United States: Climate Change And The Future Regulation Of Greenhouse Gas Emissions In The United States: President Obama Introduces New Climate Action Plan

On June 25, 2013, President Obama released his Climate Action Plan (the Plan) detailing the current administration's comprehensive strategy to address climate change. [1] The Plan focuses on "three key pillars" of action: reducing domestic carbon pollution, preparing the United States for the impacts of climate change and leading international efforts to combat global climate change and prepare for its impacts. The most notable directives articulated in the plan -- and certainly the ones that will have the greatest impact on American industry -- are those relating to the first "pillar" of action, the reduction of domestic carbon emissions. A summary of the various aspects of the Plan can be found in this table.

CARBON EMISSION LIMITS

At the forefront of the new Climate Action Plan is President Obama's goal to significantly reduce so-called "carbon pollution" in the United States. To supplement the Plan, the President released a Memorandum entitled "Power Sector Carbon Pollution Standards" (the Memo), which establishes an aggressive timeline for the U.S. Environmental Protection Agency (EPA) to develop carbon emission standards for both new and existing power plants. [2] Specifically, the Memo directs the EPA to propose carbon emissions standards for new power plants by September 20, 2013. These new proposed standards will replace the agency's April 2012 proposal of 1,000 pounds of carbon dioxide per megawatt-hour for new sources. The EPA has already sent its new proposed rule to the White House Office of Management and Budget for review and approval. It is not clear at this time at what level the carbon emission standards for new power plants will be set.

The Memo also establishes a very aggressive timeline for the EPA to propose and adopt, and the states to implement, "carbon pollution standards, regulations or guidelines, as appropriate, for modified, reconstructed and existing power plants." [3] In particular, the EPA must issue its proposal by no later than June 1, 2014, finalize it by no later than June 15, 2015, and require the states to submit implementation plans and supporting regulations by no later than June 30, 2016. There will be staunch opposition to the EPA's proposal from industry, the states and non-government organizations, and the issues that will need to be addressed by the rule will be complex and have significant economic consequences. For example:

  • What happens to existing state programs (e.g., California and the Regional Greenhouse Gas Initiative)?
  • Will the EPA allow for market-based programs such as Cap-and-trade? Will the standards adopted by the EPA be tailored to specific fuels and technologies?
  • How will the standards interact with EPA's existing new source review and "modified unit" rules?
  • What are the potential impacts on the electricity market (and electricity consumers)?

These questions, as well as a host of other issues, will need to be vetted and resolved by the EPA as part of the rulemaking process. Ultimately, most believe that the timeline established by President Obama is unrealistic and will likely not be met by the EPA.

Despite an aggressive approach to power plant carbon emission standards, the Plan and Memo are silent with respect to greenhouse gas (GHG) emission standards for the petroleum sector, which the EPA is required by Consent Decree to propose and finalize. In all likelihood, the EPA will defer its GHG emission standards for this sector until the rulemaking process for the power plant sector is complete. Finally, the Plan confirms the President's intent to evaluate the need to reduce methane emissions across various industrial sectors, including possibly requiring further reductions in the oil and gas sector. Ultimately, however, the Plan notes the need for intergovernmental coordination and additional information to identify opportunities to reduce methane emissions.

RENEWABLE ENERGY INCENTIVES AND EXPEDITED LICENSING

In addition to calling for new carbon emissions standards for new and existing power plants, the Plan also establishes a goal of doubling renewable electricity generation in the United States by 2020. To accomplish this goal, the Plan directs several key federal departments to implement new measures to accelerate the clean energy permitting process. Most notably, the Department of the Interior has been directed to permit 10 gigawatts of renewable energy on public lands by 2020. The Department of Defense has also committed to deploy 3 gigawatts of renewable energy on military installations by 2025.

