Article by Kyle Danish, Shelley Fidler, Kevin Gallagher, Megan Ceronsky and Tomás Carbonell

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Commentary

The recurring adjective describing the agreement reached in Cancún is "modest." The parties agreed on a framework for monitoring and verification of emission mitigation pledges made under the Copenhagen Accord, a priority for the U.S. delegation. The parties also reached terms on rainforest protection initiatives, technology sharing, and the establishment of a "Green Climate Fund." Kicked down the road were such issues as the fate of the Kyoto Protocol, the legal form of any new agreement, and how industrialized countries will come up with money they have pledged . . . The D.C. Circuit Court of Appeals rejected motions to stay EPA's greenhouse gas (GHG) endangerment finding and other rulemakings that are an outgrowth of that finding. Had the court granted the stay, the effect would have been a suspension of Prevention of Significant Deterioration permitting obligations and of EPA's authority to promulgate and enforce any GHG regulations until there was a ruling on the merits. Absent this relief, industry opponents of EPA GHG regulation likely will redouble their efforts to get Congress to take action.

Executive Branch

  • EPA Seeks Delay of Two Major Clean Air Act Rulemakings. The Environmental Protection Agency (EPA) took steps to delay finalizing two major Clean Air Act rulemakings for non-greenhouse gas (GHG) air pollutants, suggesting that EPA may be adopting a less aggressive regulatory posture as Republicans prepare to take control of the House of Representatives next year. One of these rules is a revised National Ambient Air Quality Standard (NAAQS) for ozone, which was first finalized in 2008 and subsequently stayed for reconsideration by the incoming Obama Administration. The other rule would prescribe stringent Maximum Achievable Control Technology (MACT) standards for hazardous air pollutant emissions from industrial boilers. Because both rules were due to be released this fall pursuant to court orders, EPA has filed motions with the United States Court of Appeals for the District of Columbia Circuit asking for a delay of the NAAQS standard until July 2011 and a delay until April 2012 for EPA to completely re-propose and finalize the MACT standards. Although the court filings state that the delays are necessary in order to gather additional scientific opinion (in the case of the NAAQS) and allow for adequate public notice and comment (in the case of the MACT standards), the timing of the decisions has led EPA observers to speculate that the delays are intended to blunt criticism of the agency in Congress and avoid potential curbs on EPA's authority or funding once the House of Representatives changes party control in 2011.
  • USDA Unveils New Climate Change Initiatives. Secretary of Agriculture Tom Vilsack announced several new climate change initiatives to be undertaken by the U.S. Department of Agriculture (USDA). The programs include $15 million in Conservation Innovation Grants to incentivize carbon sequestration on rural lands and launch sequestration demonstration projects; an effort to provide farmers participating in the Conservation Reserve Program with information on the carbon benefits associated with voluntary tree planting; and an online tool called "Carbon Net" that will allow farmers to market voluntary carbon offset credits. The initiatives are described at http://www.usda.gov/wps/portal/usda/usdahome?contentidonly=true&contentid=2010/12/0645.xml.
  • Secretary Chu Voices Support for Clean Energy Standard. Secretary of Energy Steven Chu urged Congress to consider adopting a national "Clean Energy Standard" policy that would require utilities to ensure that a certain minimum percentage of electricity they distribute comes from low-carbon sources, which would include not only renewable energy and energy efficiency but also nuclear and coal with carbon capture and sequestration. Chu suggested that the target for clean energy sales be set at 25% by 2025, increasing to 50% by 2050. Chu also proposed that electricity from any generator capturing at least 90% of its GHG emissions be allowed to qualify as "clean energy" for purposes of the standard. Chu did not state whether he believes natural gas generation should be able to qualify as "clean energy" under this definition.
  • EIA Projects Increase in Fossil Fuel GHG Emissions in 2010. The Energy Information Administration's most recent short-term energy outlook predicts that GHG emissions from U.S. consumption of fossil fuels will increase 3.9% in 2010, reversing a historic 7% decline in 2009 that resulted from the recession. The report is available at http://www.eia.gov/emeu/steo/pub/contents.html.
  • Key Climate Policy Adviser Leaves White House. Joseph Aldy, who is Special Assistant to the President for Energy and the Environment, announced he would resign his position within weeks to assume a position as an assistant professor at Harvard University.

