Air commission denies environmental group’s petition to explore stronger greenhouse gas rules

Nearly two years after the passage of Colorado’s landmark climate law, environmental advocates are still pressing Gov. Jared Polis’ administration to enshrine its targets into strict, comprehensive rules limiting greenhouse gas emissions by big polluters — and Polis and state regulators still aren’t budging.

On a 7-1 vote, the Colorado Air Quality Control Commission on Friday denied a request by an environmental group to initiate a rulemaking process aimed at establishing a state cap-and-trade program for greenhouse gas emissions. Commissioner Jana Milford was the only no vote.

“I think given everything we have on our plate for the next two years, it’s just not a tactical possibility,” Curtis Rueter, the AQCC’s chair and a Noble Energy executive, said ahead of Friday’s vote. “I also think this is an issue for the governor and the legislature — if they want Colorado to have a cap-and-trade program, they should be making those decisions and directing us to implement them.”

The rulemaking petition, filed by the Environmental Defense Fund in December, would have set statewide greenhouse gas “allowances” for pollution sources like utilities and industrial plants, subject to various trading and offset mechanisms. Consistent with House Bill 19-1261, the climate law passed by Democrats in the legislature in 2019, allowances would decline over time to meet the state’s emissions targets — beginning with a 26% cut from 2005 levels by 2025, and a 50% cut by 2030.

Polis has consistently opposed such a system, instead favoring a “sector-by-sector” approach characterized by collaborative and voluntary efforts from emitters, as laid out in a Greenhouse Gas Pollution Reduction Roadmap finalized by his administration last month. Multiple environmental groups, including EDF, have sued the AQCC and its supporting state agency, the Air Pollution Control Division, for failing to comply with HB-1261.

EDF said its proposed rule would be complementary to the Polis administration’s approach, allowing the APCD and other state agencies to pursue sector-specific strategies while providing a baseline of regulatory certainty that HB-1261’s science-based emissions targets will be met.

“This program really is designed to act as a backstop,” Pam Kiely, EDF’s senior director of regulatory strategy, told commissioners. “It will work great alongside other policies that are designed to deploy particular technologies or change how systems work.”

Accepting EDF’s petition would have launched a lengthy rulemaking process during which the organization’s representatives hoped the proposed rule could be evaluated further by state regulators, and any issues worked out.

But APCD regulators urged the commission to reject the proposal, saying the division lacked the staff and resources to administer such a program. In a letter to commissioners opposing EDF’s petition, Polis noted that the AQCC is slated to undertake four climate-related rulemakings in 2021, in which it will consider new rules on key emissions sources like buildings and the transportation sector.

“If APCD staff capacity were to be diverted to further evaluation of this petition, it would likely slow these critical rulemakings,” Polis wrote. “I encourage you to reject the rulemaking petition from EDF and instead focus your efforts on achieving the ambitious legislative and administrative policies laid out in the Roadmap.”

“It’s very clearly at odds with the vision that the governor has laid out,” APCD director Garry Kaufman told commissioners on Friday. “This is not a backstop that will go into effect if the governor’s roadmap doesn’t achieve the goals. This is a separate regulatory program that has massive implications for Colorado’s economy.”

Environmental groups who spoke in favor of EDF’s petition, however, continue to fear that the administration’s approach relies too heavily on voluntary action by the private sector. The legislative and regulatory actions taken by Colorado to date will only be enough to achieve half of HB-1261’s 2025 and 2030 goals, the state’s own roadmap analysis found.

“We understand that this is a big program,” Kiely told commissioners. “We think Colorado needs a big program. Because we can’t get to these emission reduction levels without targeting pollution, and crafting a program to do so.”