I agree with a lot of this, but a few things to point out:

While the New Source Review rules are written on an input basis, that could easily be changed without either killing the whole program or amending the Clean Air Act.  In the late 1990s EPA was starting to recognize that output-based regulations were infinitely preferable, and there are now output-based standards out there for some industries.

I do believe that if Bush had never been elected, we would have made some important changes to NSR, including writing output=based regulations.  Instead, as is well-documented elsewhere, the Bushies came in laden with gifts to their big industrial buddies, one of which was a (later overturned in court) switch from a tons/year accounting under NSR to a lbs/hour emissions standard -- which would have allowed big emitters to tremendously increases emissions without tripping a regulatory threshold - exactly the opposite effect from what we'd want.

On the third point you make -- which grandfathering definitely pushes plants to keep old emitting equipment around indefinitely, this effect would not have been nearly so pronounced had the rules been fully enforced.  Again in the late 1990s, EPA finally began enforcing against all the huge utilities that had made equipment changes that should have triggered NSR.  Those cases were enormously successful -- until the Bush administration shut them down and again, tried to rewrite the rules to exempt big stuff forever ("routine maintenance" rules that were also overturned in court).

On the second point, confusing the path with the goal -- ok, that's true, and perverse, but again, it probably did encourage one particular big unanticipated change -- not to creative use of resources, but instead fuel-switching to natural gas.  I think creativity is a tougher nut to crack and it's somewhat unfair to lay too much blame at the doorstep of NSR.

Finally (for anyone still reading), the new source review rules were not written to cover carbon -- BUT as soon as EPA decides to regulate carbon under the Clean Air Act in any context, NSR rules will begin to apply, and in theory, carbon reductions (i.e. efficiency) will have to happen because of those rules.

Re: the fact that NSR could be changed, I agree.  Indeed, there was an abrupt about-face from the feds on output-based standards once Bush came into office, effectively derailing a train that was moving in the right direction.  When I asked a friend of mine (who shall remain nameless, but who works for certain federal environmental agency) why, his response was telling: "because I was told that if we went to an output standard, it would cause us to burn less coal".  You do the math.  That said, while you could switch NSR from input to output, that would still not fix its pass/fail grading system, nor it's failure to put any financial value on overcompliance, nor it's disincentive to make the kind of major modifications that would raise efficiency.

Re: grandfathering, allow me to split a few hairs.  Grandfathering does two negative things, but their immediate impact is in opposed directions.  They keep the bad stuff around forever (bad).  But they also stop people from doing good stuff to bad plants (also bad, but in this case for opposite reasons).  In this latter sense, when you write that:

Again in the late 1990s, EPA finally began enforcing against all the huge utilities that had made equipment changes that should have triggered NSR.  Those cases were enormously successful -- until the Bush administration shut them down and again, tried to rewrite the rules to exempt big stuff forever ("routine maintenance" rules that were also overturned in court).

We may be in disagreement.  I'm not suggesting that it is always good to change the definition of "routine maintenance".  However, there is a good case to be made for not blocking energy efficiency investments - even though to do so would go to the heart of the NSR failure.  

Re: gas, I don't entirely agree.  If you look at the timing of gas generation deployments, the big boon started when gas was $3, and was essentially a response to the deregulation of wholesale generation rather than NSR.  In other words, coal has never really made all that much sense unless you have guaranteed cost recovery, at least relative to $2 - $3 gas.  The many merchant power plants that dominated the gas investment boom of the 90s were driven primarily by a desire to make a buck, and a realization that the utlities weren't making economically rational investments.

Finally, re: carbon (yeah, I kept reading), I would not be quite so sanguine, since regulating carbon under NSR implicitly means either throwing out the old regs or writing new ones, since NSR compliance is directly opposed to energy efficiency.  (As a point of reference, a coal plant that is fully NSR-compliant burns 10% more fuel than one that doesn't to run all the parasitics associated with downstream pollution control.)  This is why the "4P" bills were so important, as you can't regulate one pollutant without thinking about carbon impacts.  The trouble with this is that air regulators, by their nature are exceptionally conservative, in the classic sense of the term.  They are motivated only indirectly by emissions reduction; their big motivation is a fear of change.  This is because to their way of thinking - which is not without justification - they have "one whack" at a project when they write the permit, and their great fear is not that some new idea isn't better than the old idea, but that something might slip through the cracks that makes their "whack" smaller.  This makes them extremely resistant to regulatory change.  So while in theory carbon regulation would get them to focus on efficiency, in practice it is going to have to take executive direction to force the EPA (and their state brethren) to adopt a more holistic methodology.

Sean, you make a lot of good points.  The first one I agree with completely -- I've seen firsthand exactly what the Bush administration has done, and I know for whom they've been doing it.

I get defensive about the NSR program, because (1) it has been a favorite whipping boy for so long, especially (unfairly) for smug and often quite nasty lobbyists from very powerful polluting industries, and also (2) as a regulator I've seen the good it has done, bringing down NOx and SO2 emissions across industries that affect the health of a lot of people and the haze in many places.  It's not solely responsible, of course, but it has had some serious success over 30 years.

Your point about natural gas is well taken, and I also understand how efficiency investments are inhibited.  

