1. Florida Department of Environmental Protection Greenhouse Gas Update 2010 Jacksonville Environmental Symposium: Green City Gateway to Florida Joseph Kahn Division of Air Resource Management July 16, 2010

2. Climate Activities – State and Federal Brief look at: Recent state actions by DEP Rules Technical analyses Federal policy proposals Federal actions & regulations by EPA 2

3. Florida's Clean Car Rule Florida DEP successfully adopted GHG rules, February 2009 Fleet average GHG for light duty cars and trucks Same GHG standards as California, as per CAA Savings vs. (old) federal rules, cumulative by 2020: 22.6 million metric tons (MMT) CO2E 2.54 billion gallons of gasoline Effective after two milestones: EPA approval of California standards (July 2009) Ratification by Florida Legislature (has not yet happened) 3

4. Florida's Clean Car Rule Part of the national debate Florida: ~6% of US population, ~9% new car sales Florida joined a dozen other states in adopting CA Road to the new federal fuel economy rules May 2009 agreement (Obama, manufacturers, CA) May 2010 new joint NHTSA/EPA rules Federal rules now recognized as equivalent to CA Start the process of repealing the Florida rule Required by Environmental Regulation Commission 4

5. Florida's Idling Reduction Rule Heavy-duty trucks (semis, tractor trailers, etc.) Idling for more than 5 min is prohibited Saves fuel; reduces GHG and other pollutants Some idling allowed (traffic, emergency, bus AC) Alternatives (APU, truck-stop infrastructure) Assistance to truckers Compliance (no penalties for first time offenders) Fact-sheets and outreach activities APU rebate program (Oct 2009 to Mar 2010) Provided $82,500 to truckers to purchase 55 APU 5

6. Florida’s Emission Inventory Preliminary inventory of Florida GHG emissions to help guide planning efforts in the state Last update published September 2007 EPA’s State Inventory Tool 14 industrial sectors Covers emissions from 1990 to 2004 Total 2004 GHG emissions of 289 MMTCO2E Available at: www.dep.state.fl.us/air/about_air/climate.htm www.dep.state.fl.us/air/about_air/climate.htm 6

7. Florida's Cap-and-Trade Rule for Utilities Preparing Florida for national program Identifying issues important to Florida & consensus where it exists Laying groundwork for future federal rules Economic analysis of impacts of regulatory options Evaluating offset procedures Key to early success of cap-and-trade Methodologies and verification are critical Projects of interest in Florida – forestry, landfill gas 7

8. DEP’s Comparative Study of Offset Protocols Greenhouse gas offset projects Sequestration or reduction at non-capped sources Protocols account for amount of GHG to credit Many studies of offset programs and policies Few studies of technical design elements of the protocols (calculations, recordkeeping, monitoring frequency) DEP study 15 offset project types (afforestation, landfill gas) 11 offset programs (Climate Action Reserve, RGGI) Comments welcome on the draft, available here: www.dep.state.fl.us/air/rules/ghg/electric/offsets.htm 8

9. DACS Woody Biomass Economic Study Analysis and report to the Legislature March 1, 2010 Department of Agriculture and Consumer Services with DEP Contract with UF’s School of Forest Resources and Conservation, and Food and Resource Economics Department 15.9 million acres of timberland in Florida 10.1 million in private ownership A 7% RPS (equivalent of 1% to 3% electricity production from wood sources over time) would be: Feasible without much disruption of timber supply to existing forest products industry Economically beneficial to the economy of the state, and especially to timber producers and forestry in general www.fl-dof.com/forest_management/woody_biomass.html 9

10. Federal Policy Proposals – Considerations White House vs. Congress (Senate) on “pricing carbon” Tax vs. cap-and-trade – what industries to include Cap and milestones – how quickly to tighten caps Allowance allocation method – free or auction, coal vs. gas, new vs. existing Allowance price controls Offsets – limited, U.S. vs. international, project types, existing or new Electricity rate increase protection – concessions on other air pollutants? Auction revenue – projects, low income households, R&D, treasury Block action by EPA and states? Stand alone or part of energy bill Carbon capture and storage RPS or “RES” Nuclear Biofuels and biomass Energy efficiency 10

