In Praise of Folly

Jackson Global Warming Plan an Exercise in Magical Thinking

Last Thursday – coincidentally the same day that Barack Obama nominated Lisa Jackson to become head of the US Environmental Protection Agency – the NJ Department of Environmental Protection (DEP) released Jackson’s long overdue plan to implement the “Global Warming Response Act” (GWRA). http://www.nj.gov/globalwarming/home/documents/pdf/final_report20081215.pdf

The GWRA established ambitious emissions reduction goals and required that DEP produce a Plan no later than June 30, 2008 demonstrating how the goals were to be achieved. Jackson has come under criticism for failing to meet this deadline.

Obama, Governor Corzine, and some environmentalists have praised Jackson as a leader on global warming and suggested that NJ’s global warming program is a national model for the Obama administration.
But Jackson’s record has already come under critical scrutiny at the national level.

• Likely EPA Pick Hit for Jersey Record
  by Joaquin Sapien, ProPublica – December 15, 2008

Accordingly, in the run-up to the Senate confirmation hearings, it is likely that Jackson’s global warming Plan will come under intense scrutiny.
To assist this effort, we have conducted a preliminary analysis of Jackson’s plan and concluded that the Plan amounts to a deeply flawed exercise in magical thinking.
The plan paints pretty pictures in charts, but does not provide raw data and policy assumptions supporting the claimed emissions reductions, or even a cursory description on how those reductions would be achieved or financed.
The Plan is based on what amounts to aspirational emission reduction goals that are not backed by necessary regulations, funding, and mandatory private sector participation.
The Plan relies on NJ energy conservation programs created years ago and reads like a shotgun style inventory – throw everything at the wall and see what sticks.
Here is – in DEP words – how DEP assumes we are going to secure the emission reductions to meet the GWRA 2020 goal to reduce emissions to 1990 levels:
1) “Full Implementation of the Energy Master Plan (EMP). This benefits analysis did not evaluate each individual measure outlined in the EMP (e.g., an emission benefit for the Renewable Portfolio Standard (RPS), an emission benefit for increased energy efficiency, etc.), but instead evaluated all these measures as a package using information provided by the New Jersey Board of Public Utilities (NJBPU);
2) Full implementation of the State’s Low Emission Vehicle (LEV) program (including its GHG component, the latter of which is currently the subject of federal litigation); and,
3) Full implementation of the Regional Greenhouse Gas Initiative (RGGI) program with assumptions on GHG reduction benefits to New Jersey.”
Readers should note that all three of these programs either preceded Lisa Jackson’s tenure as DEP Commissioner or are under the exclusive jurisdiction and control of the NJ Board of Public Utilities. Note also that DEP assumes and does NOT even attempt to provide data to support reductions from the BPU EMP, that the LEV program is subject to litigation, and that RGGI is seriously flawed and will INCREASE current emissions, as discussed below.
Accordingly, these emissions reductions are a chimera, and cannot be implemented. Here’s a summary of why:

A) Questionable 1990 Baseline
The NJ Global Warming Response Act mandates that emissions be reduced to 1990 levels by the year 2020, and by 80% by the year 2050. Thus, the 2020 emissions baseline is very important in determining compliance with the ambitious goals of the Act. The DEP Plan fails to provide the data and assumptions used to derive this 1990 baseline, instead providing a link to a November emissions inventory.

The most recent data from the US Energy Information Administration (EIA) estimates that US man made global warming emissions increased by 16.7 % between 1990 and 2007. Global emissions increased at an even greater rate of 32%. See: “Emissions of Green House Gases in the United States“ (December 2008)

In contrast with federal data, DEP estimates only an 11% increase in NJ emissions over the same timeframe.
What explains this large – more than 50% – difference in NJ versus US emissions?
B) Reliance on Carbon Capture and Sequestration and Nukes
Al Gore has described carbon capture and sequestration as a coal industry myth. The technology does not exist. To educate the public and expose this coal industry lie, he has sponsored “The Reality Campaign” see:
http://action.thisisreality.org/about

Yet the DEP Plan relies on carbon capture and sequestration as a tool to reduce emissions – see table 4.2 on page 71. DEP projects a 26% increase power from “nuclear and fossil with sequestration” yet the plan does not identify facilities, sites, technologies, environmental permits, schedules, or funding to achieve this large rate of growth in so called “zero carbon” power. Thus, it is a totally meaningless assumption.