Congress

  • House Republicans Give Upton Energy Chair; Reject Hastings's Play for Energy Jurisdiction. The House Republican steering committee selected Rep. Fred Upton (R-MI) to chair the Energy and Commerce Committee during the 112th Congress. The steering committee rejected a campaign by Rep. Joe Barton (R-TX), current ranking member, to obtain a waiver from term limit rules Barton needed to take the chairmanship. Rep. Upton released a statement saying that he would work with House leadership to "repeal Obamacare, fight rampant job-killing regulations, cut spending, and help put folks back to work." The steering committee also selected other key chairs:
    • Rep. Hal Rogers (R-KY) was selected to chair the Appropriations Committee. As in the case of Rep. Barton, the steering committee denied a similar request for a waiver by current Chairman Rep. Jerry Lewis (R-CA). Rep. Rogers subsequently announced plans to increase oversight of EPA regulations, including those addressing GHG emissions, and to bring in witnesses from the private sector to testify to the effects of the rules.
    • Rep. Darrell Issa (R-CA) was selected to chair the Oversight and Government Reform Committee.
    • Rep. Ralph Hall (R-TX), who has expressed skepticism of anthropogenic sources of climate change, was selected to chair the Science Committee.

The House Republican leadership also rejected Rep. Doc Hasting's (R-WA) proposal to shift jurisdiction over energy issues from the Energy and Commerce Committee to the Natural Resources Committee, which Hastings will be chairing in the next Congress. The proposal was strongly opposed by Energy and Commerce Committee Republicans.

