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January 03, 2011
EPA Regulations on Emissions Take Effect
    by Robert Kropp

As of January 2, 2011, new and upgraded power plants must install technology to reduce greenhouse gas emissions.


Basing its authority to regulate greenhouse gas (GHG) emissions on a 2007 Supreme Court decision relating to the Clean Air Act, the Environmental Protection Agency (EPA) established rules requiring large facilities emitting over 25,000 tons of GHG emissions a year to obtain permits demonstrating that they are using the best practices and technologies to minimize GHG emissions. The rules took force yesterday.

EPA estimated that 400 new sources and modifications would be subject to annual review for GHG emissions, and approximately 14,000 large sources would need to obtain operating. When the rules were originally proposed, in October 2009, EPA Administrator Lisa P. Jackson said that they would "significantly reduce greenhouse gases from sectors that account for nearly 70 percent of non-vehicle emissions."

EPA also announced last week its plan for establishing GHG pollution standards for fossil fuel power plants and petroleum refineries, which, according to the Agency, account for "nearly 40 percent of the GHG pollution in the United States." EPA will propose standards for power plants in July 2011 and for refineries in December 2011, and issue final standards for both in 2012.

In 2009, when Jackson announced the proposed rules that took effect yesterday, she said, "We are not going to continue with business as usual while we wait for Congress to act. We have the tools and the technologies to move forward today, and we are using them." However, the political climate has worsened considerably since then.

Despite the 2007 Supreme Court decision, the US Chamber of Commerce, for instance, filed a lawsuit challenging the authority of EPA to regulate GHG emissions. In response to the lawsuit, Tim Smith, Senior Vice President of
Walden Asset Management, sent letters in August to 35 companies that sit on the Chamber's Board, noting that "the Chamber is obstructing progress as it speaks out and lobbies against positive policy solutions addressing climate change."

And in an
op-ed piece published in the Wall Street Journal, Fred Upton, the chairman-designate of the House Energy and Commerce Committee, wrote that the regulations that took effect yesterday "represent an unconstitutional power grab that will kill millions of jobs—unless Congress steps in."

Upton's op-ed piece was co-written by Tim Phillips, president of Americans for Prosperity, a conservative group started by oil billionaire David Koch.

Following the November election, a coalition of 259 investors with more than $15 trillion in assets under management issued a
statement calling for "clear, credible, and long-term policy frameworks that shift the risk-reward balance in favor of less carbon-intensive investment."

Jack Ehnes, chief executive officer of the
California State Teachers' Retirement System (CalSTRS), the nation's second largest public pension fund with $141 billion in assets, said, "Climate change may be out of vogue in Washington today, but it poses serious financial risks that are not going away and will only increase the longer we delay enacting sensible policies to transition to a low-carbon economy."

 

 
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