I have admired those skeptics that would not stop until they had open access to the climatic data that was used for the hockey stick calculations. In my own way I try to emulate their tenacity attempting to get policy makers to use the best rationale for decisions. This is a story of a complete failure of an attempt of mine in that regard.
This post reflects my opinion as a private retired citizen. They do not reflect the position of any of my previous employers or any other company I have been associated with, these opinions are mine alone.
The Cross State Air Pollution Rule (CSAPR) is a regional cap-and-trade program that regulates emissions from large fossil fuel-fired electricity generating units (EGUs) that produce electricity for sale and have a nameplate capacity greater than 25 megawatts electrical. The New York State Department of Environmental Conservation (DEC) recently revised their Parts 243, 244, and 245 rules to ensure New York maintains authority to allocate federal CSAPR allowances to regulated in-state generators and the New York State Energy Research and Development Authority (NYSERDA).
CSAPR is a cap and trade program. In this approach a cap is set that limits the total amount that sources can emit. Allowances representing a ton of emissions are distributed equal to the level of the cap. Sources have flexibility to choose how to meet their limits by either reducing their own emissions or purchasing allowances from other sources. Sources measure and report emissions, and must have sufficient allowances to cover their emissions. If they fail to surrender an allowance for each ton of pollution emitted then there are significant automatic penalties. This approach has been very successful so far but as the caps are ratcheted down there are limits to how well it work in the future.
New York State has submitted comments to the Environmental Protection Agency complaining that the CSAPR emission caps in upwind states are insufficient to enable New York to meet the ozone National Ambient Air Quality Standard limits. They claim that those emissions create so much ozone in the State that it is impossible for in-state sources to reduce enough to meet the ozone limits. They have submitted comments that claim that the upwind sources are not running their existing control equipment enough to lower emissions.
This is a component of cap and trade that some claim is a weakness of the approach. If the cost of an allowance is cheaper than the cost to run control equipment to reduce a ton of pollution, then the source will choose to emit rather than run the control equipment. If you want emissions as low as possible then this frustrates lower emissions. Ultimately this is a problem related to the size of the cap. If the cap is too high then allowances are cheap and their costs will be low and this problem will arise.
Earlier this year the DEC proposed changes to their regulations for the cap and trade programs associated with CSAPR. Their process includes a stakeholder meeting where the proposed rule changes are presented and stakeholders get to ask questions. This is followed by a formal release of the proposed rules and a comment period. Comments are submitted and the final rule is promulgated after consideration of the comments.
My particular problem with the DEC revised rules is that it has an allocation methodology that rewards sources that do not run their control equipment to the full extent possible. In CSAPR, EPA allocates each state a fixed number of allowances. The states get to pick how they allocate those allowances to the affected sources. In earlier programs DEC allocated allowances based on operations and the state-wide emission rate that they determined would meet the cap. In that case, a source had an incentive to run their pollution control equipment more because it would generate extra allowances that could be sold beyond those needed for compliance. The recently promulgated rule awards allowances based on recent emissions. In this case a source that does not run its pollution control equipment gets more allowances!
Despite my comments pointing out this problem and simply recommending that they go back to the previous allowance allocation methodology DEC promulgated the rule with the emissions allowance allocation methodology. It seems hypocritical of DEC to demand that upwind states reduce their emissions when their own rules reward sources that do the same thing.
Pragmatic Environmentalist of New York 