Air Quality: Multi-Pollutant Legislation in the 108th Congress

Order Code RL31779

CRS Report for Congress

Received through the CRS Web

Air Quality:

Multi-Pollutant Legislation

in the 108th Congress

Updated November 17, 2003

Larry Parker

Specialist in Energy Policy

Resources, Science, and Industry Division

John Blodgett

Specialist in Environmental Policy

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Air Quality: Multi-Pollutant Legislation

in the 108th Congress

Summary

With the prospect of new layers of complexity being added to air pollution

controls and with electricity restructuring putting a premium on economic efficiency,

interest is being expressed in finding mechanisms to achieve health and

environmental goals in simpler, more cost-effective ways. The electric utility

industry is a major source of air pollution, particularly sulfur dioxide (SO2), nitrogen

oxides (NOx), and mercury (Hg), as well as suspected greenhouse gases, particularly

carbon dioxide (CO2). At issue is whether a new approach to environmental

protection could achieve the Nation’s air quality goals more cost-effectively than the

current system.

One approach being proposed is a “multi-pollutant” strategy – a framework

based on a consistent set of emissions caps, implemented through emissions trading.

Just how the proposed approach would fit with the current (and proposed) diverse

regulatory regimes remains to be worked out; they might be replaced to the greatest

extent feasible, or they might be overlaid by the framework of emissions caps.

In February 2002, the Bush Administration announced two air quality initiatives.

The first, “Clear Skies,” would amend the Clean Air Act to place emission caps on

electric utility emissions of SO2, NOx, and Hg. Implemented through a tradeable

allowance program, the emissions caps would generally be imposed in two phases:

2008 and 2018. The second initiative begins a voluntary greenhouse gas reduction

program. This plan, rather than capping CO2 emissions, focuses on improving the

carbon efficiency of the economy, reducing current emissions of 183 metric tons per

million dollars of GDP to 151 metric tons per million dollars of GDP in 2012.

In the 108th Congress, eight bills have been introduced that would impose multipollutant controls on utilities. Two of the bills, H.R. 999/S. 485, are the

Administration’s three-pollutant proposal, and two other bills, H.R. 203 and S. 1844,

are modified versions of the Administration’s proposal. The other four bills are fourpollutant proposals that include carbon dioxide. S. 366, is similar to a bill reported

by the Senate Environment and Public Works Committee in the 107th Congress while

S. 843 and H.R. 3093 are modified versions of S. 3135 introduced in the 107th

Congress . Likewise, H.R. 2042 is similar to H.R. 1256 introduced in the 107th

Congress. All of these bills involve some form of emission caps, typically taking

place in 2008-2009; and most include a tradeable credit program to implement that

cap. The provisions concerning SO2, NOx, and Hg in S. 366, H.R. 203, S. 843, H.R.

2042, and H.R. 3093 are generally more stringent and take effect earlier than the

comparable provisions of H.R. 999/S. 485 and S. 1844. S. 366, S. 843, H.R. 2042,

and H.R. 3093 would cap emissions of CO2. It is difficult to compare those CO2 caps

to the Administration’s proposal concerning CO2 – both because the Administration’s

proposal is voluntary rather than mandatory and because it is broader (covering all

greenhouse gas emissions rather than just utility CO2 emissions). However, it

appears that actual U.S. greenhouse gas emissions would be higher under the

Administration’s proposal than those allowed by these bills. This report will be

updated as warranted.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

The Bush Administration’s Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Proposed Legislation and Legislative Action in the 108th Congress . . . . . . . 3

SO2, NOx, and Hg Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Related Regulatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

CO2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

List of Tables

Table 1: Emissions From U.S. Fossil-fuel Electric Generating Plants . . . . . . . . . 1

Table 2: Comparison of Administration’s Voluntary Program with Proposed

Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Appendix 1: Comparison of Multi-Pollutant Control Proposals . . . . . . . . . . . . . 7

Air Quality: Multi-Pollutant Legislation

in the 108th Congress

Introduction

Electric utility generating facilities are a major source of air pollution. The

combustion of fossil fuels (petroleum, natural gas, and coal), which accounts for 67%

of U.S. electricity generation, results in the emission of a stream of gases. These

gases include several pollutants that directly pose risks to human health and welfare,

including particulate matter (PM),1 sulfur dioxide (SO2), nitrogen oxides (NOx), and

mercury (Hg). Particulate matter, SO2 and NOx are currently regulated under the

Clean Air Act (CAA), and the Environmental Protection Agency (EPA) has

announced its intention to regulate mercury. Other gases may pose indirect risks,

notably carbon dioxide (CO2), which may contribute to global warming.2 Table 1

provides estimates of SO2, NOx, and CO2 emissions from electric generating

facilities. Annual emissions of Hg from utility facilities are more uncertain; current

estimates indicate about 48 tons. Utilities are subject to an array of environmental

regulations, which affect in different ways both the cost of operating existing

generating facilities and of constructing new ones.

