Exploring Carbon Fees & Clean Air Act Regulations

What Does “Regulatory Pause” Really Mean?

Welcome to Citizens’ Climate University, a weekly webinar program of Citizens’ Climate Lobby that provides CCL supporters with access to in-depth training opportunities on topics relating to climate change and effective climate advocacy.

I’m your host Brett Cease and tonight’s topic is Carbon Pricing & the Clean Air Act. Join Dr. Ross Astoria, CCL Board Chairman and Chair of Politics, Philosophy, and Law Department at University of Wisconsin at Parkside for a webinar exploring the important history of the Clean Air Act and how key EPA regulations would interact with federal carbon pricing like the Energy Innovation Act.

Webinar slides: http://cclusa.org/clean-air-regs

Skip ahead to the following sections:

Administrative Law Review (2:19)

Clean Air Act History & Framework (5:27)

EPA Greenhouse Gas Regulations (14:07)

The Energy Innovation Act’s Pause (18:13)

Evaluation Framework For Carbon Pricing & Regulations (26:50)

Final Takeaways (39:10)

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About Our Speaker

Ross Astoria, PhD/JD

Professor and Chair
Dept. of Politics, Philosophy, and Law

University of Wisconsin at Parkside

CCL Board Chairman

Advanced Climate Policy Camp Director

Ross Astoria (Chairman)

Professor Ross Astoria teaches political science and law at the University of Wisconsin, where he has been recognized as an outstanding educator by Phi Delta Kappa. He recently completed a chapter on greenhouse gas mitigation and utility law for a forthcoming Oxford University Press book. Ross is the group leader for the CCL’s Racine-Kenosha chapter and liaison to the office of Speaker of the House Paul Ryan.

Professor Astoria has recently published on several aspects of international trade and greenhouse gas mitigation policy, including carbon border tax adjustments.

Three Main Points

Understand where to find and begin interpreting EPA regulations governing greenhouse gases.

Evaluate the interaction of legislation like the Energy Innovation Act with key regulations.

Reviewing the history and regulatory architecture of the Clean Air Act.

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Learning Goals

After tonight’s lesson attendees should be able to:

Our Agenda

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Administrative Law Review

Clean Air Act History & Framework

EPA Greenhouse Gas Regulations

The Energy Innovation Act’s Pause

Evaluation Framework For Carbon Pricing & Regulations

Q&A Discussion

Administrative Law Review

Policy Formation Model

Policy coalition develops

Legislation passes
enabling statute

Administrative implementation occurs

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In this Schoolhouse Rock Version, there are three ways to make administrative law

Administrative Law

Definition

Branch of law governing the creation and operation of administrative agencies. Of special importance are the powers granted to administrative agencies, the substantive rules that such agencies make, and the legal relationships between such agencies, other government bodies, and the public at large. (Cornell Law)

Types of Judicial Challenge

Ultra Vires

Constitutional
Challenge

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Ultra vires

Definition

Latin, meaning "beyond the powers." Describes actions taken by government bodies or corporations that exceed the scope of power given to them by laws or corporate charters. When referring to the acts of government bodies (e.g., legislatures), a constitution is most often the measuring stick of the proper scope of power. (Cornell Law)

The courts in our system supervise administrative agencies

Ultra vires - a challenge saying that the administrative agency has gone beyond the powers the implement the rules.

Congress is also limited in types of laws it can pass and may be limited by with the Commerce clause, etc.

Clean Air Act History & Architecture

Clean Air Act Architecture

Mobile v. Stationary Sources

Criteria Pollutants and National
Ambient Air Quality Standards

Existing v. New Sources

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Federalism and
Cooperative Federalism

There are four critical areas of the Clean Air Act

National Ambient Air Quality Standards

The Clean Air Act requires EPA to set National Ambient Air Quality Standards (NAAQS) NAAQS are currently set for carbon monoxide, lead, ground-level ozone, nitrogen dioxide, particulate matter, and sulfur dioxide. for six common air pollutants (also known as "criteria air pollutants.

Criteria Air Pollutants | US EPA

State Implementation Plan (SIP)

Mobile - sources - CA was taking the lead in passing energy efficiency standards as well as automobile regulations.

The auto industry supported the clean air act - as long as it pre-empted state regulations. It made one exception - it allowed CA to continue implement its own laws.

