Though the Obama administration will be challenged no matter how it chooses to regulate greenhouse gases under the Clean Air Act, the statute's New Source Performance Standards (NSPS) would be a more practical way to reduce emissions under existing law, three Duke University experts argue in a new paper.
So far, U.S. EPA has used only the New Source Review (NSR) provisions of the Clean Air Act to regulate greenhouse gases from factories, power plants and other large facilities. Starting on Jan. 2, 2011, the agency will require permits for new and modified facilities that would exceed certain emissions levels.
Critics contend that existing laws are ill-suited to address climate change, but as long as the Obama administration is intent on regulating greenhouse gases under the Clean Air Act, the NSPS provisions are the best option, say Jonas Monast, Tim Profeta and David Cooley of Duke's Nicholas Institute for Environmental Policy Solutions.
Supplementing existing NSR rules with the performance standards would allow EPA to build a "cost-effective program that delivers meaningful emissions reductions, is consistent with both the statutory language of the act and legal precedent, and is politically viable," the scholars wrote in a paper released yesterday.
EPA argues that it is required to regulate greenhouse gases because of its scientific finding that carbon dioxide emissions are a threat to human health and welfare. That finding was prompted by the Supreme Court's 2007 decision in Massachusetts v. EPA, which told the agency to decide whether to regulate carbon dioxide as a pollutant.
The new paper, which emerged from a gathering of Clean Air Act scholars earlier this year, aims to balance EPA's legal obligations and political realities as the agency moves forward with its regulations, Profeta said in an interview. So far, the agency has taken a "careful" approach by limiting its greenhouse gas rules to the largest emissions sources, he said.
"That was a legal decision, but what they really need to do now is figure out the best way to use the act to tackle greenhouse gases comprehensively," Profeta said. "The only way that changes is with intervention from legislators."
The performance standards, which could also be used to set emissions limits for existing facilities as well as new sources, have gotten broad support from environmental groups and are seen by industry as preferable to the rules finalized by EPA this year.
The NSPS approach would provide more certainty than the litigation-plagued NSR program, said Jeff Holmstead, an industry attorney at Bracewell & Giuliani LLP who was EPA's air chief under President George W. Bush.
Unlike NSR rules, the NSPS provisions could include emissions trading, allowing EPA to borrow some of the ideas that were put forward in Congress during negotiations on a climate bill. That would help the administration strike deals with industry groups and avoid some legal challenges, the new paper says.
The standards could be based on energy efficiency and other available technologies. According to a recent study by the think tank Resources for the Future, standards for efficiency and biomass use at coal-fired power plants could reduce the sector's greenhouse gas emissions by 5 to 10 percent.
Including existing facilities would allow for greater reductions, and it could also prevent some of the legal wrangling over NSR permits, which must be done for each individual facility. Compared to the NSR rules, which he described as the "worst of all worlds," performance standards "could be better environmentally and more acceptable to industry, depending on how they do it," Holmstead said.
"It depends a lot on how aggressive they try to be," he added. "There are sensible ways to get meaningful reductions in CO2, but nowhere near the types of reductions that many in the environmental community are talking about being necessary."
'Not the end of the matter'
In its proposed budget for fiscal 2011, the Obama administration requested $7.5 million for EPA to assess the option of setting greenhouse gas limits for several major industry sectors through the NSPS program. Though EPA did not include greenhouse gas limits in its recently finalized standards for cement kilns, the agency hinted that those types of requirements might be on the way.
"This is not the end of the matter," EPA says in the rule. "To the contrary, based on our current knowledge we believe that it may be appropriate for the agency to set a standard of performance for GHGs" (Greenwire, Sept. 9).
In a recent letter to EPA Administrator Lisa Jackson, three major environmental groups threatened to take legal action if the agency did not agree to set performance standards for power plants. The letter, which was signed by attorneys from the Sierra Club, Natural Resources Defense Council and Environmental Defense Fund, asked the agency to make a decision by Sept. 15.
That deadline came and went without a public announcement from EPA. There is "nothing new to report," said David Doniger, policy director at the NRDC's climate center, in an interview yesterday.
In the absence of climate legislation, the environmental groups feel the performance standards are "the best tool we have," Doniger said.
Though the Obama administration's climate rules have prompted several lawmakers to introduce measures that would strip EPA of its authority to regulate greenhouse gases, Doniger said he was not worried about the potential backlash from the stationary source rules.
"We think that when the dust settles on this, and the NSR regulations go into effect, people will see that there's been a whole lot of crying wolf and Chicken Little," Doniger said. "The requirements are the same as those that have applied to other pollutants for decades -- the factories get built, the economy keeps growing, and the air gets cleaner."
Click here to read the paper.