January 9, 2004
Mr. Mark Friedrichs
Office of Policy and International Affairs
U.S. Department of Energy
1000 Independence Ave., SW
Washington, DC 20585
Dear Mr. Friedrichs:
Thank you for the opportunity to comment on the Department of Energy’s (DOE) proposed rule, General Guidelines for Voluntary Greenhouse Gas Reporting, published December 5, 2003 in the Federal Register (Vol. 68, No. 234).
On behalf of the organizations listed above, we commend DOE for removing “transferable credits” from its plan to “enhance” the Voluntary Reporting of Greenhouse Gases Program (VRGGP), established under Section 1605(b) of the 1992 Energy Policy Act (EPAct).
As we have explained on previous occasions, transforming the VRGGP into an emission reductions credit program would be both illegal and unwise. It would be illegal because Section 1605(b) furnishes no authority to award regulatory offsets applicable to future emission reduction mandates; and unwise because a credit program would mobilize lobbying for energy rationing schemes such as the Kyoto Protocol, Senator Jim Jeffords’s (I-VT) Clean Power Act (S. 366), and the McCain-Lieberman Climate Stewardship Act (S. 139)—policies the Administration rightly opposes.
In the coming months, three interest groups will likely pressure DOE to reverse its decision and include credit provisions in the final rule. Those groups are: (1) corporations that expect to have large quantities of surplus credits to sell under a future Kyoto-style emissions cap-and-trade program, (2) environmental activists who correctly view credits as a strategy to build corporate support for cap-and-trade, and (3) agency officials whose power and prestige would increase dramatically if the VRGGP became the framework for a future energy rationing system. To help DOE resist such pressure, we want to explain, for the record, why DOE was correct to omit from its proposed rule any provisions for an early credit program.