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Friday, September 28, 2012

Clean Water Act and Pollutant Total Maximum Daily Loads (TMDLs)



Claudia Copeland
Specialist in Resources and Environmental Policy

Section 303(d) of the Clean Water Act (CWA) requires states to identify waters that are impaired by pollution, even after application of pollution controls. For those waters, states must establish a total maximum daily load (TMDL) of pollutants to ensure that water quality standards can be attained. A TMDL is both a quantitative assessment of pollution sources and pollutant reductions needed to restore and protect U.S. waters and a planning process for attaining water quality standards. Implementation of section 303(d) was dormant until states and the Environmental Protection Agency (EPA) were prodded by lawsuits. The program has been controversial, in part because of requirements and costs faced by states to implement this 40-year-old provision of the law, as well as industries, cities, farmers, and others who may be required to use new pollution controls to meet TMDL requirements.

Despite controversies, the TMDL program has become a core element of overall efforts to protect and restore water quality. States and EPA develop several thousand TMDLs annually, but many more need to be completed. The most recent information indicates that over 41,000 waterbodies do not meet water quality standards and need a TMDL to initiate corrective measures. The 303(d) program has evolved, and especially during the last decade, EPA and states have addressed more complex issues, including TMDLs involving both point (direct discharges) and nonpoint sources (diffuse discharges) such as stormwater; TMDLs for less-traditional causes of impairment such as ocean acidification and climate change; TMDLs for pollutants such as mercury that involve coordination among water, air, and other environmental programs; and multi-jurisdictional TMDLs.

The largest multi-jurisdictional TMDL, for the Chesapeake Bay watershed, has drawn considerable attention. It was developed by EPA and was necessitated because previous largely voluntary restoration efforts by the Bay jurisdictions were insufficient to attain water quality standards. It addresses all segments of the Bay and its tidal tributaries that are impaired from discharges of nitrogen, phosphorus, and sediment, with a goal of having TMDL implementation measures in place by 2025. The Chesapeake Bay TMDL has a number of novel elements, including Watershed Implementation Plans in which the jurisdictions identify specific measures to achieve needed pollutant reductions, and biennial reports to the public on progress in implementation. The Bay TMDL has been controversial with a number of groups concerned about the costs of implementation and the likely mandatory nature of many of EPA’s and states’ actions. EPA’s authority to develop the TMDL has been challenged in a lawsuit.

When a TMDL is developed, implementation is a major uncertainty. First, section 303(d) does not require implementation, and states’ strategies for implementation vary widely. Only a few have laws requiring implementation plans, while many others rely on less structured policies. Second, a number of barriers to implementation can be identified. The most prominent is insufficient funding, but technical impediments such as insufficient scientific data also are a challenge. At the same time, factors that may aid effective implementation can be identified, including active involvement of stakeholders and governments, and adequate resources.

The TMDL program is in a period of transition and increasingly is addressing new challenges— more complex TMDLs, larger scale impairments, and nonpoint sources. Other than recent oversight hearings on the Chesapeake Bay TMDL, Congress has not shown active interest in the TMDL program for more than a decade. Some stakeholders, especially states, believe that several issues present Congress with an opportunity to examine the TMDL provisions of the CWA.



Date of Report: September 21, 2012
Number of Pages: 22
Order Number: R42752
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Wednesday, September 26, 2012

Cooling Water Intake Structures: Summary of EPA’s Proposed Rule



Claudia Copeland
Specialist in Resources and Environmental Policy

Thermoelectric generating plants and manufacturing facilities withdraw large volumes of water for production and, especially, to absorb heat from their industrial processes. Water withdrawals by power producers and manufacturers represent more than one-half of water withdrawn daily for various uses in the United States. Although water withdrawal is a necessity for these facilities, it also presents special problems for aquatic resources. In particular, the process of drawing surface water into the plant through cooling water intake structures (CWIS) can simultaneously pull in fish, shellfish, and tiny organisms, injuring or killing them. Congress enacted Section 316(b) of the Clean Water Act (CWA) specifically to address CWIS.

