Approved by the Legislative Commissioner

April 30, 2008

AN ACT CONCERNING CONNECTICUT GLOBAL WARMING SOLUTIONS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 22a-200 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2008):

As used in sections 22a-200 to 22a-200b, inclusive, as amended by this act, section 5 of this act and section 4a-67h:

(1) "Direct emissions" means emissions from sources that are owned or operated, in whole or in part, by an entity or facility, including, but not limited to, emissions from factory stacks, manufacturing processes and vents, and company owned or leased motor vehicles;

(2) "Entity" means a person, as defined in section 22a-2, that owns or operates, in whole or in part, a source of greenhouse gas emissions from a generator of electricity or a commercial or industrial site, which source may include, but not be limited to, a transportation fleet;

(3) "Facility" means a building, structure or installation located on any one or more contiguous or adjacent properties of an entity;

(4) "Greenhouse gas" means any chemical or physical substance that is emitted into the air and that the Commissioner of Environmental Protection may reasonably anticipate will cause or contribute to climate change, including, but not limited to, carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride;

(5) "Indirect emissions" means emissions associated with the consumption of purchased electricity, steam and heating or cooling by an entity or facility.

Sec. 2. Section 22a-200a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2008):

[(a) It shall be the goal of the state to reduce emissions of greenhouse gas in order to make an appropriate contribution to achieving the regional goals of reducing emissions of greenhouse gas to those levels emitted in 1990, which reduction to occur not later than January 1, 2010, and to levels ten per cent below the 1990 levels not later than January 1, 2020. The Commissioner of Environmental Protection shall consult with the Conference of New England Governors and Eastern Canadian Premiers to establish a date for the long-term regional goal of reducing the emissions of greenhouse gas by seventy-five to eighty-five per cent below 2001 levels. If the Conference of New England Governors and Eastern Canadian Premiers has not established a date for such long-term regional goal by January 1, 2007, the date for reaching such goal shall be 2050.

(b) Not later than January 1, 2005, the Governor's Steering Committee on Climate Change, established in November 2002, shall develop a multisector, comprehensive climate change action plan, with the opportunity for public comment, which plan shall contain the policies and programs necessary to achieve the state's goals for the reduction of greenhouse gas emissions by 2010 and 2020. The steering committee shall notify each member of the General Assembly of the development of such plan and of such opportunity for public comment. Not later than January 1, 2005, the steering committee shall submit, in accordance with section 11-4a, such plan to the joint standing committees of the General Assembly having cognizance of matters relating to the environment, energy, transportation and commerce. Not later than January 15, 2005, such committees shall convene a joint informational public hearing for the purpose of reviewing such plan. Not later than February 1, 2005, such committees shall meet for the purpose of consideration of endorsement of such plan. Not later than February 15, 2005, the steering committee shall submit a final plan to such committees.

(c) Not later than January 1, 2008, the steering committee shall develop an amended climate change action plan, with the opportunity for public comment, for achieving the state's contribution towards reaching the long-term regional goal established pursuant to subsection (a) of this section. The steering committee shall submit, in accordance with section 11-4a, such plan to the joint standing committee of the General Assembly having cognizance of matters relating to the environment.

(d) Not later than December 1, 2005, and annually thereafter, the Commissioner of Environmental Protection, in collaboration with the commissioners of other state agencies and the steering committee, shall submit a report to the joint standing committee of the General Assembly having cognizance of matters relating to the environment on the progress made in achieving the goals established in subsection (a) of this section and to evaluate the appropriateness of the climate change action plans developed pursuant to subsections (b) and (c) of this section in achieving such goals.]

(a) The state shall reduce the level of emissions of greenhouse gas:

(1) Not later than January 1, 2020, to a level at least ten per cent below the level emitted in 1990; and

(2) Not later than January 1, 2050, to a level at least eighty per cent below the level emitted in 2001.

(3) All of the levels referenced in this subsection shall be determined by the Commissioner of Environmental Protection.

