So here are some things you need to know about this plan, and its significance:
What is the Clean Power Plan?
The Clean Power Plan is a regulation advanced by the Environmental Protection Agency under the Clean Air Act that would cut carbon dioxide emissions from U.S. power plants 32 percent below their 2005 levels by the year 2030. The rule works by requiring states to make their own cuts — each state is given a different emissions reduction goal under the plan and will have various options for hitting its target.
Those options, dubbed “building blocks,” can include increasing the percentage of a state’s electricity that comes from renewable sources like solar and wind; increasing efficiency at power plants so that they generate more electricity with fewer emissions; and switching away from coal-fired power plants and toward natural gas generation, which is less carbon intensive.
It’s important to note that most of these changes — more renewables, more natural gas, fewer coal-fired power plants — are happening anyway. The Clean Power Plan seeks to ride atop an energy sector trend that is already occurring, while also hastening it along.
How is the final rule different from the proposed rule?
It’s tougher. The original rule, proposed in June of 2014, would only have achieved a 30 percent emissions reduction below 2005 levels by 2030. The final rule achieves a 9 percent greater cut, according to a summary provided by the administration. At the same time, the final rule gives states two extra years to get started on cutting emissions.
Moreover, although the final plan has not yet been released in all of its detail, an administration fact sheet says that these emissions reduction goals will be less reliant on a growth in electricity generation from natural gas than was the case with the earlier proposal. According to the summary, the new rule will include a so-called Clean Energy Incentive Program, which will promote “early deployment of renewable energy and energy efficiency.” As a result, there will be less of an “early rush to gas.”
Here, it’s important to note that while generating electricity by burning natural gas generally emits only about half as much carbon dioxide as does generating it by burning coal, generating it from solar arrays or wind turbines doesn’t emit any at all. Furthermore, some environmentalists argue that methane leaks from shale gas sites offset much of the advantage of natural gas over coal.
Thus, the more states respond to the Clean Power Plan by upping their renewables, the more the nation’s emissions as a whole will decline.
Additional changes to the rule, according to administration officials, seem designed to head off an array of criticisms leveled at the draft plan. Those include adding a “reliability safety valve” that would make sure that the plan doesn’t undermine the reliability of electricity delivery or cause blackouts – a leading criticism of the 2014 proposed rule — and the removal of one “energy efficiency” building block that, some argued, might draw successful legal challenges.
Why is the Obama administration using the EPA to control emissions?
This wasn’t the original plan. When President Obama came into office in 2009, the administration wanted a cap-and-trade bill that eventually died in the Senate. And there are many other proposed options for combating climate change, including a revenue neutral carbon tax, combined with a dividend, which would actually pay Americans back the money reaped by the fee on emissions.
These proposals might be more popular than an EPA-centered approach — and they might also be harder to challenge legally (everyone expects lawsuits over the final Clean Power Plan). But gridlock in Congress has prevented the passage of legislation to curb climate change.
Meanwhile, in the 2007 case Massachusetts vs. EPA, the Supreme Court found that greenhouse gases counted as “air pollutants” under Clean Air Act definitions, and in 2009 the EPA released an “endangerment finding” stating that carbon emissions endanger the public and proceeded to regulate them, first by focusing on automobiles and then turning its attention to power plants.
In light of this legal history, the move toward EPA regulation was probably bound to happen eventually, especially since no legislation has been passed to address these emissions through a more direct route.
What are the costs likely to be?
There’s a vast debate over what the economic costs of EPA’s proposed Clean Power Plan would be — with many studies on the matter reaching different conclusions. And once the new plan is out, the economic modelers will surely fire up their computers again — with, likely, similarly diverging results.
The administration itself says that the plan will “save the average American family $85 annually on their energy bill by 2030.” It also says there will be immense public health benefits to cleaning the air, resulting in “an 88% decline in premature death.”
But critics are likely to see more costs than benefits. To give just one example, in 2014 the U.S. Chamber of Commerce’s Institute for 21st Century Energy released a much-cited report asserting that the nation’s GDP would take a $51 billion annual hit from emissions cuts like those that were then expected to be required by EPA. But the Chamber report also made several assumptions that differed from the EPA’s proposed plan.
And now, the final version of that plan is different. Let the economic studies begin (again).
Does this really do anything to combat global warming?
Global warming is a global problem — the United States can only address its own contributions, and we are now merely the second largest emitter (after China).
Nonetheless, the plan is the centerpiece of the Obama administration’s push to cut emissions. And the administration says it should put the United States on course for reducing power sector emissions 27 percent below their 2005 levels by the year 2020.
The United States has pledged, as part of United Nations climate negotiations, to reduce total emissions (from the power sector and beyond) by 26 percent to 28 percent below 2005 levels by 2025. In combination with other measures — including curbs on emissions from light duty vehicles, trucks, the agricultural sector, and more, many of which have only been rolled out this year — the newly released Clean Power Plan will be a key component of getting there.
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