Abby L. Harvey
GHG Monitor
6/6/2014
If all states reach carbon emission reduction targets laid out for them in the Environmental Protection Agency’s proposed emissions guidelines released early this week, the resulting total nation-wide reduction is estimated to be 30 percent below 2005 levels. The long-awaited rule sets targets for each state as a total reduction of CO2 emissions from 2012 levels and mandates that states develop their own plans to reach their targets through a number of means. The proposed regulations have been praised and criticized throughout the week with some stating that the targets are unattainable and others saying they are a step in the right direction. After being posted in the Federal Register, the proposal will go through a 120 day comment period before moving forward on the path to finalization, which is expected next June. Members of Congress have already announced potential legislation aimed at blocking the regulations, and lawsuits are expected.
The regulations center on the emissions targets which EPA worked to tailor to each state’s unique circumstances. To develop the targets EPA took into consideration what energy resources were available to each state and what steps they had taken already, a group of senior agency officials explained during a conference call following the announcement of the proposed rule. Because states have different starting points, the targets range anywhere from 72 percent reductions from 2012 levels for Washington to 11 percent emissions reductions for North Dakota.
States with more available renewable energy and natural gas or states which have already developed a framework for emissions reductions generally were expected to feasibly be able to reach greater reductions than those heavily reliant on coal or those which lacked such legislation the officials said. There is no “baseline” for the reductions and the 2005 estimate is used only for comparison the officials said. “[The targets] reflect what we’ve estimated states can do over the course of the next decade, ending in 2030,” one official said. “We’ve answered the question, ‘what can the states do and what can the utilities do?’ by looking at a set of measures and applying those measures to the fleet as it existed in 2012. So it’s not a reduction from an emissions level in any particular year. It’s using a calculation to apply the ‘what can they do’ measures to the existing fleet and then projecting it forward over time.”
The targets are broken down further into four “building blocks” or areas of potential emissions reductions which comprise the best system of emission reductions (BSER). The building blocks as listed in the proposed rule are:
- Reducing the carbon intensity of generation at individual affected EGUs through heat rate improvements.
- Reducing emissions from the most carbon-intensive affected EGUs in the amount that results from substituting generation at those EGUs with generation from less carbon-intensive affected EGUs (including NGCC units under construction).
- Reducing emissions from affected EGUs in the amount that results from substituting generation at those EGUs with expanded low- or zero-carbon generation.
- Reducing emissions from affected EGUs in the amount that results from the use of demand-side energy efficiency that reduces the amount of generation required.
Further, states would be allowed to join with other states to create multi-state networks to meet their reduction targets. “If states don’t want to go it alone, they can hang out with other states. We can do multi-state market based programs, we’re doing them today, or they can be creative and make new ones.” EPA Administrator Gina McCarthy said while announcing the proposed rule.
Backlash Expected
Several coal-state congressman released statements in response to the announcement saying they intend to fight against the proposed rule. Senate Minority Leader Mitch McConnell (R-Ky.) introduced legislation immediately which would “require that simple but important benchmarks be met before [the] rules could take effect: The Secretary of Labor would have to certify that it would not generate loss of employment. The Director of the Congressional Budget Office would have to certify that it would not result in any loss in American gross domestic product. The Administrator of the Energy Information Administration would have to certify that it would not increase electricity rates. And the Chair of the Federal Energy Regulatory Commission and the President of the North American Electric Reliability Corporation would have to certify that electricity delivery would remain reliable,” McConnell said on the floor. The measure was blocked by Senate Majority Leader Harry Reid (D-Nev.). Representatives David McKinley (R-W.V) and Nick Rahall (D-W.V.) are also planning legislation to block to the rule.
Chances of blocking the rule in Congress are slim, Center for Climate and Energy Solutions (C2ES) senior Fellow Kyle Aarons said, explaining that although a measure may get through the Republican-controlled House, those who oppose the proposed rule would not be likely to be able to get it through the Democrat-controlled Senate. Considering a measure that would strip EPA of power to regulate greenhouse gas emissions, Aarons said “even though that would pass the House, actually, something like that may have already passed the House, it wouldn’t pass the Senate and certainly would be vetoed.” The EPA is safe for now, Aarons concluded, but may not be for long, “After this year if both houses are controlled by Republicans and they won’t pass a budget unless it says EPA doesn’t have any money to work on this program, then Obama would be in a tough spot,” he said.
Legal action is also likely, though any suits filed against the rule at this point would automatically be thrown out as action cannot be taken against a rule until it has been finalized. “We could see law suits being filed, especially from state attorney generals who want to win political points by fighting against it, but all of those challenges will be thrown out because you can’t challenge a proposed rule. Once the rule is final, a year from now, then it will certainly be challenged in court by probably power companies and states.” The way the rule has been constructed however, may give EPA an advantage in court, Aarons said. “The way that EPA has broken down the targets into these four different building blocks is probably a good defense against law suits,” he said. “What this might do is create a nice spot for severability for the rule. If a state or a power company challenges and says, for example, demand-side energy efficiency shouldn’t be covered by this rule because it’s too far removed from power generation itself and you can’t mandate changes in consumption to get at power plant emissions, instead of a court being able to throw out the whole rule, the kind of worst case scenario there would be a court saying ‘you’re right, energy efficiency goes too far, therefore this fourth block is removed, but the rule stands, it’s just going to be based on the first three blocks instead.’”
Further measures to block the rule have been proposed by some coal states, such as Kentucky where a law was enacted this spring which could block the state from complying with the new EPA rule. EPA senior officials said that in the case of a state not submitting a proposal, EPA would have the authority to draft one for them. “This is no strange process to the states, this is the way the Clean Air Act works in many of its parts where the EPA sets standards or expectations and the states develop plans to meet them,” an official said. “We think frankly that the states will want to move forward with their own plans, we’ve provided ultimate flexibility for the states to design the plans that they want and need and states will want to be in the driver’s seat for designing those plans rather than looking to EPA to do it.”