(b) On or before January 1, 2010, and biannually thereafter, the state agencies that are members of the Governor's Steering Committee on Climate Change shall submit a report to the Secretary of the Office of Policy and Management and the Commissioner of Environmental Protection. The report shall identify existing and proposed activities and improvements to the facilities of such agencies that are designed to meet state agency energy savings goals established by the Governor. The report shall also identify policies and regulations that could be adopted in the near future by such agencies to reduce greenhouse gas emissions in accordance with subsection (a) of this section.

(c) Not later than January 1, 2012, and every three years thereafter, the Commissioner of Environmental Protection shall, in consultation with the Secretary of the Office of Policy and Management and the Governor's Steering Committee on Climate Change, report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to the environment, energy and transportation on the quantifiable emissions reductions achieved pursuant to subsection (a) of this section. The report shall include a schedule of proposed regulations, policies and strategies designed to achieve the limits of greenhouse gas emissions imposed by said subsection, an assessment of the latest scientific information and relevant data regarding global climate change and the status of greenhouse gas emission reduction efforts in other states and countries.

(d) At least one year prior to the effective date of any federally mandated greenhouse cap and trade program including greenhouse gas emissions subject to any state cap and trade requirements adopted pursuant to this section, the Commissioner of Environmental Protection and the Secretary of the Office of Policy and Management shall report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to the environment, energy and technology and transportation. Such report shall explain the differences between such federal and state requirements and shall identify any further regulatory or legislative actions needed to achieve consistency with such federal program.

Sec. 3. Section 22a-200b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2008):

[(a) The Commissioner of Environmental Protection shall work to establish a regional greenhouse gas registry for greenhouse gas emissions and a regional reporting system in conjunction with other states or a regional consortium.

(b) Not later than April 15, 2006, and annually thereafter, the owner or operator of any facility that is required to report air emissions data to the Department of Environmental Protection pursuant to Title V of the federal Clean Air Act and that has stationary emissions sources that emit greenhouse gases shall report to the regional registry direct stack emissions of greenhouse gases from such sources. The owner or operator shall report all greenhouse gas emissions in a type and format that the regional registry can accommodate.

(c) The commissioner shall consider, on an annual basis, requiring the expansion of reporting to the regional greenhouse gas registry to include, but not be limited to, other facilities or sectors, greenhouse gases, or direct and indirect emissions. A decision for or against an expansion of reporting and an explanation of such decision shall be included in the annual report required pursuant to subsection (d) of section 22a-200a.

(d) Not later than July 1, 2006, the commissioner shall provide for the voluntary reporting of emissions of greenhouse gas to the regional greenhouse gas registry by entities and facilities that are not required to submit information pursuant to subsections (b) and (c) of this section but which do so on a voluntary basis. The greenhouse gas emissions reported shall be of a type and format that the regional greenhouse gas registry can accommodate.

(e) If a regional greenhouse gas registry is not developed and implemented by April 15, 2007, the commissioner shall evaluate the feasibility of establishing and administering a state-wide greenhouse gas registry for the collection of emissions data pursuant to subsections (b) and (c) of this section. If a regional greenhouse gas registry is developed after the commissioner establishes a state-wide greenhouse gas registry, the reporting requirements in subsections (b) and (c) of this section shall revert to the regional greenhouse gas registry in accordance with said subsections (b) and (c).

(f) Not later than July 1, 2006, and triennially thereafter, the commissioner shall publish a state greenhouse gas emissions inventory that includes comprehensive estimates of the quantity of greenhouse gas emissions in the state for the last three years in which data is available.]

