suing over the standards. More than two-thirds of voters favor federal action to reduce emissions of pollutants that cause climate change.

If the new administration tries to take steps to roll back these important measures, they will have to do so knowing that they are woefully out of touch with the majority of the American people.

Weakening or rescinding the Clean Power Plan, or other public health and environmental protections, also won’t do anything to address the economic concerns that did figure prominently in Trump’s campaign.

As recent analyses by respected energy experts have demonstrated, the coal industry has been experiencing declining production and employment due to factors that have nothing to do with the Clean Power Plan – including intense competition from natural gas, the falling cost of renewables, and a slew of bad investment decisions. Even Senate Majority Leader Mitch McConnell recently expressed doubt that attacking environmental regulations will cause a turnaround for the coal industry.

At the same time, undoing the Clean Power Plan could adversely and needlessly affect long-term growth in America’s vibrant clean energy industry –  which currently supports hundreds of thousands of manufacturing and construction jobs around the country, and employs far more people than the coal or oil and gas industries.

Leading Businesses, Cities of All Sizes and in All Regions Support the Clean Power Plan

In addition to enjoying the support of millions of Americans, limits on carbon pollution represent good business and good governance. Our cities, states, and companies support limits on climate pollution and investments in new, clean energy technologies that bring jobs and economic opportunity to our communities.

The week after the election, more than 360 of the nation’s leading businesses — including DuPont, General Mills, Levi Strauss, Nike, and Starbucks — signed a remarkable statement urging Trump to honor the United States’ commitments in the Paris Agreement to reduce dangerous climate pollution. These companies declared that “Failure to build a low-carbon economy puts American prosperity at risk,” and that the “right action now will create jobs and boost US competitiveness.”

Power companies that together own or operate one of every ten megawatts of the nation’s generating capacity – including some of the nation’s largest operators of fossil fuel powered plants – are supporting the Clean Power Plan in court.

So are many large energy users. Leading businesses that employ tens of thousands of people in all regions of the country — including Adobe, Apple, Amazon, Google, IKEA, Mars, and Microsoft — recognize the importance of the Clean Power Plan to their economic growth and are also supporting the rule. More than 100 of America’s top companies signed a public statement this spring calling for “swift implementation” of the Clean Power Plan.

Adding to this groundswell of support, 18 States, 60 cities, the U.S. Conference of Mayors, and the National League of Cities are supporting the these standards in court. These municipalities include major cities in states that are litigating against the Clean Power Plan, such as Houston, Grand Rapids, and Miami.  Many of these cities are on the front lines of climate change and they know their citizens don’t want leaders who put politics above their safety and well-being.

Our Nation’s Clean Air Laws Require EPA to Protect the Public from Harmful Pollutants that are Destabilizing Our Climate

EPA has a legal responsibility to protect the public from dangerous climate pollution that threatens our prosperity, security, and public health.

The Supreme Court has affirmed EPA’s authority to regulate greenhouse gases under the Clean Air Act three times since 2007, including EPA’s authority to limit carbon pollution from power plants under the Clean Air Act provision that is the basis for the Clean Power Plan.

As so many Americans around the country recognize, the Clean Power Plan is a common-sense and cost-effective step towards fulfilling this bedrock legal obligation. Many companies and states also recognize that it provides unprecedented compliance flexibility that may not be replicated in another regulatory approach. Although Congress could attempt to modify or roll back the Clean Power Plan by amending the Clean Air Act, such action would be extremely controversial and encounter especially stiff opposition. Americans across the country — and the numerous states, municipalities, businesses, consumer advocates, faith organizations, and other leaders who support the Clean Power Plan — will vigorously oppose any attempt to weaken these vital, hard-fought protections for climate and public health.

The Incoming Administration Cannot Simply Dismantle the Clean Power Plan by Fiat

In addition to deep support, proponents of a safer climate have America’s bipartisan bedrock clean air laws on our side.

Any attempt to withdraw or modify the Clean Power Plan or other clean air protections would first have to go through the same rigorous, inclusive public notice and comment process that EPA carefully followed in adopting them. Such changes would also be subject to judicial review in the federal courts, and would be set aside if they are contrary to the Clean Air Act or do not rest on sound technical and policy foundations.

Previous Administrations that have attempted to make sweeping changes to Clean Air Act protections – including the George W. Bush Administration – abandoned these efforts in the face of strong public opposition and defeat in the federal courts.

The Clean Power Plan Builds on and Accelerates the Transition to a Clean Energy Future that is Already Under Way in the Power Sector

Perhaps the biggest reason opponents shouldn’t expect to overturn the Clean Power Plan overnight is that this important rule is only cementing the direction our energy system has been moving for years.

