Playing without Aces: Offsets and the Limits of Flexibility under Clean Air Act Climate Policy
AbstractThe U.S. Environmental Protection Agency (EPA) continues to move ahead with regulation of greenhouse gas emissions under the Clean Air Act (CAA). Previous work has indicated that basic forms of compliance flexibility—trading—appear to be legally permissible under the relevant part (Section 111) of the CAA. This paper takes a close look at more expansive and ambitious types of flexibility: trading between different kinds of sources, biomass co-firing, and, above all, offsets. It concludes that most types of such extended flexibility are either legally incompatible with the CAA, or so legally problematic that EPA is unlikely to adopt them. This has important implications for both the costs of CAA climate policy and the level of environmental benefits that are achievable. It also creates tension between CAA climate policy and state-level policies, such as California’s, that aim to include various forms of extended flexibility.
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Bibliographic InfoPaper provided by Resources For the Future in its series Discussion Papers with number dp-11-49.
Date of creation: 05 Dec 2011
Date of revision:
Clean Air Act; offsets; carbon; GHGs; greenhouse gases; flexibility; §111; §111(d); CAA; biomass co-firing; AB32;
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-03 (All new papers)
- NEP-ENE-2012-01-03 (Energy Economics)
- NEP-ENV-2012-01-03 (Environmental Economics)
- NEP-REG-2012-01-03 (Regulation)
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