The Administration also will take steps to encourage the development of hydroelectric power at existing dams. The Red Rock Hydroelectric Plant in Iowa is the first energy project to be designated as "high priority" under the Federal Infrastructure Projects Permitting Dashboard, the stated goal of which is to "[cut] timelines [for permitting] in half for major infrastructure projects while creating incentives for better outcomes for communities and the environment." [4]

The Plan also commits to expanding and modernizing the nation's electric grid to provide more reliable and cost-efficient electricity to American consumers. As an initial step toward achieving this goal, President Obama issued a Presidential Memorandum on July 7, 2013, directing federal departments to streamline the siting, permitting and review process for electric transmission projects across federal, state and tribal governments. [5] This Memorandum calls for the establishment of energy corridors in western states to expedite the permitting and environmental review process for projects subsequently completed in such corridors, the preparation of a study on potential corridors in non-western states and a requirement for key federal departments to coordinate permitting efforts and to develop and "integrated, interagency pre-applicant process for significant onshore (emphases added) electric transmission projects requiring federal approval." [6]

To complement the various renewable energy initiatives introduced by the Plan, the President has firmly committed to long-term investment in clean energy innovation. Most notably, the Department of Energy will be issuing a Federal Register Notice within the coming weeks announcing a draft of a solicitation making up to $8 billion in loan guarantee authority available for a number of advanced fossil energy products. The Obama Administration also reaffirmed its commitment to clean energy research by increasing funding for clean energy technology across all agencies to $7.9 billion for the Fiscal Year 2014, representing roughly a 30 percent increase in funding.

The Plan also renews Obama's commitment to improving fuel economy standards, instructing the Administration to partner with industry leaders in developing post-2018 fuel economy standards for heavy-duty trucks, buses and vans to extend and advance the Model Year 2014-2018 standards introduced in 2011. These standards are expected to reduce GHG emissions from heavy duty vehicles by roughly 270 million metric tons. The plan also reaffirms the President's first-term passenger vehicle standards requiring an average performance of 54.5 miles per gallon by 2025.

In addition to committing to reduce GHG emissions, promote renewable energy generation and invest in clean energy innovation, the President has also committed to cutting energy waste in homes, businesses and factories. The Plan details a number of steps that the Administration will take in order to achieve the lofty goal of doubling energy productivity levels of 2010 by 2030. Most notably, the Administration will work towards improving efficiency standards for appliances and federal buildings to reduce carbon pollution by at least three billion metric tons cumulatively by 2030.

Additionally, the Department of Agriculture's Rural Utilities Service has been instructed to finalize its proposed update to the Energy Efficiency and Conservation Loan Program to provide up to $250 million to rural utilities to facilitate investments by business and homeowners across rural America in energy efficiency. The Plan will also continue the Better Buildings Challenge -- which was implemented in 2011 to help commercial and industrial buildings become at least 20 percent more energy efficient by 2020 -- and expand upon it by including multifamily housing and launching the Better Buildings Accelerators track to encourage the adoption of state and local policies to cut energy waste.

ADDITIONAL MEASURES

Finally, the Plan articulates a number of broad mandates and lofty goals proactively designed to manage the risks associated with climate change and to make the United States a world leader on addressing global climate change. One potential controversial policy goal, as stated in the Plan, is the President's desire to eliminate U.S. fossil fuel tax subsidies in his Fiscal Year (FY) 2014 budget. If approved (an unlikely prospect given the political divide in the U.S. Congress), the President's 2014 budget would eliminate current subsidies for all fossil fuels (e.g., oil, gas and coal products). This would eliminate, for example, the deduction of intangible drilling costs for the oil and gas industry. A summary of these initiatives, as well as those discussed in more detail above, can be found in this table.

CONCLUSION

While President Obama's newly proposed Climate Action Plan is certainly extensive in terms of the scope of the issues addressed, it provides little substantive insight as to the economic impact that will inevitably result from the undertaking. On its face, the Plan purports to commit over $20 billion in federal funds to clean energy projects, while remaining virtually silent on the costs that will be borne by industry and the American consumer. Funding to implement the Plan also is in doubt, particularly given that the Republican-controlled House of Representatives appears unwilling to continue funding for renewable energy. We will continue to monitor the President's Climate Action Plan, most notably, in the near term, the EPA's carbon rules for the power sector.

Authorship Credit:  Martin T. Booher and Erin Rodman

Footnote

Footnote

[1] A complete copy of President Obama's Climate Action Plan.
[2] A complete copy of the Presidential Memorandum on Power Sector Carbon Pollution Standards.
[3] Presidential Memorandum on Power Sector Carbon Pollution Standards, supra note 2.
[4] Federal Infrastructure Projects Permitting Dashboard.
[5] A complete copy of the Presidential Memorandum on Transforming our Nation's Electric Grid Through Improved Siting, Permitting, and Review.
[6] Presidential Memorandum on Transforming our Nation's Electric Grid Through Improved Siting, Permitting, and Review, supra note 5.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.