States and power companies across the country recognize this transition is the best way to provide ratepayers with affordable, reliable, and low carbon electricity – and they understand that the Clean Power Plan provides a common-sense, flexible, cost-effective framework for achieving those goals.

Even without the Clean Power Plan targets in effect, the Energy Information Administration has reported that power sector carbon emissions have fallen by 21 percent since 2005 –almost two-thirds of the way towards meeting the Clean Power Plan’s 2030 emission reduction targets.

Wind and solar are expected to account for almost two-thirds of the electric generating capacity added to the grid in 2016. Many states are on track to fully meet their Clean Power Plan reduction targets. Meanwhile, retail electricity prices actually fell in 2016 for the first time in many years.

That doesn’t mean the Trump Administration can’t attack the Clean Power Plan. We fully expect a fight, and we know it won’t be easy. But we are ready to fight – and we hope you’ll join us.

The transition to a clean energy future is already well underway, and it cannot and will not be stopped. The health and prosperity of America’s families and communities depend on it.

Also posted in Clean Air Act, Clean Power Plan, EPA litgation, Partners for Change, Policy / Read 1 Response

Open Road Ahead for Clean Trucks

By Jason Mathers / Published: October 25, 2016

rp_iStock_000002312011Medium2-1024x768.jpgOur nation is making great progress in reducing the environmental impact of trucking.

This is tremendous news, of course, as trucking – the main method of transporting the goods and services we desire – is critical to the fabric of our society.

Consider these facts:

We’re making major progress because of a team effort from truck and equipment manufacturers, fleets, policymakers, and clean air and human health advocates. With protective, long-term emission standards in place, manufacturers are investing in developing cleaner solutions and bringing them to market. Truck fleets are embracing new trucks because of lower operating costs and improved performance.

(For a more detailed picture of the widespread support for cleaner trucks, see EDF’s list of quotes supporting recent national Clean Truck standards.)

We must continue this team effort to make further necessary improvements in the years ahead.

Despite our recent progress, diesel trucks continue to be a leading source of NOx emissions, which is why a number of leading air quality agencies across the nation, health and medical organizations, and more than  30 members of Congress are calling for more protective NOx emission standards.

Trucks are also a large and growing source of greenhouse gas emissions. Thankfully, the new fuel efficiency and greenhouse gas standards mentioned above – which were released this past August and just published in the Federal Register today – will cut more than a billion tons of emissions.

Trucking fleets are embracing cleaner trucks. UPS, for example, is expanding its fleet of hybrid delivery trucks. PepsiCo, Walmart, Kane and others have applauded strong fuel standards for trucks.

Manufacturers are developing solutions to further improve the environmental footprint of trucking.

In the past few weeks alone:

  • Cummins unveiled a 2017 engine that cuts NOx emissions 90 percent  from the current emission standard.
  • Volvo Trucks North American showcased its entry to the DOE SuperTruck program, which is  a concept truck capable of surpassing 2010 efficiency levels by 70 percent and exceeding 12 miles per gallon.
  • Navistar also revealed its SuperTruck, the CatalIST, which hit a remarkable 13 mpg.

The progress we’ve made to date does more than just improve conditions within the U.S. Our strong standards push U.S. manufacturers to develop solutions that will resonate with international markets. For example, the European Union, Brazil, India, Mexico, and South Korea all are exploring new fuel efficiency and greenhouse standards for big trucks. U.S. manufacturers will be well positioned to compete in markets that put a premium on fuel efficiency.

In the coming years, we will need to continue to advance protective emission standards to protect the health of our communities and safeguard our climate. When the time comes, we will be building upon an impressive record of progress and cooperation.

Also posted in Cars and Pollution, Economics, Greenhouse Gas Emissions, Policy / Comments are closed

Cutting carbon pollution from aviation: A major breakthrough years in the making

By Nat Keohane / Published: October 12, 2016

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(This post originally appeared on EDF Voices)

Five years ago, I had one of the hardest tasks in government for someone who cares about climate action: running an interagency process in the White House on addressing carbon dioxide emissions from international aviation.

To put it mildly, climate action in the aviation sector was at an impasse.

The European Union was seeking to extend its greenhouse gas emission trading system to include international flights to and from Europe. The EU was well within its legal rights, and a range of studies showed that despite significant emission reductions the costs to passengers would be slight.

But the political opposition was widespread and fierce.

India had gone ballistic at the idea. Russia threatened to deny Europe access to its airspace. China said it would cancel orders for European aircraft.

In the United States, meanwhile, not a single senator was willing to block legislation that railed against Europe’s proposal to cover American air carriers.

And yet, last week, the 191 member states of the International Civil Aviation Organization agreed to the first-ever cap on carbon pollution from a global sector, adopting by broad acclaim a market-based measure on carbon dioxide emissions from international flights.

