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February, 2011 - The USA will never build a national cap-and-trade system for greenhouse gases!---perhaps

 

The USA will never build a national cap-and-trade system for greenhouse gases!…true?  

Tom Markowitz - Saturday, February 05, 2011

Welcome to Enerhope
 

Welcome to the February, 2011 blog of www.Enerhope.com  ,  a website providing education, information and professional services in Emissions Trading.

This blog entry includes a summary of major January, 2011 cap-and-trade news items, and a special feature article, "The USA will never build a national cap-and-trade system for greenhouse gases! - perhaps"

If you wish to comment on the article or the news items, please join the blog at the bottom of the page.

 

Emissions Trading: Major News Headlines of January, 2011

 

Organized Crime Blamed for Roiling $110 Billion Carbon Market
Organized criminals are being blamed for stealing European Union pollution permits and sparking a police hunt across the continent, battering confidence in an 80 billion-euro ($110 billion) market.
Bloomberg
January 31, 2011
http://www.bloomberg.com/news/2011-01-31/organized-crime-may-have-stolen-carbon-permits-amid-weak-security-eu-says.html

Cap and Trade Returns From the Grave
The president's plans for "clean energy standards" amount to carbon controls by other means.
Wall Street Journal
January 28, 2011
http://online.wsj.com/article/SB10001424052748703893104576108501552298070.html

Carbon emissions trading bill to be submitted to parliament next month
The government plans to submit a bill on a carbon emissions trading system to the National Assembly next month, a highlight of South Korea's efforts to fight global warming, a presidential panel said Thursday.
Yon Hap News (KOREA)
January 27, 2011
http://english.yonhapnews.co.kr/national/2011/01/27/7/0301000000AEN20110127003900315F.HTML

NRTEE Recommends Phased-In Climate Harmonization Policy with U.S.
Canada should adopt a phased-in approach to climate harmonization policy with the U.S. to avoid delay in emissions reductions and maintain economic competitiveness.  This measured approach would establish a 'price collar' that limits carbon price differentials between Canada and the U.S. and takes other national measures, says a new report by the National Round Table on the Environment and the Economy.
NRTEE (CANADA)
January 25, 2011
http://www.climateprosperity.ca/eng/studies/canada-us/report/canada-us-report-eng.php

Pollution Cap and Trade Cleans the Chesapeake Bay
Triple Pundit
January 18, 2011 
http://www.triplepundit.com/2011/01/pollution-cap-trade-cleans-chesapeake-bay/comment-page-1/

EDITORIAL: New climate treaty.
This year, international negotiations on a new climate treaty to replace the Kyoto Protocol will reach a crucial stage. This is also an important year for Japan's domestic measures to fight global warming.
Asahi Shimbun
January 18, 2011
http://www.asahi.com/english/TKY201101170271.html

Proliferation of Emissions Offsets Threatens to Depress Europe's Carbon Trading
A huge influx of international greenhouse gas emission offsets looms over the carbon markets, but traders and banks don't know yet what to make of the situation.
New York Times Climatewire
January 17, 2011
http://www.nytimes.com/cwire/2011/01/17/17climatewire-proliferation-of-emissions-offsets-threatens-60792.html

Global carbon market value edged up in 2010
The value of the global market in carbon emissions permits edged up 1 percent in 2010 to 92 billion euros ($120.9 billion), said Point Carbon, a Thomson Reuters company, on Thursday.
Reuters
January 6. 2011
http://in.reuters.com/article/idINTRE7053JC20110106

New Mexico threatens a U-turn on environmental regulations
New Mexico, the only state besides California to move forward on comprehensive global warming regulations, is reversing course under a new Republican governor, Susana Martinez. The move threatens to cripple the Western Climate Initiative, a California-driven effort to enact a regional trading program to curb greenhouse gas emissions.
Los Angeles Times
January 5, 2011
http://latimesblogs.latimes.com/greenspace/2011/01/cap-and-trade-new-mexico-global-warming-climate-change.html

Cap-and-trade regime coming for industrial emissions
The Union environment ministry is planning a scheme to control emissions from industrial plants and other air polluters, using a market-based mechanism.
Press Trust Of India
January 3, 2011
http://www.business-standard.com/india/news/cap-and-trade-regime-coming-for-industrial-emissions/420528/

 

February Feature Article:

The USA will never build a national cap-and-trade system for greenhouse gases! - perhaps

© Enerhope.com 2011

The End of a USA Greenhouse Gas Cap-and-Trade System

In the USA mid-term congressional elections, on November 2nd, 2010, the Democratic Party lost control of the House of Representatives, and almost lost control of the Senate. Enerhope’s November, 2010 newsletter summarizes the cap-and trade consequences of this midterm election.
http://www.enerhope.com/_blog/November,_2010_-_Cap-and-Trade_and_the_US_Midterm_Elections

In a press conference on November 3rd, President Obama announced that his administration would be looking at means other than cap-and-trade to address the problem of global warming. He hinted at the power of the Environmental Protection Agency (EPA) to regulate greenhouse gases (GHGs), but he stressed the importance of finding ways to solve environmental problems that do not hurt the economy.
http://latimesblogs.latimes.com/greenspace/2010/11/obama-revisits-energy-policy-cap-and-trade-epa-regulation.html

The EPA is now proceeding to enforce reductions of GHG emissions by large stationary sources through “Command and Control.”