11. Congressional Climate Policy Proposals Key Bills – House (passed) and Senate (moving targets) Waxman-Markey bill (June 2009) Kerry-Lieberman bill (May 2010) 3% below 2005 levels by 20124.75 percent below 2005 levels by 2013 17% below by 202020% below by 2020 42% below by 2030 Same 83% below by 2050Same REPS of 20% by 2020 Cap-and-trade for utilities, manufacturers Allowance allocation through 2025 Allowance allocation through 2025 35% of allowances to utility sector Additional allowances in first 3 years Pre-emption of state programs through 2017 Pre-emption of state and regional programs Prohibition against using CAA for GHGs Passed House on June 26, 2009Incentives for new nuclear Not yet considered by the Senate New proposal for utility only (July 2010) 11

12. Congressional Climate Policy Proposals Key Bills – Senate (more moving targets) Lugar Energy bill (June 2010) Carper bill (February 2010) Vehicle, building energy eff. stds. Multi-pollutant, NOx, SO2 and Hg coal unit retirements, new nuclear Possible link to CO2 No caps or cap-and-trade Unnamed Energy & Climate bill (Reid) Rockefeller bill (February 2010)Utility-only cap and trade, opt in for others? Imposes two year delay in EPAMay include pre-emption of EPA regulations regulation of GHGsKerry, Snowe, Lieberman, Bingaman, more Murkowski Resolution (June 2010) Rockefeller-Voinovich bill (July 2010) Disapprove EPA endangerment finding Promote CCS; merge with energy bill? Senate vote June 10 – did not pass (47-53) 12

13. EPA Findings April 2007 – Mass. vs. EPA (motor vehicles) Supreme Court ruled that GHGs are pollutants under Clean Air Act EPA must determine whether science supports endangerment finding December 2009 – EPA publishes final “endangerment” & “cause or contribute” findings GHG concentrations pose a danger to public health and welfare & motor vehicle emissions contribute to GHG pollution Range of potential GHG regulations under CAA Petitions for reconsideration 13

14. EPA’s Regulations Light-duty Vehicles GHG emissions from new light-duty vehicles Light-duty vehicles are responsible for about 60 percent of U.S. transportation GHG emissions May 2010 joint NHTSA/EPA rules First harmonized GHG and fuel economy standards, MY 2012 to 2016 New CAFE rules about the same as the CA rules Equivalent to fleetwide average of 35.5 mpg by MY 2016 14

15. What’s Next for EPA’s Vehicle Regulations? Light-duty cars and trucks for MY 2017 to 2025 Heavy-duty (commercial) vehicles (MY 2014+) Promotion of cleaner fuels, including biofuels (with DOT) Renewable Fuels Standard (RFS) program Advanced vehicle technologies (with DOE) 15

16. EPA Reporting Rule Effective December 2009, for stationary sources Collect accurate and timely emissions data to inform future policy decisions Annual reports to EPA Suppliers of fossil fuels or industrial greenhouse gases Manufacturers of vehicles and engines Facilities that emit 25,000 metric tons or more per year of GHG emissions CY 2010 reports due in 2011 16

17. EPA Tailoring Rule Published May 2010 Regulation of vehicles under CAA triggers PSD/TV permitting for GHGs for stationary sources EPA’s legal basis is “doctrine of absurd results” “Tailoring” (increasing) emissions threshold for GHGs 75,000 – 100,000 tons/year CO2E Statutory threshold is 100 or 250 tons Step 1: January 2, 2011 sources subject to PSD (75,000 TPY) Step 2: July 1, 2011 new projects for PSD (100,000 TPY), modifications (75,000), existing for TV (100,000) Step 3: Smaller sources after April 30, 2016 Challenges pending 17

18. Federal Regulations – Requirements Best Available Control Technology (BACT) New and modified units under PSD What is BACT for CO 2 ? Efficiency (unit or facility?) Fuel type? (natural gas vs. coal or oil) Design of unit? (IGCC vs. boiler) CAAAC technical teams Considering BACT, data, possible NSPS Probable FIP for Florida – permitting for GHGs by EPA Region 4 starting January 2, 2011 18

19. More Information? DEP’s Division of Air Resource Management : www.dep.state.fl.us/air www.dep.state.fl.us/air EPA: www.epa.gov/climatechange/www.epa.gov/climatechange/ Feel free to contact me at joseph.kahn@dep.state.fl.us or 850-488-0114 joseph.kahn@dep.state.fl.us Or contact Julie Ferris, Climate Policy Coordinator, at julie.ferris@dep.state.fl.us or 850-488-0114julie.ferris@dep.state.fl.us 19