Law and the Environment : Environmental Lawyer & Attorney : Foley Hoag Law Firm : Boston, Washington D.C.

According to a report released last week by Environment America, power plants were responsible for 42% of the CO₂ emitted in the United States in 2007, substantially more than any other sector, including transportation. What’s the explanation? Largely, it’s the age of the United States power plants. The report, based on EPA data, states that 73% of power plant CO₂ emissions came from plants operating since prior to 1980.

What’s the solution to this problem, in the absence of cap-and-trade legislation enacting? EPA’s already told us, and we shouldn’t be surprised – promulgation of EPA’s “Tailoring Rule,” subjecting existing facilities emitting more than 25,000 tons per year of CO_2e to EPA’s New Source Review program.

And what’s the problem with this solution? To a significant degree, it’s that it is the NSR program that got us in this mess in the first place. As my friend Rob Stavins has noted, regulatory programs – such as NSR – that impose different requirements based on the age of a facility, known in the lingo as “vintage-differentiated regulations” or “VDR”, not surprisingly lead to the perverse result that older, more-polluting, facilities stay in service longer than if regulations were imposed in an even-handed manner on different vintages of facilities.  In other words, we have the NSR program to thank for the situation described in the Environment America report.

Can anyone doubt, therefore, that application of NSR rules to GHGs will cause those who own such facilities to try to operate them as long as possible without implementing any “modifications” that would trigger application of NSR? Moreover, can anyone doubt that application of NSR rules to new facilities would give old facilities a further cost advantage? Sure, EPA can try to tighten the NSR rules and continue to pursue NSR enforcement cases in order to discourage existing facilities from disguising “life-extension” projects as routine maintenance. However, it’s still a jury-rigged system at best. After all, the program is called New Source Review for a reason.

I’m just a poor country lawyer, but I still think that a cap-and-trade program is a better solution for all sides. Add a traditional three-pollutant piece to it, trade that for elimination of the NSR program in its entirety, and you’d really have something. 

Still dreaming, I know.

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As I discussed last week, in response to the current dire state fiscal outlook, Massachusetts Secretary of Energy & Environmental Affairs Ian Bowles announced, pursuant to a request from Governor Patrick, a search for “options for departmental reorganization and consolidation, streamlined operations and procedures, and new models for doing the public's business.” Given that Secretary Bowles has invited public assistance, it should not be too surprising that some folks have stepped up to the plate, so I thought I would share submittals that I have seen. 

Recently, both NAIOP and the Environmental League of Massachusetts have made suggestions to Secretary Bowles. Before going further, I should note that I need to be a little more circumspect here that I might normally be, because I do advise NAIOP on regulatory reform issues and I’m on the board of ELM. Since that is the case, you’re going to get more summary and less commentary than you otherwise might. That being said, here goes.

The NAIOP letter was much more detailed. I think that the regulated community sees this as an opportunity to push for regulatory reform efforts that it truly believes benefit both the regulated community and EEA. The benefits to EEA are precisely those that were the subject of the Governor’s request to his cabinet – by increasing use of general permits, privatizing more audit-type functions, and reducing the number of unnecessary, i.e., not statutorily-mandated regulations and guidance documents, EEA and MassDEP can operate more leanly and conserve precious resources. These types of changes may have a sympathetic audience at EEA, but they are very difficult to implement, because the environmental community is so skeptical of these types of programs. The current budget problems may provide a rare opportunity to advance this part of the regulated community’s agenda.

ELM’s letter was much more limited in its scope. It largely provides the rationale for limiting cuts to EEA departments. I think that this largely reflects a “where you stand depends on where you sit” phenomenon. NAIOP sees the budget problem and the Secretary’s invitation as an opportunity; ELM and other environmental NGOs see it as an exercise in damage control. ELM’s position is understandable and defensible. It is true that DEP, at least, took what many see as disproportionate cuts during the last budget crisis.

If I may mix my metaphors, I’m an optimist, so I sit in the half-full glass, and I thus stand squarely in favor of seizing this opportunity for thoughtful regulatory reform. The budget crisis is obviously a major headache for EEA and its departments. However, many of the suggestions NAIOP has made are good public policy that would maintain – or increase – environmental protection, while allowing the agencies to accomplish this important goal with fewer resources.

