This story has been updated.
The growing criticisms of the U.S. Environmental Protection Agency’s plans to cut greenhouse gas emissions have a common theme — the agency and the president, it is often alleged, are waging a “war on coal.” And indeed, if the so-called “Clean Power Plan” is successfully implemented by the agency, it’s pretty clear that coal use will decline, even as we’ll get more and more of our electricity from natural gas and renewables (all trends that have begun already anyway).
But according to a new analysis of how the plan will work, all this emphasis on coal may distract from one of the policy’s key features. The Clean Power Plan, finds the analysis by the Center for Climate and Energy Solutions (C2ES), will work most of all by stoking more efficient uses of energy. In other words, wherever electricity comes from under the plan — whether coal, natural gas or renewables — we’ll be giving off less greenhouse gas emissions simply because we’ll be using less of it in total (in some cases, if you will, wasting less).
Not only is energy efficiency arguably less controversial than cutting down on coal use; it also saves everybody money on their energy bills — a projected 8 percent by 2030 under the Clean Power Plan, according to EPA. After all, if more homes are weatherized, if they contain more energy-efficient appliances and smarter thermostats, if buildings are constructed more sustainably, then there will be less overall electricity required for powering our daily lives.
The C2ES analysis examined the results of six economic models which were used to identify “least-cost pathways” for how the Clean Power Plan might be implemented. And it found that “all studies project that energy efficiency will be the most used and least-cost option to implement the plan.”
“The studies also show that the effect of energy efficiency is large enough that overall electricity consumption declines,” the analysis, written by Jeff Hopkins, adds. (The paper draws on modeling studies from EPA, the Natural Resources Defense Council and several other outlets.)
A similar analysis last year, by the American Council for an Energy-Efficient Economy, found that the nation’s overall carbon emissions could shrink by 26 percent by the year 2030 if all states put in place a suite of four major energy-efficiency measures — a pretty dramatic level of savings.
The research on energy efficiency, explains C2Es president Bob Perciasepe, “really makes it clear that no matter how people have started to look at this, it almost always turns out to be the most cost-effective approach.”
The reason energy efficiency could play such a big role turns on the way the Clean Power Plan is designed. The regulation would set targets for states to reduce their greenhouse gas emissions by 2030, but then allow the states to reach these goals by drawing on a blend of four separate approaches or “building blocks.” Those include not only switching to more natural gas and renewables but also finding ways to use less energy overall to achieve the same goals — in other words, increasing efficiency. The EPA assumed that states might be able to increase overall energy efficiency by as much as 1.5 percent per year.
Notably, C2ES’s analysis of the models showed that in hypothetical cases in which energy efficiency is for some reason not counted, or is constrained under the Clean Power Plan, the result is sharper cuts to coal use, and more stark increases in use of natural gas. “All models respond to the constraint by dispatching less coal generation and more natural gas generation,” wrote author Jeff Hopkins.
As we have previously highlighted, under the Clean Power Plan, states could even meet EPA’s emissions reductions goals, in part, by a truly novel approach in the context of environmental “regulation” — “nudging” human behavior itself. If people simply change their habits to use a little less energy in their homes, then greenhouse gas emissions (and electricity bills) will inevitably decline, whether or not each flip of the light switch is ultimately powered by coal.
Indeed, the benefits of increasing energy efficiency extend far beyond those who actually take steps to implement efficiency measures, says Susan Tierney, a senior adviser with the Analysis Group and former assistant secretary at the Department of Energy. “We know that what happens with energy efficiency is that, the overall systems requirements go down, so the most expensive power plants don’t have to run as much,” Tierney says. “So there are savings not only for the households and firms who adopt efficiency measures, but it helps people who don’t do it anyway.”
That’s not to say that the energy efficiency component of the Clean Power Plan is uncontroversial — to the contrary. Perhaps the biggest critique of this “building block” is that EPA doesn’t have the power to institute it.
Bruce Braine, vice president at the large utility company American Electric Power, has argued that EPA may lack authority to govern states’ energy efficiency programs, noting that “Energy policies that include [energy efficiency] programs and goals are traditional areas of regulation reserved for states under the 10th Amendment, and included in integrated planning processes in states with vertically integrated utilities.” Eugene Trisko, an attorney representing the United Mine Workers of America, made similar arguments recently before the Senate Environment and Public Works Committee.
So in sum, with EPA’s regulatory plans, it’s hard to consider any aspect of them truly uncontroversial or uncontested.
Nonetheless, it’s safe to say that with all talk of targeting coal, we often fail to realize that a fundamental part of the plan is simply based on doing more with less. The disconnect was epitomized by a recent exchange before a subcommittee of House of Representatives’ Committee on Energy and Commerce. Janet McCabe, the EPA’s acting assistant administrator for the Office of Air and Radiation, was testifying about the Clean Power Plan, and was questioned by Republican Rep. David McKinley of West Virginia:
Rep. McKinley: I want to make sure I am hearing — you said energy prices are going to go down?
McCabe: Energy bills will go down, congressman.
McKinley: How in the world are they going to go down if we are spending this …
McCabe: With energy efficiency, people will be buying less electricity.
McKinley: And you are serious? You really —
McCabe: I —
McKinley: — believe this?
McCabe: I do. We are seeing it all across the country.