Regulatory efforts by the Environmental Protection Agency (EPA) to implement Section 316(b) have a long and complicated history over 35 years, including legal challenges at every step by industry groups and environmental advocates. Currently most new facilities are regulated under rules issued in 2001, while rules for existing facilities were challenged and remanded to EPA for revisions. In response to the remands, in March 2011 EPA proposed national requirements affecting approximately 1,150 existing electric powerplants and manufacturing facilities. Even before release, the proposed regulations were highly controversial among stakeholders and some Members of Congress. The issue for Congress has been whether a stringent and costly environmental mandate could jeopardize reliability of electricity supply in the United States. Many in industry feared, while environmental groups hoped, that EPA would require installation of technology called closed-cycle cooling that most effectively minimizes the adverse environmental impacts of CWIS, but also is the most costly technology option.

The EPA proposal declined to mandate closed-cycle cooling universally and instead favors a less costly, more flexible regulatory option. EPA’s recommended approach would essentially codify current CWIS permitting procedures for existing facilities, which are based on site-specific determinations and have been in place administratively for some time because of legal challenges to previous rules. EPA acknowledges that closed-cycle systems reduce the adverse effects of CWIS to a greater extent than other technologies, but in the proposed rule it rejected closed-cycle cooling as a uniform requirement at existing facilities. The agency based that conclusion on four factors: additional energy needed by electricity and manufacturing facilities to operate cooling equipment and adverse consequences to reliability of energy delivery (i.e., energy penalty), additional air pollutants that would be emitted because fossil-fueled facilities would need to burn more fuel as compensation for the energy penalty, land availability concerns in some locations, and limited remaining useful life of some facilities such that retrofit costs would not be justified.

Not surprisingly, stakeholder groups viewed the proposal differently. Environmental groups endorsed the parts of the rule to establish nationally uniform requirements, but criticized those allowing for site-specific determinations. Industry groups urged EPA to provide greater flexibility that would be more cost-effective. State permitting authorities were divided on modifying the rule to be more flexible. In June 2012, EPA said it is considering alternatives that reflect some recommendations of industry and utility groups, and in July, the agency said it will delay issuance of a final rule until June 27, 2013.



Date of Report: September 12, 2012
Number of Pages: 29
Order Number: R41786
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Thursday, September 20, 2012

Carbon Tax: Deficit Reduction and Other Considerations



Jonathan L. Ramseur
Specialist in Environmental Policy

Jane A. Leggett
Specialist in Energy and Environmental Policy

Molly F. Sherlock
Specialist in Public Finance


The federal budget deficit has exceeded $1 trillion annually in each fiscal year since 2009, and deficits are projected to continue. Over time, unsustainable deficits can lead to reduced savings for investment, higher interest rates, and higher levels of inflation. Restoring fiscal balance would require spending reductions, revenue increases, or some combination of the two.

Policymakers have considered a number of options for raising additional federal revenues, including a carbon tax. A carbon tax could apply directly to carbon dioxide (CO2) and other greenhouse gas (GHG) emissions, or to the inputs (e.g., fossil fuels) that lead to the emissions. Unlike a tax on the energy content of each fuel (e.g., Btu tax), a carbon tax would vary with a fuel’s carbon content, as there is a direct correlation between a fuel’s carbon content and its CO2 emissions.

Carbon taxes have been proposed for many years by economists and some Members of Congress, including in the 112th Congress. If Congress were to establish a carbon tax, policymakers would face several implementation decisions, including the point and rate of taxation. Although the point of taxation does not necessarily reveal who bears the cost of the tax, this decision involves trade-offs, such as comprehensiveness versus administrative complexity.

Several economic approaches could inform the debate over the tax rate. Congress could set a tax rate designed to accrue a specific amount of revenues. Some would recommend setting the tax rate based on estimated benefits associated with avoiding climate change impacts. Alternatively, Congress could set a tax rate based on the carbon prices estimated to meet a specific GHG emissions target.

