REC Tracking Systems: A Cost-Effective Means of Clean Power Plan Compliance

The Obama administration Environmental Protection Agency's (EPA) Clean Power Plan gives states broad leeway in meeting a national target of reducing greenhouse gas emissions (GHGs) from existing coal-fired power plants 30 percent from 2005 levels by 2030. One pathway is to bring more renewable energy generation capacity online.

Businesses instinctively deride stricter environmental regulations, claiming that the additional costs of regulatory compliance will constrain economic growth, raise prices for consumers and reduce their competitiveness. As numerous studies have shown, that's the case only if businesses limit the scope of the analysis by excluding the costs to human health and ecosystems as encapsulated in broader economic sustainability metrics such as natural capital accounting, as well as by ignoring economic and job growth in other sectors that can capitalize on the new regulations.

Moreover, as highlighted in a report from the Center for Resource Solutions (CRS) and the Regulatory Assistance Project (RAP), a tracking and reporting mechanism that's already in wide use can provide a cost-effective means for U.S. states to help assure compliance with the Clean Power Plan: the information systems used to track and report on renewable and solar renewable energy certificates (RECs and SRECs).

Clean Power Plan blowback

As expected, it didn't take long for the coal industry and coal-friendly U.S. states to challenge the EPA's Clean Power Plan in U.S. courts. Twelve states sued the EPA this past week, arguing that the proposed new regulations are illegal because existing power plant emissions are already regulated under another section of the Clean Air Act.

The latest legal challenge to the Clean Power Plan – filed in the U.S. Court of Appeals for the District of Columbia by state attorney generals in Alabama, Indiana, Kansas, Kentucky, Louisiana, Nebraska, Ohio, Oklahoma, South Dakota, South Carolina, West Virginia and Wyoming – comes on the heels of a lawsuit filed six weeks ago by Murray Energy Corp., the nation's largest privately held coal mining company.

Nine states joined Murray Corp.'s lawsuit. Claiming that the Clean Power Plan would cause “real harm” to their economies, seven of the nine also are party to the lawsuit filed with the U.S. District Court of Appeals in D.C.

Such claims as a rule ignore the economic and job stimulus compliance with the Clean Power Plan would create. They also ignore the long-term social, environmental and economic benefits cleaner air, less land and water pollution, and lower GHG emissions would have on the U.S. economy and society for this and future generations.

Sensible, cost-effective Clean Power Plan compliance

Finding cost-effective ways of Clean Power Plan compliance by making use of existing technology and information systems makes good sense all around. As CRE and RAP note in Tracking Renewable Energy for the U.S. EPA's Clean Power Plan: “Renewable energy is one of the four main building blocks outlined in the EPA's Clean Power Plan, and states are likely to rely upon the production of renewable energy as part of their efforts. To control carbon in the electric sector."

"The REC tracking systems already in use in states across the country “hold promise as an enabler of 111(d) compliance with renewable resources such as solar and wind generation...When used according to basic protocols, these systems can support the ability of every state to comply with federal carbon standards,” the report authors continue.

Action on the part of state regulators, who “have broad authority to develop the policies and requirements that are needed to tap the full potential of existing REC tracking systems” is the key to making this happen.

In their paper, CRE and RAP explore and elaborate how renewable energy is accounted for and tracked via these REC tracking systems and how they may make use of these to assure Clean Power Plan compliance.

The full report is available free to the public.

*Image credits: 1) First Energy Mansfield Ohio coal power plant via Shutterstock; 2) First Solar/NRG