Yesterday, I explored the various ways that the USDA takeover of bio-sequestration offsets could affect how well the offsets provision of the Waxman-Markey Climate Security Act would work. Today, we have legislative language in the form of an amendment offered by Rep. Collin Peterson (D-MN), which fills in some of the details. While some of the changes may be helpful, others are cause for worry.
The amendment gives all offset authority over bio-sequestration and agricultural activities to the USDA – the authority to initially approve offset rules; to create rules for “additionality,” leakage, and permanence; to approve offsets themselves; and to account for reversals. The language does remain specific about what must guide the rulemaking, and is also specific about accounting for reversals and holding offset credits in reserve for reversals. The offset reversal part of the law does expand the list of offsets eligible for requirements of insurance or reserve, but it also gives the USDA unilateral power to not require that reserves be replenished for unintentional failure of offsets if it was because of a “natural disaster.” (Sec. 504(c)(3)(B)(iii)).
Besides these changes, the effect of the change from the EPA to the USDA over the majority of domestic offsets depends on whether or not one thinks that the USDA can do as good a job or not at coming up with genuine rules and adequately policing these rules. Because the USDA is not primarily an enforcement and compliance body (unlike the EPA), environmentalists have their worries.
Full textLast night, House Energy and Commerce Chair Henry Waxman announced that he had agreed with Agriculture Committee Chair Collin Peterson that the USDA could have jurisdiction over agricultural offsets in the massive American Clean Energy and Security Act, which the House may vote on this Friday.
In agreeing to what had been one of the major sticking points to bringing farm Democrats on board, Waxman appears to believe that any concerns over USDA’s role are outweighed by the other good things in the bill. There are a lot of potential concerns with the USDA having the lead role on agricultural offsets. Most environmentalists have asserted that the EPA would be more likely to properly enforce the requirements that offsets be additional, verifiable, and not have leakage.
It is hard to make predictions about the effect of this change without specific legislative language, which is expected later today. But if we assume that most of the offset provisions of the bill otherwise remain the same, we can address some of the likely variables.
Giving the USDA primary jurisdiction over agricultural offsets essentially gives it control over most domestic offsets, since the largest categories of offsets are likely to be forestry sequestration, changes in land management, and methane capture from farms through the use of bio-digesters. The key in the legislative language will be defining “primary” jurisdiction. New legislative language could authorize USDA jurisdiction over approval and monitoring of individual offset applications or also include jurisdiction of the approval of offset categories. If only the former, the impact of putting USDA in charge is much less than if the latter.
Full textYesterday the Supreme Court ruled in Coeur Alaska, Inc. v. Southeast Alaska Conservation Council that the United States EPA and the Army Corps of Engineers could interpret the Clean Water Act to exempt water pollution sources from pollution control requirements if the pollution was accompanied by fill material.
This legal feat was accomplished because the Clean Water Act divides jurisdiction between the Corps for “fill” material and the EPA for pollutants. This division ostensibly gives each agency control of its own area of expertise, the Corps dredging and filling and the EPA pollutants that could harm human health or the environment generally. The problem comes when, as in this case, “fill” material contains significant amounts of pollution. Who then should regulate? I believe a straightforward reading of the intent of the legislation indicates that generally the Corps should only regulate fill that might contain de minimis amounts of pollution, as otherwise the “fill” exception could swallow the whole pollutant regulatory apparatus. Prior to this case, the Corps had never asserted jurisdiction over fill material whose primary purpose wasn’t fill. However, during the Bush administration, the agencies came to a written understanding that at this particular mine in Alaska, the release of fill laced with extensive pollutants into a lake would not be regulated by the EPA or be subject to strict pollution controls, and that the EPA would instead regulate the releases from that lake. The Supreme Court majority opinion upheld this action.
As bad as this decision is for the environment, the damage from any similar future scenarios could be contained, either by the agencies undergoing a more formal rulemaking, or, preferably, Congress addressing any ambiguity legislatively. The damage done to administrative law jurisprudence, though, is far more dangerous.
Full textOn Friday, the House Energy and Commerce Committee released its anticipated Beta version of its comprehensive GHG and energy bill. Among other goals, the new discussion draft attempts to address concerns from moderate and conservative Democrats concerning the proposed cap and trade system and how it would work. The most notable change involves the free allocation of allowances to certain economic sectors to assist in the transition to the new system, and this is the part that seems to most directly respond to actual political pressures regarding the cost of controlling greenhouse gases.
With respect to offsets, the most problematic change is allowing the offsets, which are more uncertain than emission reductions, to be treated as equal in value to emissions allowances. The original Waxman-Markey discussion draft discounted all offsets by 20% with respect to equivalent greenhouse gas allowances, so that it took 1.25 offsets to be equal to one emission allowance credit. Though a rather blunt instrument, this was designed to account for the relative uncertainty of offset reductions, to provide an incentive to encourage actual reductions from regulated sources, and to even increase real reductions if the offsets proved 100% valid. The new draft retreats from this broad provision by allowing domestic offsets to count as equal to emission allowances on a one to one basis, though international offset credits are still subject to the 1.25 equivalency ratio.
Full textTwo weeks ago, Representatives Waxman and Markey put forth a 648-page legislative draft for dealing with climate change. That draft had proposals for the use of offsets, some good and some not so good (see my earlier post). Moderate and conservative Democrats on the Energy and Commerce Committee have now put forward suggested changes (as reported by ClimateWire) that they say are necessary to make the proposed bill less onerous. In general, these provisions would more or less weaken the targets and enforcement mechanism in the proposed bill, and that is not a positive thing. We already know that climate change is serious and that the U.S. is going to have to take a leading role in addressing it, or we will never reach the international consensus necessary to address the problem. Yes, it will be hard, but instead of shirking our responsibility to ourselves and the future, we should try to make real changes, but do them in the most economic way possible.
Full textThe Waxman-Markey draft bill treads some familiar ground with respect to the use of offsets to meet greenhouse gas reduction requirements, but also introduces some new innovations. In departing from other drafts and bills, the offsets provision may be most controversial in its limited examination of the environmental effects of offsets, and its use of offset management to try and address international competitiveness issues. Full text