Stationary sources - coal, natural gas, and other factories.

Criteria Pollutants

Existing vs. New - made a distinction between them - put a higher standard on new sources - the hope as good policy was that as existing facilities retired they’d be replaced with better technology. It places a higher qualifier - an important note for us - is that utilities didn’t shut down their existing plants - they’ve kept them running as long as possible evading the need for new construction meaning that a lot of the plants out there are depreciated and old and ready to be replaced.

Federalism - cooperative federalism - CAA sets tells the EPA sets the national ambient air quality standards and then kicks it off to states to do

Criteria Pollutants

  • Carbon monoxide
  • Lead
  • Nitrogen Dioxide (NO2)
  • Ozone (O3)
  • Particular Matter (2.5 & 10 microns)
  • Sulfur Dioxide
  • Greenhouse gases?

The Clean Air Act requires EPA to set National Ambient Air Quality Standards (NAAQS) NAAQS are currently set for carbon monoxide, lead, ground-level ozone, nitrogen dioxide, particulate matter, and sulfur dioxide. for six common air pollutants (also known as "criteria air pollutants.

Criteria Air Pollutants | US EPA

These are all the negatively impactful gases. PM - the statistical studies - high correlation between it and heart attacks. So small when you breathe it in it goes through your aveloi it will help form blood clots more likely - when you breathe it it does bad things.

Clean Air Act Ultra Vires Challenges

Plaintiff asserts rule beyond authority

Review for “arbitrary
and capricious” standard

Section 202 of the Clean Air Act: The
[EPA] Administrator shall… prescribe...standards applicable to the emission of
any air pollutant… which...contribute to air pollution which may reasonably be anticipated to endanger public health or welfare.”

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Ultra Vires Challenges and Massachusetts v. EPA

1. Plaintiff asserts that an administrative agency has issued a rule which extends “beyond” the authority allocated to it in the text of its enabling legislation.

2. “arbitrary and capricious” standard for judicial review

3. Section 202 of CAA: “The [EPA] Administrator shall by regulation prescribe (and from time to time revise) in accordance with the provisions of this section, standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare”

In the late 1990s - the Clinton admin’s EPA started to wind up theories to use the CAA to regulate GHGs - debate happened. In the Bush admin there was some strong advocates for carbon dioxide regulation in the administration, especially Wittman. Once the Bush admin took over some petitioners went to the EPA to regulate CO2 - those petitioners became litigants suing them over Section 202. They argued that CO2

The Clean Air Act’s definition of an air pollutant:

“The term ‘air pollutant’ means any air pollutant agent or combination of such agents, including any physical, chemical, biological, radioactive . . . Substance or matter which is emitted into or otherwise enters the ambient air.”

Massachusetts v. EPA (2007):
carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons are without a doubt ‘physical [and] chemical ... substance[s] which [are] emitted into ... the ambient air.’ The statute is unambiguous.

Ultra Vires Challenges and Mass v. EPA (2007) Law: https://www.law.cornell.edu/supct/html/05-1120.ZS.html (529)

Stepwise Regulation

Senate Rejects Kyoto

Petition For Rule- making

EPA Denies Rule- making

Mass. v. EPA

Obama & McCain embrace cap-and- trade

Waxman- Markey Passes House & Endanger-ment Finding

Senate Fails Cap & Trade vote

Mobile Sources Standards

New Stationary Sources

Existing Sources (Clean Power Plan)

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Today

Regulatory framework isn’t an on-off switch - there are ways to suspend certain elements while -

Even if sympathetic administration - hard to get it up and running for many years - no costs with

1997 Senate disapproves of Kyoto Protocol

1999 Petition for rulemaking

2003 EPA denial of petition for rulemaking

2007 Massachusetts v. EPA

2008 Obama & McCain embrace cap-and-trade

2009 Waxman Markey passes House

2009 Endangerment Finding: https://www.epa.gov/ghgemissions/endangerment-and-cause-or-contribute-findings-greenhouse-gases-under-section-202a-clean

2009 Mandatory Monitoring and Reporting Rule: https://www.epa.gov/sites/production/files/2017-12/documents/391-3-1.02-2017.pdf

2010 Senate fails to vote on cap-and-trade & Prevention of Significant Deterioration Standards

2010 (updated since) Mobile Sources (CAFE): Light-duty fuel efficiency standards (with US Highway Traffic Safety Administration, who authority comes from a different section of code)