(a) The Commissioner of Environmental Protection shall, with the advice and assistance of a nonprofit association organized to provide scientific, technical, analytical and policy support to the air quality and climate programs of northeastern states: (1) Not later than December 1, 2009, publish an inventory of greenhouse gas emissions to establish a baseline for such emissions for the state and publish a summary of greenhouse gas emission reduction strategies on the Department of Environmental Protection's Internet web site, (2) not later than July 1, 2010, publish results of various modeling scenarios concerning greenhouse gas emissions, including, but not limited to, an evaluation of the potential economic and environmental benefits and opportunities for economic growth based on such scenarios, (3) not later than July 1, 2011, analyze greenhouse gas emission reduction strategies and, after an opportunity for public comment, make recommendations on which such strategies will achieve the greenhouse gas emission levels specified in section 22a-200a, as amended by this act, and (4) not later than July 1, 2012, and every three years thereafter, develop, with an opportunity for public comment, a schedule of recommended regulatory actions by relevant agencies, policies and other actions necessary to show reasonable further progress towards achieving the greenhouse gas emission levels specified in section 22a-200a, as amended by this act.

[(g)] (b) The commissioner may adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this section. Nothing in section 4a-67h, 22a-200, as amended by this act, 22a-200a, as amended by this act, or this section shall limit a state agency from adopting any regulation within its authority in accordance with the provisions of chapter 54.

Sec. 4. Section 22a-200c of the 2008 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2008):

(a) The Commissioner of Environmental Protection shall adopt regulations, in accordance with chapter 54, to implement the Regional Greenhouse Gas Initiative.

(b) The Department of Environmental Protection, in consultation with the Department of Public Utility Control, shall auction all emissions allowances and invest the proceeds on behalf of electric ratepayers in energy conservation, load management and Class I renewable energy programs. In making such investments, the Commissioner of Environmental Protection shall consider strategies that maximize cost effective reductions in greenhouse gas emission. Allowances shall be auctioned under the oversight of the Department of Public Utility Control and the Department of Environmental Protection by a contractor or trustee on behalf of the electric ratepayers.

(c) The regulations adopted pursuant to subsection (a) of this section may include provisions to cover the reasonable administrative costs associated with the implementation of the Regional Greenhouse Gas Initiative in Connecticut and to fund assessment and planning of measures to reduce emissions, [and] mitigate the impacts of climate change and to cover the reasonable administrative costs of state agencies associated with the adoption of regulations, plans and policies in accordance with section 22a-200a, as amended by this act. Such costs shall not exceed seven and one-half per cent of the total projected allowance value. Such regulations may also set aside a portion of the allowances to support the voluntary renewable energy provisions of the Regional Greenhouse Gas Initiative model rule and combined heat and power.

(d) Any allowances or allowance value allocated to the energy conservation load management program on behalf of electric ratepayers shall be incorporated into the planning and procurement process in sections 16a-3a of the 2008 supplement to the general statutes and 16a-3b of the 2008 supplement to the general statutes.

Sec. 5. (NEW) (Effective October 1, 2008) In order to achieve the emission reduction requirements established in section 22a-200a of the general statutes, as amended by this act, the state shall implement the following:

(1) The Department of Environmental Protection shall monitor the development of low-carbon fuel standards in other states or jurisdictions, evaluate the potential of any such standard to achieve net carbon reductions, and assess whether the analytical framework used to determine the carbon benefit measures the full lifecycle of greenhouse gas emissions, including direct and indirect emissions of greenhouse gas caused by changes in land use or other factors. Such assessment shall include, but not be limited to, the modeling tools developed by the California Air Resources Board and the United States Environmental Protection Agency. The analytical framework used to measure actual lifecycle greenhouse gas emissions for fuel shall include all stages of fuel and feedstock production, delivery and use of the finished fuel to the ultimate consumer, and shall adjust the mass values for all greenhouse gas emissions relative to such emissions' relative global warming potential.

(2) The Department of Transportation shall, within available appropriations, continue to investigate the potential for improvements to the state's transportation system that will reduce greenhouse gas emissions and coordinate with the northeastern states on regional strategies to incorporate greenhouse gas emission reductions into regional transportation planning, including, but not limited to, high speed rail, light-rail passenger service and freight rail service within the northeast region.

(3) The Department of Environmental Protection may work with interested states and Canadian provinces to develop and implement market-based compliance mechanisms to achieve the greenhouse gas levels and limits established by section 22a-200a of the general statutes, as amended by this act, including, but not limited to, cap and trade programs.

