Reform Is Right, But Is It The Right Reform? Only Legislation Can Clear the Air on New Source Review, Say Pollution Experts 6/14/2002
From: Melinda Wittstock of Resources for the Future (RFF) 202-328-5019 or 202-251-5730 (cell) WASHINGTON, June 13 -- There's a strong case for replacing the Clean Air Act's New Source Review with more effective and efficient environmental policies, say air pollution experts at the independent environmental think tank Resources for the Future (RFF). As currently applied, their research shows, NSR "wastes resources and can retard environmental protection". "Reform is necessary, but are these the right reforms? It's not a given the environment will be any better or any worse from these new rules," says Alan Krupnick, RFF Senior Fellow. "NSR had to be tackled - it was not only bad for the economy but in some cases was leading to higher pollution levels by keeping old, dirty plants around longer than otherwise. But this plan misses an opportunity to extend emissions caps beyond the utility sector." Only Congress, say the scholars, can enact the new policies needed to effectively and efficiently reduce air pollution. "Today's action should add to the impetus for legislation on new power plant emissions caps by dimming the prospect that NSR will be implemented in a way that forces major reductions in emissions from existing power plants," says Howard Gruenspecht, RFF resident scholar and former senior member of President Clinton's Council of Economic Advisors. But Gruenspecht says many of today's changes will have their greatest impact in other sectors. "Refiners, chemical plants, pulp and paper, and other industries will find it much easier to make changes at their facilities without triggering the NSR process," he says. "With NSR playing a much smaller role, it remains unclear what, if any, alternative programs are planned to drive emission reductions in these sectors." Environmental economists at RFF have studied the impact and implications of air quality regulations for 25 years, and believe it is possible - and eminently reasonable - to be both a strong advocate for environmental protection and a strong advocate for the elimination or modification of NSR. Gruenspecht says there's been "a lot of posturing and exaggeration on both sides of the issue". Industry has overstated the adverse effects of NSR, he says, while the claim of environmentalists that NSR reform will lead to environmental "hot spots" are a red herring because ambient air quality standards will remain in effect and state implementation plans will remain the primary regulatory mechanism to prevent unhealthy concentrations of air pollutants. NSR imposes tougher emissions standards on new plants than on old ones - be they power plants, refineries, or plants in other sectors of the economy. The theory was that emissions would fall as old plants were retired, but experience over the past 25 years has shown that companies are motivated to keep old (and dirty) plants operating and holdback on investments in new (and cleaner) technologies. Triggered by modifications and upgrades at old plants, NRS has acted as a disincentive for improvements and turnover of old plants. Krupnick says NSR is particularly problematic - even redundant - in the power sector because SO2 emissions (and soon NOx emissions) are capped. In this case, aggregate emissions are constant irrespective of NSR being applied, but costs of control are larger than they otherwise would be - "a cost without a benefit". The best approach is to cap total pollution emissions and use an allowance trading system to ensure any emissions increase at one plant is balanced by offsetting reductions at another. Failing that - a big task if it includes all types of industrial sectors - the Administration's plan to ensure that emissions don't increase by furthering the use of plant-wide emissions caps (termed plant-wide applicability limits, of PALs) is a step in the right direction, says Krupnick. For more information and background, http://www.rff.org Also Howard Gruenspecht in the Boston Globe on NSR: http://www.rff.org/news/newsarticles/BostonGlobe.htm For expert interviews: Alan Krupnick (202 328 5107) Howard Gruenspecht (202 328 5026) Dallas Burtraw (202 328 5087) |