6/17/2009
Daniel K. DeWitt
The Midwestern Greenhouse Gas Reduction Accord Advisory Group finalized their recommendations on June 8, 2009. As one of the most coal-dependent regions of the United States, the Midwest states play an important role in the future of climate change. The recommendations have not yet been formally approved by the individual states, but serve as a platform for the states to implement their own programs to reduce greenhouse gas emissions. These recommendations are the result of an 18-month effort, which began in 2007. The members of the Advisory Group have hopes that these recommendations will become a part of the national debate on climate change.
Recommendations
The Advisory Group called for a target 20% reduction in greenhouse gas emissions from 2005 levels by 2020, and an 80% reduction by 2050. The recommendations cover the following GHG emissions: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorochemicals (PFCs), and sulfur hexafluoride (SF6).
The recommendations also outline a regional cap-and-trade system. Although the federal cap-and-trade system currently being discussed in Congress is leaning toward free emissions allowances, the allowances in the cap-and-trade system proposed by the Midwestern Advisory Group would originally be sold for a fee. Part of the revenue generated by these fees would be invested in new technologies designed to improve energy efficiency and conservation. The cap-and-trade program would generally apply to sources with 25,000 metric tons of greenhouse gas emissions. While the Advisory Group has a “strong preference” for implementation of a federal cap-and-trade system, the recommendations are designed to provide a model for the region if Congress does not act by 2012.
The Midwestern plan would also create mandatory emissions reporting for facilities with greater than 20,000 metric tons of CO2e, which is a lower threshold than U.S. EPA's currently proposed reporting threshold. If formally adopted by the states and provinces involved, the reporting obligation would commence in 2011, with data collection beginning in 2010.
How WNJ Can Help?
The Climate and Energy Practice at Warner Norcross & Judd LLP is ready to assist clients that have questions regarding the Advisory Group’s recommendations, its requirements, and its applicability to your business. Our attorneys can help you develop a strategy to determine how the recommendations would affect you and navigate the requirements in the most cost-effective manner possible. For more information contact Daniel K. DeWitt, practice chair, at 616.752.2208 or ddewitt@wnj.com, or any member of Warner's Climate and Energy Practice.
