California Requires Significant New Greenhouse Gas Emission Reductions and Increases Oversight of the California Air Resources Board
On September 8, 2016, California Governor Jerry Brown signed a pair of bills expanding California's climate change programs and increasing legislative oversight of the lead agency tasked with implementing those programs. Senate Bill 32 ("SB 32") requires the California Air Resources Board ("CARB") to enact regulations ensuring the maximum technologically feasible and cost-effective greenhouse gas ("GHG") emission reductions, and sets a new statewide GHG emission reduction target of 40 percent less GHG emissions than the existing 2020 goals by 2030.
The companion law, Assembly Bill 197 ("AB 197"), increases legislative oversight of CARB by, among other things, adding two new nonvoting CARB board members to be filled from the legislature. It also creates new public reporting requirements for CARB, which must report emissions data annually on its website and to the newly created Joint Legislative Committee on Climate Change Policies.
AB 197 also requires that CARB consider "social costs," or net economic damages including health impacts, caused by climate change, and prioritize direct emission reductions from stationary, mobile, and other sources. A system of direct emission reductions would disfavor emission credit trading systems that California has been relying upon to meet its 2020 emission reduction goal. On the other hand, AB 197 also reaffirms the preexisting requirements that CARB consider other factors, such as the cost-effectiveness of regulations and minimizing leakage, or the flight of industry (and thus emission sources) across state borders. CARB will need to weigh these competing priorities when deciding how to strengthen existing programs, or design new ones, to meet the new 2030 target.
For more on this new legislation, read our Commentary," California Requires Significant New Greenhouse Gas Emission Reductions."
President Obama Directs Agencies to Consider National Security Impacts of Climate Change
On September 21, 2016, President Obama issued a Memorandum titled Climate Change and National Security. The purpose of the Memorandum is to "ensure that climate change-related impacts are fully considered in the development of national security doctrine, policies, and plans." The Memorandum establishes the Climate and National Security Working Group, to be made up of representatives from various federal agencies, including the Environmental Protection Agency, the Council on Environmental Quality, and the Department of Energy. The Working Group will ultimately develop recommendations for agencies such as the Departments of State, Defense, and Homeland Security.
Presidential Memoranda are akin to Executive Orders, and they have similar legal significance. This Memorandum will remain in effect unless revoked by the next administration. In fact, one of the deadlines established by the Memorandum, by which certain agencies must develop an implementation plan, is not until February 2017. This Memorandum is just one of many examples of the President's focus on climate change issues, and it follows Executive Order 13653 (directing federal agencies to incorporate climate-resilience considerations into operations), Executive Order 13677 (setting requirements for integrating climate-resilience considerations into international development work), and Executive Order 13693 (requiring federal agencies to improve environmental performance and sustainability).
The Memorandum has faced some resistance. For example, on September 26, 2016, the House Committee on Science, Space, and Technology sent a letter to the White House, requesting a briefing on the Memorandum and stating that "it is necessary for us to better understand the science that underpins the studies, climate models, reports, and conclusions that the Administration will use as the basis of its analysis and national security policy development."
Additional information about how this Memorandum may affect the regulated community will likely be available before the end of the year, when the Working Group will issue its Action Plan, outlining specific objectives, milestones, and timelines for carrying out the policies identified in the Memorandum.
EPA Proposes Revisions to the PSD and Title V GHG Permitting Regulations
On October 3, 2016, the United States Environmental Protection Agency ("EPA") published a Proposed Rule titled Revisions to the Prevention of Significant Deterioration (PSD) and Title V Greenhouse Gas (GHG) Permitting Regulations and Establishment of a Significant Emissions Rate (SER) for GHG Emissions Under the PSD Program ("Proposed Rule"). EPA explains that the Proposed Rule is intended to further conform its regulations to the U.S. Supreme Court's 2014 decision in UARG v. EPA (134 S. Ct. 2427) and the 2015 judgment by the D.C. Circuit in Coalition for Responsible Regulation v. EPA (Nos. 09-1322, 10-073, 10-1092, and 10-1167).
The most noteworthy change is that the Proposed Rule would establish a Significant Emissions Rate ("SER") for GHGs. Specifically, EPA is proposing to establish a 75,000 tpy CO2e SER. The agency concluded that this level represents a de minimis level of GHG emissions for purposes of determining whether a GHG Best Available Control Technology ("BACT") review should be required as part of an "anyway source" PSD permit. An "anyway source" is a source that is otherwise required to obtain a PSD permit based on its emissions of one or more regulated New Source Review pollutants other than GHGs. UARG limited the scope of the PSD permitting program to "anyway sources" and held that the EPA may exempt an "anyway source" from the GHG BACT requirement if the source emits a de minimis amount of GHGs.
The Proposed Rule would also revise several definitions. For example, the Proposed Rule would exclude GHG emissions from "major source" and "major modification" determinations. The Proposed Rule would also add a definition of "GHGs": "the air pollutant defined in § 86.1818–12(a) of this chapter as the aggregate group of six greenhouse gases: Carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. To represent an amount of GHGs emitted, the term tpy CO2 equivalent emissions (CO2e) shall be used and computed as follows: (a) Multiply the mass amount of emissions (tpy), for each of the six greenhouse gases in the pollutant GHGs, by the gas's associated global warming potential published at Table A–1 to subpart A of part 98 of this chapter—Global Warming Potentials. (b) Sum the resultant value for each gas to compute a tpy CO2e."
If finalized, the Proposed Rule would amend several other regulations that EPA reasons are no longer necessary after UARG . Comments on the Proposed Rule are due by December 2, 2016. Additional information about GHG permitting under the Clean Air Act is available here.