Sec. 6. Section 22a-201c of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2008):

(a) On and after January 1, 2007, the Commissioner of Motor Vehicles shall charge a fee of five dollars, in addition to any other fees required for such registration, for each new motor vehicle. Said fee may be identified as the "greenhouse gas reduction fee" on any registration form, or combined with the fee specified by subdivision (3) of subsection (k) of section 14-164c of the 2008 supplement to the general statutes. All receipts from the payment of such fee shall be deposited into the federal Clean Air Act account established pursuant to section 14-49b.

(b) The Commissioner of Environmental Protection may draw upon not more than sixty per cent of the funds deposited into said account pursuant to subsection (a) of this section to implement the requirements of section 22a-174, as amended by this act, sections 22a-200a to 22a-200c, inclusive, as amended by this act, section 5 of this act, and sections 22a-201a and 22a-201b, and the Commissioner of Motor Vehicles may draw upon not more than forty per cent of the funds deposited into said account pursuant to subsection (a) of this section to implement the requirements of sections 22a-201a and 22a-201b.

Sec. 7. (NEW) (Effective October 1, 2008) (a) Not later than January 1, 2009, the Governor's Steering Committee on Climate Change shall establish a subcommittee which may be composed of, but not be limited to, members of the Governor's Steering Committee on Climate Change. Such subcommittee shall (1) assess the impacts of climate change on state and local infrastructure, public health and natural resources and habitats in the state; (2) develop recommendations and plans that, if adopted, would enable state and local government to adapt to such impacts; and (3) provide technical assistance to implement such recommendations and plans.

(b) On or before December 31, 2009, the subcommittee shall report to the Governor's Steering Committee on Climate Change on its assessment of current state and private programs and research concerning the projected impact of climate change in the state on: (1) Infrastructure, including, but not limited to, buildings, roads, railroads, airports, dams, reservoirs, and sewage treatment and water filtration facilities; (2) natural resources and ecological habitats, including, but not limited to, coastal and inland wetlands, forests and rivers; (3) public health; and (4) agriculture. The subcommittee may conduct one or more public hearings regarding such assessment and regarding the recommendations for further assessments of impacts on the resources specified in subdivisions (1) to (4), inclusive, of this subsection.

(c) On or before July 1, 2010, the subcommittee shall report to the Governor and the General Assembly, in accordance with the provisions of section 11-4a of the general statutes, containing the results of its assessment in accordance with subsection (b) of this section concerning its recommendations for changes to existing state and municipal programs, laws or regulations to enable municipalities and natural habitats to adapt to harmful climate change impacts and to mitigate such impacts.

Sec. 8. Subsection (b) of section 22a-174 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(b) The commissioner shall have the power to [employ] (1) enter into contracts with technical consultants, including, but not limited to, nonprofit corporations created for the purpose of facilitating the state's implementation of multistate air pollution control programs, for special studies, advice and assistance; to consult with and advise and exchange information with other departments or agencies of the state; and (2) serve on the board of directors of a nonprofit corporation, including, but not limited to, a nonprofit corporation created for the purpose of facilitating the state's implementation of multistate air pollution control programs.

The following fiscal impact statement and bill analysis are prepared for the benefit of members of the General Assembly, solely for the purpose of information, summarization, and explanation, and do not represent the intent of the General Assembly or either chamber thereof for any purpose:

OFA Fiscal Note

State Impact: See below

Municipal Impact: See below

Explanation

Section 1 of the bill requires the Department of Environmental Protection (DEP) to determine all levels of greenhouse gas (GHG) emissions. There is no fiscal impact associated with this section.

Section 2 requires state agencies that are members of the Governor's Steering Committee on Climate Change, and DEP in consultation with the Office of Policy and Management (OPM), to submit various reports. There is no fiscal impact associated with these requirements.

