Abby L. Harvey
GHG Monitor
4/17/2015
A group of state officials from Colorado, Virginia and Rhode Island warned this week that the Environmental Protection Agency’s proposed carbon emissions standards for coal-fired power plants would not provide enough time to implement market-based compliance options, such as a carbon tax or a cap-and-trade system. Under the proposed rule, states would have to submit implementation plans to meet EPA-set emissions reduction goals by mid-2016 with the compliance period for the rule beginning in 2020. “Frankly, I think it’s going to be difficult for us to pursue [carbon pricing] although if it comes to us we certainly won’t say no. I think it’s difficult just in the way Colorado is set up to engage in those conversations particularly given the rule itself,” Martha Rudolph, Director of Environmental Programs with the Colorado Department of Public Health and Environment, said during an event hosted by the Center for Climate and Energy Solutions.
Many states acknowledge that a market-based approach may be the most cost effective way to implement the EPA’s proposed regulations, but remain concerned due to the current uncertainty surrounding the rule. Virginia, for example, has considered as a means of compliance joining the Regional Greenhouse Gas Initiative, a cap-and-trade program currently comprised of nine states, said David Paylor, Director of the Virginia Department of Environmental Quality. However, because it remains unclear how RGGI will be treated under the final rule, which is due to be issued mid-summer, the state remains uncertain on what path to take. “There has been a push within some members of our legislature and some of the NGOs for us to just join RGGI, as an off the shelf solution, that’s one of the options. … But we don’t know what RGGI is going to look like in the context of the Clean Power Plan yet,” he said. “Market-based solutions are likely to make a lot of sense and you talk about flexibility, that’s really a key with this. The time frame … is a real problem,” Paylor said.
Timeline Issues Could Discourage Market Based Compliance Options
Janet Coit, Director of the Rhode Island Department of Environmental Management, said that Rhode Island, as a member of RGGI, is confident that the program will help the state meet its goal under the proposed rule. However, she acknowledged that the program took several years to set up and it may be difficult for other states to set up similar systems by the EPA’s deadlines. “It would be very difficult for Rhode Island to achieve reductions if we weren’t part of a regional effort [and] we think the regional effort has worked very, very well,” Coit said. “We would welcome people to join it, but I want to also endorse some of the concerns about timing. It took the RGGI group several years to create the model rule, several years after the program was created to get it up and running with auctions and revenue proceeds coming back to the states. So my concern is …. that maybe the timeframes set out will have the unintended consequence of discouraging people from exploring regional market based solutions and I think that would be a shame.”
