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SCOTUS Overturns Mercury Rule

The Supreme Court, in a 5–4 decision, ruled that the Clean Air Act required the U.S. Environmental Protection Agency (EPA) to consider the costs of its Mercury and Air Toxics Standard (MATS) rule when determining whether it was “appropriate and necessary” to regulate mercury emissions from the power sector.

The MATS rule requires coal-burning power plants to reduce emissions of toxic pollutants by installing control technologies. The EPA estimated MATS would cost industry about $9.6 billion a year but cut coal and oil emissions by 90 percent and generate $37 billion in savings through “co-benefits.” Because these benefits are calculated on the basis of increased life expectancies and reduced health effects, the values have been subject to much of the debate.

“It is not rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits,” wrote Justice Antonin Scalia for the majority. “Statutory context supports this reading.”

The Supreme Court did not dictate how the agency should address its ruling. It sent the case back to the U.S. Court of Appeals for District of Columbia Circuit for reconsideration of the rulemaking.

“EPA is disappointed that the court did not uphold the rule, but this rule was issued more than three years ago, investments have been made and most plants are already well on their way to compliance,” said EPA spokeswoman Melissa Harrison, noting the agency is reviewing the ruling.

The Nicholas Institute for Environmental Policy Solutions’ Climate and Energy Program Director Jonas Monast notes that the immediate impact of the Supreme Court’s decision will likely be limited because electric utilities have already taken steps to comply with the regulation.

World’s Top Emitters Announce Climate Pledges

Three of the world’s 10 largest emitters of greenhouse gases—Brazil, China and the United States—announced new climate change commitments.

China made its intended nationally determined contribution to the United Nations, which calls to cut greenhouse gas emissions per unit of gross domestic product by 60–65 percent from 2005 levels and obtain 20 percent of its energy from low-carbon sources in 2030 (11.2 percent now comes from such sources).

“China’s carbon dioxide emission will peak by around 2030 and China will work hard to achieve the target at an even earlier date,” said Chinese Premier Li Keqiang.

In a joint statement, the United States and Brazil pledged to source 20 percent of their electricity from non-hydropower renewable sources by 2030. Brazil also committed to restore a swath of forest 46,332 square miles—roughly the size of England—through policies that aim to tackle deforestation.

The commitments come just months before the United Nations Climate Change Conference in Paris, where countries will work toward a global climate agreement. Brian Deese, senior White House climate adviser, said the announcement by the United States and Brazil “substantially elevates and builds” on climate progress and “should provide momentum moving into our shared objective of getting an agreement in Paris later this year.”

Alberta Doubles Carbon Fee, Moves on Climate-Policy Review

The Canadian province of Alberta last week announced it would double its carbon fee—the first to be levied by a North American jurisdiction—from C$15 to C$30 a metric ton and increase its emissions intensity reductions target from 12 to 20 percent by 2017 in an effort to curb greenhouse gases from industrial facilities, coal plants and oil-sands production. The government, which will also begin a climate-policy review to prepare recommendations ahead of the United Nations climate talks in Paris later this year, has said the province needs to be a leader in climate policy in order to support the oil-sands industry, long criticized for its environmental impact.

“If Alberta wants better access to world markets, then we’re going to need to do our part to address one of the world’s biggest problems, which is climate change,” said Environment Minister Shannon Phillips in announcing the news.

The carbon fee is levied on industrial facilities emitting more than 100,000 metric tons of carbon dioxide per year for emissions that exceed a facility’s emission intensity target. The levy was introduced in 2008, Alberta has collected fee revenues of $578 million, which it has put into a technology fund for initiatives that reduce emissions. Those 103 facilities have the option of reducing their emissions intensity, buying Alberta-based offsets to meet the intensity targets, or paying into that fund.

While Alberta’s fee is in support of an emissions intensity target rather than on total emissions, neighboring province British Columbia levies a broad-based carbon tax on emissions from most major sources and uses those tax revenues to largely fund tax cuts. A recent Nicholas Institute for Environmental Policy Solutions-University of Ottawa analysis of that tax found that it was reducing emissions with little net impact, either negative or positive, on provincial economic performance.

The International Emissions Trading Association (IETA) welcomed the news that Alberta would extend its carbon fee measure, officially the Specified Gas Emitters Regulation, to December 31, 2017, the date on which Ontario will likely launch its emissions-trading market, “which is intended to link with those of California and Quebec,” according to IETA.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.