2013 - New Sources (Stationary): set at an emission rate of MWh per ton of CO2: Stationary Sources of Air Pollution | US EPA

2015 - Existing Sources (Stationary): this is the Clean Power Plan

The Energy Innovation Act

Section 11:

No Preemption of State Law

Section 11: No Preemption of State Law

Section 11. p. 48 - line 8:

Meaning all state policy is retained:

    • utility regulatory law
    • transportation policy
    • state carbon pricing
    • renewable portfolio standards
    • nuisance law

Includes: transportation and infrastructure policy: zoning, building codes, highways construction

Also includes: California’s Clean Air Act 209 waiver for automobiles

What Rights Do States Maintain?

SEC. 11. NO PREEMPTION OF STATE LAW.

Nothing in this legislation shall preempt or super-

sede, or be interpreted to preempt or supersede, any State

law or regulation.

The Energy Innovation Act

Section 8: Adjustments to
Greenhouse Gas Regulations

Section 8: Adjustments to Duplicative GHG Regulations

For all of us in the climate movement, we want to make sure it retains a robust set of tools for continuing to solve the climate crisis. Here’s some more specific feedback from my interpretation of the text to speak to your questions:

Section 330. (a):

“FUELS.—Unless specifically authorized in section 202, 211, 213, or 231 or this section, if a carbon fee is imposed by section 9902 or 9908 of the Internal Revenue Code of 1986 with respect to a covered fuel, the Administrator shall not enforce any rule limiting the emission of greenhouse gases from the combustion of that fuel under this Act (or impose any requirement on any State to limit such emission) on the basis of the emission’s greenhouse gas effects.

What about Clean Air Act Authority?

First, the language at Sec 8 of this legislation amends Title III of the Clean Air Act (CAA) by adding a new section (Sec. 330) at the end of that title. This means that the regulatory adjustment language modifies only the Clean Air Act, so if a regulation, program, or policy is either a state program or authorized under a different federal statute, then this language does not impact it. For instance, you mentioned new construction standards (building codes) and rules restricting fossil fuel infrastructure. Building codes are an important part of mitigation and because they are passed and implemented by state legislation, they are not be affected by the Sec. 330 language. Hydrocarbon infrastructure (let’s say pipelines transporting crude) is not regulated directly by the CAA, so is not impacted by the Sec. 330 language. It depends upon the type of infrastructure, but the National Environmental Protection Act (NEPA), the Federal Power Act (and the Federal Energy Regulatory Commission), or other state policies might be the source of regulatory oversight of these types of projects. The regulatory adjustment language does not amend any of these statutes. (Also, the effectiveness of these statutes in achieving their environmental objective depends upon who is administering them and the statutory language of each places certain limits upon what might be achieved with them.)

‘‘(c) AUTHORIZED REGULATION.—Notwithstanding subsections (a) and (b), nothing in this section limits the Administrator’s authority pursuant to any other provision of this Act—

‘‘(1) to limit the emission of any greenhouse gas because of any adverse impact on health or welfare other than its greenhouse gas effects;

‘‘(2) in limiting emissions as described in paragraph (1), to consider the collateral benefits of limiting the emissions because of greenhouse gas effects;

‘‘(3) to limit the emission of black carbon or any other pollutant that is not a greenhouse gas that the Administrator determines by rule has heat- trapping properties; or

‘‘(4) to take any action with respect to any greenhouse gas other than limiting its emission, including—

‘‘(A) monitoring, reporting, and record-keeping requirements;

‘‘(B) conducting or supporting investigations; and

‘‘(C) information collection.

Go word by word to run attendees through how this works:

Section 330 (c):

  • EPA authority over criteria
    pollutants untouched
  • Title V Prevention of Significant Deterioration
  • Sec. 111(b) new sources performance review
  • Sec. 111(d) existing sources (i.e., the Clean Power Plan)
  • No federal low carbon fuel standard

What else does it include?