Section 3 would result in a cost to DEP of $350,000 in FY 09 and FY 10 for annual contractual services with the Northeast States for Coordinated Air Use Management (NESCAUM) to assist DEP in publishing an inventory of GHG emissions in effort to establish a baseline for these emissions. The contractor will also assist DEP in publishing a summary of strategies to reduce GHG emissions on DEP's website.

Section 3 would also result in a cost of $120,250 in FY 09 and $159,900 in FY 10, including fringe benefits, to DEP's EQ fund for two positions related to work with NESCAUM to accomplish these tasks. One staff planning specialist would be required to oversee and manage the NESCAUM contract and oversee climate planning efforts for the state agencies required to report to DEP and OPM under the bill as amended. Additionally, one staff position would be required to provide assistance directly to state agencies in formulating plans and implementing strategies to make progress towards the targets as specified in the bill as amended.

Section 4 allows certain funds to cover the reasonable costs to various state agencies associated with regulations, plans, and policies related to the requirements under the bill. Since the bill does not define what is considered “reasonable”, it is uncertain what impact this will have upon the various state agencies.

Section 5: 1) requires DEP to monitor the development of low carbon fuel standards in other states, 2) requires DEP to evaluate the potential of this standard to achieve net carbon reductions, 3) requires DEP to assess the framework to determine if it fully measures the life cycle of GHG emissions, and 4) allows DEP to work with other states to develop and implement certain compliance mechanisms. There is no fiscal impact associated with these requirements since DEP currently performs much of these tasks.

Section 5 also requires the Department of Transportation (DOT) to investigate potential improvements to the state's transportation system, especially within the public transit arena that will promote the reduction of greenhouse gas emissions. DOT is also required to coordinate with other states in New England and New York on regional strategies to make GHG emission reduction a goal in regional transportation planning.

The requirement that DOT perform these tasks within available appropriations will likely result in one of three outcomes: 1) DOT will proceed with the investigation and planning, and will require a deficiency appropriation during FY 09; 2) DOT will delay the investigation and planning pending the approval of additional appropriations to meet this mandate in future fiscal years; or 3) DOT will shift administrative resources from other department priorities, thereby impacting existing departmental programs.

Section 501 allows funds from the Department of Motor Vehicles (DMV) “greenhouse gas reduction fee” to be used to cover the certain costs required under the bill. There is currently about $500,000 available in this account to cover certain costs.

Section 502 requires the Governor's Steering Committee on Climate Change to establish a subcommittee to perform various functions related to climate change. There is no fiscal impact associated with this requirement.

Lastly, Section 503 permits DEP to enter into contracts with nonprofit corporations that facilitate the state's implementation of multistate air pollution control programs and allows DEP membership on its board of directors. Since DEP already works with such nonprofits, there is no fiscal impact associated with this section.

House “A” removes many requirements that various state agencies adopt regulations and makes other various changes. The fiscal impacts of these changes have been noted above.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation. There may also be significant costs to DEP in the outyears once the majority of reporting, planning, and evaluation work is completed. There also may be costs to various state agencies in the outyears to comply with provisions of the reports, plans, and policies developed in the preliminary planning phases to reduce the GHG emissions of the state.

OLR Bill Analysis

sHB 5600 (as amended by House “A”)*

AN ACT CONCERNING CONNECTICUT GLOBAL WARMING SOLUTIONS.

SUMMARY:

This bill mandates reductions in state greenhouse gas (GHG) emissions and makes changes designed to help the state achieve these reductions.

Current law sets state GHG emission reduction goals for the years 2010, 2020, and 2050. The bill requires the state to meet its 2020 goal and a modified 2050 goal.

It requires certain state agencies to identify (a) activities and facility improvements to meet state energy saving goals and (b) policies and regulations they may adopt to help meet the emission limits. It also requires the Department of Environmental Protection (DEP) commissioner, with the help of a regional nonprofit air quality and climate organization, to publish a baseline inventory of GHG emissions and recommend strategies, regulatory actions, and policies to achieve the necessary emission reductions.