The agreement, while not perfect, is significant – not only for the emissions reductions it promises to achieve, but also because of the circuitous journey that got us here.

Industry: We need consistency

The impetus to find a way out of the impasse came from two quarters.

The first was a business imperative. What the aviation industry feared more than anything was a patchwork of regulations – one approach in Europe, another in the U.S. and still another in China. That made the industry, a strong opponent of the EU’s plan, willing to come to the table to get a global deal.

The second was the Obama administration’s commitment to climate action. If we couldn’t overcome the widespread opposition to Europe moving ahead, could we leverage the threat of EU action to land an international agreement?

ICAO, the aviation agency of the United Nations, had already agreed in 2010 to explore policy options to achieve a global solution. So in the fall of 2011, I raised the idea of pivoting to ICAO in a conversation with Mike Froman, then the White House Deputy National Security Advisor for International Economic Affairs.

A breakthrough came the following spring, when Tony Tyler, head of the International Air Transport Association, met with Mike and made it clear that the industry would support a robust market-based measure in ICAO.

EU: Get a deal or else

That summer, U.S. Special Envoy for Climate Change Todd Stern held the first of a series of informal meetings among countries to discuss an ICAO solution.

Meanwhile, the administration worked to ensure that when the anti-E.U. legislation was passed by Congress that autumn, it directed the administration to negotiate a global approach.

Work on a global market-based approach accelerated once ICAO agreed in 2013 to develop a proposal for formal consideration.

The EU kept the pressure on by making clear that it would reinstate its coverage of international flights if ICAO failed to act.

The industry remained supportive, just as Tony Tyler had pledged back in 2012. Environmental Defense Fund and our partners in the International Coalition for Sustainable Aviation, which EDF helped to found 20 years ago, published economic and legal analyses and provided technical support to governments, including through expert participation in ICAO working groups.

My former colleagues in the Obama administration spearheaded the effort to reach an agreement and put on a full-court diplomatic press in the last few weeks to secure participation from as many countries as possible.

Nations: We’ll move if we can compromise

The global market-based measure announced in Montreal last week will reduce carbon pollution by an estimated 2.5 billion tons over the first fifteen years of the program. It signals continued momentum on climate action, and positions the aviation sector as an engine of demand for high-quality emissions reductions around the world.

To be sure, the agreement is not perfect. An ideal agreement would apply to all anticipated emissions growth, whereas the deal currently covers 76 percent – although that will rise if more nations join.

The “carbon-neutral growth” target must be strengthened over time if the aviation sector is to do its fair share to address climate change – which is why the agreement includes provisions for regular review in light of the Paris Agreement’s long-term temperature goals.

To accommodate the concerns of fast-growing emerging markets, the agreement initially ties each air carrier’s responsibility to the sector’s overall emissions growth, not just its own emissions – arguably a more equitable approach, but one that dampens incentives for within-sector emission reductions.

And the agreement sets a two-year time frame for finalizing the crucial draft rules needed to determine what types of emissions units will be eligible for use in the program and ensure that they are not “double-counted” against other compliance obligations.

Such compromises, however, were crucial to garnering the support of a huge majority of ICAO’s member nations and getting the agreement across the finish line.

A good day for the climate

Some, including a few of my colleagues in the environmental movement, focus on the deal’s shortcomings to castigate it or at least damn it with very faint praise.

But letting the perfect be the enemy of the good is a luxury the world cannot afford – least of all the people of countries on the front lines of climate change, such as Jamaica, Burkina Faso and the Marshall Islands, whose representatives helped create momentum for the deal in the final days of the negotiations by eloquently urging ICAO to act.

Back home in New York the night after the deal was announced, my daughters, 11 and 14, asked how my day had been. I had to pause and let it sink in.

“Well, we got an international agreement that we’ve been working toward for many years that will limit carbon pollution from airplanes – and help make the future of the planet just a little bit safer” I told them. “So, yes, it was a very good day.”

Also posted in Greenhouse Gas Emissions, International, Partners for Change, Policy / Comments are closed

Today’s Clean Power Plan Oral Argument: A View from Inside the Courthouse

By Martha Roberts / Published: September 27, 2016

rp_Gavel-and-earth-from-Flickr-300x199.jpgEarlier today the U.S. Court of Appeals for the D.C. Circuit heard oral argument on the Clean Power Plan — America’s first-ever limits on climate pollution from power plants, which are our single largest source of this harmful pollution.

For the first time, these vital safeguards are being reviewed on the merits. Ten active judges on the D.C. Circuit presided over today’s argument.

I was at the courthouse today. Here’s my read out:

Judges’ probing questions reflected their active engagement and preparation as anticipated in such a high profile case — as well as a skeptical view of opposing arguments

The judges today were prepared and engaged. They asked sharply probing questions of all sides.