Second, the prohibition on promulgating regulation which limit greenhouse emission, allows for “carve outs” – in particular, specific language added to §202, §211, §213, §231 can authorize EPA’s Clean Air Act authority to limit greenhouse gases based upon the greenhouse gas effect of those emissions. In particular, this legislation adds language to §202 allowing for such regulation, and §202 is the section which authorizes the EPA’s CAA “tailpipe” standards. The EPA promulgated those “tailpipe” standards in conjunction with Corporate Average Fuel Economy (CAFE) standards. CAFE standards are mandated by a different section of the United States Code (49 U.S.C. Chapter 329, “Automobile Fuel Economy”, to be precise) and this language does not amend that language. The Nation High Traffic Safety Administration administers CAFE standards, and retains that authority. Similarly, this legislation amends the CAA to allow the EPA Administer to regulate the greenhouse emissions from nonroad engines and nonroad vehicles (in §213) and emissions from aircraft (in §231). And the somewhat mysterious (perhaps) reference to §290(b)(1) on p. 45 preserves California’s power to issue its own fuel economy standards for vehicles.

Third, the regulatory adjustment language carefully parses out the effects of different pollutants between the “greenhouse gas effect” (defined at §9901(p), p. 8) and their “standard” impacts on health and welfare. The EPA may still regulate the “standard” impacts of a greenhouse gas. The EPA may also continue to regulate all “criteria” pollutants and toxic pollutants. This legislation only prohibits regulations which limit greenhouse gas emissions because of their greenhouse gas effects.

So, where does the regulatory adjustment language have some bite? Once a fossil fuel has been priced (a critical condition!), the Administrator is prohibited from enforcing “any rule limiting the emission of greenhouse gases from the combustion of that fossil.” Within the context of the Clean Air Act statutory language, this includes EPA regulations under §111(b) and §111(d). Both those sections apply to stationary sources – mostly natural gas and coal-fired power plants. Section 111(b) covers new stationary sources and §111(d) covers existing stationary sources. Under the Obama Presidency, the EPA issued New Source Performance Standards for stationary source under its §111(b) statutory authority and, subsequently, standards of performance for existing stationary sources under its §111(d) authority (called the “Clean Power Plan”). Those regulations, or any other which might be issued under §111(b) or §111(d) are prohibited under this language.

Is this okay? It would be objectionable if this legislation undermined an essential tool of greenhouse mitigation and here I think there are two things to note. First, subjecting an entity to different (and potentially redundant, or worse, conflicting policies) is poor policy design, and the guiding principle in determining which CAA regulations where redundant turned on the principle of no double jeopardy: given the objective of reducing the emission of heat-trapping greenhouse gases, which EPA regulations subject entities to redundant requirements? The CPP’s mitigation obligations were state by state, and the EPA’s Integrating Planning Model showed that the CPP’s emission reduction schedules produced a “shadow” price on carbon of anywhere between $0 - $39. This legislation’s carbon price schedule exceeds the CPP’s “shadow” carbon price for almost all states within 1-2 years.

Second, modeling of the power sector shows that carbon pricing results in the reduction of greenhouse gas emissions superior to those required by the CPP. For instance, a recent run of the Haiku model, from the good folks at Resources for the Future, predicts that a carbon price of $50 produces both substantial changes in the mix of generation on the grid by 2030 and emission reductions greater than the CPPs. Recall also, that current Administration is replacing the CPP, and the projected emission reductions from that plan negligible at best. As a result, this legislation produces a carbon price in excess of the CPP’s “shadow” price for most states very quickly and trustworthy models predict carbon pricing on par with its carbon price produce emission reductions greater than the CPP.

Also on this account, under this legislation states retain authority over power plants, so if performance standards for new or existing power plants are still needed, states can still legislate and state-level environmental protection agencies can still regulate. States may, for instance, enact renewable energy portfolios which set out a multi-year mitigation pathway for their state (in a way similar to the mitigation pathways proposed by the CPP for each state).

We don’t want to lose any policy tools and this legislation’s regulatory adjustment language keeps a full-stocked toolbox. Good luck everyone – we’re here to make sure you have everything you need to be successful, so don’t hesitate to keep directing questions to this forum. Also, if you want to learn more about the interaction of the Clean Air Act and Pigouvian pricing on carbon, you can check out a training I gave on this topic here.

Ross Astoria is a Professor of Politics, Philosophy, and Law. He organizes CCL’s annual policy camp and published on carbon pricing, international law, and the utility sector.

