Air Board Contemplates Greenhouse Gas Rules for Power Industry

By Published On: December 7, 2007

State air regulators November 30 kicked off work on a master plan for carrying out the state’s climate protection law, AB 32. An expected key element is how to cut greenhouse gas emissions from the power industry. Known as the “scoping plan,” the California Air Resources Board is developing the blueprint to identify the specific rules it later would adopt to meet the law’s mandated greenhouse gas emissions reductions. “The scoping plan is really going to be the vision for the long-term way California will address climate change,” said Chuck Shulock, Air Board assistant executive officer. It’s set to focus on achieving an expected 29 percent cut in emissions by 2020, Air Board staff said at an initial organizational meeting for developing the road map. However, they added, it also would include preliminary ideas about how to achieve the law’s 2050 goal of cutting greenhouse gas emissions by 80 percent. Air Board staff plans to include direct regulations that name specific technologies businesses in a broad array of industries–including petroleum refining, cement making, and farming–must use to cut emissions. Staff also plans to identify and evaluate a number of market mechanisms that provide incentives for cutting emissions. These are likely to include not only the much discussed cap-and-trade approach, but also carbon taxes and fees and “feebates,” said Kevin Kennedy, Air Board climate change program development lead staff. A key issue for the Air Board is how to regulate the electricity sector. The staff plans to begin work on developing a greenhouse gas regulatory plan for the power industry at a January 16 workshop. Kennedy said the Air Board intends to examine numerous options for the industry, including: -A “load-based” cap-and-trade system that would hold utilities responsible for reducing emissions from the sector. -A “first seller” cap-and-trade rule that primarily would regulate power generators and wholesalers. -Placing only generators under a cap-and-trade rule and leaving utilities subject largely to existing energy efficiency and renewables portfolio standard requirements to cut greenhouse gas emissions. -Holding off on requiring the industry to function under any cap-and-trade rule until either a Western regional or national cap-and-trade program is developed. To help make its decision, Kennedy said the Air Board is awaiting the results of an economic modeling study being performed under the auspices of the California Public Utilities Commission, as well as interim recommendations from the commission and California Energy Commission due in late winter. Final recommendations from the two agencies to the Air Board are expected in late summer 2008. Meanwhile, the Air Board plans to hold a series of public meetings and carry out a number of studies. Its goal is to outline the “maximum technologically feasible” and “cost effective” measures for cutting greenhouse gas emissions. The agency’s staff said it expects its board to adopt a final scoping plan in November 2008. One of the first studies aimed at shaping the plan is due in March, Kennedy said. It is to evaluate the economic effects of various “scenarios”–or regulatory approaches–for meeting the law’s emissions reduction targets. Following the evaluation, the Air Board plans to release a staff draft of the scoping plan for public comment next June.

Share this story

Not a member yet?

Subscribe Now