On 2 June the USA's Environmental Protection Agency issued a proposed new rule with the authority of section 111(d) of the Clean Air Act that would establish state-by-state carbon dioxide emission reduction goals for existing fossil-fuelled power plants.
Under the proposed rule, EPA would require all US states to develop plans to meet CO2 emission targets starting in 2020 on a state-wide basis. States could allow their power plants to employ a number of measures to meet those goals, including heat rate
improvements, energy efficiency, plant retirements, and renewable energy. EPA projects that the proposed Rule will result in power sector emission reductions of 30% from 2005 levels by the year 2030. This measure goes far beyond an EPA proposal last year to limit emissions from new power plants and is a major plank of president Obama's initiative to fight climate change. Last June, he asked the EPA to use its authority under the Clean Air Act to limit power plants emissions, which account for the largest share -- nearly 40% -- of total US emissions. The new Rule will give states different reduction targets but will seek a national average -- from 2005 levels -- of 25% by 2020 and 30% by 2030. Coal-fired facilities will of course be the hardest hit and the industry along with sympathetic legislators can be expected, as in the past, to initiate legal challenges.
The rule will not take effect for at least two more years. Obama has asked the EPA to finalise it in June 2015, after which the states will have at least a year to write their plans.
The authority for this new move lies in the Clean Air Act Section 111(d) which directs EPA to create suitable regulations establishing a federal-state process for setting standards of performance limiting emissions from existing sources for pollutants not otherwise regulated in other specified sections of the CAA. Under this process, EPA develops performance standards, states are to submit plans to EPA to meet these standards, and EPA then approves or disapproves the state plans. Part (d) has only been used in a handful of rules over the forty-plus year history of section 111, and there is almost no case law interpreting EPA's authorities under section 111.
In the previous rules under section 111(d), EPA has issued a "guideline document" that set out emission reduction targets and compliance deadlines for states, and has required states to implement compliance plans that ensure that the regulated sources meet those targets. The Proposed Rule includes such a guideline, along with a requirement that states submit plans to achieve compliance with the guideline.
Each state goal would take the form of an average rate of emissions per net MWh of electricity (lb CO2 / MWh) across all power plants within the particular state. However, in the proposed rule EPA allows the flexibility to convert the rate-based goal into a mass-based goal. This could allow a state to set a cap on emissions from its power sector. This flexibility is responsive to the comments of some states that had requested a mass-based system, and could be necessary to integrate existing cap-and-trade programs already implemented by California and a collection of Northeastern states with the proposed rule's framework.
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