‘‘(c) AUTHORIZED REGULATION.—Notwithstanding subsections (a) and (b), nothing in this section limits the Administrator’s authority pursuant to any other provision of this Act—

‘‘(1) to limit the emission of any greenhouse gas because of any adverse impact on health or welfare other than its greenhouse gas effects;

‘‘(2) in limiting emissions as described in paragraph (1), to consider the collateral benefits of limiting the emissions because of greenhouse gas effects;

‘‘(3) to limit the emission of black carbon or any other pollutant that is not a greenhouse gas that the Administrator determines by rule has heat- trapping properties; or

‘‘(4) to take any action with respect to any greenhouse gas other than limiting its emission, including—

‘‘(A) monitoring, reporting, and record-keeping requirements;

‘‘(B) conducting or supporting investigations; and

‘‘(C) information collection.

Section 330(b) New Motor Vehicles & New Motor Vehicle Engines. p. 45 - line 24: -
(
5) Notwithstanding subsections (a) and (b) of section 330, the Administrator may—

‘‘(A) limit the emission of any greenhouse

gas (as defined in section 9901 of the Internal

Revenue Code of 1986) on the basis of the

emission’s greenhouse gas effects (as defined in

section 9901 of the Internal Revenue Code of

1986) from any class or classes of new motor

vehicles or new motor vehicle engines subject to

regulation under subsection (a)(1); and ‘‘(B)

grant a waiver under section 209(b)(1) for standards for the control of greenhouse gas emissions.’’

What about vehicle standards?

- p. 44 - Notwithstanding subsections (a) and (b) of

section 330, the Administrator may—

‘‘(A) limit the emission of any greenhouse

gas (as defined in section 9901 of the Internal

Revenue Code of 1986) on the basis of the

emission’s greenhouse gas effects (as defined in

section 9901 of the Internal Revenue Code of

1986) from any class or classes of new motor

vehicles or new motor vehicle engines subject to

regulation under subsection (a)(1); and ‘‘(B)

grant a waiver under section 209(b)(1) for standards for the control of

greenhouse gas emissions.’’.

What is the Regulatory Pause?

Section 9903(a)(2), p. 13

  • Energy Innovation Act includes ambitious emission targets
  • If not met, then EPA regulatory authority kicks back in with greater clarity than the statutory authority provided by Mass v. EPA (Section 330 (e))

u“(e) Suspension Expiration.—

“(1) DETERMINATION.—The Administrator shall make a determination by March 30, 2030, and no less than once every five years thereafter, based on the determination required by section 9903(b) of the Internal Revenue Code of 1986, as to whether cumulative greenhouse gas emissions from covered fuels subject to taxation under section 9902 of such Code during the period from calendar year 2022 through the calendar year preceding the determination exceed the cumulative emissions for that period that would have occurred if the emission reduction targets in section 9903(a)(2) of such Code were met.

“(2) CONSEQUENCE OF CUMULATIVE EMISSIONS EXCEEDANCE.—If the Administrator determines under paragraph (1) that cumulative greenhouse gas emissions from covered fuels subject to tax under section 9902 of the Internal Revenue Code of 1986 exceed the cumulative emissions for the period covered by the determination that would have occurred if the emission reduction targets in section 9903(a)(2) of such Code were met, then the prohibitions in subsection (a) of this section, and in section 211(c)(5) of this Act, shall cease to apply.

des emission targets

If not met, then EPhttps://www.congress.gov/bill/116th-congress/house-bill/763/textA regulatory authority kick back in.

Evaluation Framework

Adjustments to Greenhouse Gas Regulations

Example of Double Jeopardy Analysis

  • When it enable more cost effective mitigation in conjunction with a carbon price; for instance, for other market failures.
  • When it achieves a separate objective, besides mitigation (e.g., reduces local pollution)

When is a policy complementary?