Table 1: Emissions From U.S. Fossil-fuel Electric Generating Plants

(thousands of short tons)

Emissions

1994

1995

1996

1997

1998

1999

SO2

14,211

11,437

12,053

12,317

12,432

11,968

NOx

6,790

6,737

6,996

7,227

7,221

7,051

CO2

1,986,079

1,995,471

2,065,339

2,142,118

2,209,286

2,191,576

Source: Energy Information Administration, Electric Power Annual 1999, vol. II, p. 40

1

Particulate matter is regulated depending on the particle size; current regulations address

particles less than 10 microns in diameter (PM10); EPA has promulgated regulations for

particles less than 2.5 microns in diameter (PM2.5) which have not yet been implemented.

SO2 and NOx emissions could be affected by regulations of PM2.5. Current concerns about

emissions from fossil-fuel electric generating plants do not explicitly address PM, but could

indirectly do so through attention to SO2 and NOx.

2

Steam-electric utilities produce minor amounts of volatile organic compounds (VOCs),

carbon monoxide (CO), and lead — on the order of 2% or less of all sources.

CRS-2

The evolution of air pollution controls over time and as a result of growing

scientific understanding of health and environmental impacts has led to a

multilayered and interlocking patchwork of controls. Moreover, additional controls

are in the process of development, particularly with respect to NOx as a precursor to

ozone, to both NOx and SO2 as contributors to PM2.5, and to Hg as a toxic air

pollutant. Also, under the United Nations Framework Convention on Climate

Change (UNFCCC), the United States agreed to voluntary limits on CO2 emissions.

The current Bush Administration has rejected the Kyoto Protocol, which would

impose mandatory limits, in favor of a voluntary reduction program. Thus,

mandatory federal CO2 controls in the United States appear unlikely in the near term.

For many years the complexity of the air quality control regime has caused some

observers to call for a simplified approach. Now, with the potential both for

additional control programs on SO2 and NOx and for new controls directed at Hg and

CO2 intersecting with the technological and policy changes affecting the electric

utility industry, such calls for simplification have become more numerous and

insistent. One focus of this effort is the “multi-pollutant” or “four pollutant”

approach. This approach involves a mix of regulatory and economic mechanisms

that would apply to utility emissions of up to four pollutants in various proposals –

SO2, NOx, Hg, and CO2. The objective would be to balance the environmental goal

of effective controls across the pollutants covered with the industry goal of a stable

regulatory regime for a period of years.3

The Bush Administration’s Proposals

In February 2002, the Bush Administration announced two air quality proposals

to address the control of emissions of SO2, NOx, Hg, and CO2.4 The first proposal,

called “Clear Skies,” would amend the Clean Air Act to place emission caps on

electric utility emissions of SO2, NOx, and Hg. Implemented through a tradeable

allowance program, the emissions caps would be imposed in two phases: 2010 (2008

in the case of NOx) and 2018. As part of a complete rewrite of Title IV of the Clean

Air Act, it was introduced in the 108th Congress on February 27, 2003 as H.R. 999

and S. 485.

The second proposal (for which no legislation has been introduced) initiates a

new voluntary greenhouse gas reduction program, similar to ones introduced by the

earlier George H. W. Bush and Clinton Administrations.5 Developed in response to

the U.S. ratification of the 1992 UNFCCC, these previous plans projected U.S.

compliance, or near compliance, with the UNFCCC goal of stabilizing greenhouse

3

Larry Parker and John Blodgett, Electricity Generation and Air Quality: Multi-pollutant

Strategies, CRS Report RL30878.

4

Papers outlining the Administration’s proposals are available from the White House web

site: [http://www.whitehouse.gov/news/releases/2002/02/clearskies.html] for the three

pollutant proposal and, for the climate change initiative:

[http://www.whitehouse.gov/news/releases/2002/02/climatechange.html].