I don't really think that NSR is the tool of choice to regulate carbon, which is why I said "in theory" carbon reductions would have to happen under NSR. God knows the lawsuits would tie us in knots. However I do think the idea of carbon being subject to NSR drives fear into some hearts and could help drive them to the negotiating table on cap and trade legislation.  And besides rewarding efficiency, a huge benefit of cap-and-trade legislation will be less likelihood of legal challenge tying up the rules.

And again, as a regulator -- I'm not sure "fear of change" is the issue (God knows we'd welcome change right now), but knowing you might only have one chance is an issue. People don't take kindly to being regulated piecemeal.

Anyway thanks for your very thoughtful comments, as usual -- it helps to hear your perspective.

Scrap NSR, exactly when finally the AG is talking NSR with Midwest Generation.

Janszen pooh-poohs the current "morass of ad hoc deployment of various products and technologies, mostly improvements on what has been around for decades" like cogeneration, and your family business finds it convenient to scrap NSR, and please do not talk about water use.  The best thing you have working for you is leeching on to the market price of power going up.

Do you propose a policy about the pollution stream you mean to reinforce on the local population, or will you just do it for whoever pays?

Ids, I think you're being too hard on Sean -- his family business seems to be a positive one for the world at large (combined heat and power = efficiency and local generation).  I don't feel as negatively about NSR as he does (I'm not ready to scrap it), but I do understand where he's coming from.  

I don't see these as black and white issues.  But I expect that Sean is honestly pushing a business model that we want to encourage from an environmental point of view.  Given that he's on this blog, I think we should give him the benefit of the doubt and assume he's got the common good in mind (and if he can make a buck at the same time, then more power to him.  As it were.)

"This market focus is a good thing, on balance."

It's a dodge.  It will never amount to real reduction.

Any market based plan would first have to establish fairly regulated markets.  That is such a huge step in itself that it would delay any action on climate change too long.

How would one have developed a market solution for WW 2 war production?  It couldn't have been acomplished.

And it won't work with the climate crisis and oil war(s).  The players that control oil and auto markets will control carbon markets.  It's inevitable.  They will manipulate the trading system, whatever form it takes, for their benefit.

To free markets.  Take subsidies away from big energy players, regulate markets to stop monopoly control, then distribute part of the tax savings to subsidize renewables and conservation.  Simple, incorruptable.

http://amazngdrx.blogharbor.com/blog

Good title though.

It puts me in mind of the degradation of market based corporate monopoly run chemical agriculture and it's health effects on humans as a part of the living biosphere.  

What can cure the climate problem, could cure the health problems.  Organic farming, without antibiotics, hormones, and 'cides that chemically mimic hormones, would allow the human body to adapt to naturally evolving disease organisms.  Give the immune system a chance, so to speak.

Furthermore, pollutants and radioactive contamination are added into the mix of toxic stew occupying areas of human industrial habitation.  

The same solution for GHG climate change and high energy costs and job outsourcing...  works for human and ecosystem, food chain health.  And high heath care costs.

It's renewable energy/organic farm policy.  That's healing for the biosphere.

http://amazngdrx.blogharbor.com/blog

I agree with mush of what you say, and it seems the answer is to phase out coal/fossil fuel use and all its associated pollutants, not some esoteric system you suggest (that just happens to profit your family business).  

You still don't address the localization of your pollution stream you seek to reinforce and what standards your family has to address that when it installs its efficiency regime.  I must say, when you talk efficiency, the name Eichman comes to mind and the banality of evil.  You should have a tag here that advertises your ties to dirty efficient asthma inducing mountain destroying landfill sludging water wasting industry (did I forget anything?).

I appreciate your efforts to engage in substantive dialogue with Ids, but at this point it's fairly clear that nothing you say will prevent his knee from jerking. Profit is bad. Private enterprise is bad. Messing with any environmental regulation, for any reason, is bad. Mouthing anything but the Party Approved Environmental Line is bad. It's not so much that all this stuff is wrong (though it is). It's just that it's boooring, just as boring as listening to the kneejerk claims of climate skeptics. Trolls come in all flavors. Feeding them is rarely worth the time.

grist.org

Good discussion Sean.  This needs to be hashed out somehow, I will keep cogitating on your explanation.

On one hand we see monopoly forces at work in markets and on the other we see so called free trade globalization creating booming economies.  This is a titanic struggle and a struggle to try to understand.

I tend to like simple subsidies as solutions.  taking bad ones away, making new ones.  It's something politicians can understand.

On hedge fund trading?  Berananke had to get hedge fund guys in to try to explain the crisis it has so many complicated deals going worldwide.  Even the fed chairman does not get it.

It's hard to trust unknowns that have yielded debt crisis in the present.  that's a lot to ask of environnmentalists, place the future of the planet in the hands of traders.

I would rather see 10 cents per kwh in subsidy to renewables than some kind of complicated carbon trading scheme, gone global.  It just seems safer and more sensible somehow.

http://amazngdrx.blogharbor.com/blog

Requesting an environmental justice policy from a business reinforcing a pollution stream on a localized population is not a substantive according to Gristwash.  Like I said, I have no problem with profits.  Putting pollution into the commons for free, that's a trolls discussion for grist.  Ech.