Playing Without Aces: Offsets and the Limits of Flexibility Under Clean Air Act Climate Policy

Resources for the Future Discussion Paper No. 11-49

49 Pages Posted: 5 Jan 2012

See all articles by Nathan D. Richardson

Nathan D. Richardson

University of South Carolina - Joseph F. Rice School of Law; Resources for the Future

Date Written: December 5, 2011

Abstract

The 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.

Keywords: Clean Air Act, offsets, carbon, GHGs, greenhouse gases, flexibility, §111, §111(d), CAA, biomass co-firing, AB32

Suggested Citation

Richardson, Nathan D., Playing Without Aces: Offsets and the Limits of Flexibility Under Clean Air Act Climate Policy (December 5, 2011). Resources for the Future Discussion Paper No. 11-49, Available at SSRN: https://ssrn.com/abstract=1980143 or http://dx.doi.org/10.2139/ssrn.1980143

Nathan D. Richardson (Contact Author)

University of South Carolina - Joseph F. Rice School of Law ( email )

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