Being able to regulate a particular regulation against a carbon tax

This Article assumes that the federal government will assign a price to carbon dioxide emissions via legislation by the early 2020s for one or more of myriad reasons. This Article’s purpose, however, is not to substantiate that assumption, but to explore a particular aspect of the adoption of such legislation. The contents of that legislation will reflect negotiated agreements—built on various political tradeoffs—over a host of policy issues, ranging from taxes to energy efficiency standards. These tradeoffs would implicate not only the tax’s scope and rate, but also the policies with which the tax would interact. This Article describes interactions between a carbon tax and various existing and proposed policies relating to climate change, energy, and environmental protection. It proceeds in five parts: Part II highlights three key points of background; Part III summarizes the universe of policies that can be expected to interact with a carbon tax; Part IV provides a rough typology of interactions among a carbon tax and other policies, labeling them Complementary, Concurrent, or Conflicting; Part V identifies several important potential tradeoffs; and Part VI, which is less descriptive and more prescriptive than the other four, highlights the risks of particular tradeoffs to the effectiveness of a climate change mitigation policy suite that includes a carbon tax. One thing this Article does not address is a discussion of the quantities of greenhouse gas (“GHG”) emissions that would likely be reduced by a carbon tax alongside or as a net result of combination with other policies—existing or otherwise. Such a discussion would be a useful line of further research but is beyond the scope of this Article.

Why consider all of this now, in a political climate decidedly averse to addressing climate change at all? This Article takes as its basic premise that several circumstances create a real possibility that Congress could adopt a price on carbon, in the form of a tax, sometime around (most likely after) the 2020 presidential election: (i) a substantial number of Republican members of Congress and the Senate privately acknowledge the reality of anthropogenic climate change, and would support effective mitigation policy if doing so became less politically poisonous for them; (ii) Republicans’ control of Congress and the White House makes the present an opportune time to dismantle Obama-era regulatory responses to climate change, namely the Clean Power Plan and other regulations based on an interpretation of the Clean Air Act as requiring the Environmental Protection Agency to regulate GHG emissions; (iii) Democrats would bitterly oppose any Republican effort to undo all means of mitigating climate change by regulating GHG emissions and some Republicans would defect to join them; (iv) the Trump campaign promised a large program of infrastructure spending as well as income tax cuts, leaving open the question of how to secure new revenues to cover at least some of the promised spending; (v) Republicans’ complete control of Congress and the White House will not persist, and most Republican politicians recognize this; and thus, (vi) Republicans currently hold the strongest bargaining position they will have for the foreseeable future on the subject of federal climate change mitigation policy.

Statutory Basis For The Clean Power Plan

Clean Air Act Language:

  • “System of emission reduction”;
  • “Adequately demonstrated”;
  • “Best” considering “costs” and “energy requirements”;
  • “Achievable.”

Clean Power Plan

1. Heat rate improvement (facility-level efficiency)

2. Running existing Natural Gas more often (i.e., increasing capacity factor)

3. Relying upon/building more renewable generation

4. User side efficiency*

Heat-Rate Intensity

Fuel Switch to Natural Gas

Generating Switching to Renewables

Most likely redundant - carbon fee engages efficiency programs

Most likely redundant - natural gas has a lower carbon-intensity

Most likely redundant - carbon fee will price fossil fuels

Clean Power Plan

Heat-rate Intensity

Probably redundant – under a carbon fee coal facilities will engage in facility level efficiency program

Fuel Switching to NG

Probably redundant – NG has a lower carbon-intensity (MWh/ton CO2) than coal, so in the wholesale markets NG should displace coal

Generating Switching to Renewables

Probably redundant – a carbon fee should price coal and natural gas out of the market vis-à-vis renewables.

Under the new ACE - there’s a way to make the heat-rate intensity non-concurrent with existing review standards

PACE (Property Assessed Clean Energy)

Appliance Efficiency

MLPs (Master Limited Partnerships)

First take - complementary

First take - complementary

First take - conflicting

Other Non-Clean Air Act Policies

PACE (Property Assessed Clean Energy Financing)

First take - complementary: because enables financing.

Appliance Efficiency -
First take - complementary: because the purchaser and user of the appliance are often different people (renter/landlord; split-incentives)

MLP (Master Limited Partnership)

First take - conflicting: unless redefined, special taxing structure for certain types of projects.

  • Energy Innovation Act Q&A Resource
  • Advanced Climate Policy Camp, June 5 -7, 2019
  • Justin Gundlach’s “To Negotiate A Carbon Tax”
  • David Bookbinder’s Talk: #CCL2017 Conference

Further Resources

Energy Innovation Act Q&A - Regulatory Questions: https://community.citizensclimate.org/resources/item/19/285#heading_11

Advanced Climate Policy Camp Sign-up: https://citizensclimatelobby.org/2019-policy-camp/

CCL Laser Talk on EPA Regulations and Climate Policy: https://citizensclimatelobby.org/laser-talks/epa/

Catrina Rorke’s Clean Air Act Lesson & Slides

David Bookbinder’s Talk
Justin Gundlach’s “To Negotiate A Carbon Tax”

Key Takeaways

The Clean Air Act remains the law of the land and is the foundational EPA authority over greenhouse gases (confirmed by 2007’s US Supreme Court Massachusetts vs. EPA ruling).

