States Go to Bat for Improving Climate Change Legislation

by Kirsten Engel

September 11, 2009

Five State Attorneys General sent a letter to the Senate leadership on August 31st urging the Senate to enact strong climate legislation. The AGs letter is unusual in that states directly lobbying Congress on the details of federal legislation is a fairly infrequent phenomenon in and of itself. The AGs from California, Arizona, Connecticut, Delaware, and New Jersey are asking Congress to strengthen the House-passed American Clean Energy and Security Act (ACES), despite several important ways in which ACES would largely displace state regulation of climate change. They accept some of these limitations on state power, but argue strongly for preserving their often pathbreaking roles in devising strategies to combat climate change.

Not surprisingly, the AGs first order of business is to tell Congress how important it is that any federal climate law enacted preserve state authority to regulate greenhouse gas emissions generally. They specifically argue that they should have the right -- recognized in the House bill -- to regulate greenhouse gases more stringently than federal law requires. The AGs have a good point. The states have been out ahead of the feds on climate change for the past decade and that alone ought to demonstrate the wisdom of preserving state regulatory authority. States can regulate in areas not addressed by the federal government, provide federal regulators with the results of their experience with different regulatory approaches and tools and enforce the law against violators who have escaped the federal government’s radar. Perhaps most importantly, the AGs want to ensure that they will have the right to regulate more stringently than their federal counterparts, a right they have under just about every other environmental law and one which enables more ambitious states to move ahead more aggressively against climate change without taking the entire nation with them.

The AGs have a right to be concerned. As they themselves point out, the ACES bill is a bit schizophrenic on the topic of preserving state authority. On the one hand, the House bill contains numerous savings clauses (statutory sections specifically preserving the states’ ability to regulate in the face of federal regulation), preserving the states’ authority to implement renewable portfolio standards, state feed-in tariffs, state demand management and response, and state regulation of electricity rates. The bill also provides for a short-term solution to the challenges of overlapping state and federal cap and trade regimes. If ACES is enacted, it will require the allocation of federal emission allowances. But many of the same sources will already have been required to purchase allowances under the northeastern cap and trade regime, the Regional Greenhouse Gas Initiative (RGGI), and perhaps by then, others will too under the Western Climate Initiative (WCI). To save such sources from “paying twice”, ACES provides for an exchange of emission allowances issued before 2012 by RGGI or the WCI for federal allowances to ensure that the industries subject to these state and regional cap and trade regimes are not disadvantaged by the institution of a federal cap and trade regime. On the other hand, the bill is rough on those very same state and local trading regimes, preempting the ability of states to implement their own trading regimes for a five-year period between 2012 and 2017. In addition, the bill’s manner of preserving state authority is less than ideal. Without an umbrella savings clause and language indicating Congress’s intent that states be given wide latitude to do their own thing, the AGs argue that state authority to regulate in areas not covered by one of the bill’s many savings clauses might be vulnerable. Even state regulation in an area covered by an express clause, they say, might be held preempted by the insidious court-created doctrine of “obstacle preemption.”

Interestingly, the AGs want strong federal climate legislation. Their letter is a not a diatribe against too-stringent one-size-fits-all federal environmental legislation. Their letter contains helpful suggestions in how the Senate could improve upon the ACES bill in numerous areas, from strengthening the oversight of the proposed federal cap and trade program, to ensuring that agricultural and forestry offsets are backed by credible and transparent claims to legitimacy, to undoing the bill's elimination of New Source Review and New Source Performance Standards triggered by greenhouse gas emissions.

The State AGs made some smart requests. The Senate would do well to heed the counsel of these states, who, unlike Congress, have actual experience regulating greenhouse gas emissions.

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