Carbon tax revenues would vary greatly depending on the design features of the tax, as well as market factors that are difficult to predict. One study estimated that a tax rate of $20 per metric ton of CO2 would generate approximately $88 billion in 2012, rising to $144 billion by 2020. The impact such an amount would have on budget deficits depends on which budget deficit projection is used. For example, this estimated revenue source would reduce the 10-year budget deficit by 50%, using the 2012 baseline projection of the Congressional Budget Office (CBO). However, under CBO’s alternative fiscal scenario, the same carbon tax would reduce the 10-year budget deficit by about 12%.

When deciding how to allocate revenues, policymakers would encounter key trade-offs: minimizing the costs of the carbon tax to “society” overall versus alleviating the costs borne by subgroups in the U.S. population or specific domestic industries. Economic studies indicate that using carbon tax revenues to offset reductions in existing taxes—labor, income, and investment— could yield the greatest benefit to the economy overall. However, the approaches that yield the largest overall benefit often impose disproportionate costs on lower-income households.

In addition, carbon-intensive, trade-exposed industries may face a disproportionate impact within a unilateral carbon tax system. Policymakers could alleviate this burden through carbon tax revenue distribution or through a border adjustment mechanism. Both approaches may entail trade concerns.



Date of Report: September 17, 2012
Number of Pages: 37
Order Number: R42731
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Automobile and Truck Fuel Economy (CAFE) and Greenhouse Gas Standards



Brent D. Yacobucci
Section Research Manager

Bill Canis
Specialist in Industrial Organization and Business

Richard K. Lattanzio
Analyst in Environmental Policy


In recent years, as oil and gasoline prices have risen and concerns over greenhouse gas emissions and climate change have grown, there has been a resurgence of interest in the fuel economy and emissions of motor vehicles in the United States. Federal fuel economy and greenhouse gas standards have become a focal point for addressing these concerns. The debate over rising fuel efficiency and greenhouse gas standards for passenger vehicles and heavy trucks has been controversial. Proponents of higher fuel economy argue that new standards will create incentives for the development of new technologies that will help reduce oil consumption and limit greenhouse gas emissions. Critics argue that these standards will impose regulatory costs which will distort the market for new vehicles, and that other policy mechanisms would be more effective at reducing petroleum consumption and emissions (e.g., higher fuel taxes).

On August 28, 2012, the Obama Administration issued new passenger vehicle fuel economy and greenhouse gas standards for vehicle model years (MY) 2017-2025. The National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) expect that combined new passenger car and light truck Corporate Average Fuel Economy (CAFE) standards will rise to as much as 41.0 miles per gallon (mpg) in MY2021 and 49.7 mpg in MY2025, up from 34.1 mpg in MY2016. To the extent possible, new CAFE standards will be integrated with federal and state greenhouse gas (GHG) standards for automobiles, because fuel economy improvements are a key strategy for reducing vehicle emissions. If all of the GHG reductions were made through fuel economy improvements, the equivalent miles-per-gallon requirement would be 54.5 mpg in MY2025. However, other strategies will also be used (for example, improved vehicle air conditioners) to reduce GHG emissions to the actual GHG standard of 163 grams of carbon dioxide per mile.

The Administration expects that consumers’ fuel savings from the new standards will more than offset the additional cost of the new technology for these vehicles, which could be thousands of dollars per vehicle. EPA and NHTSA expect that the new standards will save roughly 4 billion barrels of oil and 2 billion metric tons of greenhouse gases over the life of the vehicles covered under the proposal. Critics dispute some of the Administration’s assumptions. They counter that the costs will be higher and could lead to a drop in new vehicle sales, as the higher vehicle costs may put new car financing out of reach for many consumers.

