Yesterday, in a sweeping move likely to have significant repercussions for the nation’s energy policy, President Obama announced steps that the Executive Branch will take to address climate change by reducing carbon dioxide emissions in the United States. The President’s Climate Action Plan calls for three categories of action: (1) cutting carbon emissions; (2) preparing the United States for the impacts of climate change; and (3) leading international efforts to combat climate change and prepare for its impacts. The electricity generation sector and the fossil fuel production sector are most likely to be adversely affected by the initiatives in the Plan. The building industry and construction materials industry are also likely to be subject to new regulation.
Energy Sector -
The Plan directs the Environmental Protection Agency (EPA) to establish standards for carbon emissions from both new and existing power plants. This directive represents a significant change from EPA’s April 2012 proposal to regulate carbon dioxide emissions only from new power plants. However, it is important to note that standards for existing power plants would not go into effect immediately. A new source performance standard would first apply to new units and modified existing plants. Standards regulating emissions from existing plants that make no modifications would be subject to emissions guidelines that would need to be implemented through State action. Further, the administrative process cannot be overlooked: EPA is required to consider and respond to public comments on its proposals. Companies wishing to have a voice in this process – including both generators and users of electricity – should be prepared to submit comments and provide data to support their arguments.
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