The Pacific Coast Action Plan On Climate And Energy – Will It Make A Difference?

by Davis Wright Tremaine LLP
Contact

Late last month, the Governors of California, Oregon, and Washington joined with the Premier of British Columbia to sign a Pacific Coast Climate Action Plan on Climate and Energy (PCAP). Like its ill-fated predecessor, the Western Climate Initiative (WCI), the PCAP attempts to fill the void created by Congress’ failure to address climate change at the national level. But much has changed, both regionally and nationally, in the almost seven years since the WCI was launched, and there are major differences between the PCAP and the WCI.

The question is: will this regional effort be more effective than the WCI? Will the PCAP make a real difference in terms of the mix of energy projects and strategies that will prosper in the coming years, or is it just another great press opportunity for four green elected officials?

There are at least four reasons why the PCAP is likely to make a difference. First, it has the right geopolitical footprint – the West Coast. In contrast, the WCI also included Arizona, New Mexico, Utah, Montana, Manitoba, Ontario, and Quebec. This was impressive at the outset, but it was politically unstable because the non-West Coast states are considerably more conservative than their West Coast cousins. Predictably, one-by-one, they dropped out of WCI, and the coalition unraveled.

This time, the West Coast leaders have chosen a smaller, much more cohesive team. The three states and British Columbia do not agree on everything, but they agree on enough to form a durable political partnership. And with 53 million people and a combined economy that is the fifth largest in the world, they are plenty big enough to be heard.

Second, the four PCAP leaders are taking a much more realistic approach to the regulatory tools they use to reduce greenhouse gases (GHGs). For the WCI members, a fully-integrated regional cap and trade system was the definition of success; anything less was failure. Unlike the Regional Greenhouse Gas Initiative (RGGI) that was being developed in New England during the same period, the WCI proposed to strictly regulate power purchases from outside the WCI region. This approach raised thorny issues under the U.S. Constitution, particularly the Commerce Clause, the Supremacy Clause, and (due to the inclusion of the Canadian provinces) the Treaty Clause. It also meant that each state would need to enact nearly-identical legislation in order to delegate the necessary powers to a regional regulatory entity. This was a political non-starter in virtually every WCI state, not to mention the state constitutional issues that it would have raised.

This time, the four jurisdictions are taking a more flexible approach. Instead of staking themselves to a regional cap-and-trade model, they are more broadly agreeing to establish GHG reduction targets that will be accomplished by “setting a price on carbon.” This could be done through cap-and-trade, through a carbon tax, or some other mechanism chosen on a jurisdiction-by-jurisdiction basis. And instead of a regional regulatory entity operating outside the control of any one jurisdiction, the leaders are now simply promising to “link programs for consistency and predictability” “where possible.” This may sound ho-hum, but it gives the PCAP members room to advance a common agenda without stumbling over Constitutional tripwires.

To further reduce emissions, PCAP includes a suite of other strategies, including low-carbon fuel standards, streamlined permitting for renewables, increased deployment of zero-emission vehicles, enhanced energy efficiency, more high-speed rail, and connecting the markets for buying and selling wholesale electricity in the region.

Third, two of the four jurisdictions now have regulatory systems that in fact place a price on carbon. At the time of WCI, British Columbia’s carbon tax was in its infancy, and California’s cap and trade system was a distant “Plan B” in case WCI failed. Now, despite criticism, both programs are operating successfully, creating models for Washington, Oregon, and others to consider.

Fourth, the Obama Administration is playing a supportive role, based on its June 2013 Climate Action Plan. This is a dramatic change from the WCI era, when the Bush Administration was questioning the science of climate change, and EPA was resisting the conclusion that GHGs endanger public health until the U.S. Supreme Court forced its hand in Massachusetts v. EPA.

The only thing that has remained the same is Congressional gridlock, but that leaves EPA with authority to move ahead under existing law. Under Section 111(b) of the Clean Air Act, EPA issued proposed GHG emission limitations for new power plants in September 2013, and is now developing rules under Section 111(d) for existing powerplants.

Unlike the limitations for new power plants, the rules for existing plants will be based on state implementation plans, tailored by each state in accordance with EPA guidelines and then subject to EPA approval. In those guidelines, due to be proposed by June 1 of next year, it is quite likely that EPA will endorse state plans that take a “system-based” rather than a “source-based” approach. While a source-based approach looks solely at what can be done at the powerplants themselves, a system-based approach looks at both the powerplants and all the ways to reduce the demand for electricity produced by those powerplants. Attached is a September 23, 2013 version of an EPA white paper on this topic.

As a result, Washington, Oregon, and California could use EPA’s backing to undergird implementation of the entire suite of programs described above. Indeed, the PCAP endorses EPA’s efforts to regulate GHGs from powerplants, and emphasizes the “importance of allowing state flexibility to design ambitious reduction programs within this regulation.” By leveraging EPA’s statutory authority and steering clear of the Constitutional pitfalls that contributed to the downfall of the WCI, the PCAP could affect a wide range of activities contributing to GHG emissions, thereby transforming the regional energy economy.

For these reasons, the PCAP bears watching.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Davis Wright Tremaine LLP | Attorney Advertising

Written by:

Davis Wright Tremaine LLP
Contact
more
less

Davis Wright Tremaine LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.