Is the U.S. Ready for National Greenhouse Gas Regulation?

 by Bob Shively, Enerdynamics President and Lead Instructor

Flash back eight years ago to 2005.  U.S. greenhouse gas emissions (GHG) from energy consumption were increasing annually with emissions having grown by almost 20% since GHG1990. The Bush Administration announced in 2001 that the U.S. would not implement the Kyoto Protocol. Rather than pursuing regulatory mandates, the Administration announced support for voluntary measures and tax credits to encourage businesses to reduce GHG emissions[1].

Meanwhile in Europe, the European Union launched the European Union Emissions Trading Scheme (EU ETS), which regulated GHG emissions in 31 European countries through a cap-and-trade mechanism. Its goal was to reduce emissions by 21% by 2020.  And although emissions in China had grown significantly in recent years, China’s energy-related emissions were still almost 10% less than those in the U.S[2].

U.S. GHG Emissions from the Consumption of Energy 1990-2005
(in millions of metric tons)

GHG USSource: U.S. EIA International Statistics 

How different the world of GHG looks today.  By the end of 2011, the U.S. has reduced energy related GHG emissions by 8% since 2005. With the ongoing implementation of the EU ETS, the European Union had reduced GHG by 10%.  And China, with its rapidly expanding economy, had increased emissions by a whopping 59%.

GHG Emissions from the Consumption of Energy 2005-2011
(in millions of metric tons)

world GHG

As discussed in Enerdynamics’ recent Energy Insider[3], key factors contributing to the reduction in the U.S. include the economic downturn in 2008, growth of renewable generation, energy efficiency efforts, and perhaps most importantly a major shift from coal to natural gas-generated electricity.

Interestingly, as U.S. GHG emissions have declined in recent years, there is revived talk that the time may have come for national regulation of GHG emissions. Certainly we’ve been here before.  Legislative action has stalled numerous times, included the demise of the Waxman-Markey bill in the U.S. Senate in 2010 (despite having already passed the House and having the support of President Obama)[4].  But the U.S. Supreme Court in 2007 ruled that greenhouse gases fit within the definition of air pollution in the Clean Air Act, thus requiring the EPA to regulate GHG if the EPA determined that the gases endangered public health.  Subsequently the EPA ruled that GHG do endanger public health, and this determination was upheld by the U.S. D.C. District Court of Appeals in 2012.

The EPA has already issued proposed rules for new power plants[5], and many believe that the next logical step would be to extend rules to existing units.  The Wall Street Journal recently reported that the Edison Electric Institute, a utility trade group, may take a cooperative role in working to create national GHG regulations[6] based on a belief that legislative solutions could be more flexible than EPA rules.  And George Shultz and Gary Becker of the conservative Hoover Institution recently wrote a paper suggesting the time has come for a national revenue neutral carbon tax[7].

So does this mean that fear of EPA regulation will coalesce enough parties to get legislation passed?  In today’s fractured Washington politics, that is hard to predict.  But it is a renewed possibility.

References:


[1] See: Bush Unveils Voluntary Plan to Reduce Global Warming, http://archives.cnn.com/2002/ALLPOLITICS/02/14/bush.global.warming/index.html

[3] See U.S. Greenhouse Gas Emissions at 20-year Low —
What Happened?    http://marketing.enerdynamics.com/Energy-Insider/2012/Q3Electricity.html

[4] For an interesting discussion of how this bill failed to pass in the Senate, see the New Yorker article As the World Burns available at http://www.newyorker.com/reporting/2010/10/11/101011fa_fact_lizza?currentPage=1

[6] Wall Street Journal, Power Sector Plans for New Rules, April 24, 2013

About Enerdynamics

Enerdynamics was formed in 1995 to meet the growing demand for timely, dynamic and effective business training in the gas and electric industries. Our comprehensive education programs are focused on teaching you and your employees the business of energy. And because we have a firm grasp of what's happening in our industry on both a national and international scale, we can help you make sense of a world that often makes no sense at all.
This entry was posted in Electricity, Natural Gas, Renewables and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s