5

For a discussion of those previous plans, see Larry Parker and John Blodgett, Climate

Change Action Plans, CRS Report 94-404 ENR, May 9, 1994. (archived, available from the

author)

CRS-3

gas emissions at their 1990 levels by the year 2000 through voluntary measures. The

new proposal introduced by the Bush Administration does not make that claim, only

projecting a 100 million metric ton reduction in emissions from what would occur

otherwise in the year 2012. Instead, the plan focuses on improving the carbon

efficiency of the economy, reducing current emissions of 183 metric tons per million

dollars of GDP to 151 metric tons per million dollars of GDP in 2012. It proposes

several voluntary initiatives, along with increased spending and tax incentives, to

achieve this goal. The Administration notes that the new initiatives would achieve

about one-quarter of the objective, while three-quarters of the projected reduction

would occur through already existing efforts underway.

Proposed Legislation and Legislative Action in the 108th

Congress

In the 108th Congress, eight bills have been introduced that would impose multipollutant controls on utilities. Two of the bills, H.R. 999, introduced by request by

Representative Barton, and S. 485, introduced by request by Senator Inhofe, are the

Administration’s three-pollutant proposal. Two other bills are modified versions of

the Administration’s Clear Skies proposal. H.R. 203, introduced by Representative

Sweeney, is a shortened and more stringent version of the Administration’s proposal,

while S. 1844, introduced by Senator Inhofe, would maintain the deadlines contained

in Clear Skies and includes provisions that, among other things, would weaken the

phase 1 Hg cap and exempt co-generation facilities from the bill’s mandates. The

other four bills are four-pollutant proposals that include carbon dioxide. S. 366,

introduced by Senator Jeffords, is basically the same as S. 556 as reported by the

Senate Environment and Public Works Committee during the 107th Congress (S.Rept.

107-347).6 S. 843, introduced by Senator Carper, and H.R. 3093, introduced by

Representative Bass, are similar to S. 3135 introduced in the 107th Congress. H.R.

2042, introduced by Representative Waxman, is similar to H.R. 1256 introduced in

the 107th Congress. All of these bills involve some form of emission caps, typically

taking place (at least initially) in 2008-2009; and most include a tradeable credit

program to implement that cap. S. 366, S. 843, H.R. 2042, and H.R. 3093 would cap

emissions of CO2.

The eight bills are summarized in Appendix 1. Each of these bills builds on the

SO2 allowance trading scheme contained in title IV of the 1990 Clean Air Act

Amendments (CAAA).7 Under this program utilities are given a specific allocation

of permitted emissions (called allowances) and may choose to use those allowances

at their own facilities, or, if they do not use their full quota, to bank them for future

use or to sell them to other utilities needing additional allowances.

SO2, NOx, and Hg Controls. As indicated in Appendix 1, for SO2 and

NOx, the caps in H.R. 999/S. 485 and S. 1844 are less stringent for 2008 than S.

366's or H.R. 2042's requirements for 2009 or H.R. 203's requirements for 2012; and

6

The primary difference is S. 366 compliance deadlines for its reduction requirements have

been extended one year to 2009 (except for Hg which remains at 2008).

7

Public Law 101-549.

CRS-4

remain less stringent than S. 366 or H.R. 2042 even through the second phase

beginning in 2018. H.R. 203 would require full compliance with its SO2 and NOx

provisions by 2012, in effect accelerating the Administration’s proposed emission

caps by 6 years. For S. 843 and H.R. 3093, their NOx caps are initially more stringent

than the Administration’s proposal and S. 1844 but are achieved a year later, while

its final NOx cap is the same as the Administration’s proposal and S. 1844 but

achieved 5 years earlier. S. 843's and H.R. 3093's SO2 cap is initially the same as

Clear Skies and S. 1844 but achieved a year earlier and its final cap is more stringent

and achieved 2 years earlier.

Allowance allocation schemes for the bills also differ, with S. 366 containing

detailed provisions for allocating SO2, NOx (and CO2) allowances to various

economic sectors and interests. In most cases, these interests (or their trustees in the

case of households and dislocated workers and communities) would auction off (or

otherwise sell) their allowances to the affected utilities, and use the collected funds

for their own purposes. In contrast, the Administration’s proposal initially allocates

SO2, NOx and Hg allowances to affected sources free, with a small percentage sold

at auction. Over time, an increasing percentage of the allocation is sold at auction

with affected sources receiving fewer allowances free. S. 843 and H.R. 3093 allocate

NOx, Hg, and CO2 allowances based on a powerplant’s generating efficiency and its

SO2 allowances based on current formulas within title IV of the 1990 Clean Air Act

Amendments. S. 1844 bases its allowance formulas on fuel usage adjusted by factors

specified in the bill while H.R. 203 and H.R. 2042 leaves the allocation issue to EPA.

