In 2019, the Colorado Legislature passed House Bill 19-1261, known as the Climate Action Plan to Reduce Pollution (“Climate Action Plan”), which includes statewide greenhouse gas (“GHG”) pollution emission targets. By 2025 the bill targets 26% reductions in GHG emissions from 2005 levels, 50% by 2030, and 90% by 2050. In an effort to make coordinated progress toward these goals, Governor Jared Polis directed state agencies to develop a Greenhouse Gas Pollution Reduction Roadmap (“Roadmap”). As part of this effort, the State through various executive agencies has preliminarily estimated 2005 baseline GHG emissions to identify the magnitude of emission reductions required to meet the Climate Action Plan goals and the likely sources of those reductions. It is anticipated that the 2005 baseline emissions inventory will be approved by Air Quality Control Commission (“AQCC”) during a September 2021 hearing.
The Roadmap outlines a strategy for how Colorado can reduce GHG emissions over time ito achieve the reductions identified in the Climate Action Plan. Key strategic elements include: (a) a continued shift away from fossil fuel-based generated energy to renewably generated energy; (b) a focus on reducing methane emissions from the oil and gas sector; (c) accelerated transition to electric buses, trucks, and cars; (d) changes to transportation planning and infrastructure to reduce vehicle miles traveled; (e) increased building efficiency and electrification; (f) reduction of methane emissions from agriculture, landfills, and waste water treatment; (g) strategies to enhance carbon sequestration by natural and working lands; and (h) incentivizing adoption of GHG reduction measures in the agricultural sector. These strategic elements are intended to be implemented through various efforts including:
- rulemakings before the AQCC, the Colorado Department of Transportation, and other state agencies;
- coordinated efforts between the State and private parties, particularly with utilities, in an effort to develop clean energy plans;
- a study on how to incentivize updates to local government regulations, particularly to building codes and zoning regulations;
- public investment in electric vehicles and electric vehicle infrastructure; and
- encouragement for participation in carbon reduction efforts such as the Employer Based Trip Reduction Program, Soil Health Partnership, the Agricultural Energy Efficiency Program, and the Advancing Colorado’s Renewable Energy Efficiency Program (ACRE3) Program.
The Roadmap also explicitly takes a sector-based rather than economy-wide approach to cap GHG emissions. This means that specific emission reduction targets will be set for each identified sector. The primary sectors targeted for reductions are transportation, electric generation, oil and gas, and residential, commercial, and industrial energy use. Each sector has a different target for emission reductions from the 2005 baseline. Importantly, the 2005 baseline emissions are estimated differently for oil and gas sources relative to other sectors. The State has updated its methodology to estimate future GHG emissions from non-oil and gas sources to address some of the limitations with the approach used in estimating historical emissions. For oil and gas sources, the Colorado Department of Public Health and Environment (“CDPHE”) indicated that it would use data collected under Colorado Regulation No. 7 to make improvements to current and future emission estimates for the oil and gas industry, which should result in more accurate estimates of emissions from this industry but could also potentially complicate comparisons of future emissions with the baseline.[1]
The draft of the Roadmap was published on September 30, 2020, and community members and other stakeholders were encouraged to provide comment and feedback. The Roadmap was not developed as part of a rulemaking effort, so it was not subject to the procedural requirements associated with more formal efforts. This also means that the written comments provided on the Roadmap are only available via a Colorado Open Records Act request, and the State was not required to explicitly address or respond to community comments. Some concerns have been raised regarding this process, specifically, as subsequent specific rulemakings will be undertaken in reliance upon the Roadmap, the development of the Roadmap should have occurred in a more transparent process.
While the tremendous effort associated with developing the Roadmap to date has been broadly lauded and appreciated, additional concerns have been raised that the draft Roadmap did not provide a cost-benefit analysis for any of the proposed GHG reduction strategies and did not allow for the flexibility to pursue policies to reduce emissions iteratively and in full consideration of a given policy’s total costs and associated benefits. Technical concerns have also been raised with some of the key assumptions and analyses underlying the Roadmap and its associated emission estimates. The final Roadmap, published on January 14, 2021 and available here, did acknowledge that a detailed cost benefit analysis was not provided but indicated that such cost benefit analyses would be addressed as various strategies were implemented through formal rulemakings.
While there were limited substantive changes between the draft and final Roadmap, the final Roadmap added important discussion about the Roadmap’s larger strategic goal of reducing impacts on communities disproportionately impacted by climate change and how the Climate Equity Framework (developed based on statutory guidelines from HB 19-1261) should be used to guide future action. It also addressed Carbon Capture, Utilization, and Storage (“CCUS”) more specifically and indicated that the State would convene a task force on CCUS starting in mid-2021, “which will report to the Governor within a year on recommended framework, including policies and action steps for advancing CCUS in Colorado.”
The Roadmap is an ambitious effort to address GHG emissions in Colorado. How the Roadmap will be implemented and the exact nature of any resulting programs remains uncertain, but significant changes are on the horizon for Colorado.
[1] See Section 8.5 of CDPHE’s Draft “2021 Greenhouse Gas Inventory Update Including Projections to 2050” found here.
If you have further questions, please contact Shalyn Kettering or Vasco Roma (Managing Consultant, Ramboll).