Energy Innovation Act limits only three mechanisms:

  • The Clean Power Plan
    (existing - 111(d))
  • Permitting rules for new industrial emitting plants
    (New Source Performance Standards)
  • Permitting rules for plant modifications (Title V/PSD)

Energy Innovation Act includes three integrity mechanisms:

  • If targets not met after 10 years, EPA authority over greenhouse gas emissions restored.
  • Fee ratchets up if targets are not met
  • Two National Academy of Sciences studies of environmental impacts.

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Admin Law

Ultra Vires

Massachusets v. EPA (2007)

Redundant/ Complementary Policies

Architecture of Clean Air Act

Reg’s of GHG

Text of Energy Innovation Act

The Energy Innovation and Carbon Dividend Act includes narrow limits on regulations related to greenhouse gas emissions covered by the carbon fee, so that those emissions are not subject to both the fee and regulation for the first 10 years. After that time, if the emission targets mandated in the bill are not being met, EPA regulatory authority over covered GHG emissions would be restored.

This is one of three ‘environmental integrity’ mechanisms built into the bill, the others being a ratcheting up of the carbon fee from $10 to $15 per metric ton if targets are not met, and two National Academy of Sciences studies of environmental impacts.

Importantly, the Clean Air Act will remain the law of the land. The Clean Air Act is the foundational EPA authority over greenhouse gases and was confirmed by the Supreme Court’s Massachusetts vs. EPA ruling in 2007.

The regulatory limits in this bill affect only three existing mechanisms: (1) the Clean Power Plan (CPP), which never went into effect and is being replaced by the Affordable Clean Energy rule (ACE) proposed by the Trump Administration; (2) permitting rules referred to as ‘New Source Performance Standards’ (NSPS) for new industrial plants that emit greenhouse gases; and (3) permitting rules for plant modifications under the same NSPS provisions. These three mechanisms would be put on hold as long as emissions targets were being met.

This bill explicitly preserves federal authority over greenhouse gas emissions from vehicles that are part of the Corporate Average Fuel Economy (CAFE) Standards, including California’s waiver to apply more stringent emission standards.

EPA rules that don’t directly regulate covered greenhouse gases will remain untouched and still in effect: pollutants like NOx, sulfur, ozone, particulates, and mercury; GHG authority over non-road vehicles and aircraft; the Renewable Fuel Standard for GHG reduction in gasoline; and the methane abatement program that applies to leaked and vented methane from oil and gas operations. Additionally, states would retain authority to pass GHG regulations.

There is overwhelming evidence from recent economic literature that a policy like this will effectively reduce GHG emissions far more than any existing or proposed regulation, including the CPP. This is also supported by the REMI report and by a review of 11 different revenue-neutral carbon pricing plans in a February 2018 issue of Climate Change Economics. Furthermore, compared to the CPP’s 2030 emissions target, this bill’s statutory requirements would exceed it by a factor of nine.

The carefully written provisions in this bill allow the carbon fee to simply, affordably, and effectively reduce greenhouse gas from fossil fuels while preserving regulatory authority as a backstop.

Time For Questions

Click the Microphone Icon Or *6 If On The Phone

Brett - ask about Questions - remind attendees on how to participate and unmute or use chat.

Reminder that you can press *6 on your phone.

Will need to wrap up before the top of the hour if not before.

To find out more, go to: https://citizensclimatelobby.org/2019-policy-camp/

Where To Find Upcoming Training

RSVP and share online, with social media, and with your family and friends!

Upcoming Trainings: https://community.citizensclimate.org/topics#upcomingTraining

Thank You!

Brett Cease email: brett@citizensclimate.org

Questions? Ask on the Energy Innovation Act Forum: http://cclusa.org/energy-innovation-act-forum

www.citizensclimatelobby.org

Brett Cease email: brett@citizensclimate.org

Questions? Ask on the Energy Innovation Act Forum: http://cclusa.org/energy-innovation-act-forum

CCU: Carbon Pricing & Clean Air Act Regulations - Google Slides