On mercury, H.R. 999/S. 485 and S. 1844's emissions goal allows about 3 times

more emissions and ten additional years for compliance than allowed by S. 366,

which also mandates plant-by-plant controls; H.R. 2042 is likewise three times more

stringent than H.R. 999/S485 and S. 1844, mandates plant-by-plant controls, and has

a compliance deadline 9 years in advance of the Administration’s bill. H.R. 999/S.

485 is also less stringent than S. 843 and H.R. 3093. H.R. 203 requires EPA to

promulgate Hg regulations before 2005. (It is difficult to compare the Hg controls of

the Administration’s proposal, S. 366, or H.R. 2042 to H.R. 203, which does not

specify an Hg emissions goal, leaving regulation up to EPA).

Related Regulatory Provisions. In addition to the emissions caps, H.R.

999/S. 485 and S. 1844 would substantially modify or eliminate several provisions

in the Clean Air Act with respect to electric generating facilities. The bills would

eliminate New Source Performance Standards (NSPS) (Section 111) and replace

them with statutory standards for SO2, NOx, particulate matter, and Hg for new

sources. Modified sources could also opt to comply with these new statutory

standards and be exempted from the applicable Best Available Control Technology

(BACT) determinations under Prevention of Significant Deterioration (PSD)

provisions (CAA, Part C) or Lowest Achievable Emissions Rate (LAER)

determinations under non-attainment provisions (CAA, Part D). Compliance with

these provisions exempts such facilities from New Source Review (NSR), PSDBACT requirements, visibility (Best Available Retrofit Technology) BART

requirements, Maximum Achievable Control Technology (MACT) requirements for

Hg, and non-attainment LAER requirements. The exemption does not apply to PSDBACT requirements if facilities are within 50 km of a PSD Class 1 area. Existing

sources can also receive these exemptions if they agree to meet a particulate matter

CRS-5

standard specified in the bill along with good combustion practices to minimize

carbon monoxide emissions within 3 years of enactment. S. 843 and H.R. 3093

would restrict NSR to new facilities (including replacing an existing boiler) and

projects that result in increased hourly emissions of regulated pollutants. For pre1971 generating facilities, S. 843 and H.R. 3093 would impose SO2 and NOx

performance standards beginning in 2020. In contrast, S. 366 requires all

powerplants 40-years or older to meet emission limitations based on current best

available control technology for a new source.

H.R. 999/S. 485 and S. 1844 also include an exemption for steam electric

generating facilities from Hg regulation under Section 112 of the CAA (including the

residual risk provisions), and relief from enforcement of any Section 126 petition

(with respect to reducing interstate transportation of pollution) before 2012 (2014 in

the case of S. 1844). S. 843 and H.R. 3093 provides for removal of Hg MACT

provisions for electric generating facilities, but requires EPA to carry out its

responsibilities under the residual risk provisions of the CAA within 8 years of

enactment.

Neither H.R. 203, S. 366, nor H.R. 2042 provide such regulatory relief

provisions.

CO2. Of the eight bills, S. 366, S. 843, H.R. 2042, H.R. 3093 specify CO2

reductions. In contrast, the Administration’s CO2 proposal relies on various

voluntary programs and incentives to encourage reductions in greenhouse gases from

diverse sources, including CO2 emissions from electric generation.

Based on the estimate provided by the Administration’s climate change

proposal, and using the 2002 Climate Action Report8 (CAR) for projections to 2010,

table 2 presents estimates of U.S. greenhouse gas emissions in 2010, assuming the

Administration’s voluntary program reaches its goals.9 This should not be taken as

a given, as neither the George H. W. Bush Administration’s program nor the Clinton

Administration’s program achieved their stated goals. Thus, in one sense, comparing

a mandatory reduction program, such as that proposed by S. 366, S. 843, H.R. 2042,

and H.R. 3093 with the Administration’s voluntary program is comparing apples to

oranges. The first is legally binding, the second is an exhortation.