But the big news is that a majority of judges appeared receptive to arguments in support of the Clean Power Plan.

The court understood that EPA was carrying out long-established legal authority — affirmed in three separate Supreme Court opinions — to tackle the urgent threat of climate change by addressing our nation’s largest source of climate pollution.

Judge Millett characterized petitioners’ arguments against EPA’s authority as a “bait and switch”— one that would gut the Supreme Court’s conclusion in an earlier groundbreaking case, American Electric Power, which concluded that Section 111(d) “speaks directly” to EPA’s authority regulate greenhouse gases from existing power plants. (564 U.S. 410, 424, 2011)

Judges also recognized that the Clean Power Plan’s approach reflects familiar, time tested strategies to reduce pollution — strategies that the Supreme Court and the D.C. Circuit have upheld in numerous past Clean Air Act programs adopted under administrations of both parties.

The judges’ questions demonstrated their keen understanding of how the power sector works. Several judges underscored the unique nature of the interconnected electricity grid system —which distinctly enables sources to reduce emissions cost-effectively through shifting generation to lower-emitting sources — in discussing EPA’s inclusion of generation shifting as part of the best system of emissions reduction reflected in the Clean Power Plan. Judge Tatel, for example, expressly recognized the point that generation-shifting strategies incorporated in the Clean Power Plan are “business as usual” for power companies.

Meanwhile, the judges expressed skepticism towards petitioners’ claims. In one exchange, Judge Pillard questioned why petitioners’ arguments would not entirely “immunize” highly polluting sources from pollution control.

Legal experts representing a wide variety of perspectives forcefully and effectively argued in support of the Clean Power Plan

A diverse and impressive suite of presenters argued in support of the Clean Power Plan.

Seasoned U.S. Department of Justice (DOJ) attorneys articulated the clear and compelling legal and technical basis for the Clean Power Plan, which was informed by an unprecedented level of public and expert input including more than four million public comments. The DOJ attorneys underscored how the Clean Power Plan’s approach carefully respects statutory limits on EPA’s authority and embodies well-established, proven strategies to reduce pollution.

The attorney representing power companies supporting the Clean Power Plan — a robust coalition that represents almost ten percent of America’s electricity generation capacity —emphasized that the power sector is already reducing its carbon pollution by shifting to low-cost cleaner generation, making Clean Power Plan targets eminently achievable. For these companies, the carbon reduction strategies EPA recognized in the Clean Power Plan are “business as usual” — the phrase that was then raised by Judge Tatel later during the day. The power company attorney’s remarks also emphasized that petitioners’ approach would ask EPA to ignore the widespread strategies that power companies are already using to reduce carbon pollution cost-effectively through shifting generation to lower and zero emitting resources.

Counsel for the numerous states and cities across the country that are supporting the Clean Power Plan spoke on behalf of their citizens on the urgent need for protections against climate pollution. The state attorney’s remarks highlighted how the rule’s flexible approach echoes other traditional, successful Clean Air Act programs, and properly respects states’ role in the interconnected electricity grid system.

Sean Donahue, counsel for public health and environmental organizations including Environmental Defense Fund, forcefully articulated the clear basis for EPA’s authority and the urgent need to protect our communities, our families, and our economy against climate change. In particular, Donahue underscored that Clean Power Plan opponents seek to fundamentally obstruct any progress in addressing the most pressing environmental challenge of our time – climate change. Indeed, opponents of the Clean Power Plan have, in previous statements, conceded that EPA has authority to issue the Clean Power Plan — entirely undercutting their current claims to the contrary.

It’s challenging to predict an outcome from oral argument

It’s difficult to guess a case’s outcome from any oral argument. That’s even more true in today’s case, which was heard by an en banc court – all ten active judges on the court, aside from Judge Merrick Garland who recused himself. With ten judges to observe and interpret, each with an individual perspective and background, prognostications are particularly challenging.

Nonetheless, we have many reasons for optimism after today’s rigorous review of petitioners’ claims. Most of all, the rock solid legal and technical foundation for the Clean Power Plan gives us confidence that climate protection can win the day.

Now, the judges deliberate

The judges now turn to deliberation and discussion. In a typical case, the D.C. Circuit can take several months to issue an opinion. Here, there is a true sense of urgency in resolving EPA’s clear authority to combat climate change — earlier in the case, judges issued an order for expedited consideration — but there will also be ten judges’ opinions to resolve. Our nation’s biggest step to protect the health and well-being of our communities from climate pollution hangs in the balance.

Also posted in Clean Air Act, Clean Power Plan, EPA litgation, Greenhouse Gas Emissions, Partners for Change, Policy / Read 1 Response