The Massachusetts Supreme Judicial Court (Massachusetts' highest court) recently concluded that the Massachusetts Department of Environmental Protection (“DEP”) failed to adequately comply with the Global Warming Solutions Act because it did not adopt regulations that would mandate a 25% reduction in greenhouse gas emissions by 2020. Kain v. Department of Environmental Protection
The Court found that the DEP is required under the Act to "promulgate regulations establishing a desired level of declining annual aggregate emission limits for sources or categories of sources that emit greenhouse gas emissions." The Act required that a level of reduction of between 10% and 25% from 1990 levels be chosen, and a prior administration had chosen a reduction level of 25%. Based on the commitment to this reduction, the Court looked at whether programs to meet this selected reduction level had been put in place.
The Court looked at three programs that the DEP relied on as fulfilling the Act's requirement to reduce greenhouse gas emissions: participation in the Regional Greenhouse Gas Initiative ("RGGI"), which caps greenhouse emissions from power plants over a nine state area; a low emission vehicle ("LEV") incentive program; and sulfur hexafluoride leak regulations designed to reduce emissions of a very potent greenhouse gas connected with the electric distribution system. One difficulty right off the bat was that these programs only anticipated an 18% reduction in emissions, and much of the decision centers around whether this 25% reduction was an aspirational "target" or a "mandate". The Court concluded that this was now a mandate.
The Court found all three of these programs to be helpful measures that would likely reduce emissions, but ruled that they did not meet the statutory requirements of the Act to mandate greenhouse gas reductions that would meet the 25% reduction standard by 2020. While it may not be unreasonable for the Court to have concluded that the DEP has not met the Act's required emission reduction mandates, what is disturbing in this decision is that it is very hard to conceive of a reasonable program that might pass muster according to the Court's criteria, given the reasons put forth to invalidate the three programs.
Take RGGI - for the past nine years we have been adding a surcharge to fossil fuel power generation, with the more intensive greenhouse gas emitters paying a higher surcharge. Most economists would say that making such power plants more expensive to operate means that they are called on less often to supply power, which is what has been happening in real life. However, this is not adequate for the SJC, because RGGI would allow a facility in Massachusetts to acquire allowances from another state and therefore "there is no way to ensure mass-based reduction in carbon dioxide emissions from power plants in the Commonwealth that participate in the RGGI". Because of this feature, RGGI "does not comport with the specific requirements [of the Act]".
The other two programs fail for similar reasons. A program to get more low emission cars on the road does not limit the overall number of cars in the state, and so even if there are more low emission vehicles, there could still be more cars overall and more emissions. For the sulfur hexafluoride leak program, mandating that equipment be changed out so that only minimal leaks are possible may not work because a company could just put in more equipment (even if it is better), and negate the benefits.
So what would the Court find acceptable? Let's brainstorm a bit. If RGGI does not pass muster, perhaps what we need is a state wide cap on greenhouse gas emissions from major sources. But it can have no "escape clause" since it is the possibility that a facility could just buy its way out of compliance that troubles the Court, and the scheme might need to force power plants to shut down once all the capped allowances are used up. But in reality, the effect of adding an additional burden on Massachusetts power plants would simply mean that they would operate for fewer hours than plants in neighboring states that do not have to live under this cap, and so the emissions would simply shift to out of state power plants, which may release more greenhouse gas emissions. One fact about greenhouse gas emissions is that the effect is not local. Shifting emissions from Massachusetts to Connecticut or New York or New Hampshire does not reduce Massachusetts's contribution to the greenhouse gas inventory, since it is the electric usage that must be controlled. Given that greenhouse gasses are a global, not a regional (and especially not a state), issue, a state-wide cap is useless at best, or counterproductive at worst.
So what about energy efficiency programs that reduce the actual amount of electricity people consume? Energy efficiency programs are usually "carrots" that provide incentives to reduce long term usage, to avoid the "stick" of high electric prices. But relying on that mechanism would not appear to meet the Court's requirements of a "mandate" that reduces the amount of electricity used, as a homeowner would not be prevented from using more electricity even if they were taking advantage of energy efficiency "carrots".
Buildings are a major source of greenhouse gas emissions. Green building codes are being adopted whereby new construction must meet stricter requirements. But this only limits the growth in new emissions, and does not reduce total future emissions from the building sector. Somehow existing buildings have to also be covered by a mandate to reduce emissions to levels needed to meet the 2020 and beyond limits. It is possible to conceive of a program that forces new construction to offset their emissions by paying existing buildings to reduce emissions. A cap and trade system could work precisely this way. However, a cap and trade system that covers hundreds of power plants would be very different from such a system that covers hundreds of thousands of buildings.
Would forcing utilities to buy more renewable energy work? It would likely reduce greenhouse gas emissions in the Commonwealth, but then again, people could just use more electricity and negate the offsets gained from renewables. Even programs that greatly encourage the development of solar, while obviously reducing emissions, would not pass muster, since a home with solar panels could just turn up the air conditioning and use even more dirty energy overall.
Another program that has been discussed in recent years is to tax people on the number of miles driven. Actually, the better way to do it is to somehow tax people on the mileage they get, since you would want to encourage people to drive more fuel efficient vehicles. Gee - maybe a gas tax would then make the most sense. But that was passed several years ago and then pretty much overruled by the voters. And besides, such a tax would not reduce the number of cars on the road or the actual number of miles driven, and so would certainly not count as the "mandate" to reduce emissions that the Court requires.
Maybe we could block the roads into Boston and force people to take the MBTA.
But let's get serious. I wonder if the SJC is actually speaking to the Legislature through this case (or the regulators who picked the 25% standard) - telling them that if they are going to adopted laws that mandate "feel good" policies, they have to own what they have created, and just establishing "mandates" with no real intent to back them up (say perhaps passing some sort of energy reform bill, or a gas tax, or fix the MBTA in some meaningful way) is not getting the job done.
Climate change is a very real issue. A lot has been done to reduce emissions, but a lot more needs to be done. This case reads like the deliberations over Shakespeare's "pound of flesh" -where the court ruled that you have to read the requirement literally. The Court may be saying that "mandates" by themselves are meaningless, and just lead to results such as this case - a lot of ink wasted over semantics, with not much time spent trying to figure out what works.