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Yesterday, EPA released its effluent guidelines for construction sites. The guidelines establish the first national standard containing numeric limitations on stormwater discharges. The final standard imposed is 280 nephelometric turbidity units. It will apply to all construction sites greater than 20 acres in size as of 18 months following the effective date of the regulations (which will be 60 days after Federal Register promulgation) and sites larger than 10 acres 4 years after the effective date.

As expected, EPA did not take NRDC and Waterkeeper Alliance up on their suggestion that EPA impose post-construction controls. However, since EPA has already signaled that its long-term plan is to impose stormwater controls beyond the current universe of industry and construction sites, it seems at this point that broader stormwater regulation by EPA is more a question of when than whether.

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Following my post yesterday about the E.U. construction standards directive, I received the following two emails from my friend and client Lydia Duff.

Given what people until very recently were paying for in their home purchase decisions, and builders were providing -- e. g. Cathedral ceilings, minimal insulation, no double paned windows, huge foot prints and cheap construction -- it seems that rulemaking to impose more energy efficient building prototypes is just what we deserve. Zero will be hard to get to but I think we're a long ways from technical impracticability at this point. 

Why can't they make as much, or more, money selling equally expensive houses, smaller with more meaningful features? Building disposable houses (and hence communities) is obscenely wasteful. Our time horizons for modern construction are so short. We're beginning to turn people from disposable coffee cups; perhaps we'll shift to enduring buildings, rather than architectural and moral hideosities we merely endure.  (Bias note: my house was built in c. 1860)

Will any of my friends in the development community pick up the gauntlet that Lydia has thrown down? (Oh, and my house was built in 1862, and we love it, but I wish it were more energy-efficient.)

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I spoke a few weeks ago at a NAIOP event concerning implementation of the Massachusetts Global Warming Solutions Act. During that talk, I described the GWSA as “the future of everything.” Why? Because to achieve even medium-term greenhouse gas emission targets in 2020 or 2030, let alone the 2050 target of an 80% reduction, is going to require significant changes throughout the economy. Even substantial reductions in the power plant or transportation sectors alone are not going to be enough.

Need more evidence? How about this story from yesterday’s Greenwire. The E.U. has reached agreement on a directive that will require almost all large buildings, including large houses, to attain “nearly zero” energy use. Existing buildings will have to improve energy efficiency during any renovations, if feasible. Sounds like a BACT analysis for building renovations.

The directive still must be approved by the European Parliament and then be written into the laws of the individual E.U. countries. However, unless Massey CEO Don Blankenship can convince Al Gore that we are entering a period of global cooling, can there be much doubt that something like this is in our future here as well?

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Boston Celtics’ fans know the phrase “fiddlin’ and diddlin.” Well, the Senate continues to fiddle and diddle over climate change legislation. Those who have worked with Gina McCarthy, current EPA air chief, know that she has probably never fiddled or diddled in her life, and I certainly don’t expect her to do so with respect to GHG regulation under existing Clean Air Act authority in the absence of comprehensive legislation. As a result, it now seems likely that EPA will be issuing climate change regulations before any legislation is enacted.

What’s the basis for this conclusion? First, the Senate side:

E&E Daily reported today that Senate leaders are not planning to bring the cap-and-trade bill to the floor until after work on health care and financial regulation bills has been completed.

Senator Webb today “blasted” cap-and-trade legislation as “enormously complex.” (Even with a tailoring rule, good luck eliminating the complexity from EPA regulation under current authority)

So, things aren’t exactly cooking with gas on the legislation front. What’s up at EPA?

Last week, EPA sent the endangerment rule to OMB for final review

EPA’s stakeholder group on the tailoring rule has been hard at work at work and expects to have a preliminary report out by the end of the year. The Daily Environment Report gives a good flavor of the complexities faced by this project, but there is no question that the group and EPA are moving forward.

The bottom line is that unless a health care bill passes soon, and unless passage relieves a bottleneck in the legislative pipeline, we will all be participating in the experiment to see if EPA can make climate change regulation work under existing CAA authority. 

May you live in interesting times.