While S. 366, S. 843, H.R. 2042, and H.R. 3093 focus on electric utility

emissions, their mandated reductions would result in lower total greenhouse gas

emissions in 2010 than those projected to occur under the Administration’s initiative

that includes all sources of all greenhouse gases.10 However, neither S. 366, S. 843,

8

This is the U.S. report to the UNFCCC Secretariat on U.S. emissions and measures taken

to reduce them. The Climate Action Report -- 2002, available at:

http://www.epa.gov/globalwarming/publications/car/index.html

9

For a discussion of emission projections and trends, see John Blodgett and Larry Parker,

Global Climate Change: U.S. Greenhouse Gas Emissions – Status, Trends, and Projections,

CRS Report 9-235 ENR.

10

The assessment assumes that the Administration’s proposal actually achieves its goal in

(continued...)

CRS-6

H.R. 2042, H.R. 3093, nor the Administration’s initiative would be sufficient to bring

U.S. emissions near the level committed to in the 1992 UNFCCC.

Discussion in the CAR observes that the pace of economic growth would affect

emissions. A high economic growth scenario would increase energy use and related

carbon emissions, compared to reference case of “business as usual”; likewise, lower

economic growth would decrease emissions. For example, under a high economic

growth scenario, greenhouse emissions in 2010 would increase 37.7% above those

in 1990, based on energy growth alone. This increase would represent an additional

53 million metric tons of emissions.11 However, S. 366 would cap emissions from

increased electricity generation at 1990 levels, which would reduce the 53 million

metric tons by 16 million metric tons, or 30% of the high growth increase. The

Administration’s initiative is voluntary and addresses carbon intensity, not absolute

emission levels; it does not cap emissions growth.

Table 2: Comparison of Administration’s Voluntary Program

with Proposed Legislation

Percentage Change v.

Business as Usual (2010)

Percentage Change v.

1990 levels per UNFCCC

S. 366

-7.5%

+24.2%

S. 843 and H.R. 3093*

-5.1%

+27.5%

H.R. 2042

-9.5%

+21.7%

-4.4 to -4.5%

+28.3%

0

+34.4%

Administration’s

Voluntary Program**

Business as Usual

*Assumes requirement of S. 843 and H.R. 3093 is achieved in 2010, rather than 2013.

**Assumes goal of the Administration’s voluntary program is achieved in 2010, rather than

2012.

Source: CRS calculations based on projections contained in 2002 CAR.

10

(...continued)

2010, rather than 2012.

11

Energy Information Administration, Annual Energy Outlook 2000, Washington D.C.,

DOE/EIA-0383 (2002), December 2001. p. 177.

CRS-7

Appendix 1: Comparison of Multi-Pollutant Control Proposals

Provisions

H.R. 203

(Sweeney)

S. 366 (Jeffords)

H.R. 999/S. 485

(Administration’s

Proposals)

S. 843 (Carper)

H.R. 2042

(Waxman)

H.R. 3093

(Bass)

S. 1844

(Inhofe)

Emissions

Cap on NOx

2.1 million

tons in 2008,

declining to

1.7 million

tons in 2012

1.51 million tons

in 2009

2.1 million tons in

2008, declining to

1.7 million tons in

2018

1.87 million tons

in 2009, declining

to 1.7 million tons

in 2013

estimated at 1.5

million tons in

2009

1.87 million tons

in 2009, declining

to 1.7 million tons

in 2013

2.1 million tons in

2008, declining to

1.7 million tons in

2018

Emissions

Cap on SO2

4.45 million

tons in 2008,

declining to

3.0 million

tons in 2012

2.25 million tons

in 2009

4.5 million tons in

2010, declining to

3.0 million tons in

2018

4.5 million tons in

2009, declining to

2.25 million tons

in 2016

2.23 million

tons in 2009

4.5 million tons in

2009, declining to

2.25 million tons

in 2016

4.5 million tons in

2010, declining to

3.0 million tons in

2018

Emission Cap

on CO2

not covered

2.05 billion tons

in 2009

none, program is

voluntary

estimated at 2.6

billion tons in

2009, declining to

an estimated 2.3

billion tons in 2013

estimated at

1.937 billion

tons in 2009

estimated at 2.6

billion tons in

2009, declining to

an estimated 2.3

billion tons in

2013

none

Emissions

Cap on

Mercury

EPA to

promulgate

regulations by

December 15,

2004

5 tons in 2008

26 tons in 2010,

declining to 15 tons

in 2018

24 tons in 2009,

declining to 10

tons by 2013

estimated at 4-5

tons in 2009

24 tons in 2009,

declining to 10

tons by 2013

34 tons in 2010,

declining to 15 tons

in 2018

Scope

50 states and

DC

50 states and DC

50 states, DC, and

territories

50 states and DC

50 states and

DC

50 states and DC

50 states, DC, and

territories

CRS-8

Provisions

H.R. 203

(Sweeney)

