Minnesota puts teeth into carbon-reduction policy

As governors and presidential candidates ballyhoo their embrace of broad measures to reduce greenhouse-gas emissions, Minnesota is quietly developing a regulatory policy that would make it a national leader in requiring industries seeking air-pollution permits to demonstrate how they would reduce emissions linked to climate change.
 
Over the past several weeks, Minnesota Pollution Control Agency Commissioner Brad Moore has been putting teeth into an emerging policy that could be sweeping in its application.
 
The pollution-reduction push, Moore said flatly, is being done "because that's the policy of this state." He cited the 2007 Next Generation Energy Act signed by Gov. Tim Pawlenty after it passed by a broad bipartisan majority in the Legislature, and he also referred to recommendations by a Pawlenty-appointed Climate Change Advisory Committee to develop ways to meet the law's carbon-reduction goals.

Under the MPCA plan, being described as a "work in progress," anyone seeking an air-pollution permit would have to show how it would apply best-known technologies and other strategies to ensure the least possible emissions of greenhouse gases. 
 

 
Not limited to applicant
But the review wouldn't be limited to emissions from the permit applicant, explained David Thornton, MPCA's assistant commissioner for air policy. 
 
Thornton used the example of a taconite-processing plant that buys electric power for its operations. In that case, Thornton said, the MPCA would apply the policy to the power source that generates electricity in a coal-fired boiler that emits greenhouse gases. 
 
The new policy has already been applied. Last week, the MPCA's Citizen Board required that Agassiz Energy's proposed ethanol plant near Erskine, Minn., go through a full environmental review (a first for an ethanol plant in Minnesota) in major part because of concern over emissions from a coal-fired energy source. 
 
And the new policy will almost certainly affect a lawsuit by the Minnesota Center for Environmental Advocacy (MCEA) that is challenging state permits issued last fall to Minnesota Steel Industries for its large taconite mine and steel mill near Nashwauk, Minn.
 
In that legal action, MCEA said the Minnesota Department of Natural Resources (DNR) "committed a major error" by failing to consider effects of emissions linked to climate change. The lawsuit notes that Minnesota Steel's operations would require 450 megawatts of electric power that would annually spew over 5 million tons of pollutants. 
 
"We don't know how our policy will affect that lawsuit," Thornton said.  "I guess the court will tell us." 
 
Thornton added that court action in other national cases also prompted MPCA's new policy. One was a U.S. Supreme Court ruling that said carbon emissions are pollutants that should be regulated, something that the U.S. Environmental Protection Agency (EPA) has stubbornly resisted. And EPA's refusal promoted 17 states, including Minnesota, to file a lawsuit to force EPA to act. 
 
Action on several fronts
The MPCA carbon-reduction policy, which is emerging without the kind of media show that accompanied the announcement of similar policies in Massachusetts and California, comes as final recommendations of the Minnesota Climate Change Advisory Group are being sent out for public comment. 
 
It also comes as Minnesota and six other states in the Midwest Governors' Conference are undertaking a series of meetings in Chicago to develop a regional "cap and trade" compact. Under similar systems adopted in Europe, a regional "cap" on greenhouse emissions would be established and polluters could buy "trade" pollution credits that over time would become more and more expensive, forcing reduction strategies in a kind of free-market system. 
 
The regional "cap and trade" policy is to be developed by next November. Pending legislation by Sen. Ellen Anderson, DFL-St. Paul, and Rep. Kate Knuth, DFL-Blaine, would involve legislative leaders in any regional policy. 
 
MPCA's new policy direction is the second positive sign that environmental advocates have seen from state regulators. Last December, the Minnesota Public Utilities Commission (PUC) voted to require electrical utilities to apply a higher cost — about $9 per ton — to carbon emissions when calculating costs of new power plants.

Other sources become more attractive
By applying the higher carbon cost, alternative energy sources like wind and solar become more financially attractive. But it also was an attempt by the PUC to set a carbon price that could be used in an eventual "cap and trade" system.  
 
The emerging MPCA policy is turning heads for several reasons. 
 
First, there is no state policy that requires any agency to actually put carbon-reduction policies in place. Moore is moving on his own. 
 
Second, the Pawlenty administration has been conspicuously timid in embracing recommendations of its own Climate Change Advisory Group. Earlier this year, a joint "preliminary" position announced by the Department of Commerce, either ignored or took an arms-length approach to carbon-reduction actions to meet stringent goals of the Next General Energy Act. 

Of unusual interest is that Brad Moore co-signed a letter with Deputy Commerce Commission Edward Garvey that legislators and environmental advocates roundly criticized as being remarkably weak. 
 
Third, there is no evidence that the MPCA policy is patterned after anything going on in any other state — or even the federal government, for that matter. When asked, Moore said that he had not consulted with Gov. Pawlenty's office. 
 
"Brad Moore told us that we must get serious about reducing the carbon footprint of the industries we regulate," said Myrna Hallbach of the MPCA's environmental-review section. As applied to ethanol plants, Hallbach said, the new policy would examine carbon-reduction and energy-efficiency issues with the objective of requiring industries to improve both before permits are issued. 
 
Environmental advocates who have been pushing hard for the kind of policy direction that the MPCA is now embracing were pleased. 
 
"This is fabulous, and we'll wait excitedly for what the next steps will be," said Janette Brimmer, an attorney with MCEA and who frequently appears before the MPCA on a variety of issues. 
 
Don Arnosti, a longtime MPCA watcher, was quick to praise Moore. 
 
"I've known Brad for a long time," Arnosti said. "He's a good guy and he's being smart to get in front of carbon-reduction policies that we all know are coming." The new MPCA direction, said Arnosti, may be the start of undoing "20 years of really bad commissioners at the agency."