Command and Control

…is the traditional method of environmental regulation: the Government specifies the exact emission limit for each facility, and prosecutes the facility owner if the facility exceeds the specified emission limit. As an alternative, the Government can prescribe what technologies or activities the site owner must use to limit emissions.

Command and Control does not allow trading of emission limits between regulated sites. Trading and retirement of Allowances and Offsets do not exist.

How will the US EPA command and control GHG emissions from large, stationary sources? This brief chronology shows the steps taken by the US Government.

May 2007–“Massachusetts vs. EPA”
The US Supreme Court finds that greenhouse gases are air pollutants, covered by the Clean Air Act

December 2009–Endangerment Finding on GHGs:
The EPA Administrator signs a finding that current and projected atmospheric concentrations of the six key GHGs threaten the public health and welfare.

May 2010–The final GHG Tailoring Rule specifies how many tonnes per year of GHG equivalent a major source must emit, to be required to obtain a permit. (Each source must apply every five years for a new permit.)

November 2010–Guidance, Technical Resources and Training to States and Sources on Implementation of GHG Permitting

Which sites will be required to seek permits for GHG emissions?

This summary is from the USEPA Fact Sheet,
http://www.epa.gov/nsr/ghgdocs/ghgpermittingtoolsfs.pdf

“Starting in January 2011, large industrial facilities that must already obtain Clean Air Act permits for non-GHGs must also include GHG requirements in these permits if they increase are newly constructed and have the potential to emit 75,000 tons per year of carbon dioxide equivalent (CO2e) or more or modify and increase GHG emissions by that amount.

“Starting in July 2011, in addition to facilities described above, all new facilities emitting GHGs in excess of 100,000 tons of per year CO2e and facilities making changes that would increase GHG emissions by at least 75,000 tpy CO2e, and that also exceed 100/250 tons per year of GHGs on a mass basis, will be required to obtain construction permits that address GHG emissions (regardless of whether they emit enough non-GHG pollutants to require a permit for those emissions.)

“Operating permits will be needed by all sources that emit at least 100,000 tons of GHG per year on a CO2e basis beginning in July 2011.

“Sources less than 50,000 tons of GHGs per year on a CO2e basis will not be required to obtain permits for GHGs before 2016.”

A good summary of the process, requirements and history of US large source GHG regulation process is Greenhouse Gas Permitting Guidance (Fall, 2010)
http://epa.gov/air/oaqps/eog/video/pdfs/GHGPermittingGuidance_Nov18&19Webinars.pdf

The permitting process is administered by States and by local authorities, not by the EPA itself.

The EPA documents do not specify any limits on how many tonnes of GHGs a facility will be allowed to emit. Instead, the EPA documents require that each applicant must demonstrate the use of “Best Available Control Technology” (BACT), to obtain a permit.

The November, 2010 EPA announcement offers guidance on BACT for various high-emitting industries

The guidance for coal-fired electricity is the following document:

AVAILABLE AND EMERGING TECHNOLOGIES FOR
REDUCING GREENHOUSE GAS EMISSIONS FROM
COAL-FIRED ELECTRIC GENERATING UNITS
http://www.epa.gov/nsr/ghgdocs/electricgeneration.pdf

This document describes traditional efficiency improvements for coal-fired generators, supercritical steam cycles, fuel switching, and cogeneration.

The document also mentions advanced fuel cycles, such as Integrated Gasifier Combined Cycle (IGCC), and Carbon Capture and Storage (CCS).  These are highly advanced new technologies which have not yet been applied to large, multi-hundred megawatt generating stations.

Somebody will propose an alternative to BACT!

Let’s imagine a discussion between a state environmental authority and the manager of a 500 megawatt coal-fired power station, seeking a new permit, and required to demonstrate BACT. How much new technology will be required, to demonstrate BACT?

It is highly probable that the manager, seeking a new permit, will propose something different:

“I will not be able to meet your definition of BACT for my station. Changing from a coal-fired steam cycle to an integrated gasifier combined cycle (IGCC), with carbon capture and storage (CCS), would require a completely new plant, costing 70% more than a steam-cycle plant. (1) , and would require a huge expansion of technologies that have not been proven for a 500 megawatt plant.

“I would like to offer an alternative that would reduce greenhouse gas emissions by more than the BACT that you require for my plant.

“Instead of building an IGCC with CCS, I would pay other companies, municipalities and organizations to reduce their emissions by MORE than the IGCC with CCS could reduce my emissions. Simple changes in technology and behaviour, like installing public transit systems, painting roofs white, and switching from large sport utility vehicles to small cars, can reduce the USA’s greenhouse gas emissions by tens of megatonnes per year, at low or negative cost.

“The cost of electrical energy to my customers would be less, and the net emission reductions would be more.”

 

Here we go, again!

(1)
Electricity Market Module
USDOE/EIA, Report #:DOE/EIA-0554(2010), Release date: April 2010
http://www.eia.doe.gov/oiaf/aeo/assumption/pdf/electricity.pdf#page=3

 

 

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