S. 366 (Jeffords)

H.R. 999/S. 485

(Administration’s

Proposals)

S. 843 (Carper)

H.R. 2042

(Waxman)

H.R. 3093

(Bass)

S. 1844

(Inhofe)

Affected Units

electric

generating

facilities 25

Mw or greater;

Hg regulations

to include

industrial

sources

electric

generating

facilities 15 Mw

or greater (coalfired only for Hg)

for SO2, NOx, and

Hg: existing electric

generating facilities

25 Mw or greater

(coal-fired only for

Hg); new facilities

have no size

minimum (except

for natural gas

units); voluntary

CO2 program is

economy-wide

fossil fuel-fired

electric generating

facilities greater

than 25 Mw (coalfired facilities in

the case of Hg

controls)

electric

generating

facilities 15

Mw or greater

fossil fuel-fired

electric generating

facilities greater

than 25 Mw (coalfired facilities in

the case of Hg

controls)

existing electric

generating facilities

25 Mw or greater

(coal-fired only for

Hg); co-generation

sources exempted

Penalties for

noncompliance

NOx: $6,000

per excess ton

plus one-forone offset from

future emission

allocations

determined by

EPA

NOx: $5,000 per

ton plus one-forone offset from

future emission

allocations

Hg: not

specified, CAA

enforcement

provisions

would apply

Hg: three times

the average Hg

control costs per

gram of excess

emission

NOx, SO2, Hg:

reduces the excess

emissions penalties

under CAA, title

IV to the EPA

auction clearing

price for allowances

plus one-for-one

offset from future

emission

allocations, if paid

within 30 days.

Otherwise, penalty

is three times the

clearing price plus

offsets

NOx: $5,000 per

ton plus one-forone offset from

future emission

allocations

SO2: same as

CAA, title IV

NOx , SO2 and

CO2 same as

CAA, title IV

except excess

emission penalty

is three times the

average market

price for

allowances

NOx, SO2, Hg:

reduces the excess

emissions penalties

under CAA, title

IV to the EPA

auction clearing

price for allowances

plus one-for-one

offset from future

emission

allocations, if paid

within 30 days.

Otherwise, penalty

is three times the

clearing price plus

offsets

CO2: none –

voluntary program

SO2: same as CAA,

title IV

SO2: same as

CAA, title IV

Hg: $10,000 per

lb. plus one-forone offset from

future emission

allocations

Hg: $10,000 per

lb. plus one-forone offset from

future emission

allocations

CO2: $100 per ton

plus one-for-one

offset from future

emission

allocations

CO2: $100 per ton

plus one-for-one

offset from future

emission

allocations

CRS-9

Provisions

Special

Provisions

H.R. 203

(Sweeney)

EPA to

determine by

2012 whether

emission

reductions

sufficient to

protect

sensitive

regional

ecosystems; if

not, EPA must

promulgate

rules requiring

additional NOx

and SO2

reductions

within two

years of such

determination

S. 366 (Jeffords)

beginning in

2014, all

powerplants 40years or older

must meet

emission

limitations based

on current best

available control

technology for a

new major source

SO2 cap divided

by region (West

and East) with no

trading permit

between regions

EPA to determine

by 2012 whether

emission

reductions

sufficient to

protect sensitive

regional

ecosystems; if

not, EPA must

promulgate rules

requiring

additional NOx

and SO2

reductions within

two years of such

determination

other provisions

to protect local air

quality

H.R. 999/S. 485

(Administration’s

Proposals)

new performance

standards for new

sources replace

current NSPS for

new sources.

