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Clean Air Council, Widener Law & Sustainability Center, 61 Others Petition EQB To Set Up A Cap-And-Trade Program To Reduce PA Greenhouse Gas Emissions

On November 27, Robert B. McKinstry, Jr., the Clean Air Council, Widener University Environmental Law and Sustainability Center, eco(n)law LLC and 61 other individuals, groups, businesses and local governments submitted a rulemaking petition to the Environment Quality Board to establish a market-based cap-and-trade greenhouse gas emission reduction program that eliminates those emissions from major sources by 2052.

The Department of Environmental Protection is now reviewing the petition to see if it meets the requirements for consideration by the EQB. If it is acceptable, it will go to the EQB for a vote on whether the petition should be accepted for study.

Petition Proposal

The 407-page rulemaking petition would require the EQB to adopt a regulation to cap greenhouse gas emissions from major sources at 2016 levels. The emissions cap would then be reduced by 3 percent annually until emissions are zero from covered sources by 2052.

These reductions would put Pennsylvania on track to meet the greenhouse gas reduction goals established by the 2015, achieving the reductions that the most recent report of the Intergovernmental Panel On Climate Change indicates are necessary to avoid the worst impacts of climate disruption.

Emission allowances for each ton of greenhouse gas are then created based on the cap. The regulation proposed by the petition authorizes DEP to auction off most of those allowances or distribute them to the sources covered by the program.

The proposal creates a floor price for the allowances of at least $10 per ton in 2020, with the floor price increasing 10 percent per year plus inflation until it hits the floor established by California, at which point it will move with that floor.

After the auction and distribution of allowances, any person or business may buy or sell an allowance creating a market for allowable greenhouse gas emissions.

Typically in a cap-and-trade market system, industries that can easily reduce emissions below their emissions cap can sell those emission reduction allowances to other sources that may not be able to make reductions as easily or cost effectively.

The petition proposes to cover 14 different industries that emit 25,000 tons or more of greenhouse gases a year, including cement, iron, lead, petroleum products production, coal mining, electric generating facilities, oil and gas production facilities, suppliers of natural gas and carbon dioxide, and fuel oil and petroleum product distributors.

These facilities are already required to report greenhouse gas emissions to EPA. A total of 283 major facilities in Pennsylvania are now reporting their emissions to EPA.

Covered greenhouse gases include carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons, perfluorocarbons, nitrogen trifluoride and other fluorinated greenhouse gases.

The rulemaking petition is based on California’s greenhouse gas cap-and-trade program.

Statutory Authority

The petitioners say Pennsylvania already has statutory authority under the state Air Pollution Control Act to regulate greenhouse gas emissions. In addition, greenhouse gas emissions are a pollutant required to be regulated under the federal Clean Air Act.

The EPA obligation to regulate greenhouse gas emissions as a pollutant under the federal Clean Air Act has been affirmed by the U.S. Supreme Court in Massachusetts v. EPA in 2007.

In addition, the petitioners also say Article I, Section 27 of the state’s constitution-- the Environmental Rights Amendment guaranteeing Pennsylvanians the right to clean air, pure water and the preservation of the environment-- imposes a duty on the Environmental Quality Board and the Commonwealth to act as a public trustee for common natural resources like clean air to reduce pollutants that adversely affect that resource.

In a forthcoming article to be published in the Michigan Journal of Environmental and Administrative Law, petition authors Robert B. McKinstry, Jr. and Professor John C. Dernbach argue--

“Climate disruption already adversely affects Pennsylvania, and these adverse effects will increase over time. The severity of future impacts depends to a great extent on what actions are taken to reduce greenhouse gas emissions and even remove carbon dioxide from the atmosphere.

“Yet under Article I, Section 27, the people of the Commonwealth have a right to a natural climate that is not disrupted by excessive concentrations of GHGs [greenhouse gases] in the atmosphere. In addition, the Commonwealth has a commensurate duty to limit emissions to prevent climate disruption.”

In fact, the 4th National Climate Assessment released November 23 and the 2015 Climate Change Impacts Assessment Update done for DEP document these changes.

Click Here for a copy of the full petition. Click Here for a copy of the draft regulation.

Existing Cap-And-Trade Programs

There have been cap-and-trade programs in place in Pennsylvania since 2000 that regulate and reduce emissions of nitrogen oxides and sulfur dioxide from major sources of air pollution like power plants and industrial boilers.

These market-based programs have been successful in reducing ozone pollution-causing emissions of nitrogen oxide from power plants in Pennsylvania from 375,000 tons in 1990 to 37,150 tons in 2017.

Acid rain-causing sulfur dioxide emissions from power plants in Pennsylvania were reduced from 900,000 tons in 1990 to less than 100,000 tons in 2016 because of cap-and-trade and the markets they create.

While a cap-and-trade program for these pollutants is more straightforward and better understood than for greenhouse gas emissions, the basic market principles of the system are familiar to major air pollution emitters.

2nd Petition

This is the second petition the EQB has received asking DEP to set up a greenhouse gas reduction program.

In 2014 the Environmental Quality Board rejected a petition submitted in 2013 by 19-year-old Ashley Funk from Allegheny County asking for a 6 percent reduction in carbon dioxide emissions in Pennsylvania by 2050 using a 2012 baseline.

In rejecting the petition, DEP said a national approach to greenhouse gas emissions is needed like EPA’s now defunct Clean Power Plan because climate change is a national and global issue and should cover all sources of carbon dioxide emissions, not just power plants.

PA Greenhouse Gas Emissions

Greenhouse gas emissions from power plants have already been significantly reduced in Pennsylvania as a result of the coal-fired power plant closures and the dramatic increase in the use of natural gas to generate electricity.

In fact, in comments to EPA on a proposed replacement for the former Clean Power Plan, DEP said, “Pennsylvania has already exceeded its 2030 CPP [Clean Power Plan] goal of [reducing power plant emissions to] 89,822,308 tons through a combination of market-driven techniques like fuel switching [to natural gas] and renewable energy standards while maintaining its status as a net energy exporter.”

An updated Greenhouse Gas Emissions Inventory prepared for DEP’s Climate Change Advisory Committee shows power plant emissions of greenhouse gases were reduced from 116.13 million tons in 2000 to 86.37 million tons in 2015, far below the CPP target.

Total greenhouse gas emissions from all sectors in Pennsylvania have been reduced from 324.79 million tons in 2000 to 286.78 million tons in 2015, as reported to EPA.

PA Climate Action Plan

DEP’s Climate Change Advisory Committee is scheduled to meet on December 4 to review the draft 2018 PA Climate Action Plan and recommendations as well as the updated Greenhouse Gas Emissions Inventory.

Draft Plan recommendations will, for the first time, include overall greenhouse gas emissions reduction targets of a 26 percent reduction in net emissions by 2025 from 2005 levels and an 80 percent net reduction by 2050 to gauge the results of the recommended strategies.

The targets are in line with the goals established in the goal established by the 2015 U.N. Paris Climate Agreement.

Note, however, the net pledges under the original Paris Climate Agreement fall far short of what will be necessary to keep temperature increases below 2 degrees C, much less keeping increases below 1.5 degrees C, as the most recent report of the Intergovernmental Panel On Climate Change found necessary to avoid the worst impacts of climate disruption.

For more information and available handouts and presentations, visit DEP’s Climate Change Advisory Committee webpage.

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