EPA Making 10,000 Industrial Facilities Estimate & Publicly Report Greenhouse Gas Emissions

Top Ten Greenhouse Gas Equivalent (GHG-e) Emission Sectors In The USA, Estimates From Proposed EPA Option, 2006 Data. Image credit:derived from EPA's Regulatory Impact Assessment (RIA), Table 5-1.

On January 1, 2010, the U.S. Environmental Protection Agency will, for the first time, http://www.epa.gov/climatechange/emissions/ghgrulemaking.html">require large US greenhouse gas (GHG) emitters to measure and report greenhouse gas equivalent (GHG-e) emissions data. "This new program will cover approximately 85 percent of the nation's GHG emissions and apply to roughly 10,000 facilities." You read that correctly: 85% of US' emissions, amounting to approximately 3.9 billion MtCO2e, originate from a few thousand facilities. Total estimated national costs of EPA's measurement and reporting rule will be $132 million in the first year, and $89 million in subsequent years ($2006). (via Regulatory Impact Assessment (RIA), downloadable as pdf file here).

What are the benefits to weigh against those estimated national costs to industry and taxpayers?First let's see which squeaky wheels will demand the most regulatory relief and delays. From the RIA, we can see that boiler operators, the pulp and paper industry, and the transportation sectors will be complaining loudest.

More than 80% of these costs fall on the private sector. Sectors bearing the greatest share of the ongoing costs of the rule are general station combustion (24%), Pulp and Paper Manufacturers (10%), and Motor Vehicle and Engine Manufacturers (10%).
Remember that this rule covers only Steps 1 & 2 of the traditional 3-step progression: measure, verify, & manage. (No managing included in the rule. That awaits analysis of the verified reporting, late in 2010.)

In studying the regulatory impacts, EPA distributed estimated costs over the tons of greenhouse gas emitted by each regulated sector. Car makers will spend an order of magnitude more than utilities to comply with this rule on a per-ton emissions basis.

The average ongoing private cost per metric ton of CO2e reported is $0.02. This measure varies by sector; measures range from less than $0.01 per ton (e.g., electricity generation [ARP]) to $0.24 per ton (motor vehicle and engine manufacturers).
What are the benefits of this rule?
As EPA states, "green labeling programs may use the verified GHG emissions data from this mandatory rule to provide comprehensive information to the public, particularly on durable goods such as appliances, electronics, etc."

Perhaps the most significant benefit will be to ensure that government policies of the future will be even-handed and cost-effective.

The greatest benefit of mandatory reporting of industry GHG emissions to government would be realized in developing future GHG policies. For example, in the European Union's Emissions Trading Scheme (ETS), a lack of accurate monitoring at the facility level before establishing CO2 allowance permits resulted in allocation of permits for emissions levels an average of 15% above actual levels in every country except the United Kingdom. Consequently, the allowance market experienced a price drop when the first year of emissions data were published (Bailey, 2007). The U.S. mandatory reporting rule would creates a foundation of reliable baseline emission estimates for the purpose of informing future policies and avoiding unexpected consequences of those policies.
The lifestyle angle.
Have another look at the figure at the top of the post. Will individual lifestyle changes make any difference at all for existing landfills, or for 'suppliers of industrial gases.' No they will not. But for the others in that top ten list: perhaps so.

Where do citizens get the most bang for their lifestyle changes? Something to ask next year, after the reports have been published online.

What comes next?
Experts at Competitive Enterprise Institute and similar org's are probably reverse-engineering the Agency's cost impact numbers as we speak. Won't take long. Multiply the EPA numbers by 10 or a 100, call Inhofe, and they're pretty much ready for a Congressional hearing. Guess who pays tens of thousands of dollars for that effort? Hint: 'top ten.' It's a tough job, but somebody's got to do it.

Reporting facilities can't afford the double overhead bill of staff estimating emissions with two separate methodologies, and then reporting the results to two different emission registries. And, no one should suffer being held accountable to two (necessarily) conflicting sets of numbers. So, it's pretty much goodbye for those voluntary registries cobbled together over the last decade, unless EPA subsumes one or more of them.

More posts on carbon metrics.
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Ford Becomes First Automaker to Join the Climate Registry
Free Software From Microsoft To Track Carbon Emissions