GOVERNMENT & POLICY quires the cuts to be in place by 2007, more than a decade ahead of Bush's initiative. The Bush initiative remains a proposal—no bill language has been drafted, no sponsors have been found, and EPA officials are even unclear if language will be drafted by them or by Congress. Nonetheless, EPA officials say that the heart of the Clear Skies Initiative is its pollution trading program. This program is based on the S0 2 emissions trading program that was part of the Clean Air Act amendments of 1990. That program ended another impasse with utilities by requiring them to meet a declining emissions cap and by giving them the option of doing it anyway they wanted, including buying and selling excess emissions allowances.
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CLEARING THE AIR Bush Administration initiatives may cut air pollution, but critics are asking when BETTE HILEMAN AND JEFF JOHNSON, C&EN WASHINGTON
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fewer regulations, President George W Bush, Environmental Protection Agency Administrator Christine Todd Whitman, and a host of federal officials announced the Clear Skies Initiative and what is being billed as a major proposal on climate change in a flurry of briefings and speeches that started on Valentine's Day The announcement ofthe two programs sparked an intense debate over pollution trading, emissions caps, and implementation schedules as well as discussions over whether limits would be placed on carbon dioxide emissions. But most important, the proposals lay out thefirsttangible demonstration of the Administration's overall approach to controlling air pollution. The Clear Skies Initiative applies only to electric power plants and is intended to significantly reduce emissions of sulfur dioxide (SO2), nitrogen oxides (NOx), and mercury. A second plan, the Global Climate Change Initiative, would reduce the nation's "greenhouse gas intensity"—the tons of greenhouse gases emitted per unit of economic activity—by 18% over the next 10 years, even though gross emissions would continue to rise. HTTP: / / P U B S . ACS.ORG/CEN
The Clear Skies Initiative is specifically aimed at cutting air emissionsfrommore than 500 old coal-fired electric power plants that have provided most of the U.S.'s electricity The plants are also responsible for most of the country's emissions of S0 2 , a quarter of all NO x pollution, and onethird of mercury emissions. The plan is the latest in a long-running effort to cut these utilities' emissions. Most of the facilities are at least 20 years old and operate without modern pollution control equipment. The debate over how to cut their pollution goes back 30 years to the first Clean Air Act. Bush's initiative would cut S0 2 emissions by 73% from current levels of 11 million tons per year in two phases—to 4.5 million tons by 2010 and to 3 million tons by 2018. Nitrogen oxides would be cut by 67% from current levels of 5 million tons per year to 2.1 million tons by 2008 and to 1.7 million tons by 2018. And annual mercury emissions would be reduced from current levels of 48 tons to 26 tons by 2010 and to 15 tons by 2018. The Clear Skies Initiative's emissions reductions are similar to those of Senate legislation (S. 556) authored by Sen. James M. Jeffords (I-Vt.). Jeffords' bill, however, re-
THE DRIVING FORCE behind that older program was to reduce the environmental impact of acid rain deposition from S0 2 . This time the driver is human health, Whitman notes, saying tens of thousands ofasthma attacks will be avoided and thousands of lives will be saved. EPAhas not finalized a cost-benefit study, but EPA officials and outside economists agree that benefits will be at least twice as large as the costs. Another key difference in the programs is that the earlier acid-rain trading program pushed utilities to switch to low-sulfur coal—a cheaper and easier alternative than installing S0 2 scrubbers. This time around, fuel switching won't work— unless the new fuel is natural gas. Whitman stresses that the new initiative is the Administration's model for the future, replacing command-and-control techniques with a "mandatory marketplace approach." The new program allows flexibility and certainty for industry in return for fixed caps and hourly emissions monitoring to ensure accountability, she says. It will also LESS IS MORE Greenhouse gas intensity declined 17% during the 1990s
NOTE: Greenhouse gases measured in carbon based on global warming potential. GDP- gross domestic product. SOURCES: Energy Information Administration, "Emissions of Greenhouse Gases in the U.S. 2000," "Monthly Energy Review January 2002"
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GOVERNMENT & POLICY "clear the regulatory thicket in which EPAs efforts to promote clean air often get tan gled," she adds. One thicket Whitman singles out is of particular concern to the Bush Adminis tration: new source review (NSR), a 24year-old legal provision requiring compa nies to install modern pollution control equipment when making operating equip ment modifications that increase pollu tion. The concept was to prod utilities to couple pollution improvements with pro ductive modifications. It didn't work.
