The North Carolina Environmental Management Commission voted Tuesday to begin rulemaking that would set limits on carbon emissions from energy plants to address climate change.
The proposal also calls for North Carolina to join the Regional Greenhouse Gas Initiative, a group of 11 states from Maine to Virginia. Members of the group set limits on carbon emissions and operate a marketplace where power companies can buy and sell carbon allowances — basically the right to pollute.
The system puts a price on carbon emissions and is sometimes referred to as "cap and trade." Money raised from the sales goes toward energy efficiency, renewable energy and utility bill assistance programs.
“This rulemaking is an opportunity for our state to lead the Southeast in carbon reduction which will result in cleaner air and better health," June Blotnick, executive director of Clean Air Carolina, said in a statement after the vote. “For the past few years, North Carolina has lost ground as a clean energy leader. (The Regional Greenhouse Gas Initiative) is an opportunity to put the right market mechanisms in place to properly value clean energy generation without arbitrary mandates.”
Carbon Limits Would Taper Off
Tuesday's vote starts what could be a contentious process of drafting rules to cap how much carbon dioxide power plants can send into the atmosphere. Limits would decline over time to help the state reach its goal of cutting greenhouse gas emissions 70% from 2005 levels by 2030 and eliminating them entirely by 2050.
Gov. Roy Cooper's Executive Order 80 in 2018 established state goals for reducing greenhouse gases from utilities, and big utilities, including Charlotte-based Duke Energy, have their own goals. The debate now is over the best way to achieve those goals.
"Right now, those are just goals, and they are laudable goals," said Goodrun Thompson, a senior attorney with the Southern Environmental Law Center. "But we need a way to turn those goals into action and actually take steps to meet them."
Commissioner Charlie Carter opposed the petition, calling it a solution in search of a problem. He said Tuesday he wanted more information about the financial impact of adopting carbon limits and the role of the North Carolina Utilities Commission, which regulates utilities. He also complained that lawmakers were not involved in the process.
"The bottom line is this thing is not structured in a way that makes any sense," Carter said.
Carter said he opposes efforts like this to uphold the goals of the 2015 Paris climate agreement, saying it imposes no immediate limits on China, which is a major polluter.
Hard Work Ahead
Commission Chair Stan Meiburg acknowledged during the meeting that drafting the rules would require a lot of hard work.
"Mr. Carter is absolutely right in that the rulemaking on this petition is going to be a real challenge, greater than any other rulemaking on any petition that has come before the commission, at least in my tenure," Meiburg said.
The rules could face opposition from Republican lawmakers. They're working with Duke Energy on their own reforms that among other things would allow for continued construction of gas-fired power plants and multi-year rates.
Environmental groups say the North Carolina General Assembly has been slow or unwilling to act on climate change measures. Meiburg said the proposal is an important tool to consider.
"This is an option that is available to the state to help achieve the goals that the governor set in his Executive Order 80. And it's an option that we have at our disposal, and ought to be on the table," Meiburg said.
Duke Energy would be one of the main targets of carbon limits. Spokesperson Bill Norton said Monday the company would accept the new rules if they're ultimately adopted.
"If policymakers determine this is the right path forward for the state, we will comply with the state’s policy," he said in an email. "Duke Energy’s focus is on a balanced energy transition for North Carolina that ensures the continued reliability and affordability our customers depend on while promoting economic development across the Carolinas."
The rulemaking is expected to continue into 2022 and will include a public comment period and public hearings.
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