The bill requires the Governor's Steering Committee on Climate Change (steering committee) to create a subcommittee to assess the impact of climate change on the state and recommend to the governor and legislature ways the state can adapt to, and mitigate, harmful impacts. It authorizes the DEP commissioner to contract with, and serve on the board of, a nonprofit organization created to help the state implement a multi-state air pollution control program.

It allows the commissioner to use funds from the Greenhouse Gas Reduction Fee to implement air pollution control requirements, as well as the bill's greenhouse gas reduction requirements.

It also (1) requires the Department of Transportation (DOT) to continue to investigate, within available appropriations, the potential for improving the state transportation system in ways to reduce GHG emissions; (2) requires DEP to keep abreast of low carbon fuel standards in other states and elsewhere; (3) allows proceeds from the auction of GHG emission allowances to be used to cover certain state agency administrative costs; (4) authorizes DEP to work with other states and Canadian provinces to develop market-based compliance mechanisms to achieve the GHG limits, including a cap-and-trade program; (5) changes reporting requirements, and (6) makes other changes.

*House Amendment “A” makes a number of changes in the underlying bill. Among other things, it eliminates provisions (1) requiring the DEP commissioner to establish electric industry emissions limits, (2) requiring the Office of Policy and Management (OPM) secretary to develop a model municipal smart growth code, and (3) creating more stringent building construction energy standards. It also restores existing law requiring certain major construction and renovation projects to meet green building standards; adds provisions on the steering committee subcommittee, commissioner's contracting authority, and greenhouse gas reduction fee; and makes other changes.

EFFECTIVE DATE: October 1, 2008, except the provisions concerning the DEP commissioner's contracting authority, which are effective upon passage.

SETTING GHG EMISSION LIMITS

Emission Requirements

Current law sets goals of reducing state GHG emissions to (1) 1990 levels by January 1, 2010 and (2) 10% below 1990 levels by January 1, 2020. It sets a default reduction goal of between 75% and 85% below 2001 levels by 2050. The bill eliminates the 2010 goal and instead requires the state to reduce its GHG emissions to (1) at least 10% below 1990 levels by January 1, 2020 and (2) at least 80% below 2001 levels by January 1, 2050. It requires the DEP commissioner to determine these levels.

Reporting Requirements

The bill requires, by January 1, 2010 and every other year thereafter, state agencies that are members of the steering committee to report to OPM and DEP. The report must identify (1) existing and proposed activities designed to meet state agency energy-savings goals the governor establishes, (2) improvements to agency facilities designed to meet these goals, and (3) policies and regulations agencies may adopt to meet the bill's GHG emissions limits. Steering committee members include the commissioners of DEP, DOT and the departments of Administrative Services and Public Utility Control; the chairperson of the Connecticut Clean Energy Fund; and the OPM under secretary. The departments of Revenue Services and Social Services join these agencies on the climate change coordinating committee, which staffs the steering committee.

By January 1, 2012 and every three years thereafter, the DEP commissioner, in consultation with the OPM secretary and the steering committee, must report to the Environment, Energy, and Transportation committees on the quantifiable emissions reductions achieved under the bill. The report must include a schedule of proposed regulations, policies, and strategies designed to achieve the GHG limits; an assessment of the latest scientific information and relevant data on global climate change; and the status of GHG emissions in other states and countries.

The bill requires, at least one year before the effective date of any federally mandated GHG cap and trade program that covers GHG emissions subject to state cap and trade requirements, the DEP commissioner and OPM secretary to explain the differences between the federal and state requirements in a report to the Environment, Energy, and Transportation committees. The report must identify any further regulatory or legislative actions needed to become consistent with the federal program.

The bill eliminates a requirement that DEP, in collaboration with other state agencies and the steering committee, submit an annual progress report to the Environment Committee.

GHG Emissions Reporting

Current law requires the DEP commissioner to work with other states or a regional consortium to establish a regional GHG registry and reporting system. It requires owners and operators of certain stationary emission sources (Title V sources) to annually report their emissions to the registry. It requires the commissioner to (1) annually consider expanding the reporting requirements to other facilities and sectors and (2) to provide for voluntary reporting by these entities and facilities. It also requires her to evaluate the feasibility of establishing a statewide GHG registry, and to publish a GHG emission inventory every three years.

