Pa. should implement carbon trading program

By Robert B. McKinstry Jr.

and Joseph Otis Minott

The commonwealth faces a critical choice as it continues to hold a series of hearings to determine how to implement its obligations under the Environmental Protection Agency's Clean Power Plan.

Pennsylvania can either put into place policies that curtail carbon emissions from fossil-fuel-fired power plants and enjoy a meaningful reduction of greenhouse gases - or face a future in which, by many accounts, Philadelphia will enjoy a climate much like that of Charleston, S.C., by 2100.

A failure by the commonwealth to take bold, decisive steps to reduce carbon emissions could result in more than just palm trees on the Benjamin Franklin Parkway. Areas like ours, vulnerable to coastal storms, will need to spend trillions of dollars to replace or harden infrastructure to deal with rising sea levels and superstorms. And if we do nothing now, the price will rise.

Speakers at a recent Philadelphia hearing overwhelmingly supported Pennsylvania's adoption of a program that puts it on track to reduce carbon emissions by the minimum necessary to avoid the worst effects of climate change. The question is how.

Meaningful regulation of fossil-fuel-fired power plants must be part of the solution. Pennsylvania contributes 1 percent of global carbon emissions, 40 percent of which come from power plants, making this sector a logical place to start.

All states must implement the Clean Power Plan, but they are free to decide for themselves which type of program makes the most sense. Speakers at the hearings strongly supported implementation of a mass-based carbon emissions trading program.

Under such a program, Pennsylvania would create a cap on the tons of carbon dioxide that power plants could emit each year and then reduce that cap over time, easing units into compliance by 2030.

Each fossil-fueled power plant would need to purchase and surrender a carbon dioxide emissions "allowance" for each ton of emissions. By selling the allowances, Pennsylvania could generate the cash it needs to invest in energy efficiency and zero-emission generation.

This approach puts a meaningful price on carbon emissions, reinvests the proceeds in Pennsylvania, and encourages generators of electricity who use fossil fuels to invest in technologies that reduce or eliminate carbon emissions. It also encourages them to preserve and increase carbon-neutral generation through energy sources such as nuclear, hydroelectric, solar, geothermal, or wind power. And it would be easy to do. The Wolf administration is already authorized to put this type of program into effect and could do it quickly.

The experience of the 10 states with similar programs proves that we, like the commonwealth's Quaker settlers, can "do well by doing good." These states have expanded their economies and created jobs while reducing emissions, refuting the arguments of those who claim that implementing the plan presents a false choice between the economy and the environment.

But to succeed, the plan has to be done right.

Under EPA regulations, states can exclude new energy facilities from a cap, meaning that carbon emissions from new plants would not be restricted. That gap would encourage companies to build new fossil-fuel plants that might replace our existing zero-emission facilities, which would both increase emissions and undermine the state's existing power producers.

Pennsylvania also needs to take into account problems resulting from "leakage," when power plants in states without caps export electricity to states with caps, increasing total carbon emissions.

Another very important reason for choosing a mass-based plan is to allow a transition to the broader EPA program that will go into effect in the future. That plan, which will be necessary to achieve the required 80 percent reduction in greenhouse-gas emissions, will apply across the economy. Trading allowances in the common currency of pounds of emissions makes the program applicable to most greenhouse-gas-producing industries and recognizes that there is a place for everyone in the market.

A delay will only make it more expensive to achieve the required goals in the future. A mass-based carbon trading program will be quick to implement, apply to virtually all forms of emissions, create jobs, and spur investment in the commonwealth. It's the right choice.

Robert B. McKinstry Jr. is an environmental lawyer.

mckinstry@ballardspahr.com

Joseph Otis Minott is the executive director of the Clean Air Council. joe_minott@cleanair.org