Study Shows Greenhouse Gas Emissions Standards Will Apply to Few Businesses But Reap Big Benefits

Contact: Eric Roston, 202/797-6500 (Desk), 202/253-5723 (Cell), eric.roston@duke.edu

August 4 , 2009

WASHINGTON, D.C. – The American Clean Energy and Security Act (ACES), which narrowly passed the U.S. House of Representatives in June, would require compliance from only a small portion of businesses, concentrated in the manufacturing center. Such regulation would cover the vast majority of U.S. carbon pollution, according to a new policy brief from the Nicholas Institute for Environmental Policy Solutions at Duke University.

The ACES bill would create a nationwide cap on greenhouse gas emissions that would apply to firms that emit more than 25,000 metric tons per year of carbon dioxide or its equivalent in other greenhouse gases. Many observers – including businesses themselves – have asked which businesses would actually be covered with that threshold, and thus be required to monitor and report their emissions. Questions have been raised about whether small businesses, or even individuals, would be regulated. The Nicholas Institute brief looks at several sectors of the economy and found that large-scale businesses are disproportionately responsible for U.S. emissions. In manufacturing, for example, only 1.3 percent of facilities emit cross the 25,000 ton threshold – but they are responsible for 82.5 percent of the sector's emissions.

"A key question for any major bill is, 'who is regulated?' It is critical, therefore, to understand what type and size of business entities might be subject to regulation, both to allay concerns and to design policy that can assist those most affected. Our study indicates that only very large emitters would fall under any new regulation," says David Cooley, associate in policy and research at the Nicholas Institute. "Large-scale polluters are responsible for a supermajority of U.S. greenhouse gas emissions, so we can get enormous environmental benefits while regulating a small percentage of firms.”

Cooley's analysis finds that 4,724 of America’s more than 350,000 manufacturing facilities would be covered by a 25,000-ton emission threshold. Most of these are large factories with many employees. The analysis also finds that certain types of manufacturing would be almost completely exempt from regulations: less than five percent of all food and beverage facilities, pharmaceuticals and textile plants would be covered by the threshold; as would less than a third of iron and steel mills, aluminum, rubber, and plastics plants. Almost all petroleum refineries and lime manufacturing plants would be affected, as would a majority of pulp mills and flat glass manufacturers.

The new policy brief concludes that the 25,000 ton threshold would not affect the vast majority of farms and commercial buildings. It would cover only about half of electric power plants. ACES passed the House of Representatives earlier this year. The Senate is now debating its own clean energy legislation, which is expected to have the same threshold for greenhouse gas emissions.

The analysis was conducted by the Nicholas Institute for Environmental Policy Solution at Duke University, and was made possible by a grant from Environmental Defense Fund. To read the policy brief, go to http://nicholas.duke.edu/institute/25K ton.pdf

A full report will be published in coming weeks.