The bill instead requires the commissioner, with the advice and assistance of a nonprofit association organized to provide scientific, technical, analytical, and policy support to northeastern state air quality and climate programs (apparently the Northeast States for Coordinated Air Use Management, or NESCAUM) to:

1. by December 1, 2009, publish (a) an inventory of GHG emissions to establish a state GHG emissions baseline and (b) a summary of GHG emission reduction strategies on DEP's website;

2. by July 1, 2010, publish results of various modeling scenarios concerning GHG emissions, including an evaluation of potential economic and environmental benefits and economic growth opportunities based on these scenarios;

3. by July 1, 2011, analyze GHG emission reduction strategies, and after allowing for public comment, recommend strategies to achieve the GHG emission level reductions the bill requires; and

4. by July 1, 2012, and every three years thereafter, develop, with an opportunity for public comment, a schedule of recommended regulatory actions by relevant agencies, policies, and other actions needed to show reasonable further progress towards achieving the limits.

As under current law, the commission may adopt regulations to implement the bill.

Use of Emissions Allowances

Connecticut is a member of RGGI, a multistate initiative to reduce power plant carbon dioxide emissions in the northeast. The law requires DEP to adopt regulations to implement the RGGI cap-and-trade program (see BACKGROUND), and, in consultation with DPUC, to auction all emission allowances, investing the proceeds on behalf of electric ratepayers in energy conservation, load management, and Class I renewable energy programs.

By law, DEP regulations may include provisions to (1) cover reasonable administrative costs associated with implementing RGGI, in Connecticut, (2) fund assessment and planning of emissions reduction measures, and (3) mitigate the impact of climate change. The bill authorizes these regulations to also include provisions covering the reasonable administrative costs state agencies incur in adopting regulations, plans, and policies to achieve the GHG emissions limits. By law, these costs cannot exceed 7.5% of the total projected value of the emissions allowances DEP auctions off.

LOW CARBON FUEL STANDARD

The bill requires DEP to monitor the development of low carbon fuel standards in other states and jurisdictions; evaluate the potential of these standards to achieve net carbon reductions; and assess whether the analytical framework used to determine the carbon benefit measures the full lifecycle of GHG emissions, including emissions of GHG caused by changes in land use and other factors. (Lifecycle analysis examines the full range of environmental impact of a product or service.) The assessment must include the modeling tools developed by the California Air Resources Board and U.S. Environmental Protection Agency (EPA). This analytical framework must (1) include all stages of fuel and feedstock production, delivery to, and use of the finished fuel to the ultimate consumer, and (2) adjust the mass values for all GHG emissions relative to their global warming potential.

DOT must, within available appropriations, continue to investigate the potential of improving the state transportation system to reduce GHG emissions and coordinate with other northeastern states on regional strategies to incorporate GHG emission reductions into regional transportation planning, including high speed rail, light-rail passenger service, and freight rail services in the northeast.

CLIMATE CHANGE IMPACTS SUBCOMMITTEE

The bill requires, by January 1, 2009, the steering committee to create a subcommittee to (1) assess climate change impact on state and local infrastructure, public health, and natural resources and habitats; (2) prepare recommendations and plans to enable state and local governments to adapt to the impact; and (3) provide technical assistance to implement the recommendations and plans. Steering committee members may serve on the subcommittee. By December 31, 2009, the subcommittee must report to the steering committee on its assessment of current state and private programs and its research on the impact of climate change on state:

1. infrastructure, including buildings, roads, railroads, airports, dams, reservoirs, and sewage treatment and water filtration plants;

2. natural resources and ecological habitats, including coastal and inland wetlands, forests, and rivers;

3. public health; and

4. agriculture.

