James E. McCarthy
Specialist in Environmental Policy
On June 26, the House passed H.R. 2454, a 1,428-page bill addressing a number of interrelated energy and climate change issues. The bill would amend the Clean Air Act to establish a cap-and trade program for greenhouse gas (GHG) emissions, beginning in 2012. The emissions cap would gradually decline until the year 2050, at which point the emissions cap for covered sources would be 83% below the level of 2005. The cap could be met by actual reductions in emissions or the purchase of offsets (reductions by sources not covered by the cap). In addition to the cap-and trade program, the bill establishes renewable energy and energy efficiency requirements, mandates carbon capture and sequestration by new coal-fired electric generating units, and requires EPA to set GHG emission standards for various sources. The bill distributes the cap-and trade program's emission allowances to a wide array of sectors in an effort to address potential impacts on low income households, protect industries that might be subject to import competition from countries with less stringent GHG requirements, and encourage the use of offsets.
In the Senate, energy and environmental bills originate in separate committees. The Environment and Public Works Committee approved S. 1733, which would establish a cap-and-trade program similar to that in H.R. 2454, November 5, 2009. The Energy and Natural Resources Committee approved the American Clean Energy Leadership Act (S. 1462), which would establish renewable energy requirements for electric utilities, on June 17. The latter bill was reported July 16.
EPA's actions on greenhouse gases using existing Clean Air Act authority have also been a focus of interest in recent months. On December 15, the agency finalized an "endangerment finding" under Section 202 of the Clean Air Act, which permits it (in fact, requires it) to regulate pollutants for their effect as greenhouse gases for the first time. On May 19, 2009, the President announced that EPA and the National Highway Traffic Safety Administration (NHTSA) would proceed with a joint rulemaking in which GHG emissions from new motor vehicles would be reduced under the Clean Air Act, while NHTSA would set corresponding fuel economy standards under the Corporate Average Fuel Economy (CAFE) program. EPA and NHTSA formally proposed GHG and fuel economy standards in the September 28 Federal Register. The objective of the new greenhouse gas standards would be to reach reduction levels similar to those adopted by the state of California. The proposed standards represent a change from the Bush Administration's approach on GHG regulation: EPA had denied a waiver of federal preemption for the California standards in March 2008. On June 30, 2009, EPA formally granted California the waiver.
The Bush Administration's EPA made a number of other clean air regulatory decisions that have been vacated or remanded to the agency by the courts. Among these were decisions on the Clean Air Interstate Rule (CAIR)—a rule designed to control the long-range transport of sulfur dioxide [SO2] and nitrogen oxides [NOx] from power plants by establishing a cap-and-trade program— and the Clean Air Mercury Rule, which would have established a cap-and-trade program for mercury emissions from power plants. EPA has decided to address the court decisions through new regulations; but Congress could also address the issues through legislation. Legislating might resolve ambiguities in current law, and, depending on how the legislation is drafted, could reduce the likelihood of further court challenges. Courts have also remanded Bush Administration decisions regarding National Ambient Air Quality Standards for ozone and fine particles.
This report provides an overview of clean air legislative and regulatory issues. More detailed information on most of the issues can be found in other CRS reports, which are referenced throughout this report.
Date of Report: January 4, 2009
Number of Pages: 30
Order Number: R40145
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Saturday, January 9, 2010
James E. McCarthy