  • Senate Tax Bill Extends Renewable Energy Grant Program. The Senate is considering a version of the tax compromise negotiated at the White House with Senate Republicans. The widely reported compromise consisted of principles, unaccompanied by legislative language, thus providing an opportunity for some changes in the agreement and requiring the drafting of the eventual version to be voted upon. The compromise text of the tax package released by Senate Majority Leader Harry Reid (D-NV) would extend for an additional year the Treasury Department program that provides renewable energy developers with grants in lieu of investment tax credits. The measure was originally passed as Section 1603 of the American Recovery and Reinvestment Act. The tax legislation would also extend through 2011 the ethanol tax credit at the current 45 cents/gallon level as well as the 54 cents/gallon tariff on imported ethanol and the $1/gallon production tax credit for biodiesel and renewable diesel production. In addition, the bill includes short extensions of existing tax credits for energy efficient home construction and retrofits.
  • House Democratic Caucus Votes Against Tax Compromise. In the House, the Democratic caucus reportedly voted to reject the compromise between the White House and Congressional Republicans that would extend the Bush tax cuts for all income brackets for two years. The House has not crafted or offered its own version of a tax compromise, instead waiting for Senate action. More than a quarter of House Democrats did sign a letter advocating for a two-year extension of the Section 1603 program as a vital component of any tax bill.
  • Carper Advocates Clean Energy Standard. Senator Thomas Carper (D-DE) announced his support for a "clean energy standard" (CES) that would mandate the development of low-GHG emission energy generation. As noted above, Obama Administration officials, including Energy Secretary Steven Chu, also announced their support for a CES. A spokesman for Sen. Carper suggested that a CES should contain a required "sub-target" for renewable sources. A CES is seen as potentially more viable than a renewable energy standard in the politically divided 112th Congress. Rep. Upton, incoming Chair of the Energy and Commerce Committee, recently published an article on the Daily Caller, a conservative website, opposing a renewable electricity standard. A link to the article is available at http://dailycaller.com/2010/12/03/now-is-the-time-to-slash-subsidies/.
  • Boxer Will Focus on Climate Science. Senate Energy and Public Works Committee Chair Barbara Boxer announced that the climate change agenda of the Committee will focus on the science of climate change rather than on moving comprehensive climate legislation, until there are sufficient votes in the Senate. "You've got to bring the facts, and that's my job. And when that happens I think people will say, 'let's move forward,'" Sen. Boxer said. She also noted, however, that "We will have to play some defense. I'm not blind to that. There's going to be a lot of moves to take back whatever progress we've made."
  • House CR Includes Loan Guarantees for Nuclear, CCS. The House narrowly passed a bill to fund the federal government through September of 2011. The continuing resolution (CR) provides $10 million in loan guarantee authority for nuclear reactors and carbon capture and sequestration projects (CCS). It also includes $306 million to help cover upfront loan fees (credit subsidy costs) for renewable energy, energy efficiency, and biofuel projects. Negotiations in the Senate are ongoing and it is not yet clear whether the Senate will take up a CR to fund the entire Federal budget without passage of the FY2011 appropriations bills or an omnibus funding bill which would include all House- and Senate- passed appropriations legislation for each federal agency.
  • Poe Introduces Bill to Block EPA Stationary Source GHG Regulations. Rep. Ted Poe (R-TX) introduced a placeholder bill, H.R. 6511, which would prohibit EPA from spending money to implement a GHG cap-and-trade program or impose any new statutory or regulatory requirement related to GHG emissions on stationary sources. The bill would prevent EPA from imposing GHG limits under the Clean Air Act's New Source Performance Standard or Prevention of Significant Deterioration provisions. The legislation would preserve EPA's ability to implement GHG rules for mobile sources that are set to go into effect in January. The bill was co-sponsored by twenty-three other House members. The legislation is not expected to be voted on in this Congress, given Democratic control of the House and Senate, but serves as a placeholder on this issue for reintroduction in the 112th Congress.
  • Vitter, Barrasso Introduce Bill to Reanalyze Climate Data. Sens. David Vitter (R-LA) and John Barrasso (R-WY), both noted climate skeptics, introduced S. 4015, legislation that would direct NASA to establish an official dataset on the historical temperature record and quantify the statistical uncertainty associated with each temperature observation. The creation of the record would be overseen by a panel of experts in meteorology and statistics who have not received any federal funding for climate change-related research in at least five years. The legislation also directs the publication of all raw temperature station data collected by the National Climatic Center and any algorithms used to process temperature data with detailed explanations of any data adjustment. The legislation will likely have to be reintroduced in the 112th Congress.

Judicial

  • D.C. Circuit Denies Motion to Stay EPA GHG Regulations. In a ruling that applies to legal challenges to four separate EPA GHG-related actions and rulemakings, the United States Circuit Court of Appeals for the District of Columbia Circuit denied several motions to stay all or some of EPA's challenged actions. The court's terse opinion states that in the court's view, the petitioners failed to demonstrate that they would suffer certain (as opposed to speculative) injury if EPA were to implement its GHG regulatory activities on schedule, or to show that EPA's actions would be the cause of the injuries alleged in the motion to stay. This decision does not necessarily indicate the D.C. Circuit's views on the merits of the underlying legal challenges, because the stringent legal standard used to decide motions for stay requires (among other things) a rigorous showing of both imminent, irreparable injury as well as a strong likelihood of ultimate success. The court may ultimately decide in favor of industry petitioners on one or more of the challenged EPA actions, although it may take as long as one or two years for the court to decide the merits of the cases. EPA has taken steps to require Prevention of Significant Deterioration (PSD) and Title V permitting of certain large stationary sources of GHGs beginning January 2, 2011, and to begin enforcing GHG emission standards for light duty passenger vehicles on the same date. Barring intervention by Congress, or the unlikely possibility of reconsideration by the D.C. Circuit or a successful appeal to the Supreme Court, the decision on the motions to stay means that EPA will be able to proceed with these actions on the planned date.