In recent years, EPA, the Department of Justice, and states began enforcing NSR against coal-fired power plants. The result has been settlements with some utilities and negotiations with others that could lead to installation of modern pollution control equipment and a lot less pollution. But utilities and other industries ob jected, and the Bush Administration has stopped new enforcement actions and be gun an examination of the provisions. The investigation has dragged on and on—EPA has yet to complete its evalua
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tion although it was due in late summer. However, the new initiative will end the need for NSR, says Whitman and Jeffrey R. Holmstead, assistant administrator in EPAs Office of Air & Radiation. In the meantime, Holmstead tells C&EN, until legislation is passed, EPA continues to en force NSR. That view was challenged, however, in a strong resignation letter to Whitman from a top EPA enforcement official, Er ic VSchaeffer. Schaeffer, who directed EPAs Office of Regulatory Enforcement, was instrumen tal in filing the NSR lawsuits, and in the Feb. 27 letter, he says current EPA policy and White House proposals have made NSR "settlements almost impossible and protracted litigation inevitable." HE NOTES THAT the nine power compa nies with pending suits for NSR violations emit "an incredible 5 million tons of S0 2 and 2 million tons of NO x each year." Schaeffer charges that two utilities that had tentatively agreed to settlements— Cinergy and Vepco—have backed off, "hedging their bets while waiting for the Administration's Clean Air Act reform pro posals" (C&EN, June 25,2001, page 24). Noting that the Bush Administration hadfiledno new NSR suits against utilities, he says, "We obviously cannot settle cases with defendants who think we are still rewriting the law." New legislation, he warns, "will send us right back where we started with new rules to write, which will then be delayed by in dustry challenges and with fewer emissions reductions than we can get by enforcing today's law." Officials of northeastern states, who have joined EPA in NSR suits, echo the view of Schaeffer. They argue that the Bush plan will allow huge midwestern coal-burn ing utilities to continue polluting for near ly another decade before caps hit and even longer if they can offset their emissions by making cuts elsewhere through the pollu tion trading program. "The proposal would double the amount of NO x and S 0 2 com ing into our state," says Richard Blumenthal, Connecticut attorney general. EPA officials disagree and stand by Whitman's statement that NSR enforce ment will continue, adding that the new initiative will "achieve real air quality faster and cheaper than current law" But environmental groups trumpet an internal EPA document that shows vigor ous enforcement of the Clean Air Act as currently written could result in exceeding Bush's emissions reductions by 2012, six HTTP://PUBS.ACS.ORG/CEN
years ahead of the Clear Skies Initiative. Bush officials say these numbers are not an accurate assessment of EPA enforcement policy Utilities and industry representatives cautiously support the Bush initiative. Edison Electric Institute officials say in a statement that Bush lays the groundwork for a "sensible approach" to regulating their emissions. But trade association officials also call it an "ambitious program" and very challenging to meet. Chemical industry trade associations offer limited support, noting that the proposal may continue utilities' reliance on coal, and consequently may help chemical firms by easing competition for natural gas, a chemical industry feedstock. HOST ECONOMISTS say the plan's concept ofpollution trading under a cap is road tested and ready for broad application. However, many of the successes of the acid-rain trading program, Bush's model, are only in part related to actual trading and are due more to a combination of the availability of low-sulfur coal and the development of a rail system to move it from the \Kfest to the East, where the power plants are. Dallas Burtraw, a senior fellow at the nonpartisan think tank Resources for the Future, says, 'This has been a very successful program, and although the benefits could have occurred without trading, tradinggave industry the flexibility to capitalize on the trends and find emissions reductions in the lowest cost manner.'' He predicts that Bush's program is likely to be more expensive than the acid-rain trading program because the reductions will require new scrubbers for S 0 2 and selective catalytic reduction technologies for NO, He says technologies for S 0 2 and NO x are mature and have dropped in price, but this is not the case for mercury However, he notes that, by capturing S 0 2 and NO x , pollution control systems will also remove about half of mercury emissions. And because mercury is a neurotoxin, the health benefits of its removal will be huge. Burtraw argues that there are many health and economic benefits in installing these off-the-shelf technologies faster than Bush proposes. Environmental activists say the same and warn that the extended implementation schedule could encourage utilities to make easy reductions quicker and to bank allowances with the result that the 2018 limits may not be achieved nationally until much later. HTTP://PUBS.ACS.ORG/CEN
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