Should EPA Use Emissions Averaging or Cap and Trade to Implement §111(d) of the Clean Air Act?
| Date | 01 September 2013 |
| Author |
9-2013 NEWS & ANALYSIS 43 ELR 10731
C O M M E N T S
Should EPA Use Emissions
Averaging or Cap and Trade
to Implement §111(d) of
the Clean Air Act?
by William F. Pedersen
William F. Pedersen is Counsel, Perkins Coie.
Fossil fuel-red electric generating units (EGUs)
account for 40% of the U.S. annual greenhouse gas
(GHG) emissions. No federal regulations currently
limit those releases. Two months ago, President Barack
Obama ordered1 the U.S. Environmental Protection
Agency (EPA) to ll this gap by setting GHG emission
limits for new EGUs under §111(b) of the Clean Air Act
(CAA)2 and for existing EGUs under §111(d).
e Administration has said very little about its §111(d)
plans beyond setting a schedule for action.3 But interest
groups are already staking out their advocacy positions.
Many of those positions reect the familiar clash between
proponents of GHG control and global warming deniers.
But others reect disagreements among control proponents
over exactly how to act. ere are two main contenders,
called “cap and trade” and “emissions rate averaging.”
Most remarkably, two leading control proponents—
the Natural Resources Defense Council (NRDC) among
environmental groups a nd the National Climate Coali-
tion (NCC), an association of blue-chip companies—have
endorsed emission rate averaging over cap and trade, even
though it would be less legally defensible, could not encour-
age energy conservation or zero-carbon power nearly as
much, and would be more complicated to administer.4
1. 77 Fed. Reg. 39535 (July 1, 2013).
2. 42 U.S.C. §§7401-7671q, ELR S. CAA §§101-618.
3. Until recently, EPA denied it was developing a §111(d) standard. e
Obama memorandum directing EPA to move forward says only that the
Agency should consult widely, particularly with states, and should “develop
approaches that allow the use of market based instruments, performance
standards, and other regulatory exibilities.” Presidential Memorandum,
Power Sector Carbon Pollution Standards 1(c)(iii) (June 25, 2013), avail-
able at http://www.whitehouse.gov/the-press-oce/2013/06/25/presiden-
tial-memorandum-power-sector-carbon-pollution-standards. However, the
memorandum directs EPA to issue a §111(d) proposal by June 2014 and a
nal rule one year later. Id. at 1(b).
4. D A. L ., C P P C P
L: S W C A A C C U A’ B-
C P (NRDC 2013), available at http://www.nrdc.org/air/
pollution-standards/les/pollution-standards-report.pdf; N C
is sounds like an obscure, technica l, a nd unimport-
ant debate. is Article seeks to clarif y those technicalities
and convince the reader of their importa nce. It proceeds
as follows: First, it describes the new source performance
standards (NSPS) program and the overall §111(d) debate.
Next, it sets out the two competing implementation
approaches. en, it compares and evaluates them, and
ends with a brief conclusion.
I. EPA’s Proposed NSPS
Section 111(b) requires EPA to set NSPS for emissions that
“may reasonably be anticipated to endanger public health or
welfare.”5 EPA must set those standards for selected source
categories, and balance costs against emissions reductions
when it sets them.6
A year-and-a-half ago, EPA proposed an NSPS for GHG
emissions from all newly constructed fossil fuel-red non-
peaking EGUs.7 EPA followed precedent in setting an emis-
sion limit for each separate new EGU. But it broke with
most past practice in proposing the same emission stan-
dard for both gas-red and coal-red plants, namely 1,000
pounds of carbon dioxide equivalent (CO2e) per megawatt/
hour (MWh)—a standard only gas plants can meet.
e Obama memorandum directs EPA to repropose this
standard by September 20, 2013.8 e trade press reports
that EPA may suggest separate standards for coal and gas
plants. However, neither this shift nor any other probable
change would be likely to aect the basic §111(d) issues,
which we describe below.9
C, U EPA C A A A B F
F S G G R P (2013),
available at http://www.ase.org/uploaded_les/temp/NCCNarrative.pdf.
5. CAA §111(b)(1)(A).
6. CAA §111(a)(1).
7. 77 Fed. Reg. 22392 (Apr. 13, 2012).
8. Presidential Memorandum, supra note 3, at 1(a).
9. Indeed, the NRDC’s §111(d) proposal, which we discuss in critical detail, in-
corporates separate emission reduction calculations for coal and for gas plants.
Author’s Note: My thanks to Dick Stewart for editorial comments.
Copyright © 2013 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.
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