Wednesday, November 20, 2019

Citizens Advisory Council Hears Overview Of DEP’s Process To Develop A Market-Based Program To Reduce Carbon Dioxide Emissions To Address Climate Change Compatible With RGGI

On November 19, DEP’s Citizens Advisory Council heard a presentation providing an overview of DEP’s process for developing a carbon dioxide cap-and-trade program covering power plants that is compatible with the Regional Greenhouse Gas Initiative to address climate change.
Jessica Shirley, Director of DEP’s Policy Office, gave the presentation.
DEP pointed out Pennsylvania has already seen impacts from climate change including--
-- A 1.8 degree increase in temperatures over the last century;
-- Between 1958 and 2010 there was an increase in heavy precipitation events by 70 percent Click Here for more.;
-- PennDOT has experienced record breaking impacts from floods and landslides that cost over $125.7 million extra in 2018 alone;
-- Farmers experiencing direct crop damage and heat stress may lead to declines in dairy production; and
-- Increases in mosquito-borne and tick-borne disease cases like Lyme disease.
DEP noted Yale studies show that nearly 70 percent of Pennsylvanians think global warming will harm future generations and 78 percent of Pennsylvanians support regulating carbon dioxide (CO2) as a pollutant. [EDF Poll; Muhlenberg Poll]
On January 8, Gov. Tom Wolf announced he signed a new executive order setting a statewide goal of reducing greenhouse gas emissions by 26 percent by 2025 and 80 percent by 2050 from 2005 levels.  These are the same reduction levels in the 2015 U.N. Paris Climate AgreementClick Here for more.
On April 29, Gov. Wolf was joined by Senate and House lawmakers to announce an update to the state's Climate Action Plan and that the state will join with 24 other governors in the U.S. Climate Alliance to uphold commitments of the international Paris Climate Agreement.  Click Here for more.
On October 3, Gov. Wolf took executive action instructing the Department of Environmental Protection to join the interstate Regional Greenhouse Gas Initiative (RGGI), a market-based collaboration among nine Northeast and Mid-Atlantic states to reduce greenhouse gas emissions from power plants and combat climate change while generating economic growth. Click Here for more.
In response to Gov. Wolf’s October 3 executive order, DEP is now developing developing a carbon dioxide cap-and-trade program covering power plants of 25 megawatts or more that is compatible with the Regional Greenhouse Gas Initiative to address climate change and based on the RGGI model rule that can be tailored to meet the needs of Pennsylvania.
The U.S. Environmental Protection Agency has designated carbon dioxide an air pollutant to be regulated and the federal courts have affirmed that designation.
Since EPA has designated carbon dioxide as an air pollutant, DEP is regulating CO2 under the state Air Pollution Control Act.
In the presentation, DEP laid out a rough schedule for the development of the program.  DEP is required by the order to present a proposed regulation establishing the cap-and-trade program by July 31, 2020.
Prior to that presentation, DEP will be working with several agency advisory committees to develop the proposal.
A public comment period is expected to be opened on the proposal in the Fall of 2020.  The regulation will also be reviewed by the Senate and House and the Independent Regulatory Review Commission under the Regulatory Review Act procedures.
After comments are collected and evaluated, DEP will again work with its advisory committees to develop the final proposal.
A final proposal would be presented to the EQB in the fall of 2021, under DEP’s rought schedule.
DEP provided a basic description of how a cap-and-trade program would work for carbon dioxide.  This kind of program is nothing new for DEP. 
DEP has adopted similar market-based cap-and-trade programs for nitrogen oxide and sulfur dioxide emissions from power plants by regulation.
Both the nitrogen oxide and sulfur dioxide cap-and-trade programs work much like a carbon dioxide cap-and-trade program would work under RGGI with power plants purchasing “allowances” to emit those pollutants through an auction, but there are differences.
DEP said Pennsylvania could expect the auction to generate between $227 to $315 million, based on expected 2022 project emissions.
Since the program is being developed under the state Air Pollution Control Act, the funds could only be used in limited ways to eliminate air pollution under present law.
The RGGI model rule, however, stipulates at least 25 percent of the emissions allowances should be allocated for consumer benefits, including--
-- Promotion of energy efficiency measures;
-- Direct mitigation of electricity ratepayer impacts;
-- Promotion of renewable or non-carbon-emitting energy technologies; and
-- Development of innovative carbon emissions abatement technologies with significant carbon reduction potential.
DEP has been working with the Public Utility Commission to address utility burden for low-income residents, which recently resulted in a new policy statement from the Commission lowering the maximum “energy burden” thresholds for low-income individuals to 6 percent of income.
DEP said joining RGGI is not expected to cause significant shifts in generation, however DEP will be working collaboratively with the Public Utility Commission and the grid operator PJM to identify solutions to help prevent Pennsylvania’s electricity generators from being disadvantaged based on the Commonwealth’s participation in RGGI compared to generators in the non-participating states.
DEP also noted participation in RGGI is beneficial to nuclear facilities, and other non-carbon emitting energy resources, because they would not need to purchase credits because they have zero carbon emissions.
Looking forward, DEP emphasized the point they will be seeking opportunities for engagement by the General Assembly, key stakeholders, and residents and businesses of Pennsylvania in the process to develop this program.
DEP said the first draft of the proposed regulation is expected to be presented to DEP’s Air Quality Technical Advisory Committee meeting in the first quarter of 2020.
More information is available on DEP’s Climate Change In PA webpage.
[Note: At about the same time DEP was making this presentation, primarily Republican members of the Senate and House were holding a press conference announcing legislation to take away DEP’s authority to adopt any greenhouse gas reduction program, unless it is specifically authorized by statute.]
For more information, visit DEP’s Citizens Advisory Council webpage. Questions should be directed to Keith Salador, Executive Director, by calling 717-787-8171 or send email to:
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[Posted: November 20, 2019] 

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