C) Assumes Coal based Electric Imports are Phased Out

NJ is part of an interconnected 13 state regional electric grid known as “PJM”. DEP estimates that in the year 2005, over 39% of electric power consumed in NJ was imported. See net imports in Table ES-1
http://www.nj.gov/globalwarming/home/documents/pdf/20081031inventory-report.pdf

Yet DEP’s plan assumes that imports will go to ZERO by 2020 and NJ will become a net exporter of electric power (see Table 2.1 on page 22).

Remarkably, emissions reductions from assuming that electric imports will go to zero accounts for MORE THAN 100% of the total emissions reductions between 2005 and 2020! The plan assumes electric import emissions go from 13.4. MMT in 2005 to a projected -10.1 in 2020, a reduction of 23.5 MMT . In comparison, total emissions from all sectors are projected to be reduced from 136.6 MMT in 2005 to 116.2 MMT in 2020, or 20.4 MMT.

Just last week, the Union of Concerned Scientists issued a Report warning that NJ’s imports of dirty coal electric power will increase global warming emissions from coal plants. Scientists warned that:

“Even as the Northeast blazes a trail for other regions and the federal government in fighting global warming, its pioneering efforts could unwittingly contribute to the growth of coal elsewhere.“

UCS data show that all of NJ’s efforts to reduce in state emissions of green house gases will be wiped out by expansion of coal power imports. (see Figure 11 on page 20)
IMPORTING POLLUTION – Coal’s threat to climate policy in the US Northeast
http://www.ucsusa.org/assets/documents/clean_energy/importing-pollution_report.pdf

D) Relies on flawed Regional Green House Gas Initiative (RGGI)

NJ is a member of the 10 northeastern states who have formed the “Regional Green House Gas Initiative (RGGI). RGGI is designed to control green house gas emissions exclusively from the electric sector. The electric sector accounts for less than a third of total emissions from buildings, transportation and industry. Additionally, RGGI does not apply to emissions from coal power electric imports, which represent from 27 (BPU) to 39% (DEP) of NJ’s electric consumption.

Under RGGI, NJ is allocated 22.3 million tons per year of carbon allowances. This total is HIGHER than current emissions; so by design, RGGI explicitly allows current NJ emissions to increase by 9% until 2012, and then seeks to reduce emissions by 10% from 2012 – 2020. This NET INCREASE in emissions is documented by DEP in Table 2.1, where emissions from in-state electric generation INCREASE from 19 MMT in 2005 to 19.6 MMT in 2020, a 3% INCREASE in emissions.

Yet the DEP plan claims that RGGI is an important part of emissions REDUCTIONS.

In contrast to NJ’s flawed RGGI agreement, according to the US Department of Energy

“on September 28, 2008, the Western Climate Initiative (WCI) released a detailed scoping plan for its regional market-based cap-and-trade program. The multi-sector program will be the most comprehensive carbon reduction strategy to date, covering nearly 90 percent of the region’s emissions, including those from electricity, industry, transportation, and residential and commercial fuel use, and reducing greenhouse gas emissions to 15 percent below 2005 levels by 2020.”

The RGGI program has conducted two emission allowance auctions. The market price is slightly over a paltry $3 per ton.

Compare that RGGI price with a study by Tepper School of Business at Carnegie Mellon University, which explored a price of $35 per ton. If $35 per ton would yield only a 10% reduction in emissions, it’s pretty clear that NJ’s RGGI $3 per ton won’t do very much. See:

CO2 PRICING STUDY REVEALS CONSUMPTION EFFICIENCIES
ESTABLISHING A PRICE FOR CARBON EMISSIONS IN THE U.S. WOULD SPUR IMMEDIATE REDUCTIONS IN ENERGY CONSUMPTION AND MORE EFFICIENT USE OF POWER GENERATORS, STUDY BY CARNEGIE MELLON RESEARCHERS SHOWS
Simulation of Short-Term Effects of $35 Cost Per Metric Ton of CO2 Indicates Up To Ten Percent Cut in Emissions Possiblw
http://www.tepper.cmu.edu/news-multimedia/tepper-multimedia/tepper-stories/co2-pricing-study-reveals-consumption-efficiencies/index.aspx

Contrast the RGGI paltry $3 per ton with Senate Bill 3036, the Lieberman-Warner Climate Security Act of 2008.
http://www.govtrack.us/congress/billtext.xpd?bill=s110-3036

The main purpose of that bill was to establish a Federal program designed to substantially reduce U.S. greenhouse gas emissions between 2007 and 2050, in large part through a Federal cap-and-trade program. The cost assumptions in that bill range from $50 – $250 per ton. See:
http://www.pewclimate.org/docUploads/Peace-PPT.pdf

If Jackson could not convince NJ fellow Democratic lawmakers to support an emissions reduction program that cost more than $3 per ton, how can she convince Congress to support $50 – $250 per ton?