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On the be careful what you wish for front, Massachusetts Energy and Environment Secretary Ian Bowles announced yesterday an effort to examine “options for changes in administrative structures and programs to meet environmental goals in light of budget challenges.” The announcement identifies three separate areas of investigation:

Public-Private Partnerships – This makes a lot of sense, but, based on the announcement, seems to be too narrowly focused. The announcement indicates that the review will focus on management of properties owned by the Department of Conservation and Recreation. However, we shouldn’t just be looking at whether to let Disney sponsor the Freedom Trail. For example, I am on the board of the Corporate Wetlands Restoration Partnership, a public-private partnership that leverages private money to assist publicly funded wetlands restoration projects. Surely, there are other, similar opportunities to enlist the private sector in in financing EEA programs.

New Regulatory Models – Here is where the rubber meets the road for most of us attorneys and our clients. The announcement mentions MassDEP’s very successful privatization of our state Superfund program, Chapter 21E, and asks whether there are other opportunities for similar innovations. Some thoughts:

Greater use of general permits.

Other opportunities to privatize, such as inspections and audit functions. Naysayers will raise concerns about the independence of third-party inspections, but it’s a false dichotomy to contrast a world of perfect inspections by DEP with a system of private inspections. Audits and inspections would occur with much greater regularity if regulated facilities were required to pay a third party to audit their facilities every year.  Wouldn't that be a good thing?

Greater consistency in agency decision-making. I don’t think that EEA or DEP realize the costs imposed by their failed efforts to rein in street level bureaucrats who have their own ideas as to what good policy is.

Spend less time writing new guidance and let qualified professionals exercise their professional judgment without wasting precious agency time questioning whether a regulated entity used the proper font in its latest submittal (sorry, rhetorical excess alert).

Reorganization/Consolidation of State Agencies

Secretary Bowles, Commissioner Burt, and others involved should be commended for undertaking this effort. It would be great if the current budget crisis could be turned into a real opportunity for reform. As I’ve said on other occasions, this should be a Nixon-in-China moment for regulatory reform. 

Carpe diem.

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My post on the Portland Climate Action Plan has gotten some reaction, which I take as a good thing. For as reasoned a defense of local climate action as is possible in the space of a blog post, take a look at Holly Doremus’s response in Legal Planet, the Law and Environmental Policy Blog. If the Portland plan really were just about filling in the interstices and addressing local issues, I would be more inclined to agree. However, that’s not how I see the plan. We won’t know the details of how the plan will be implemented for some time, but much of it is simply regulatory. Moreover, it’s very likely that those regulations will be of a traditional command and control sort and will indeed duplicate in some way what a federal program is or should be doing.

In any case, thanks for the reaction. Next time, post a comment. If someone hadn’t let me know about your response, I never would have seen it.

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Last week, the City of Portland, Oregon (together with Multnomah County) released an updated Climate Action Plan. The Plan presents a number of aggressive goals and targets, with ultimate goals of GHG reductions of 40% by 2030 and 80% by 2050.

The details of the Plan are obviously only relevant to those in the Portland area, but for those anticipating what regulation might look like in California, Massachusetts, and other states that have enacted or will soon enacted some version of a Global Warming Solutions Act, the Plan provides a helpful catalogue of the types of changes that might be sought. Therefore, a quick summary of some of the 2030 goals seems warranted

Reduce energy use from existing buildings by 20%-25%

All new buildings – and homes -- should have zero net GHG emissions. 

Reduce VMT by 30% from 2008 levels

Recover 90% of all waste generated

Reduce consumption of carbon-intensive foods

Expand “urban forest canopy” to cover one-third of Portland

Reduce emissions from City and County operations by 50% from 1990 levels

What’s my take? I have two immediate reactions. First, if any further evidence were needed that attaining significant GHG emission reductions is going to involve major social and economic changes, this is certainly it. 

Second, and perhaps more importantly, this Plan, and others like it, have to constitute a heavy thumb on the side of the scale arguing for comprehensive federal legislation. In the past, I’ve argued that federal legislation would be preferable to a patchwork made up of EPA regulation under existing Clean Air Act authority, public nuisance litigation, and state and regional initiatives. To that list, we can now add comprehensive local regulation. I don’t mean to be too sanguine about the ability of federal legislation to harmonize this entire process; the existing bills would not preempt most state, regional, and local regulations (other than cap-and-trade programs). Nonetheless, delays in federal enactment can only contribute to the proliferation of state, regional, and local programs, some of which may be beneficial, but many of which will be inefficient, contradictory, or both.

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