Capping greenhouse gas emissions from power plants. Under the Clean Air Act, the EPA has the power to regulate all air pollutants, and the agency determined in December 2009 that carbon dioxide and other greenhouse gas emissions fall into this category. McCarthy helped oversee a proposal last spring to limit greenhouse gas emissions from any future power plants, which has yet to be finalized. While that stands a strong chance of becoming final sometime this year, the larger question is whether EPA will propose curbing greenhouse gas emissions from existing coal-fired utilities. That move will yield major climate benefits: The World Resources Institute estimates it will make up 40 percent of the gap the United States faces right now in meeting its target of reducing its carbon output 17 percent below 2005 levels by the end of the decade. But it will prompt an outcry from the coal industry and its Republican congressional allies, who already accuse the Obama administration of waging a war against coal.
Stricter federal rules for natural gas methane emissions
. The EPA can also use its Clean Air Act authority to impose new limits on the emission of methane, a potent greenhouse gas, from natural gas operations nationwide. There may be a way to broker a political compromise on this issue, but it could anger proponents of the natural gas industry, an industry Obama has embraced in recent years.
Tightening vehicle emissions from medium and heavy-duty vehicles, as well as off-road engines. The EPA already has raised fuel-efficiency standards for medium and heavy duty trucks in the past, and will have to institute a new set of standards beyond 2018. In both of these areas, the Obama administration can push for more aggressive reductions, especially since these rules end up saving money but cutting fuel consumption.
New energy efficiency standards. The Energy Department would adopt standards aimed at improving energy efficiency in the residential, commercial and industrial sectors, which could make up 8 percent of the gap between business as usual and the administration’s 2020 climate target. This is much less controversial, and Obama hopes to promote the policy through the “Energy Efficiency Race to the Top” program he unveiled during his State of the Union last month.
Reducing global hydrofluorocarbon emissions. Hydrofluorocarbons are used mainly for refrigeration and air conditioning, and there’s a bigger problem in the developing world than in the United States. Still, the Energy Department has worked with countries such as China and India to tackle the issue, and negotiators at the State Department could try to strike a global deal to phase out HFCs.
Promoting clean energy. This has traditionally been the province of the Energy Department, which put $90 billion into green energy as part of the 2009 American Recovery and Reinvestment Act. But the failure of several companies, including Solyndra and battery maker A123, made these sort of initiatives politically toxic. The Energy Department is likely to provide funding for basic research that could provide some clean energy breakthroughs, but there’s neither the political appetite nor the funding for undertaking a similar initiative during Obama’s second term.
There are a handful of other smaller policies as well, including limits EPA could impose on greenhouse gas emissions from acid manufacturing, coal mining and landfills.
No matter what, there is one dynamic that will likely change now that Moniz and McCarthy have been nominated: The Energy Department may play a more active role in formulating regulations than it did under Energy Secretary Steven Chu.
“I think the policy development process in the second term will be much different from what we saw in the first term,” said Jeffrey Holmstead, who headed EPA’s air and radiation office under George W. Bush and is now a partner at the law firm Bracewell & Giuliani.
While the Energy Department handed out billions in federal funds during Obama’s first term, Holmstead said, it “was compeltely absent on any environmental policy” when it came to rule-making. Now, he said, Energy Department and EPA “are going to have a much more traditional relationship,” where Moniz will likely weigh in on any issue that could come to define Obama’s legacy on climate change.