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There has been a great deal of activity with respect to global warming among states during the last few years intended to fill the perceived gap resulting from the lack of action on the issue at the federal level. That trend appears likely to accelerate following the decision of the U.S. Supreme Court in Massachusetts v. Environmental Protection Agency, ruling that carbon dioxide emissions can be regulated pursuant to the federal Clean Air Act and compelling the United States Environmental Protection Agency to evaluate whether carbon dioxide and other greenhouse gasses are pollutants that endanger public health and welfare and therefore require such regulation. In the wake of Massachusetts, in addition to developing their own programs states attempting to put pressure on the USEPA to establish with respect to greenhouse gas emissions the same type of administrative machinery that presently exists for other Clean Air Act pollutants. New Jersey reasserted its position as a leader among states with respect to addressing global warming by adopting the Global Warming Response Act on June 18. This article will summarize this act, compare it to the other recent state and regional activities regarding global warming, with focus, in particular, on measures intended to reduce greenhouse gas emissions from individual facilities. In view of the actions by several states and regional organizations and the fact that greenhouse gas emissions are already regulated in Europe, most observers, including many major American corporations that emit greenhouse gases, have concluded that requirements compelling reductions in levels of greenhouse gas emissions, similar to those already applicable to emissions of other pollutants, are inevitable. It is unclear, however, whether such requirements will be imposed primarily through action at the federal level, which is the typical pattern for regulatory action to reduce our pollution, or at the state or regional level. The focus of most measures enacted by states to date has been monitoring emissions of greenhouse gases, setting emission reduction targets, encouraging reduced fuel and energy consumption increased use of renewable energy and market-based “cap and trade” emission reduction programs. The question of how the emission reduction targets are to be achieved is for the most part not addressed. New Jersey’s new Global Warming Response Act, by contrast, takes the first tentative step toward imposing the same type of technology requirements and emissions limitations that are the primary means of reducing emissions of other air pollutants. Time will tell whether the New Jersey act will be a trailblazer in this regard or serve primarily to prod action regarding greenhouse gas emission reductions by the EPA. Prior to adopting the Global Warming Response Act, New Jersey was one of the original participants in the Regional Greenhouse Gas Initiative, which began in 2003. The nine original members of Regional Greenhouse Gas Initiative consisted of all states north and east of New Jersey. Subsequently Maryland has joined Regional Greenhouse Gas Initiative and Pennsylvania, the District of Columbia and eastern Canadian provinces have observer status. The members of Regional Greenhouse Gas Initiative have entered into a memorandum of understanding regarding developing a multistate cap-and-trade program for greenhouse gas emissions. Initially this program will address carbon dioxide emissions from power plants in the participating states. How an individual source of pollutants achieves the reductions necessary to meet its allocation is left up to it, and, in particular, it may do so by purchasing credits from facilities with greenhouse gas emissions below their allocated level. The Regional Greenhouse Gas Initiative’s memorandum of understanding establishes a regional budget for carbon dioxide emissions from power plants having a rated capacity of at least 25 megawatts. That annual budget is then divided among the member states, with each state being responsible for allocating the budgeted amount among its facilities. Regional Greenhouse Gas Initiative has developed a model rule for a cap-and-trade program to be adopted by its members. More recently, in early 2007 six western states, California, New Mexico, Oregon, Washington, Arizona and Utah, established a Western Regional Climate Action Initiative. As part of the initiative those western states have agreed to set a regional greenhouse gas emission reduction target, establish a market-based system, such as a cap-and-trade program, covering multiple economic sectors as a means of meeting the selected target, and establish a greenhouse gas registry and tracking system. California has long been a leader among states in addressing global warming. Among the measures California has adopted, in addition to being part of the West Regional Global Action Initiative, are setting greenhouse gas emission target; passage of a state law requiring reduction of greenhouse gas emissions from new vehicles; creation of greenhouse gas inventory and registry; and adoption of a renewable energy portfolio standard calling for 20 percent of power generation by renewable fuel by 2017. In addition, a California Climate Action Team, composed of representatives from state agencies with authority for environmental and energy matters, has been created to, among other things, evaluate and develop emission reduction measures to meet the targets and report on progress toward meeting them. Most of California’s initiatives are contained in the California Global Warming Solutions Act, enacted in September 2006. That act requires the California Air Resources Board to approve a scoping plan by Jan. 1, 2009, for achieving maximum technologically feasible and cost effective reductions in greenhouse gas emissions by 2020 and adopt regulations by Jan. 1, 2011, setting greenhouse gas emission limits applicable to individual facilities and requiring specific emissions reduction measures to achieve the target. Consistent with the measure adopted to date by other states and regional cooperative organizations, the New Jersey act focuses to a large extent on emission reduction targets, emissions monitoring and energy