Weekly Climate Change Policy Update - April 5, 2010

Article by Kyle Danish, Shelley Fidler, Kevin Gallagher, Megan Ceronsky and Tomás Carbonell

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Commentary

President Obama characterized the new offshore drilling policy as part of a broader strategy emphasizing comprehensive energy and climate change actions that rely on homegrown fuels . . . EPA and NHTSA finalized the fuel economy and GHG emission standards for motor vehicles . . . EPA also finalized a proceeding that determines the first date that stationary sources will become subject to the Clean Air Act's Prevention of Significant Deterioration Program. Under the Agency's final determination, the PSD program will start to bite in January 2011. Further details on the implementation of the PSD program await EPA's finalization of the "Tailoring Rule" . . . EPA Administrator Lisa Jackson and Senator Lisa Murkowski (R-AK) traded letters on expected economic impacts of PSD regulation . . . The UK government offered a deal to developing countries: We'll sign on to new emission targets under the Kyoto Protocol if you take legally-binding commitments under the same . . . More from the mailbag: some states and sympathetic Senators wrote letters to Sens. Kerry, Graham, and Lieberman asking them not to preempt state climate regulations, or – if they do preempt – provide the states with compensatory allowance revenues . . . Senator Richard Lugar (R-IN) outlined climate change legislation that would eschew market mechanisms for a combination of regulatory standards.

Executive Branch

President Obama Urges Passage of Climate Bill, Calls Offshore Drilling Part of a "Broader Strategy." At a speech announcing the Administration's decision to open new areas of the Outer Continental Shelf to offshore oil and gas exploration, President Obama called the new policy part of a "broader strategy that will move us from an economy that runs on fossil fuels and foreign oil to one that relies more on homegrown fuels and clean energy." The President also voiced confidence that Congress would "pass comprehensive energy and climate legislation that's going to foster new energy -- new industries, create millions of new jobs, protect our planet, and help us become more energy independent." A transcript of the remarks is available at http://www.nytimes.com/2010/04/01/science/earth/01energy-text.html?pagewanted=1 . EPA and NHTSA Finalize Joint GHG and Fuel Economy Standards. The Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) finalized new Corporate Average Fuel Economy (CAFE) standards and the first-ever Clean Air Act (CAA) greenhouse gas (GHG) standards for passenger vehicles and light duty trucks in model years 2012 through 2016. The standards are designed to cause the average fuel economy of new vehicles to increase to 35.5 miles per gallon by 2016, and reduce the average GHG emissions of the new vehicle fleet by about 5% each year from 2012 through 2016. EPA and NHTSA also project that the new standards will save 1.8 billion barrels of oil and about 960 million metric tons CO2-equivalent emissions over the lifetime of the vehicles. This unique joint rulemaking fulfills an agreement reached in May 2009 between the Obama Administration, the state of California, and the major automakers. Under the agreement, California agreed to abstain from enforcing its own vehicle GHG standards, and the automakers agreed to abandon legal challenges to the standards, in exchange for the joint rulemaking finalized last week. At a conference call announcing the new standards, Transportation Secretary Ray LaHood said that the Administration had already begun planning for a new set of joint standards to cover model years 2017 and later. The 2012-2016 standards are available at http://www.epa.gov/otaq/climate/regulations/ldv-ghg-final-rule.pdf . EPA Issues Final Reconsideration of...