Waxman-Markey: Environmental Justice

On Tuesday, March 31, House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and Rep. Edward Markey (D-MA) released a "discussion draft" of the American Clean Energy and Security Act of 2009 – a climate change bill that will serve as the starting point for long-delayed congressional action on the world’s most pressing environmental program. CPRBlog asked several Center for Progressive Reform Member Scholars to examine different aspects of the 648-page Waxman-Markey bill. This entry, by Alice Kaswan, examines the bill’s implications for environmental justice issues. 

Climate change legislation is obviously essential to protecting the planet from catastrophic global warming. But that’s not all it can do. The fundamental changes in our energy infrastructure that lie ahead provide the opportunity to achieve unfinished business. Climate legislation could not only allow us to achieve greater energy security, as the bill’s name suggests, it could also present the opportunity to clean the nation’s air.

While carbon dioxide does not pose local hazards, it is inevitably accompanied by co-pollutants – pollutants that are not greenhouse gases but that are also generated by burning fossil fuels, and that go up the same smokestack. Many of those pollutants do pose local hazards. So carbon policies are likely to substantially implicate these co-pollutant emissions. In other words, co-pollutant emissions are likely to track greenhouse gas emissions.

To be clear, the Waxman-Markey bill’s establishment of greenhouse gas reduction goals is a critical step for the climate and is likely to improve overall air quality as well. But the Act’s almost complete reliance on a cap-and-trade program for reducing facility emissions may not offer as many opportunities for reducing co-pollutant emissions as it would if it were combined with some direct regulatory measures. Under a cap-and-trade program, facilities may purchase allowances to maintain, rather than reduce emissions, and may therefore maintain not only their greenhouse gas emissions, but associated co-pollutant emissions. A regulatory approach that sets greenhouse gas performance standards or develops discrete technology-based standards could, at times, be more effective at ensuring that facilities reduce both their greenhouse gas and co-pollutant emissions where possible and cost-effective. Since regulations would apply to all covered facilities, the covered facilities would be more likely to reduce emissions rather than maintaining them through allowance purchases, and would therefore better distribute the co-pollutant benefits of greenhouse gas reductions.

The Act, however, specifically exempts greenhouse gases from the Clean Air Act’s regulatory programs and does not allow EPA to set greenhouse gas standards for major facilities under the trading system. This is not to say that such regulation will always be appropriate, but EPA should at least retain the option of identifying industries or practices in which minimum industry standards could provide a cost-effective and beneficial complement to the trading program.

The Act’s offset provisions will also be critical to achieving pollution reduction co-benefits. It’s straightforward: The more that U.S. facilities must reduce their own emissions, without relying on biological offsets or international allowances, the more U.S. facilities will reduce domestic emissions and their associated co-pollutants. The Act’s requirement that 1.25 offset credits are needed to offset each ton of emissions should create at least some disincentive to use offsets. Determining the percentage of emissions that could be covered by offsets is complicated under the Act, but one reviewer has noted that the level of permissible offsets increases as the cap becomes more stringent, ranging from approximately 20 percent at the beginning of the program to as much as 70 percent by 2050. The percentage of allowable offsets appears high, and could undermine incentives for polluting facilities to adopt greenhouse gas and co-pollutant controls or switch to less polluting energy sources.

While the federal approach appears to give relatively scant attention to co-pollutant reduction benefits, the Act does appear to give the states the ability to achieve environmental co-benefits. While the Act makes clear that the Clean Air Act does not apply to greenhouse gases, it does not appear to prevent the states from regulating them. States appear to retain the authority to adopt direct regulatory approaches to achieve greater certainty of reductions in both greenhouse gases and co-pollutants. The Act also appears to allow states to set their own requirements for the use of federal allowances, an option that could allow a state to impose extra allowance requirements to encourage facilities to reduce their emissions rather than purchase allowances to cover “business as usual.”