standards. Many aspects of the New Jersey act parallel initiatives adopted by California. First, the act sets emission reduction targets. By Jan. 1, 2020, the level of greenhouse gas emissions must be reduced to a level equal to the level of greenhouse gas emissions that occurred in 1990. By Jan. 1, 2050, the level of greenhouse gas emissions must be below 80 percent of the level established for 2006. The facilitate meeting these targets, within one year of the act’s passage the New Jersey Department of Environmental Protection is required to establish inventories of the 2006 and 1990 levels of greenhouse gas emissions. In addition, the N.J. DEP is required to establish by Jan. 1, 2009, a monitoring and reporting program for greenhouse gas emissions, pursuant to which all significant sources of such emissions will be required to monitor and report their existing emissions and the level of their emissions annually thereafter. The N.J. DEP will also be required to adopt rules regarding reporting of greenhouse gas emissions by the fossil fuel production and handling, electricity generation and gas industries. Second, by June 30, 2008, the N.J. DEP is required to prepare a report recommending the measures necessary to reduce the greenhouse gas emissions to achieve the 2020 target level and by June 20, 2010, report recommending measures necessary to achieve the 2050 target level. While the New Jersey act’s requirement is to prepare a report, rather than adopt regulations, as is the case with the California act, this deadline is two and one-half years earlier than California’s. The requirement to recommend emission reduction measures will be discussed further below. The remaining actions required by the act are assigned to the New Jersey Board of Public Utilities (BPU) and relate to promoting energy efficiency and parallel measures adopted in other states. The BPU is required to establish a disclosure form for energy suppliers regarding its mix of fuels and its greenhouse gas emissions to appear on each customer’s bill. Clearly, it is hoped that armed with this information, consumers will choose energy sources emitting lower levels of greenhouse gasses. Second, the BPU is required to adopt and “emissions portfolio standard” for energy suppliers, that shall require specified levels of renewable energy usage. The standard is also required to address means of mitigating “leakage.” The BPU is also required to develop a net metering standard for energy suppliers that will offer metering at rates that are not discriminatory to small generators of renewable forms of energy. Finally, the efficiency portfolio standard may require each utility to implement efficiency measures that reduce usage in New Jersey by 2020 to a level that is 20 percent below the usage otherwise projected. The N.J. DEP has one year from the New Jersey act’s passage to recommend measures to reduce greenhouse gas emissions sufficient to achieve a level in 2020 equal to what the level had been in 1990. This is indeed a daunting task. In this regard New Jersey, as a result of the act, will not only be a leader in the field, but will be breaking new ground in at least two respects. The act contains no guidance regarding what these measure might be or how they should be developed. The inventory of 2006 and 1990 emissions that the act requires the N.J. DEP to develop will not be completed until these recommendations are due. Consequently when identifying particular measures N.J. DEP will not have the benefit of knowing its numerical target. While the technology of greenhouse gas emission reduction is beyond the scope of this article and it an in-depth discussion of it beyond the capability of this author, suffice it to say that work has only recently begun on developing technology to capture and sequester greenhouse gasses, particularly carbon dioxide, and that such technology has not yet been demonstrated in practice to be reliable. N.J. DEP will also need to perform its evaluation without reference to regulation or guidance published by the EPA, since EPA had made a conscious decision not to designate greenhouse gasses as an air pollutant and accordingly has not developed the regulations and detailed guidance documents that it has for the “pollutants” it has designated pursuant to the federal Clean Air Act. Preparing such documents even for a more typical air pollution regulatory situation, let alone a cutting edge one such as this, is a task state environmental agencies are rarely able to take on. Except in very limited circumstances, when a state imposes an emission limitation or technology standard on a source of air pollution it does so relying on requirements developed by the EPA or a modified version of those requirements, or at the very least materials prepared by EPA provide context for the state’s selection of requirements. The prospect of New Jersey writing emission limitations or technology standards wholly on their own, without the background and context provided by EPA documentation must make facility operators in those states somewhat nervous. Depending on how regulatory practice with respect to greenhouse gas emissions evolves, however, the scenario described above may never occur. It is important to keep in mind that the New Jersey act only requires a report recommending measures to reduce greenhouse gas emissions. Certainly one of the primary purposes of the report is to influence the ongoing debate regarding how to address the pollutants thought to cause global warming. While such requirements are likely inevitable and facility operators would be wise to anticipate them, and evaluations such as will be required by the act undoubtedly accelerate their development, their actual adoption is still some time in the future. But once the EPA, in the wake of Massachusetts, turns its attention to emission reduction measures for greenhouse gasses, it may find that some of the groundwork has already been laid by New Jersey. KERMIT L. RADER is a partner in Wolf Block Shorr & Solis-Cohen’s environmental and land use practice group. His practice focuses on the environmental aspects of real estate and corporate transactions, regulatory compliance counseling and remediation issues.

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