Compliance with

bill’s provisions

exempts facilities

from New Source

Review (NSR),

PSD-BACT

requirements,

visibility BART

requirements, and

non-attainment

LAER

requirements. The

exemption does not

apply to PSDBACT requirements

if facility is within

50 Km of Class 1

area. Existing

sources can opt in

by meeting a

particulate standard

exempts utility units

from Hg regulation

under CAA, Section

112, including

residual risk

provisions

prevents EPA from

enforcing any

Section 126 petition

before 2012

NOx cap divided by

region (West and

East)

S. 843 (Carper)

tonnage limitations

in effect for 20

years; EPA to

reassess after 15

years

CO2 limitations

include provisions

providing CO2

allowances for

renewable energy,

sequestration, and

other greenhouse

gas emission

reduction projects

revises New

Source Review

(NSR) to cover

new units; and

imposes new SO2

and NOx

standards on pre1971 units

beginning in 2020;

in 2009, a cost

threshold is

included in

determining

Lowest Achievable

Emission Rate

(LAER)and the

offset requirement

in non-attainment

areas is eliminated

for new electric

generating

facilities

H.R. 2042

(Waxman)

H.R. 3093

(Bass)

S. 1844

(Inhofe)

all powerplants

30-years or

older must

meet current

New Source

Performance

Standard

(NSPS)

requirements

tonnage limitations

in effect for 20

years; EPA to

reassess after 15

years

new performance

standards for new

sources replace

current NSPS for

new sources.

Compliance with

bill’s provisions

exempts facilities

from New Source

Review (NSR),

PSD-BACT

requirements,

visibility BART

requirements, and

non-attainment

LAER

requirements. The

exemption does not

apply to PSDBACT requirements

if facility is within

50 Km of Class 1

area. Existing

sources can opt in

by meeting a

particulate standard

CO2 limitations

include provisions

providing CO2

allowances for

renewable energy,

sequestration, and

other greenhouse

gas emission

reduction projects

revises New

Source Review

(NSR) to cover

new units; and

imposes new SO2

and NOx

standards on pre1971 units

beginning in 2020;

in 2009, a cost

threshold is

included in

determining

Lowest Achievable

Emission Rate

(LAER)and the

offset requirement

in non-attainment

areas is eliminated

for new electric

generating

facilities

exempts utility units

from Hg regulation

under CAA, Section

112, including

residual risk

provisions

prevents EPA from

enforcing any

Section 126 petition

before 2014

NOx cap divided by

region (West and

East)

CRS-10

Provisions

Implementation

Strategy

H.R. 203

(Sweeney)

tradeable

allowance

system for SO2

and NOx.

Hg compliance

on a source-bysource basis

S. 366 (Jeffords)

tradeable

allowance system

for SO2 (restricted

between East and

West regions),

NOx and CO2.

Allowances

allocated to

various sectors

and interests,

including

households,

dislocated

workers and

communities,

electricity

intensive

industries,

affected utilities,

energy efficiency

and renewable

energy activities,

and sequestration

activities

H.R. 999/S. 485

(Administration’s

Proposals)

tradeable allowance

system for SO2,

NOx, and Hg.

Allocation formulas

in the bill initially

provide most

allowances to

affected sources

free, with a small

percentage sold at

auction. Over time,

an increasing

percentage of the

allocation is sold at

auction with

affected sources

receiving fewer

allowances free

S. 843 (Carper)

tradeable

allowance system

for SO2, NOx Hg,

and CO2.

Allocation

formulas for NOx,

Hg, and CO2 based

on generating

efficiency; SO2

allocations based

on current CAA,

title IV provisions

Allocations

formulas for all

four pollutants

include a new

source reserve to

provide allowances

to newly

constructed

sources

H.R. 2042

(Waxman)

H.R. 3093

(Bass)

S. 1844

(Inhofe)

to be

determined by

EPA – market

mechanisms

permitted

(except for Hg)

tradeable

allowance system

for SO2, NOx Hg,

and CO2.

Allocation

formulas for NOx,

Hg, and CO2 based

on generating

efficiency; SO2

allocations based

on current CAA,

title IV provisions

tradeable allowance

system for SO2,

NOx, and Hg.

Allocation formulas

based on historic

fuel usage adjusted

by factors specified

in the bill

Allocations

formulas for all

four pollutants

include a new

source reserve to

provide allowances

to newly

constructed

sources

Hg compliance

on a source-bysource basis

(plantwide

averaging

explicitly

allowed)

Unless otherwise noted, estimates by CRS using Department of Energy and Environmental Protection Agency data.

7% of SO2 and 5%

of NOx and Hg

allowances are set

aside for new units