Complying with the EPA’s Clean Power Plan and Engaging State Regulators
As part of a series of meetings with environmental advocates around the country, David Farnsworth addressed advocates in the Southeast on the United States Environmental Protection Agency’s (EPA) Clean Power Plan (CPP) and methods for engaging state regulators and other decision-makers. The CPP, the EPA’s proposed rule to reduce greenhouse gas emissions from existing power plants, carves out a major role for renewable energy sources as a compliance option. Regulators can leverage existing renewable energy certificate tracking systems and protocols to ensure proper accounting for renewable energy generation and increase the likelihood of achieving emission reduction goals under the CPP in a cost-effective manner. Mr. Farnsworth explored two regional compliance options with the advocates: “cap-and-invest,” and Western Resource Advocates’ “Carbon Reduction Credit” program proposal. In the mass-based, cap-and-invest model, states auction allowances and recycle the revenue into clean energy programs to further reduce CO2 emissions. Following this model, states in the Regional Greenhouse Gas Initiative (RGGI) have jointly raised more than $1.5 billion to invest in their individual energy efficiency programs, renewable energy technologies, and other plans to reduce emissions. By contrast, the Carbon Reduction Credit program proposal (CRC) is a rate-based approach to CPP compliance that would award carbon reduction credits to generators and others based upon their output and CO2 emission rate relative to a state-established CO2 emissions rate. These market-based approaches would offer states greater flexibility, and an opportunity to accelerate low-cost CO2 reductions as part of the CPP compliance.