States and Cities

  • New Mexico Passes Backstop GHG Regulatory Program. In response to continuing uncertainty related to the Western Climate Initiative, New Mexico passed a GHG reduction plan that will go into effect if the state does not participate as planned in the regional cap-and-trade program. The plan passed by the New Mexico Environmental Improvement Board (EIB) would go into effect in 2013 and would require covered entities to reduce their GHG emissions three percent annually from a 2010 emissions level baseline. Covered entities would include large power plants, as well as oil and natural gas facilities. The program incorporates trading and banking provisions, and would impose a price cap of $50 per tons of CO2. Although the EIB recently approved the state's participation in the WCI, the program's status remains in doubt given statements by other WCI members in the United States, such as Oregon and Washington, that they will not be prepared to participate when the program begins in 2012.
  • Washington Approves GHG Emissions Reporting for 2012. The Washington Department of Ecology passed a rule that will require large stationary sources and transportation fuel suppliers to report their GHG emissions beginning in 2012. The rule goes into effect January 1, 2011 and provides covered sources a year to prepare for the requirements. The reporting requirement applies to all entities in the covered sectors that emit 10,000 metric tons of CO2 or more per year. Transportation related emissions account for nearly half of Washington state's GHG emissions.
  • Alaska Agency Issues Climate Strategy Report. The Alaska Department of Fish and Game issued a "Climate Change Strategy" report that assesses the expected impacts of climate changes on the state. Among the impacts described in the report are changes in ice patterns, precipitation patterns, wildfire tracks, and subsistence opportunities for wildlife. The report is intended to assist the state in adapting its resource management practices to climate change.

Industry and NGOs

  • Carbon War Room Launches Shipping Efficiency Database. The Carbon War Room, an organization founded by Sir Richard Branson, launched an online database with fuel efficiency data on almost 60,000 vessels used in international shipping. Called ShippingEfficiency.org, the website rates the efficiency of each vessel using letter grades. According to officials of Carbon War Room, the website is intended to spur retailers and distributors to select shipping companies using cleaner vessels. International shipping accounts for approximately 2.7% of global GHG emissions.
  • CAP and ACP Call on U.S. to Lead in International Climate Finance. The Center for American Progress (CAP) and the Alliance for Climate Protection (ACP) issued a report at the Cancún, Mexico climate change summit calling on the U.S. to catalyze international financial flows to stimulate investment in clean energy and climate adaptation. According to the report, the emission reduction pledges made under the Copenhagen Accord through 2020 fall 6.5 billion tons CO2-equivalent short of what will be required to limit global temperature increases to 2 degrees Celsius above preindustrial levels. To stimulate further reductions, the report recommends that the U.S. lead a global climate investment partnership. The report also proposes a timetable for increasing climate investments through 2020, and sets forth targets for increases in public spending, private financing, development bank lending, and growth in carbon markets. Bilateral partnership agreements providing funding for key strategic allies such as India and Indonesia are also proposed in the report. The report is available at http://acp.3cdn.net/7c8a9d7c5e6ade5be2_z7m6bspol.pdf.

Studies and Reports

  • Research Finds Clouds Likely to Amplify Warming. Research by Andrew Dressler of Texas A&M University analyzed the effect of clouds on the amount of solar radiation retained in the Earth's atmosphere during short-term climate variations between March 2000 and February of 2010. Uncertainty about the effects of cloud formation on radiation has been a major source of uncertainty in estimates of the climate's sensitivity to increases in atmospheric GHG concentrations because clouds both reflect radiation back into space and trap radiation emitted from the Earth's surface. Dressler found that during the study period the "feedback" (or impact) of clouds on the top-of-atmosphere radiation budget was .54 ± .74 watts per square meter per Kelvin, amplifying warming during periods when the Earth warmed in response to an El Niño cycle. The researchers concluded that clouds are likely to enhance the warming caused by rising GHG concentrations, a finding in line with the predictions of most climate models. The researchers also noted that although it is possible for clouds to have a slightly cooling effect, their results do not indicate that any cooling effect would be large enough to counteract the overall warming trend. The abstract of the study, published in Science, is available at http://www.sciencemag.org/content/330/6010/1523.short.

