The potential stringency of EPA’s performance standard is linked to the universe of emission reduction measures available to facilities. A source-based model limits the stringency of EPA’s performance standards because existing facilities may only consider within-the-fence-line emission-reducing measures. In contrast, under a system-based approach, EPA may promulgate performance standards that require greater emission reductions because existing facilities may consider a wider range of emission-reducing options.
EPA’s performance standard is by definition required to be the best system of emission reduction. This begs the question of the permissible scope of measures EPA may consider in reaching a BSER determination. It’s quite clear that a system-based approach, if lawful, constitutes BSER because it provides for not only source-based but also beyond-the-fence-line measures. There will be available more economically efficient measures for reducing carbon emissions simply because a greater number of options are on the table. Opponents of a system-based approach argue the BSER determination is limited to source-based measures in part because EPA operated under such a model during the 1970s. Further, absent express Congressional intent, EPA’s regulatory authority should be narrowly interpreted.
In contrast, proponents of a system-based approach contend nothing in the plain language of Section 111 suggests Congress intended to cabin EPA’s decision making to source-based considerations. Moreover, system-based advocates argue the integrated nature of the energy grid prevents accurate assessment of emissions impacts and costs of pollution control equipment under a source-based model.
For instance, if Plant X installs pollution control technology that lowers emissions while also increasing cost per unit of energy, demand from Plant X will likely drop. However, if Plant Y does not install comparable pollution control technology, its demand will likely increase because its cost per unit of energy remains stable. Furthermore, Plant Y very well may produce more emissions per unit of energy generated as compared to Plant X. Consequently, the net emissions reduction achieved by Plant X installing pollution control technology actually would be less than the figure provided by a source-based calculation. This is because a source-based model does not account for emissions impacts taking place outside of a particular power plant. In contrast, a system-based approach would account for these types of hidden cost-benefit impacts in the energy marketplace, and therefore would provide a more accurate evaluation of emissions reductions.
Tags: climate action plan, coal-fired power plants, EPA regulations
