California Emissions Waiver, Two Steps Forward One Step Back

Photo via: Injuryboard.com

Here at GBET we have previously discussed the new Federal fuel efficiency standards and the goals they sought to achieve. One of the key issues the new standards addressed was the discrepancy between California emissions standards and the Federal standard. It appeared as though there was finally going to be one unified standard which would allow for auto manufacturers to produce one version of a car for distribution nationwide. However, on June 30th, 2009 the EPA granted California an emissions waiver, clearing the way for them to once again set their own greenhouse gas emissions standards. California has agreed not to toughen the standards until 2017 but this still leaves one wondering what the long term implications of allowing multiple standards will be. Currently, the Waxman-Markey Climate Change Bill is being reviewed by the Senate, the bill will have sweeping implications across the U.S. economy in terms of regulating greenhouse gas emissions and is a laudable achievement if it passes. What will occur if states are allowed to set their own greenhouse gas emissions? Will we see a race to the top, with each state attempting to be the greenest? The potential implications of this waiver loom large and it will be very interesting to see what happens in 8 short years.

The critics to the waiver argue that allowing California to set their own standards will lead to higher costs to consumers as expressed by Scott Segal:

"California already has experience in adopting differential regulations for gasoline and electricity," said Scott Segal, an attorney for Bracewell and Giuliani in Washington, which represents utilities and refiners on climate change policy. "In each case, the results have been high prices for consumers, small businesses, schools, hospitals and industry. The precedent set here for cars could be just as damaging."

Allowing states to regulate their own environment whether through green building mandates or stricter emission standards is helping to spur development of a green collar economy but we must be careful to do so in a manner which does not destroy the backbone of the blue collar economy on which so many individuals rely.

Part One: Proposed Climate Change Legislation

 

It is widely agreed that greenhouse gases are a leading cause of global warming. The most plentiful and arguably hardest to regulate of these gases is one which every single one of us is responsible for generating, Carbon Dioxide CO2. Carbon Dioxide is a natural byproduct of respiration, combustion, and decomposition. Traditionally, the EPA has regulated pollutants which originate from point sources (sources which are stationary, and readily identifiable such as smoke stacks, drainage pipes, and other similar structures) and not from mobile sources such as vehicles, vessels, and other activities such as deforestation.

The new climate change legislation proposed by Representatives Waxman and Markey is divided into four titles the first two of which will be summarized below:

Title I: Clean Energy

  •  Renewable Energy
  •   Retail electricity suppliers must provide certain percentages of their load with electricity generated from renewable resources such as wind, solar, geothermal, and biomass.
  •  The following amounts of energy must be from renewable source, 6% in 2012 stepped up to 25% in 2025

·         Carbon Capture and Sequestration (CCS)             

o   Enables coal to continue to be used for electricity generation while reducing global warming by capturing and injecting the carbon dioxide into underground wells.

·         Clean Fuels and Vehicles

o   Establishes low-carbon fuel standard to promote biofuels. Additionally authorizes grants or loan guarantees for large-scale demonstration of electric vehicles.

·         Smart Grid and Electricity Transmission

o   Provides for deployment of a smart grid including measures to promote smart grip capability in new appliances. Also directs the Federal Energy Regulatory Commission to provide for new transmission lines to carry electricity from renewable sources.

·         Partnership with States

o   Form a State Energy and Environmental Development Fund in each state to serve as repository for federal money for clean energy and energy efficiency projects

·         Federal Purchase of Renewable Energy

o   Federal agencies may enter into long term contracts to purchase renewable electricity

Title II: Energy Efficiency

·         Building Energy Efficiency

o   Federal funding and training for states that adopt advanced building codes.

o   Directs the EPA to develop procedures for rating building energy efficiency

·         Appliance Energy Efficiency

o   Codifies efficiency standards for lighting and other appliances.

o   Improves DOE process for setting energy efficiency standards and strengthens the cost-effectiveness test to establish minimum standards. Incentives are provided to retailers who sell high volumes of “Best-In-Class” appliances.

·         Transportation Efficiency

o   Seeks to harmonize vehicle emission standards of the EPA, California, and Federal fuel economy standards.

o   Directs EPA to set emission standards for locomotives, marine vessels, and nonroad sources.

o   Large metropolitan planning organizations must submit plans which establish goals for reducing global warming pollution from the transportation sector.

·         Utilities Energy Efficiency

o   Distribution companies must show their customers have achieved a 1% electricity savings and 0.75% natural gas savings in 2012 and increase to 15% electricity savings and 10% natural gas savings by 2020.

·         Industrial Energy Efficiency

o   Secretary of Energy is required to establish standards for industrial energy efficiency and to seek ANSI recognition of the standard.

·         Public and Federal Energy Efficiency

o   Amends the Energy Independence and Security Act of 2007 to include nonprofit hospitals and public health facilities as public institutions eligible for grants and loans for energy efficiency.

Later this week part two of this series will focus on the remaining two titles of the proposed legislation as well as what it means from a regulatory prospective as well as its implications for green building.

 

 A copy of the draft legislation can be found here.

The executive summary of the legislation can be found here.

An excellent article form the New York Times explains some of the problems the EPA will have with implementing the new legislation if it becomes law.