WCI to close public comment on mandatory GHG reporting policy June 4
The Western Climate Initiative (WCI) will close the public comment period on its “Final Draft Essential Requirements of Mandatory Reporting for the WCI this Thursday, June 4. The Final Draft and Response to Stakeholder Comments, made available together on May 8, 2009, describe both WCI’s responses to prior public comment (regarding its January 2009 greenhouse gas reporting requirements) and the changes it made in response to those comments.
Although the report informs the public of changes WCI considered in response to public comment, recommended changes to key policy details were largely rejected. For instance, “many commenters” expressed concern that the reporting and verification thresholds (e.g., 25,000 metric tons of CO2e for the cap and trade program; 10,000 metric tons of CO2e for mandatory emissions reporting) were too low and that third-party verification of emissions reports was unnecessary.
With regard to the threshold comments, WCI responded:
The choice of the cap-and-trade program threshold was made after analysis of estimated facility-level emissions and was designed to ensure capture of 85-90% of WCI Partner jurisdiction emissions. Raising this threshold to 50,000 or 100,000 metric tons … would incentivize “leakage” of emissions to smaller facilities within an industry. The reporting threshold was set at a lower level to allow monitoring of uncapped sources for “leakage”, to allow WCI Partner jurisdictions to check for avoidance of the cap by facilities underestimating their emissions . . .. WCI expects that many of the facilities . . . in the 10,000 to 25,000 metric tons of CO2e emissions range will have only simple combustion sources [for which] emissions quantification … will be fairly simple.
In response to the verification comments, WCI stated that it “still firmly believes that third party verification is necessary” and that after “examining the experience of other GHG programs, WCI has found that third party verification is a cornerstone of national and international GHG reporting protocols.” WCI also rejected calls for reporter exemptions for CO2 emissions from biomass combustion. However, WCI did agree to relax the blanket requirement for a full verification if a reporter engaged a new verifier merely due to a change in verifier personnel.
Waxman-Markey climate change and energy bill faces significant political hurdles
On March 31, 2009, House Energy and Commerce Committee Chair Henry Waxman (D-MA) and Energy and Environment Subcommittee Chair Ed Markey (D-MA) unveiled the American Clean Energy and Security Act of 2009 (ACES). Although the legislation sketches a skeletal framework for carbon regulation, it is conspicuously silent on several key issues. Most importantly, the bill does not discuss what percentage of allowances, if any, will be auctioned or provided free of charge; nor does it specify whether, to what extent, and in what form, the billions in revenue generated by allowances will be returned to US taxpayers. These critical questions have been tabled for committee deliberation.
Reps. Waxman and Markey have fast-tracked ACES to be out of committee by Memorial Day. This schedule is consistent with the administration’s larger objective of signing a comprehensive climate and energy bill into law in advance of the December 2009 UN Climate Change Conference in Copenhagen. With key questions yet to be addressed and stark policy differences between supporters and detractors of the draft bill, some are skeptical whether the US can agree on comprehensive climate legislation before the Copenhagen summit.
The far-reaching, 648-page draft bill sets forth standards and incentives designed to promote clean energy and energy efficiency while reducing greenhouse gas emissions. Employing a comprehensive approach, the legislation is intended to enhance US energy independence, reduce energy costs to American consumers, create green jobs, and curb global warming pollution. The draft bill’s global warming regime is modeled largely on US Climate Action Partnership (USCAP) recommendations from the Blueprint for Legislative Action. To reduce global warming emissions, the bill broadly outlines a market-based cap-and-trade program with aggressive carbon reduction standards and offset-availability to covered entities. Relative to 2005 levels, the bill calls for reductions of 3% by 2012, 20% by 2020, 42% percent by 2030, and 83% by 2050.
