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Virginia Begins Development of Cap-and-Trade Program for Electric Power Sector

On May 16, 2017, Virginia’s Governor Terry McAuliffe signed Executive Directive 11 (the “Directive”), which directs Virginia’s Department of Environmental Quality (“DEQ”) to develop regulations to reduce greenhouse gas (“GHG”) emissions from the power sector.  Notably, the Directive requires DEQ to develop a program that is “trading-ready,” with market-based mechanisms capable of linking with other jurisdictions.

The Directive builds on Executive Order 57, which Governor McAuliff signed in June, 2016, and which directed Virginia’s Secretary of Natural Resources to convene a working group and recommend mechanisms for reducing GHG emissions in Virginia.  The working group held six meetings during 2016 and early 2017, and issued its final report on May 12, 2017.  The report evaluates various climate change-related risks and mitigation options, and states that “it is important and necessary that Virginia work through a regional model, like the established and successful [Regional Greenhouse Gas Initiative (“RGGI”)], in order to both achieve lower compliance costs and address the interstate nature of the electric grid.”

While no specific reduction target was set by the Directive, it instructs the DEQ to design a program containing “a corresponding level of stringency to limits on carbon dioxide emissions imposed in other states with such limits.” By way of comparison, California’s cap-and-trade program has a goal of reducing economy-wide GHG emissions 40% below 1990 levels by 2030, while Massachusetts’ Global Warming Solutions Act targets reductions corresponding to 25% below 1990 levels by 2020 and 80% below 1990 levels by 2050.  Similarly, RGGI, a cap and trade program limited to the electric power sector, reduces its GHG emissions cap by 2.5% annually. 

The Virginia DEQ must propose its new GHG regulations by December 31, 2017, with a public comment and participation period to follow. Virginia’s gubernatorial election is taking place on November 7, 2017, and Governor McAuliffe is not eligible for reelection, which may influence both the pace and nature of the regulatory process.  But if new regulations are developed and adopted—and are not blocked or rescinded through litigation or by a subsequent administration—Virginia could very well be the next state to adopt a cap-and-trade program to reduce GHG emissions.

© 2020 Beveridge & Diamond PC

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About this Author

David M. Friedland Air Pollution Attorney Beveridge & Diamond Washington, DC
Principal

David’s practice touches every aspect of the regulation of air pollution under the Clean Air Act and state and local air pollution statutes and regulations.

On the regulatory side, he has helped companies and trade associations prepare comments on scores of proposed rules including revisions to the ozone and particulate matter NAAQS, several rounds of PSD/NSR regulations (e.g., the WEPCO rule in 1992, the NSR Reform rule in 2002, the equipment replacement rule in 2003, and the Duke hourly rate rule in 2006), numerous MACT standards (e.g., the boiler, commercial and industrial solid...

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Brook Detterman Environmental Litigation Attorney Beveridge & Diamond Boston, MA
Principal

Brook's practice focuses on climate change, renewable energy, and environmental litigation.

Brook helps his clients to navigate domestic and international climate change programs, develop renewable energy projects, and generate carbon offsets.  He helps his clients to negotiate, structure, and implement transactions related to carbon offsets and renewable energy, and works with clients during all phases of renewable energy and carbon offset project development.  Brook also represents clients during complex environmental litigation, having served as litigation and appellate counsel during dozens of proceedings in state and federal courts across the country. 

Prior to joining the firm, Brook was an associate in the environmental department of a large international law firm.

Brook served as a law clerk at the U.S. Department of Justice, Environment and Natural Resources Division, where he worked on a range of legal issues arising under federal environmental law, including Clean Water Act (CWA) wetlands jurisdiction, liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), Resource Conservation and Recovery Act (RCRA) compliance, and National Environmental Policy Act (NEPA) requirements.

Brook also maintains an active pro bono practice, counseling individuals and non-profit entities on a range of legal matters in Massachusetts.

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