2011 Reports

What’s Ahead for Power Plants and Industry? Using the Clean Air Act to Reduce Greenhouse Gas Emissions, Building on Existing Regional Programs

Litz, Franz T.; Bianco, Nicholas M.; Gerrard, Michael; Wannier, Gregory E.

Written jointly with the World Resources Institute, this report asserts that cap and trade regulations are legally defensible under Section 111 of the Clean Air Act, and details options for implementing potential cap and trade regimes through federal-state partnerships. It particularly examines the legal viability of certain existing flexibility mechanisms that enable states and regions to achieve carbon reductions in a more efficient manner than is possible through standard-based EPA regulations. Issues discussed include: how categories are defined and whether emissions could be netted across multiple infrastructure types; whether the Act allows offsets (credits for emission reductions achieved outside of the regulated category); whether regional programs allowing for international allowance trading could survive; whether allowances could be borrowed and/or banked across multiple compliance periods (a common mechanism in carbon markets today); and what degree of cost-containment mechanisms such as caps on carbon prices would be valid.