Can Colorado hit emissions targets?

The case for putting price on pollution as a way to nudge change from transportation

by Allen Best

A subtle tension was evident in a subcommittee meeting of the Air Quality Control Commission on July 16. The subcommittee spent an afternoon hearing from state agencies and others about strategies for achieving emissions from the transportation and building sectors needed to meet state carbon reduction goals.

Two days before, Colorado had announced it was part of an agreement among 15 states and the District of Columbia to develop a broad set of strategies for heavy-duty vehicles.

For this, Colorado and the other states are hitching their wagons to California, but trying to use the bulk of numbers to achieve deep market penetration, 100% by mid-century.

This is from the July 23, 2020, issue of Big Pivots. Subscribe for free to the e-magazine by going to Big Pivots.

A Boston-based group, NESCAUM, says trucks and buses account for only 4% of vehicles on the road but produce nearly 25% of total transportation sector greenhouse gas emissions. Trucks are the fastest growing source of emissions.

In Colorado, as coal plants begin closing and lingering ones get used less, transportation has become the largest source of air pollution. And, if the effects of covid-19 linger, suppressing in-person shopping in favor of deliveries by Amazon and others, it will be “critical that we development a thoughtful and balanced approach,” to use the words of a press release from three Colorado state agencies.

Will Toor, director of the Colorado Energy Office, told air commission members that there was a broader strategy, including an effort to replace older and more polluting diesel vehicles. He described an effort to work with stakeholders and perhaps ultimately the Legislature to create the necessary infrastructure that “could have a big impact in the short term.”

Is this enough? Or does there need to be something more, a broader strategy to disincentivize pollution while also delivering revenue to Colorado’s efforts to decarbonize?

Travis Madsen, who took over transportation program at the Southwestern Energy Efficiency Program from Toor when Toor joined the Polis administration in 2017, made the case for a low-carbon fuel standard.

“First, we should increase the cost of polluting,” he said. That, he added, would increase the advantage of climate friendly options but also generate revenue necessary to accelerate the transition.

The plan that would limit on carbon dioxide emissions from transportation would require fuel distributors to get permits, so the tax is applied at the wholesale level. The permits would be limited to allow the state to hit a 40% reduction by 2030.The state’s goal for 2030 is a 50% economy wide reduction.

This could be done, Madsen said, without violating the Tabor limits on tax revenue. California conducts its programs with a market-based program of credits. This could be put in place as early as 2022-23, he said, causing the gradual replacement of fleets to lower-emission vehicles.

This was in the July 23, 2020, issue of Big Pivots.  To receive copies of the e-magazine by e-mail, please sign up at BigPivots.com.

John Putnam, who directs environmental programs for the Colorado Department of Public Health & Environment, responded that the earlier the start, the greater the cumulative benefits, “because it takes a lot of time for the polices to manifest them. You won’t see immediate large reductions, but you will over time, especially as you get out to 2030 and beyond.”

A study about the low-carbon fuel standard for the Colorado Energy Office is expected to be completed next week.

Putnam said he believes the air commission has the legal authority, especially given the specific delegation of authority under SB 1361. “The bigger challenge will be the resources to develop what would be a very complicated rule-making, especially the consequences of missing those rules,” he said.

“I think it’s an interesting concept and one worth exploring, but it’s one I don’t think we can do without involvement from the Legislature.”

Toor also suggested some “real world constraints.” He described it as “very complicated and divisive approach to generating revenue.” He said he supports a more “straight-forward approach” to revenue whether it’s the need for hydrogen infrastructure or incentives for the state to switch to zero-emissions trucks.

The subcommittee also took on how the state can move ahead more briskly to lessen emissions from buildings. Toor described several bills that didn’t make it through the covid-disrupted legislative session this year that would have sought to reduce emissions. Among them was a bill for benchmarking of new buildings starting at 50,000 square feet. This falls under the heading of performance standards, one that the air commission can move forward on with its rule-making authority.

It was a long session, and Putnam at one point admitted to many small reductions that the state agency hope will yield the numbers. Representatives of several environmental groups I spoke with afterward were unpersuaded.

“It’s clear they have a lot of reasons each of these policies won’t work and the policies that are left on the table don’t add up to the emission reductions we need,” said Stacy Tellinghuisen, of Western Resource Advocates

I’ll write about this much more deeply in a future issue.

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Allen Best