The subcommittee may hold public hearings on its assessment and on recommendations for further assessments of the impact of these resources. It must report to the governor and legislature, by July 1, 2010, on the results of its assessment and its recommendations for changes to state and municipal programs, laws, or regulations to enable municipalities and natural habitats to adapt to and mitigate harmful climate change impact.

DEP COMMISSIONER'S AUTHORITY

Current law authorizes the commissioner to employ technical consultants for special studies, advice, and assistance. The bill authorizes her to enter into contracts with these consultants, including contracts with nonprofit corporations created to help the state implement a multi-state air pollution control program. It authorizes her to also serve on the board of directors of such a nonprofit corporation. It is unclear if this would violate the state Ethics Code's prohibition against public officials engaging in any business, employment, transaction, or professional activity that substantially conflicts with the proper discharge of their duties, employment in the public interest, or responsibilities as prescribed by law (CGS § 1-84).

USE OF GREENHOUSE GAS REDUCTION FEE

By law, the Department of Motor Vehicles commissioner must charge a $5 “greenhouse gas reduction fee” for each new motor vehicle sold on and after January 1, 2007. The fee must be deposited in the Clean Air Act account. The DEP commissioner may use up to 60% of this money to implement the requirements of the GHG labeling program for new motor vehicles and a GHG public education program. The bill allows the commissioner to also use the fee revenue to implement air pollution control requirements and the bill's greenhouse gas emission reduction, low carbon fuel standard, and DOT study requirements.

BACKGROUND

Climate Change Action Plan and Governor's Steering Committee on Climate Change

The Conference of New England Governors and Eastern Canadian Premiers, representing the six New England states and the provinces of New Brunswick, Newfoundland, Labrador, Nova Scotia, and Prince Edward Island, issued a Climate Change Action Plan in 2001 that recommended short- and long-term goals to reduce greenhouse gas emissions. The governor subsequently appointed a steering committee to organize a discussion among businesses, nonprofit organizations, state and local government agencies, and academic institutions of ways to reduce greenhouse gas emissions.

Regional Greenhouse Gas Initiative

Connecticut is a member of RGGI, a multistate initiative to design and implement a flexible, market-based, cap-and-trade program to reduce power plant carbon dioxide emissions in the northeast United States. Connecticut was one of seven states to agree in 2005 to a CO₂ cap-and-trade program for all fossil-fuel electric generating units of 25 megawatts or more. The program begins January 1, 2009.

Each state will allocate allowances up to the amount of its emission budget, with each allowance allowing a regulated source to emit one ton of CO₂. Under RGGI, instead of giving allowances directly to electric generators for free, states will sell a significant portion through a regional auction, or other means. By law, Connecticut must auction all emission allowances and invest the proceeds on behalf of electric ratepayers in energy conservation, loan management, and class I renewable energy programs. The state may use up to 7.5% of the total projected allowance value for reasonable administrative costs of implementing RGGI (CGS § 22a-200c).

Cap-and-Trade Program

Under a cap-and-trade program, states set the total amount of carbon dioxide emissions to be allowed from all sources (emissions cap). The emissions allowed under the new cap are then divided into individual permits that represent the right to emit that amount. Companies are free to buy and sell permits in order to continue operating in the most profitable manner available to them. Thus, companies that are able to reduce emissions at a low cost can sell their extra permits to companies facing high costs (which will generally prefer to buy permits rather than make costly reductions themselves).

Title V Sources

DEP issues Title V operating permits to power plants and other major sources of air pollution subject to the federal Clean Air Act. Permittees must ensure compliance with pollution control requirements. According to DEP, about 126 Title V facilities report to it.

Legislative History

On April 3, the Public Safety Committee reported a substitute bill that eliminated (1) current law requiring certain construction and renovation projects to meet green building standards and (2) a provision prohibiting issuance of certificates of occupancy for new construction and major renovation projects that do not meet the bill's new energy standards.

COMMITTEE ACTION

Environment Committee

Joint Favorable Substitute

Public Safety and Security Committee

Joint Favorable Substitute

Appropriations Committee

Joint Favorable