Colorado's uncertain path to 2030

Can state reduce economy wide carbon emissions 50% by 2030 with exiting tools? Some air commissioners dubious

by Allen Best

Closing most of the coal plants in Colorado during the next decade will be the easy part.

Transportation—already the No. 1 source of greenhouse emissions in the state—will be a much tougher challenge.

But even that won’t be enough to allow Colorado to hit its targeted reductions in greenhouse gas emissions. There will have to be reductions in emissions caused by buildings, but also farm operations and other sectors of the economy.

The Colorado Climate Action Plan, a law also known as HB 19-1261, specified a target of 26% reduction by 2025, as compared to 2005 levels. Colorado is already at roughly 18% based on improved energy efficiency and planned coal plant retirements.

Far heavier lifting will be required to achieve the 50% reduction by 2030 identified by the law and then the 2050 goal.

Can Colorado hope to hit that 2030 target using the tools available? For their last two meetings, members of the Air Quality Control Commission have been asking that question in different ways.

The commission has been moving forward deliberately, methodically, on vehicle emissions standards and tightening of regulations governing oil and gas extraction and distribution. In May, the commission adopted regulations reducing use of hydrofluorocarbons, a powerful greenhouse gas, in refrigerants.

Far more are being queued up, such as regulations to further reduce methane emissions from oil and gas operations, the fourth largest source of emissions in Colorado.

Coal plant closings continue to be announced, in line with explicit legislative orders to utilities to reduce emissions 80% or more by 2030 and shifts in technology and costs that make those closings easy to justify. The commission has authority, under its requirement to create rules to address regional haze, to make sure the emissions drop rapidly.

But will all this be enough? Should the state be moving even faster? At the commission’s May meeting, and then with more elaboration in June, a significant minority of commission members expressed reservations about the pace of the state’s actions.

Auden Schendler, a commission member, juggled baseball and football idioms to make his point at the June meeting about “astoundingly hard” rule-making. “We keep knocking things out of the park,” he said, “But they only move the ball a little bit down the field.”

Auden Schendler

Schendler, along with two commission members from Boulder County continued to wonder whether broader, more muscular top-down regulations will be necessary in Colorado for the state to briskly decarbonize its economy as identified by the law. More sweeping changes might require additional legislation or even voter approval of tax reform.

“We need to stop digging a deeper hole,” said Elise Jones, an air commission member who is also a Boulder County commissioner. She pointed to actions taken by DRCOG, or the Denver Regional Council of Governments, that she described as working against Colorado’s decarbonization goals. She did not describe them.

Along with Jana Milford, a commissioner who is also from Boulder County, Jones fretted about long-term infrastructure decisions being made now that will work against the state achieving its goal.

“We have an emergency here,” she said later.

HB 1261 made the air commission, or AQCC, the lead agency in achieving emissions reductions, but also describes roles for the Public Utilities Commission and other state agencies.

Two agencies stand out in creating this theoretical path forward. It’s described without apparent sense of irony as a “roadmap” by the Colorado Energy Office and the Colorado Department of Public Health’s Air Pollution Control Division. They predict September delivery after a summer of continued work.

But what exactly will it look like? In their draft plan, the agencies describe a variety of actions that altogether may—or may not—get Colorado to where it needs to go. The process they favor calls for checking in on the progress from time to time during the next decade, then modifying the course as necessary. They call it adaptive management. This approach is suggested by the law, which says revisions to the plan may occur “as necessary over time to ensure timely progress toward the 2025, 2030 and 2050 goals.”

To Jones, from Boulder County, it feels “like flying blind a little bit.”

Jones wondered whether carbon pricing might be the broad policy, the backstop, that Colorado needs to diminish emissions.

This would be a substantial shift for Colorado—and politically a heavy, heavy lift, quite possibly requiring direct approval of voters. Funding could be shifted from income to pollution, i.e. a carbon tax. An alternative would not reduce income tax but instead fully refund taxes on carbon to the public through a process carbon fee and dividend.

“A backstop may or may not be the right thing,” said, Tony Gerber, a commission member who is physician and professor from National Jewish Health.

John Putnam, director of environmental programs for the CDPH&E, said an attempt will be made to address this in the roadmap. But several times in the course of two afternoons speaking with commission members last week he identified a funding gap. California, has $50 million just to administer its cap-and-trade program, he said. And his agency, he said, has funding for only 5 or 6 people in its climate change department.

At least one environmental group says the state needs to move more briskly.

“We can’t just check back every two years. We really have to put a lot of thought into what the total regulations will be,” said Stacy Tellinghuisen, senior climate policy analyst for Western Resource Advocates.

While the state’s process has involved some stakeholder groups, she said she believes the state – even if short-funded given the enormity of the task – should make more effort to tap the expertise of stakeholder groups. She pointed to the formulation of stakeholder groups by Maine as part of its effort to achieve comparable reductions in emissions to those in Colorado.

The draft roadmap sketched by the two agencies starts with the electric source— mostly, but not completely, on its way toward decarbonization—and also sees steady work in reducing methane emissions from the production of oil and gas. The steps here range from proposed rules governing continuous monitoring for methane to, down the line, electrification of oil and gas operations, something that already has started but which could be expanded.

Two tough sectors will be transportation and buildings. Unlike electrical generation, which involves a handful of utilities, most of them already regulated by state government, transportation involves several million people. It’s already the largest source of emissions in Colorado.

The state has plans to induce electrification of transportation, with a goal of having 42% of vehicles on the road by 2030 electrified. Xcel Energy recently submitted its proposal to spend $102 million to help add charging infrastructure, to encourage more comfort among EV buyers. And there’s a possibility that Colorado might tag along with California’s upcoming efforts to adopt emissions standards for medium- and heavy-duty vehicles.

How much will Coloradans reduce their annual vehicle miles traveled as a result of the stay-at-home procedures now commonplace during the time of covid? The two state agencies and their consultant, Energy + Environmental Economics, tend to think we’ll be driving less. Nobody really knows, of course. “There is a lot of uncertainty,” agreed Amber Mahone, from the consulting company, when pressed by Milford.

Ditto for oil and gas operations. The modeling here suggests a flattening of extraction in Colorado in the next decade, unlike the rambunctious growth of the past two decades, first in the Piceance Basin and then in the Wattenberg Field. But nobody really knows.

Legislators have already tightened building codes, requiring local jurisdictions to adopt one of the last three iterations, each of which successively tamps down energy use in homes and other buildings. Before, there was no requirement.

Will Toor, director of the Colorado Energy Office, discussed expansion of benchmarking from commercial buildings, such as has been adopted by Denver, Boulder, and Fort Collins (and which is being studied by Aspen, perhaps among others). A bill introduced into the Legislature this year—but dropped, because of covid constraints, would have required rulemaking around benchmarking. (For a primer on benchmarking, see Urbanland story.) Performance standards are designed to incentivize modest improvements over time to allow lower-performing buildings to move up to higher performance.

And a renewable natural gas standard was also dropped, for similar reasons, but could have a role in reducing emissions from buildings.

As for taking action to reduce emission of methane from coal mines, Schendler advised that this should be done—because it’s relatively easy and it has a big impact. As an employee of the Aspen Skiing Co., he was largely responsible for Colorado’s sole success to date in that regard.

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