In a blast from the past, state approves Clean Power Plan

Source: Debra Kahn, E&E News reporter • Posted: Tuesday, August 1, 2017

California regulators are complying with the federal Clean Power Plan to send a message to the rest of the world that the Obama-era climate regulation is achievable.

The California Air Resources Board (ARB) voted yesterday to approve its plan to comply with the rule, despite the Trump administration’s moves to undo former President Obama’s signature policy for reducing greenhouse gases at power plants. The program is currently stayed by the U.S. Supreme Court, and a case in the U.S. Court of Appeals for the District of Columbia Circuit is also on hold while U.S. EPA decides how to handle the regulation.

“This is a plan which the federal government doesn’t really want to receive, but we want to send it to them anyway,” said ARB Chairwoman Mary Nichols. “We’ve done the work, and we think the regulation that it was developed under was a good regulation and one that we supported.”

ARB’s plan envisions using the state’s carbon cap-and-trade program as the main tool for complying with the federal rule. The market-based program is estimated to far exceed the federally assigned target of a 32 percent reduction below 2005 levels in power-sector emissions by 2032. In the event California falls short, the state plans to use a separate trading program for the 93 facilities that are subject to the CPP to bring them into compliance.

“This isn’t just an empty gesture; it’s also intended to communicate to the world at large that the reductions that were called for in that plan can be accomplished and we have a way to do it,” Nichols said.

The board also adopted a set of amendments to its cap-and-trade regulations that align the program with U.S. EPA’s compliance timeline, extend free allowance allocations to industry, and set the program up to link with outside jurisdictions. The amendments envision linking markets with the Canadian province of Ontario next year. They would also create other one-way links, such as outside jurisdictions being able to buy and retire California carbon allowances without selling their own instruments into the state.

Nichols announced that a new rulemaking later this year would address issues brought up by A.B. 398, the bill signed earlier this week by Gov. Jerry Brown (D) that extends the cap-and-trade program through 2030.

Calif. approves VW settlement

California regulators also yesterday approved part of their $800 million settlement with Volkswagen AG over the company’s cheating on state and federal emissions tests. The settlement stems from the part of the scandal in which Volkswagen admitted to setting up software to engage emissions controls on diesel cars only during testing.

The first $200 million tranche of funding, to cover the first 30 months of the 10-year investment plan, will go toward 400 electric vehicle chargers, 350 of them in five metropolitan areas and 50 of them on highways. It will also fund a brand-neutral ad campaign to promote zero-emission vehicles. About a quarter of the money will be devoted to building infrastructure in one “green city,” which will be Sacramento.

U.S. EPA approved its portion of the initial investment plan in April with little fanfare, allowing Volkswagen to immediately begin construction. But the $800 million that California is receiving has been subject to criticism from automakers and environmental groups that want to see more of the money spent on hydrogen infrastructure and in disadvantaged communities.

Environmental justice advocates, in particular, argued that it should meet the state’s own goals for spending proceeds from its cap-and-trade program. Lawmakers passed a bill last month, S.B. 92, that instructed ARB to “ensure to the maximum extent allowable” that at least 35 percent of the funds go to low-income and disadvantaged communities.

In late June, VW proposed to designate Fresno as a sixth metropolitan area and shift $2 million to $3 million of the advertising spending to companies that would target disadvantaged and low-income communities, among other changes aimed at increasing poor communities’ share of the investment.

ARB board members yesterday grilled Mark McNabb, CEO of Electrify America, Volkswagen’s new subsidiary set up to implement the settlement. “Can we trust you?” asked board member and former state Sen. Dean Florez (D).

McNabb pointed out that nearly 60 percent of Sacramento’s census tracts are disadvantaged. “You have my commitment and my intent to move this team to strive to ensure that we meet the 35 percent,” he said.

A representative from Toyota Motor Corp. said the plan still lacked sufficient investment in hydrogen infrastructure, and an official from electric vehicle charging company ChargePoint faulted its lack of specifics on how the charging station sites would be selected and how pricing would be set.

“A lot can happen in 30 months,” said Anne Smart, ChargePoint’s vice president of public policy. “The impacts of these investments could negatively impact other investments.”

Also yesterday, U.S. EPA and ARB announced that they had approved technical fixes for most of the affected 2.0-liter engine vehicles, including Jetta, Golf, Beetle and Audi A3 models. Within 10 days, Volkswagen is to notify vehicle owners and lessees that they can bring their cars in for modification.