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March 13, 2009
EPA Proposes Mandated National Reporting of Greenhouse Gas Emissions
    by Robert Kropp

The proposed rule, which would mandate annual reporting from major emitters of carbon dioxide and other greenhouse gases, could lead to mandatory limits on emissions.

President Obama's economic stimulus package has already signaled his determination to press ahead with policies to combat global climate change despite the current economic crisis. As reported in a previous article, the stimulus contains substantial tax and spending provisions for the renewable energy industry, and has been met with enthusiasm by the industry and sustainable investors alike.

Now, in another striking departure from the previous administration's resistance to addressing the crisis of climate change, the US Environmental Protection Agency (EPA) has proposed the first comprehensive national system for reporting emissions of carbon dioxide and other greenhouse gases produced by major sources in the United States. The rule was developed by the EPA under the authority of the Clean Air Act.

Approximately 13,000 facilities would be covered under the proposed reporting system. The facilities include suppliers of fossil fuel and industrial chemicals, manufacturers of motor vehicles and engines, and large direct emitters from energy intensive sectors whose greenhouse gas emissions are equal to or greater than a threshold of 25,000 metric tons per year. The facilities covered by the proposal account for up to 90% of the greenhouse gases emitted in the United States.

Under the proposed rule, companies would submit their first annual report to EPA in 2011 for the calendar year 2010, except for vehicle and engine manufacturers, which would begin reporting for model year 2011. Most small businesses would not be required to report their emissions because their emissions fall well below the threshold.

The EPA estimates an expected cost to comply with the reporting requirements of $160 million for the first year. In subsequent years, the annualized costs for the private sector would be $127 million.

As the proposal, entitled Mandatory Reporting of Greenhouse Gases, notes, "The proposed rule does not require control of greenhouse gases, rather it requires only that sources above certain threshold levels monitor and report emissions."

But as Paul Dickinson, CEO of the Carbon Disclosure Project (CDP), observed in a statement released in response to the EPA proposal, "If you don't measure emissions, you can't manage them and as regulation increases, those companies that don't manage their emissions will find themselves disadvantaged."

And as Stu Dalheim, Director of Shareholder Advocacy at the Calvert Group, told, "To produce the major and necessary shift in the ways we source and use energy, government needs to put a price on carbon." The EPA proposal appears to be a historic step in the right direction.


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