Clean Air Act Regulation of Power Plants: Greenhouse Gas Performance Standards

J E N N I F E R M A C E D O NI A N A R UC WI N T E R M E E T I N G S F E B R UA R Y 5 , 2 0 1 3

GHG PERFORMANCE STANDARDS

Clean Air Act Regulation of GHGs

Supreme Court decision Massachusetts v. EPA
EPA authority to regulate GHGs under CAA EPA may not decline to do so, except on grounds specified in statute

EPA Endangerment Finding: GHGs endanger public health and welfare First CAA regulation of GHGs: mobile source tailpipe standards
Triggered GHG pre-construction permitting requirement (BACT) for large new sources & major modifications (including power plants)

3/12 EPA proposed category-wide GHG standards for new power plants
Limits CO2 to 1000 lbs CO2/MWh, on annual or 30 year average For new coal builds: requires CCS within 10 years

Expected: performance standards for existing power plants

GHG: Greenhouse Gas CAA: Clean Air Act BACT: Best Available Control Technology CO2: Carbon Dioxide MWh: Megawatt-hour CCS: Carbon Capture and Storage

GHG PERFORMANCE STANDARDS

CAA Authority for Power Plant GHG Performance Standards

Standard of performance: reflects the degree of emission limitation achievable through the application of the best system of emission reduction (taking into account cost, health & environmental impacts, and energy requirements) which the Administrator determines has been adequately demonstrated

States & EPA

EPA/Federal

NSPS: New Source Standard

EPA issues performance standards for new and modified sources For each category of sources that causes, or contributes significantly to, air pollution that may reasonably be anticipated to endanger public health or welfare.

Existing Source Standard

Once NSPS applies to new sources EPA guidance for states on existing source performance standards States develop, implement, and enforce existing source standards EPA reviews state plans and steps in if states fail to do their part

CAA: Clean Air Act : section of law NSPS: New Source Performance Standard

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CAA Authority for GHG Performance Standards

Varies in significant ways from other authorities of CAA, e.g.,
Not as prescriptive in timing, form, and stringency as 112 control of air toxics Not specific authority to use cap and trade, as in acid rain SO2 trading program Specific consideration of cost, energy impact, health and environmental impact, and remaining useful life of facilities

Little precedent b/c 111(d) rarely used

B/c applicable only to pollutants not covered under other sections of CAA; not applicable to air toxics (mercury) nor criteria pollutants (SO2, NOX, ozone, PM) Proposed by EPA in 2005 Clean Air Mercury Rule; but design/approach was not tested by courts (b/c deemed improper section to regulate mercury)

CAA: Clean Air Act : section of law SO2: sulfur dioxide NOX: nitrogen oxides PM: particulate matter

GHG PERFORMANCE STANDARDS

Potential for CAA 111(d) to tap spectrum of GHG reduction options depends on design, legal interpretations, & state intentions
GHG reduction opportunities, such as:
Efficiency upgrades (process & equipment) at existing electricity generating units Post-combustion carbon capture, if/when feasible Fuel-switching/blending, including biomass (depending on GHG treatment) Industrial generation: combined heat & power (CHP), waste heat to power (WHP) Renewable energy Demand-side energy efficiency Transmission/distribution losses

CAA: Clean Air Act : section of law GHG: greenhouse gas

GHG PERFORMANCE STANDARDS

Examples of Potential Forms for Existing Source Standards: best system of emission reduction
Per stack emission rate(s)
(e.g., lbs CO2/MWh)

System-wide (e.g., averaging/trading; inclusion

of renewables & energy efficiency; tapping states best efforts to reduce GHGs)

RPS

RGGI

CA AB32

EERS

RPS: Renewable Portfolio Standards EERS: Energy Efficiency Resource Standards RGGI: Regional Greenhouse Gas Initiative CA AB32: California law establishing GHG program

GHG PERFORMANCE STANDARDS

Other design issues for existing source performance standards Stringency/basis for standards Flexibility Timing Interaction with existing state programs Assessment of state equivalency Regional coordination Early action/baseline year Monitoring & verification State design, implementation, enforcement

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Jennifer Macedonia jmacedonia@bipartisanpolicy.org