While federal climate change legislation has stalled, federal agencies, states, and Congress made some progress on controlling greenhouse gas emissions in the past two years.
The world has been waiting to see if and when the United States would take meaningful action on climate change. The U.S. House of Representatives passed a comprehensive climate and energy bill in June 2009, but by summer 2010, the Senate failed to produce a companion bill, putting into question Congress’ seriousness in addressing the climate change problem. While federal climate change legislation has stalled, federal agencies, states, and Congress made some progress on controlling greenhouse gas (GHG) emissions in the past two years.
This fact sheet reviews notable steps taken by the Environmental Protection Agency (EPA), Department of Energy (DOE), and through stimulus funding, international finance commitments, regional cap-and-trade programs, and state energy policies. It also identifies political and economic developments that could impact federal climate legislation and additional regulatory action to reduce emissions by federal agencies. While these efforts are important, it is clear that much further action, including a binding cap on carbon, are necessary in the United States.
Without climate legislation, federal agencies can control greenhouse gases using existing legal authorities. Federal agencies such as EPA use “rulemaking” to write administrative laws authorized by existing legislation. Rulemaking is a multi-step process in which a rule is first proposed by the agency, then commented on by the public, and then revised and finalized by the agency. This process is currently underway to control certain GHG emissions under the Clean Air Act.
In December 2009, EPA, through the Clean Air Act, found that CO2 and five other GHGs constitute a threat to public welfare and that emissions from vehicles contribute to climate change. This “endangerment finding” allows the EPA to regulate GHGs under existing provisions of the Clean Air Act. The endangerment finding was followed by a proposal for fuel efficiency improvement standards for cars and light trucks – including SUVs and minivans – in September 2009 that will apply for model year 2017.
In May 2010, EPA issued a final rule establishing thresholds for GHG emissions for stationary sources, which will require permits and use of “best available control technologies” to minimize GHGs. Beginning July 2011, the regulations will apply to new and modified facilities that will emit more than 100,000 and 75,000 tonnes of GHGs respectively – including power plants, refineries, and cement factories. This rule will apply to 70 percent of national GHG emissions from stationary sources. The EPA will explore regulating facilities that are no smaller than 50,000 tons after 2016.
New climate laws are dependent on Congress passing new legislation. Legislation must be approved by both chambers of Congress – the House of Representatives and the Senate – which act independently, but come together in a “conference committee” to reconcile differences. This must happen during the same two-year congressional session; in this session, by the end of December 2010. The House passed a climate bill in June 2009. If the Senate does not act in the remaining months of 2010, both houses must start the process from the beginning to write, negotiate,and pass new bills in the next session that begins January 2011.
The House climate bill is called the American Clean Energy and Security Act (Waxman-Markey or ACES). It would reduce U.S. emissions by 28 percent below 2005 levels by 2020 (16 percent below 1990 levels) and 40 percent below 2005 levels by 2030 (30 percent below 1990) in 2030. This bill included an economy-wide cap-and-trade program and additional “complementary policies,” including mandated reductions through efficiency standards. The full Senate has yet to formally consider a climate bill, but in 2010 debated bills with significant differences. For instance, the bill sponsored by Senator Bingaman, the American Clean Energy Leadership Act, does not set a price on carbon and does not have reliably quantifiable reductions in emissions, while the bill sponsored by Senators Kerry and Lieberman, the American Power Act, would achieve net global emissions reductions equal to 38 percent below 2005 levels in 2020 (28 percent below 1990 levels) and by 55 percent by 2030 (48 percent below 1990). A comparison of emissions reductions under several proposed U.S. climate bills can be found here. Other completed congressional actions have climate consequences, notably stimulus packages that made green spending a key feature, passed in response to the global economic crisis. The passage of the Emergency Economic Stabilization Act in 2008 and the American Recovery and Reinvestment Act in 2009 dedicated $112 billion to climate-related initiatives, which is three-fold the budget of these programs without the stimulus.
Stimulus funding included $3.4 billion for the Smart Grid Investment Grant awards, the largest grid modernization investment in U.S. history. The Electric Power Research Institute estimates that implementation of smart grid technologies could reduce U.S. electricity use by more than 4 percent by 2030. Green recovery alone will not achieve broader climate objectives but it can reduce the cost of such policies when they are passed.
WRI analysis finds that for every $1 billion that the United States spends on green stimulus it reduces emissions, on average, by 592,600 tons. This means the U.S. stimulus could reduce emissions by around 50mt CO2. HSBC estimates that the stimulus’ funding of renewables and energy efficiency could avoid 65mt CO2, around 1 percent of US CO2 emissions in 2007.
Part of the Copenhagen Accord is a commitment of developed countries to jointly mobilize $30 billion over the next three years and $100 billion per year by 2020 to fund climate change activities in developing countries. The U.S. Congress appropriated $1.304 billion in FY 2010, which is triple its climate related appropriations from FY 2009. On July 29, the U.S. Senate Committee on Appropriations approved $1.725 billion for FY 2011, which has yet to be approved by the Senate. The United States must still demonstrate how it is going to raise funds for long-term climate obligations, and it is unclear to what extent these funds are ‘additional,’ a criteria of the Copenhagen fast-start finance pledge. To date, the U.S. funding is budgeted for the following sources:
More than half of the U.S. states, covering a majority of the U.S. population, have taken steps to reduce their CO2 output. Specifically:
Eight states are actively observing and are considering joining regional cap-and-trade systems.
Some developments could determine how further climate action fares in the upcoming months:
The fate of the climate bill
Economic crisis is pushing some states to step back from climate policy
Litigation challenging EPA rulemakings
Congressional efforts to limit EPA authority to regulate GHGs
2010 elections may alter political dynamics