E) Offsets – Reliance on Forest and Wetland Carbon Sequestration

Forests and wetlands store carbon. DEP assumes that a 5.9 MMT reduction will come from carbon sequestration. This reduction represents 29% of total reductions of 20.4 MMT.

But DEP’s data and methodology for deriving these emission reductions conflict with DEP and Rutgers data that show NJ is LOSING forests and wetlands at an accelerating rate. According to Rutgers, NJ is losing almost 15,000 acres per year of forests and wetlands to sprawl development and coastal erosion. View the data and a dramatic visual map of NJ land use change over time here :
http://deathstar.rutgers.edu/projects/lc/

Sprawling development destroys forests and wetlands, increasing emissions of carbon stored in those systems and reducing their capacity to store carbon. Additionally, more sprawl development increases emissions from transportation, housing and commercial sectors. DEP has no credible and enforceable plan to enforce the Plan’s assumed land use change related emission reductions.

In contrast to NJ’s failed approach to land use and carbon emissions, according to the US Department of Energy:

“On September 30, 2008, Governor Arnold Schwarzenegger of California signed S.B. 375 to integrate greenhouse gas emissions into California’s transportation planning decisions. Under the law, the California Air Resources Board will work with California’s 18 metropolitan planning organizations to align their regional transportation, housing, and land-use plans and prepare a “sustainable communities strategy” to reduce vehicle-miles traveled in their respective areas and demonstrate the region’s ability to meet its greenhouse gas reduction targets.”

F) Failure to Regulate Emissions

I saved the best (actually the worst) for last.

The DEP plan fails to regulate green house gas emissions. It relies totally on voluntary and market based measures and subsidies. It eschews “command and control” regulation. This is a fundamental flaw.

Just a couple of examples:

DEP failed to consider a mandatory employee trip reduction program; mandatory energy efficiency requirements for buildings; installation of solar on rooftops; a mandatory timetable to meet the emission reduction goals of the GWRA (similar to the Clean Air Act “acid rain cap and trade program”) or mandatory offset requirements for major new emission sources like development.

All these ideas have been vetoed by the business community as too costly.

The high significance of this issue is well understood in the federal context, where the Bush EPA recently declined to regulate emissions, a move that was denounced by environmental advocates.

In July 2008, the US EPA released an Advance Notice of Proposed Rulemaking (ANPR) purportedly to implement the ruling of the U.S. Supreme Court case, Massachusetts v. the Environmental Protection Agency. On April 2, 2007, the Supreme Court ruled that the Clean Air Act (CAA) gives the EPA authority to regulate emissions of greenhouse gases.

However, instead of proposing regulations, EPA deferred action and punted. The ANPR listed – but did not resolve – four key issues for discussion only:
* descriptions of key provisions and programs in the CAA and advantages and disadvantages of regulating greenhouse gases under those provisions;
* how a decision to regulate GHG emissions under one section of the CAA could or would lead to regulation of GHG emissions under other sections of the Act
* establishing permitting requirements for major stationary sources of air pollutants;
* issues relevant for Congress to consider for possible future climate legislation;
* the potential for overlap between future legislation and regulation under the existing CAA; and
* scientific information relevant to, and the issues raised by, an endangerment
analysis.

This DEP failure to regulate is worse than the Bush EPA’s cave in.

DEP has existing regulatory authority to set emission limits, emissions fees, and emission offset requirements. As DEP concedes in the Plan itself (at page 100, for those that got that far):

“CO2 as a Pollutant

“In November 2005, New Jersey adopted a new regulation under the authority of New Jersey’s Air Pollution Control Act to classify CO2 as an air contaminant. This rule enables the State to implement its responsibilities under the RGGI (discussed in greater detail below) and to enact additional rules to reduce CO2 emissions from other sectors as necessary. It also sends a powerful message in light of the federal government’s failure to regulate CO2 under its existing Clean Air Act Authority. New Jersey also added CO2 as an air pollutant in its emission statement program requirements. The emission statement program require the annual reporting of actual emissions of about 50 air contaminants by approximately 700 of the largest stationary sources of air pollution in New Jersey.”

Lisa Jackson has done NOTHING with this existing regulatory authority due to strong opposition by energy and business interests.

This reluctance to use the regulatory stick does not bode well for progress at the national level.