EPA Moves to Require Greenhouse Gas Reporting

The U.S. Environmental Protection Agency (EPA) has taken the first crucial step toward creating a transparent and accountable climate change program by proposing a greenhouse gas registry. The registry would require thousands of facilities from a broad range of industries to record and report their annual emissions of greenhouse gases. A comprehensive registry is a prerequisite for any future efforts to reduce greenhouse gas emissions.

According to EPA [1], the proposed registry would cover approximately 13,000 facilities, accounting for roughly 85 to 90 percent of greenhouse gases emitted in the United States. The proposed threshold for reporting greenhouse gases is 25,000 tons per year of carbon dioxide equivalent (CO2e). Carbon dioxide is only one of at least six gases covered by the draft rule, but since each gas has a different impact on global warming, the impacts are converted into the carbon dioxide equivalent for consistency. The EPA published the proposed registry rule [2] on April 10 and is accepting public comments on the plan until June 9.

The proposal would cover many energy-intensive industry sectors such as cement production, iron and steel production, and electricity generation, among others. Emissions from cars and trucks would not be covered directly, but motor vehicle and engine manufacturers and transportation fuel suppliers would be covered. Petrochemical production facilities and refineries would also be covered. Emissions from manure management systems at the largest factory farms would be included.

EPA estimates that first-year reporting costs for the private sector would total $160 million, with annual reporting thereafter costing $127 million. EPA's proposal also provides for administrative, civil, or criminal penalties for facilities that fail to monitor or report greenhouse gas emissions under the new rule.

Benefits of Registry

As Congress moves climate change legislation [3] forward and the EPA proceeds with greenhouse gas regulations [4], a registry becomes more essential. Detailed and transparent data on emissions are crucial for efficiently implementing a cap-and-trade system, which would place a monetary value on each ton of emitted gases and is now being pushed by President Obama and leaders in Congress. A mandatory registry covering all major emitters could provide the transparency to efficiently set prices on emissions and the accountability to ensure their reduction.

Even without mandatory emissions regulations, public disclosure of emissions could serve as an incentive to reduce such pollution. The EPA's Toxics Release Inventory (TRI), which requires reporting of releases of toxic chemicals from specific facilities, has used public disclosure to drive significant reductions in toxic emissions over the years.

Data collected under this proposal might give EPA a better understanding of the relative emissions of specific industries and the distribution of emissions from individual facilities within those industries. These data could be used to evaluate what forces are driving emissions increases and what technologies are succeeding at emissions reductions.

Additionally, a greenhouse gas registry provides a baseline whereby facilities can earn credit for early emissions reductions reached before a mandatory system is implemented. A comprehensive registry of emissions also would enable EPA to use voluntary reduction programs for industries not covered by future legislation.

Missing Pieces

Even though the proposed registry rule represents a major step forward for EPA’s efforts on climate change, there are several facets noticeably absent from the current proposal. It is likely that the agency will receive comments pushing for several of these missing pieces to be addressed before moving forward.

First, the proposed registry does not include a mechanism to track greenhouse gas offsets, which are measures that reduce the amount of global warming gases in the atmosphere. Offsets are likely to play a major role in future climate change legislation. Tracking the creation and verification of offsets would be crucial to an efficient emissions trading scheme.

The proposed rule also does not require third-party certification of a facility's emissions report. Without independent verification, the market for greenhouse gases would be functioning with less certainty and accountability. The draft rule does, however, require electronic reporting, and EPA intends to use existing reporting programs where practicable – both provisions could improve the accuracy of reported data.

Manufacturers of cars and trucks would need to report emissions rates for greenhouse gases, similar to current reporting for other pollutants. However, the proposed registry would not collect data on emissions from in-use travel. Almost 30 percent of U.S. greenhouse gas emissions come from the transportation sector.

It is also notable that the proposed rule does not address how the new registry will mesh with the assortment of local, state, and regional greenhouse gas registries, some voluntary and some mandatory. The programs are widely varied in both the breadth of reporting sources and methods for tracking emissions. It is unclear if the national program will preempt these programs or if states will be encouraged to alter their existing programs to fit more readily within the new federal program.

EPA's current timetable calls for 2010 to be the first year of emissions reporting, and while efforts to reduce greenhouse gases would benefit from having several years of baseline emissions data, time is of the essence when it comes to enacting climate change mitigation policies. Leaders in Congress hope to pass climate change legislation by the end of 2009, and the final major international meeting [5] to produce a treaty to succeed the Kyoto Protocol will be held in December. It is hoped that the data from the proposed greenhouse gas registry will enhance expected U.S. mitigation policies once they are enacted; such implementation would occur over the course of several years.