International

  • Cancún Negotiators Reach Agreement on Some Key Issues, Push Kyoto Decision and Most Details to 2011. Concluding two-weeks of negotiations with a tense final push that extended beyond the scheduled end of the talks, negotiators at the 16th Conference of the Parties (COP 16) to the United Nations Framework Convention on Climate Change reached final agreement on a modest package of documents. Negotiators reached consensus on several major issues – including transparency, financing, technology transfer, and deforestation – but the documents are generally short on details of how those agreements are to be implemented. As with previous COP sessions, the Cancún talks were conducted under parallel tracks: the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) and the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA). The highlights of the "Cancún Agreements" include the following:
    • Negotiations under the Kyoto Protocol will continue through 2011 with the goal of reaching agreement to prevent a gap between the Protocol's first commitment period, which expires in 2012, and any subsequent commitment period;
    • Parties recognized the need to undertake deep GHG emissions cuts to limit the increase in global average temperature to 2 degrees Celsius above pre-industrial levels and that industrialized nations as a group will need to reduce emissions in a range of 25-40 percent below 1990 levels by 2020;
    • Industrialized nations will provide $30 billion in "fast-start" financing for developing nations by 2012 with the aim of ultimately achieving the goal established under the Copenhagen Accord to provide a total of $100 billion annually by 2020;
    • Governments will create a "Green Climate Fund," controlled equally by industrialized and developing nations, to distribute financing for mitigation and adaptation activities in developing nations;
    • The agreements establish the "Cancún Adaptation Framework" as a mechanism to distribute financial assistance and technical support for adaptation projects in developing nations;
    • Transparency, which has been a major point of contention between the United States and China, will be addressed through a framework for monitoring, reporting and verification (MRV) procedures. For developing nations, the MRV framework incorporates international MRV procedures for internationally supported mitigation actions; domestic MRV procedures based on international guidelines for domestic mitigation actions; and "international consultations and analysis" of GHG emissions inventories. Industrialized nations will be subject to enhanced reporting and review guidelines.
    • Parties agreed to a policy framework for reducing emissions from deforestation and degradation (REDD) that provides the foundation for the creation of a global REDD mechanisms; and
    • The agreements create a "Technology Mechanism" to facilitate the development, deployment and exchange of low-carbon technologies.

Coming on the heels of the tumultuous COP meeting in Copenhagen, Denmark, observers feared that failure in Cancún could severely damage the viability of the multilateral process as a venue for future climate change negotiations. While the meetings did not result in a comprehensive treaty or binding emissions targets, the Cancún talks can be seen as successful in that they sustained a degree of confidence in the multilateral process by reaching agreement on some issues and avoiding the collapse of the Kyoto regime. Negotiators will meet again late next year at the 17th COP in Durban, South Africa to try to build on the agreements reached in Cancún. The decisions adopted at COP 16 are available at http://unfccc.int/2860.php. The press release issued following the end of the negotiations is available online here.

  • World Bank Fund To Help Emerging Economies Develop Carbon Markets. The World Bank announced the creation of the "Partnership for Market Readiness" (Partnership), a funding mechanism aimed at helping emerging economies development market based mechanisms for GHG emissions. The Partnership will provide assistance in the form of information exchange and expert advice. The World Bank seeks a total of $100 million in funds from developing nations to implement Partnership. Contributions by developing nations will count toward their fast-start mitigation and adaptation funding obligations under the Copenhagen Accord.

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