In a similar process to an earlier Obama Administration agreement that led to new fuel economy and greenhouse gas standards for MY2012-MY2016, the Administration has secured commitment letters from the state of California and from 13 automakers to support the MY2017-2025 rulemaking as well. There has been concern about a potential “patchwork” of different federal and state standards if EPA, NHTSA, and California were to establish different standards on fuel economy and GHG emissions. Two key parts of the agreement are that California will treat any vehicle meeting the new federal GHG standards as meeting California standards, and that the automakers agree to not challenge the new standards in court.

In August 2011, the Administration also tightened fuel economy and GHG emissions standards for MY2014-MY2018 medium- and heavy-duty trucks.



Date of Report: September 11, 2012
Number of Pages: 15
Order Number: R42721
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Wednesday, September 19, 2012

The Supreme Court Agrees to Decide Whether Logging Road Runoff, When Channeled, Requires a Clean Water Act Permit



Robert Meltz
Legislative Attorney

Claudia Copeland
Specialist in Resources and Environmental Policy


U.S. forests are crisscrossed by thousands of miles of logging roads. When it rains or snow melts, runoff from these roads can be environmentally harmful, so how to address this runoff under the Clean Water Act (CWA) has long been an issue. On June 25, 2012, in Decker v. Northwest Environmental Defense Center, the Supreme Court agreed to review a Ninth Circuit decision on one aspect of this issue. The Ninth Circuit held that where such runoff is collected in ditches, culverts, or other channels before being discharged into waters covered by the CWA, the discharge, being from a “point source,” requires a permit under the act. Until this decision, logging road runoff had been viewed as nonpoint source pollution, subject only to a requirement of best management practices.

Discharges from point sources into federal jurisdictional waters generally require a CWA permit. The Ninth Circuit rejected EPA’s view that its 1976 Silvicultural Rule means that logging road runoff is not a silvicultural point source even when channeled. Further, the court viewed EPA regulations implementing the 1987 stormwater amendments to the CWA as a separate ground for requiring discharge permits.

In the Supreme Court, petitioners—Oregon state officials and timber companies—argue that the decision displaces the longstanding regulatory scheme based on the view that stormwater runoff from logging roads is nonpoint source pollution. In an amicus brief, the United States asserted, to no avail, that the case did not warrant Supreme Court review because Congress and EPA have already taken steps to address concerns that requiring permits would impose unacceptable burdens on timber companies and regulators (see below).

Silvicultural activities are a known cause of water quality impairment in U.S. waters, with impacts such as increasing loading of sediment and chemical pollution. According to EPA, these impacts can result from improperly designed or maintained forest roads, but where they occur, the majority may be attributed to a relatively small subset of forest roads.

The challenge for EPA, should the Supreme Court affirm the Ninth Circuit, will be to develop a mechanism to manage the very large number of logging roads that could become subject to permitting—potentially hundreds of thousands, or even millions, according to timber industry amici. After the Ninth Circuit decision, it was initially presumed that EPA would develop a general permit system. This has been the agency’s practice for more than two decades as new categories of dischargers have become subject to CWA permitting, because of statutory or regulatory modification or judicial decisions. Proponents note that general permits allow the permitting authority to provide timely permit coverage and to allocate resources efficiently.

Despite these initial expectations, EPA is not developing a general permit in this instance. Instead, EPA is proposing to focus on those forest roads with stormwater discharges that cause or contribute to water quality impairment. EPA intends to quickly revise its rules to nullify the Ninth Circuit ruling by specifying that stormwater discharges from logging roads are not subject to current stormwater rules. The agency then will consider regulatory and non-regulatory approaches and determine which forest road discharges, if any, should be regulated. Congressional interest in the Ninth Circuit ruling has been strong, as well. Congress enacted a measure that bars EPA until September 30 from requiring a permit for stormwater runoff associated with silvicultural activities, and bills that would provide a permanent exemption have been introduced (H.R. 2541 and S. 1369).



Date of Report: September 6, 2012
Number of Pages: 14
Order Number: R42587
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