The bill’s energy provisions require that 25% of the US energy supply be generated from renewable sources such as wind, solar, and geothermal by 2025. In addition, the bill promotes development of carbon capture and sequestration technology (CCS), modernization of the US electrical grid, increased production of electric vehicles, and heightened energy efficiency across all sectors of the economy, including building, appliances, and transportation. To facilitate transition to a clean energy economy, Title IV of the bill subsidizes domestic education and training for green jobs as well as exportation of clean technologies to developing countries abroad.
The Waxman-Markey draft has sparked a chorus of approval among commentators and policymakers alike. In an email statement, White House spokesman Ben LaBolt affirmed that “President Obama is committed to an energy policy that launches a new sector of clean energy jobs, makes our economy more competitive, and weans the nation off its dependence on foreign oil,” adding that “[i]t is clear that Chairman Waxman’s legislation would advance all of those goals.” Echoing the response from Pennsylvania Ave., Dr. Richard H. Moss, vice president for climate change at the World Wildlife Fund issued a statement praising the draft as “a major first step toward a strong cap and trade bill that will cut emissions, jumpstart a new clean energy economy and strengthen the ability of the Obama administration to negotiate a fair and effective global climate deal this December in Copenhagen.”
Opponents of the bill do not share Dr. Moss’s optimism. House Minority Leader John Boehner (R-OH) claimed that bill, as proposed, would “raise energy taxes in the midst of a serious recession.” Likewise, Sen. Joe Lieberman (I-CT), a longtime supporter of climate legislation, opined that the draft bill’s emissions targets “impose too much of a burden [on industry]” making it unlikely the bill would garner the 60 votes necessary to pass in the Senate.
Indeck Energy files lawsuit challenging New York's authority to implement RGGI
Indeck Energy has filed suit against several New York state agencies over their participation in the Regional Greenhouse Gas Initiative (RGGI), a carbon trading system between 10 Northeastern states designed to limit greenhouse gas emissions by power plants. Indeck Energy is the owner of Indeck-Corinth Generating Station, a combined-cycle natural gas plant in upstate New York. RGGI began its first compliance period on January 1, 2009. The Indeck lawsuit alleges that the agencies did not have authority from the New York legislature to implement the system. The complaint further alleges that the multi-state RGGI compact is unconstitutional without Congressional authorization. The complaint names Governor David Paterson, the New York State Department of Environmental Conservation, the New York State Energy Research and Development Authority, and the New York State Public Service Commission as defendants.
According to Indeck, regulations implemented pursuant to the RGGI would essentially impose an unauthorized tax on it. Under RGGI, power plants must buy permits or allowances to cover the amount of carbon they produce. Furthermore, Indeck alleges, it would not have a fair opportunity to recover its costs. Indeck contends that because the RGGI regulations target clean, low-emitting stations with onerous costs, the net result would be to actually increase emissions.
In a statement released to the press, Indeck’s President Gerald F. DeNotto claimed, “The regulations arbitrarily discriminate against a few electric generators that are bound by long-term fixed price contracts.” Furthermore, he contends that “New York’s version of RGGI levies a ‘RGGI tax’ on electric generators.” According to DeNotto, this leaves Indeck’s Corinth plant with “a heavy cost of the allowance tax, and no opportunity to recover it.” These claims echo statements made by DeNotto in public comment hearings regarding RGGI implementing regulations in 2007.
Environmental groups and the New York state agencies named in the complaint have begun to respond quickly to Indeck’s allegations. According to Peter Iwanowicz, director of the Office of Climate Change in New York’s Department of Environmental Conservation, Indeck’s claims are without merit. Iwanowicz claims that his department adopted the RGGI pursuant to authority the legislature had previously provided. As to the issue of the constitutionality of the multi-state compact, Iwanowicz denied that was an issue, noting that each state in the RGGI adopted separate regulations and maintained full sovereignty. State government watchdog group Environmental Advocates of New York (EANY) also issued two statements objecting to Indeck’s claims. Among other statements, EANY notes that the two-year public process to finalize RGGI regulations already resulted in a 1.5 million ton set aside for power plants in long term contracts.
