As states, industry and other stakeholders prepare their public comments to U.S. EPA on the agency's proposed existing power plant regulations, how much flexibility has been built into the rule and how much power do states have to either make or break the regulations? During today's OnPoint, Kenneth Kimmell, president of the Union of Concerned Scientists and a former commissioner of the Massachusetts Department of Environmental Protection, discusses the challenges to linking state and federal goals on energy and environment agendas and the role regional trading systems should play in helping states comply with the rule.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Kenneth Kimmell, president of the Union of Concerned Scientists. Ken most recently served as commissioner of the Massachusetts Department of Environmental Protection. Ken, it's nice to have you here.
Kenneth Kimmell: It's a pleasure to be here.
Monica Trauzzi: Ken, we're right in the middle of the public comment period on EPA's existing source standard. What do you see as the role states will play in the overall success of the 111(d) rule, and how much power do the states actually have in their hands?
Kenneth Kimmell: That's a great question. States are critical to the success of the rule. As you know, the EPA in this rule is setting an overall standard that each state needs to make to meet, but it's up to the states to figure out how to do it. And that means then that the states have a lot of different tools in the toolbox to pick from. The rule even gives states the opportunity to band together into regional entities recognizing that electricity flows across state lines, giving them a chance not only to act as individual states but as groups of states to try to meet the goal. So the role of the states is critical, and I think one of the really good news pieces about this rule is many of the states are already doing the types of things that other states will have to do under this rule to comply.
Monica Trauzzi: But does that also mean that states could derail the rule and that they have -- do they have enough power to basically dictate the future of the president's Climate Action Plan?
Kenneth Kimmell: No, I really don't think they will have that power. First of all, as I've said, many states are already on the path towards complying. Many other states that are looking at things like energy efficiency and renewable energy are really coming to appreciate how important those things are for their states and how it's in their economic interest to invest in a diversified fuel supply and invest in energy efficiency. So I don't think we're going to see a lot of states refusing to comply with the rule. Maybe there will be a few that will, you know, go to court and try to delay it, but I don't see the states trying to derail the plan.
Monica Trauzzi: What are the biggest challenges that exist to linking state goals and agendas on energy and environment and federal goals and agendas, because in some respects you have overlapping agendas and in others you have competing elements?
Kenneth Kimmell: Yeah, I think that's a good question. I mean I think actually from my point of view one of the things that I like about this rule is that it starts putting all states on a bit more of an even playing field. Rather than just having some states, you know, going out ahead making these investments in energy efficiency and renewable energy and having others lag behind, the rule is moving everyone in the same direction. So I think the rule actually harmonizes as opposed to puts in conflict what the states and the federal government are doing.
Monica Trauzzi: So this is a 600-page document and all the states are reading through it. They've read through it already by now, but how should states be sort of working to define what the best approach is, what the best process is for that state?
Kenneth Kimmell: Well I mean one thing I'd recommend is they should start now, not wait till the rule gets finalized, because they don't really have that much time once the rule is finalized to submit their plans. A second thing that I would recommend for all states is to really consider the possibility of working with their neighbor states. That could be joining RGGI. That could be starting their own cap-and-trade program, but in essence coming up with ways to work together as opposed to individually to meet the requirements. And then I think the other piece is to take a really good hard look at the pathways of energy efficiency and renewable energy, because in the long run that's really where we need to go, and to avoid what may seem like the easiest response, which would be for example to back down coal plants and just use a lot more natural gas.
Monica Trauzzi: But what about those coal states that are so heavily reliant economically on coal, how should they be sort of looking at the rule and looking at the process for moving forward?
Kenneth Kimmell: Well, you know, I think in those states really what the rule is doing is perhaps pushing a little forward and a little more quickly what market force is already doing. A lot of those coal plants that you're talking about are 40 or 50 years old and are likely to retire in the near future anyway. And maybe what this rule may do is accelerate that to some degree, but for the most part I think it's a given that those antiquated and now inefficient coal plants are going to retire. And the question now for those states is do we put all of our eggs in the natural gas basket or do we look for a diversified, reliable fuel system that has some more natural gas but also some renewables and energy efficiency, and I think that's the real question.
Monica Trauzzi: So Massachusetts is part of the Regional Greenhouse Gas Initiative. You've had firsthand experience with a regional trading scheme. Which states are best suited to link in directly to RGGI and which do you see as best suited to create their own individual trading scheme?
Kenneth Kimmell: Well I would say first of all that any state in the country can do what we did and create their own Regional Greenhouse Gas Initiative. There is nothing special about the Northeast and the Mid-Atlantic states; it was just a matter of political leadership. So I think almost every state is well suited to create those programs. I think there's a number of states, you know, in the Northeast that should really look at joining RGGI and taking advantage of the fact that it's already up and running. So I think about a state like Pennsylvania, perhaps Virginia, and I did myself send a letter to Governor Christie of New Jersey recently requesting that he take a second look at this issue and consider rejoining RGGI. So those would be the types of states in RGGI. I also think the Midwest is very well poised to form a program of their own. It may not be a cap-and-trade program but a regional program that really allows them to get the synergies that they need to cost-effectively cut their carbon emissions.
Monica Trauzzi: What are the limits, though, that the agency has built into the rule of how flexible states can be?
Kenneth Kimmell: Well I mean there aren't a lot of limits; that's one of the beauties of this rule. And EPA really got this right was to, you know, give states a variety of different ways. I think at the end of the day the bottom line though is that they will be held to an overall performance standard, and I don't think they have the opportunity to get out of that.
Monica Trauzzi: We've heard from some environmental groups on this show that the agency did not go far enough in its rule. Do you think that that agency struck the right balance?
Kenneth Kimmell: Well there's a lot to like about the rule: the design, the flexibility, the encouragement of regional groups. I do think though we would agree that the overall performance standard of a 30 percent reduction by 2030 really isn't what the science tells us we need to avert the worst consequences of climate change. And really our sense is we could do quite a bit better. In the public comment period that's coming up, we'll be focusing a lot on the renewables part of the rule, and I think we'll be able to show pretty convincingly that EPA really is pushing states to do about what the average of the states are doing as opposed to what the best states are doing. So we think there is an enormous room for more renewable penetration in the United States. The prices of solar and wind are dropping, so we could do a lot better. And if the renewable target was raised, then the overall performance standard could be raised, and then we'd get to the range where we really want to be.
Monica Trauzzi: All right, we'll end it there. A discussion that we will certainly continue. Thank you for coming on the show.
Kenneth Kimmell: Thank you. My pleasure.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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