These comments were submitted on June 17 2021 on the US EPA’s Proceeding on Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation and Trading Program under the American Innovation and Manufacturing Act (Docket EPA-HQ- OAR-2021-0044; 86 FR 27150). Two members of FEASTA’s Board of Trustees reside in Massachusetts and Virginia.
Summary: We recommend that designers of a hydrofluorocarbon (HFC) cap-and-permit system should look to the carbon market design literature rather than the ODS model.
Many lessons have been learned in the 30 years since the 1990 Clean Air Act Amendments were implemented, lessons that matter even more in a phasedown (HFCs and other greenhouse gases) than they do in a phaseout (ODSs).
Efficiency, fairness, and ease of administration and participation all point toward auctioning as the optimal way to perform allocations. This is evident in EPA’s own assessment of the available options. An auction regime can be designed to be simple and resistant to gaming, fair to smaller and disadvantaged players, and compliant with special provisions of the AIM Act.
Feasta urges EPA to return funds from a GHG price on HFCs back to the people as a climate dividend, to ensure that the program complies with environmental justice objectives, to promote citizen interest and stewardship, and to pave the way for an eventual more general GHG-based carbon dividend program.
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