1 / 22

CO 2 Regulation – Soon a Reality

Delve into the impending CO2 regulation landscape as federal legislation and state initiatives intensify. Explore litigation, permit proceedings, and the impact on various states' emission targets. Regional efforts like RGGI and AB 32 are also examined.

jgoff
Download Presentation

CO 2 Regulation – Soon a Reality

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CO2 Regulation – Soon a Reality Ruth H. Silman Nixon Peabody LLP100 Summer StreetBoston, MA 02110rsilman@nixonpeabody.com Scott M. Turner Nixon Peabody LLP1100 Clinton SquareRochester, NY 14620sturner@nixonpeabody.com

  2. Daily Coverage Source: The New York Times1/10/07 Source: The Wall Street Journal 1/11/07

  3. Pressure From All Angles Federal Legislation State Initiatives CO2 State Legislation Litigation Permit Proceedings

  4. Federal Legislation • The mid-term elections changed everything in the Senate • Sen. Boxer as key chair instead of Sen. Inhofe • Sens. Bingaman, Boxer, Feinstein, and McCain/Lieberman, drafting legislation • Things are less clear in the House

  5. Litigation • Cases arise in three different contexts • Clean Air Act litigation • NEPA litigation • Nuisance litigation

  6. CAA Litigation • Massachusetts v. EPA • Coke Oven Environmental Task Force v. EPA

  7. NEPA Litigation • Border Power Plant Working Group v. DOE • Friends of the Earth v. Watson • Mayo Foundation v. Surface Transportation Board

  8. Nuisance Litigation • Connecticut v. American Electric Power • California v. General Motors • Comer v. Murphy Oil

  9. Permit Proceedings • IGCC and BACT determinations • State NEPAs

  10. State Laws and Initiatives ME, NH, VT, CT, NY, NJ, DE, MD (as of 1/07) = RGGI DC, MA, PA, RI – Observing RGGI Process AZ: 2000 levels by 2020; 50% below 2000 levels by 2040 CA: 2000 levels by 2010; 1990 levels by 2020; 80% below 1990 levels by 2050NM: 2000 levels by 2012; 10% below 2000 levels by 2020; 75% below 2000 levels by 2050OR: Stabilize by 2010; 10% below 1990 levels by 2020; 75% below 1990 levels by 2050 www.pewclimate.org/what_s_being_done/in_the_states/emissionstargets_map.cfm www.rggi.org/about.htm

  11. Regional Greenhouse Gas Initiative (RGGI) • Cooperative regional effort to reduce carbon dioxide emissions from electric power generators in participating states • Cap-and-trade program with a market-based emissions trading system • In future, may include other sources of CO2/GHG emissions, and GHGs other than CO2 Source: www.rggi.org

  12. RGGI Process Source: http://www.ccap.org/domestic/srt05presentations/(Franz_Litz)_%20RGGI_Update.pdf

  13. Memorandum of Understanding – 12/20/05 • Commitment to address the challenge of climate change while increasing energy efficiency investments and stimulating emerging clean energy technology markets • 2009-2015: stabilize CO2 emissions from region’s power plants at current levels • By 2019: 10% reduction in CO2 emissions from region’s power plants

  14. RGGI Model Rule – August 15, 2006 • CO2 budget unit = at any time on or after January 1, 2005, serves electricity generator with a nameplate capacity equal to or greater than 25 MWe • Program begins 1/1/2009 (or date unit commences operation) • State regulatory agency issues CO2 budget permit • Compliance Certification Report due by March 1 of year following control period • CO2 Allowance Tracking System

  15. RGGI – Issues • Allowance Allocation • Auction v. Giveaway? • 25% of allowances must be to consumer benefit or strategic energy purpose • Early reduction CO2 allowances • Voluntary renewable energy market set-asideVoluntary limited industrial exemption set-aside • Banking allowed • Leakage

  16. RGGI – Offsets • CO2 equivalent emission reductions or carbon sequestration • Real, Additional, Verifiable, Enforceable, Permanent • Offset project types (must commence after 12/20/05) • Landfill methane capture and destruction • Reduction in SF6 • Carbon sequestration due to afforestation • Reduction/avoidance of CO2 emissions from natural gas, oil or propane end-use combustion due to end-use energy efficiency • Avoided methane emissions from agricultural manure management operations

  17. RGGI – Offsets (cont’d) • If average price of allowance < $7.00, offsets may be used from across the US; 50% discount from outside RGGI region; up to 3/3% of generator’s emissions • If average price of allowance > $7.00, offsets may be used from across North America at 1:1 ratio; up to 5% of generator’s emissions (“Offset Trigger”) • If average price of allowance = $10.00, offsets may be used from international projects; up to 20% of generator’s emissions (“Safety Valve Offset Trigger”)

  18. RGGI – Next Steps • Governors of participating states have agreed to propose regulations by 12/31/08 • Regional Organization (“RO”) • Administration of Allowance Auctions • Emission and Allowance Tracking • Guidance Documents • NY – 12/5/06 Pre-Proposal Draft • www.dec.state.ny.us/website/dar/preproposal.htm

  19. AB 32 – California Global Warming Solutions Act of 2006 (9/27/06) • Reduce GHG emissions to 1990 levels by 2020 • By 2050, ↓ GHG emissions to 80% below 1990 levels • CARB must develop regulations and market mechanisms • Adopt mandatory reporting rules for GHG sources

  20. Examples from Other States • NM: Executive Order (12/28/06) - Reduce GHG emissions to 2000 levels by 2012, 10% below 2000 levels by 2020 and 75% below 2000 levels by 2050 • AZ: Executive Order (9/8/06) - Reduce GHG emissions to 2000 levels by 2020, and 50% below 2000 levels by 2040.

  21. Conclusions • CO2 regulation is a reality, at least locally and regionally • National regulation is a question of “when,” not “if” • Owners of existing power plants should push for broad cap and trade systems, rational allowance allocations, new source set asides, and a wide array of offset opportunities • Developers of new coal-fired power projects early on must develop strategies to deal with CO2 in the permitting process

More Related