Carbon Pricing Opportunities in the power sector (40% of US emissions) to reduce carbon pollution (cues.org)

Published on August 7th, 2015 | by Sandy Dechert

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Why Not The Clean Power Plan?

August 7th, 2015 by  

Visible air pollution (ucsusa.org)

The Clean Power Plan just finalized by the Obama administration has occupied the media for most of a week now.

So what’s the big deal? The Earth has a significant problem with climate change, and the US government has put together a coherent nationwide approach. Individual states hold high responsibility for its reach and implementation. The new American plan follows a trend set by the 28-state European Union and the 190-some United Nations, which collate differing responses from individual countries.

The US plan currently takes aim at huge emissions of carbon dioxide, a powerful greenhouse gas, from the fuel and electric power industries. These entities make up the largest segment (about 40%) of harmful atmospheric CO2 pollution. Within the energy sector, coal-fired power plants emit more CO2 than any other source. That’s why the regulatory finger currently points at them as an obvious candidates for change.

Opportunities in the power sector (40% of US emissions) to reduce carbon pollution (cues.org)

Bickering over coal power started with scientific signposts and has intensified with government action. However, as David Roberts pointed out in Grist several years ago, the United States—with the Environmental Protection Agency as its lead department—is legally obliged by Section 111 of the half-century old Clean Air Act (you know, the one that made skylines crisp again) to do something about the threat posed by this invisible gas and its nasty relatives in the atmospheric greenhouse:

“[T]his series of executive actions is prescribed by statute. EPA is not “bypassing” Congress, or going around it, or in any way exceeding its authority. It is not even acting on Obama’s discretion, not really. It is simply carrying out the will of Congress, as embodied in the Clean Air Act…. On that, Obama has no choice.”

In a recent article in Fortune magazine, Katie Fehrenbacher opined that the White House has operated through the EPA because “politically a national carbon emissions reduction plan wouldn’t be able to pass through Congress.” For sure, the party currently prevalent in the Senate and House resists rules for power plants, but congressional dissonance is not the reason the EPA is involved. The agency has not only the authority to regulate the energy sector’s emissions, it has a sworn duty to do so.

Fehrenbacher’s words softly whisper another point, though. The Clean Power Plan the US is using to respond to unacceptable carbon pollution isn’t the best way to approach the climate problem. But we’ll get back to that in a minute.

In compiling the final rules, the EPA consulted over 200 groups and held well over 100 unofficial meetings, almost ten times the 11 public listening sessions required by law. It received an unprecedented four million responses to the proposed regulation.

2014 poll shows that all states favor CO2 regulation (dot earth/blogs.nytimes.org)

Ordinary people spoke with their feet in the huge climate march held in New York last September and through other grassroots forums. A majority of adults in all 50 states support emissions targets. Even 4 of the 16 states with more stringent standards in the final plan vs. the original proposal support CO2 regulation by more than 75%.

Local governments, cities, and multistate regions have coalesced around climate problems and are quickly coming up with solutions without federal or state engagement. And business—a power hitter with the likes of Apple, Google, Walmart, and Coca-Cola—becoming painfully aware of (and has admitted some responsibility for) the overarching problems, has begun to step up to the plate.

Renewable energy has a much more even track record for price than natural gas (ucsusa.org)This year, natural gas overtook coal as the #1 fuel source for American energy. The recent natural gas boom, which has propelled the United States to petroleum leadership, the dramatic drop in oil prices, and the choice of 2005 (nearly the peak year for US carbon) as the baseline for emissions cuts have inspired closure of many coal plants already. At least 20% of aging and uneconomical US coal-fired plants have shut down within the past couple of years or are now closing. Almost half (40%) have plans to retire by 2025. But natural gas has its problems as well. One of the greatest is price fluctuations similar to those we have historically experienced from using oil.

In the US, the electric power industry is highly regional. Some states, like California and Texas, have impressive solar and wind industries already, while others benefit from large coal and natural gas resources or have consumed mostly coal since people started using the black gold to mass-produce electricity in the 19th century. Big producers, like Wyoming, and the coal states that have not started to change with the times stand to lose more than others with the Clean Power Plan. Three of the biggest coal-chompers (Virginia, North Carolina, and Tennessee), however, are already on track to hit about 80% of their Clean Power Plan targets.

EPA estimated state emission reductions vs consultant estimates (ucsusa.org)

Even without the great renewable gains foreseen by consultants (above), individual consumers should collectively be able to save $155 billion from 2020-2030 on bills for electric power under the existing Clean Power Plan.

Business Insider calls the plan “a massive 15-year project designed to make the US less dependent on nonrenewable forms of energy.” The statement rings true, as far as it goes. You may have noticed that it doesn’t go all that far, considering (1) the huge savings to individuals and (2) the involvement of other nations for many decades, US congressional awareness since the late 1980s, and the continuing work of Al Gore and other hefty climate Cassandras.

James Murray, editor of BusinessGreen, calls the CPP action only the latest (but arguably the highest-profile) addition to the global trend of decarbonization. At that, it’s still a miserably slow and complicated route toward addressing carbon dioxide, even though critic Joe Romm has said it might work anyway.

The US once seriously discussed carbon taxation as a reasonable alternative. Its speed, universality, and demonstrated effectiveness make a carbon tax even more attractive now. Too, real carbon pricing looms large in the minds of others around international bargaining tables. Let’s not forget that the Clean Power Plan actually does have a reasonable alternative.





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About the Author

covers environmental, health, renewable and conventional energy, and climate change news. She's currently on the climate beat for Important Media, having attended last year's COP20 in Lima Peru. Sandy has also worked for groundbreaking environmental consultants and a Fortune 100 health care firm. She writes for several weblogs and attributes her modest success to an "indelible habit of poking around to satisfy my own curiosity."



  • Otis11

    Why can’t we simply get a CO2 tax? Easier to implement and more cost-effective than top-down regulation. (Plus, instead of spending money policing polluters we could use it for, something useful – education perhaps?)

    • Matt

      While a national carbon fee/dividend system would work better. Is easier to implement, already measure at power plants. It is not going to happen in the next few years. Need to keep pushing for it, but CCP is at least a step in the right direction.

      • Otis11

        Sure, I didn’t differentiate between a carbon fee or a carbon tax… Honestly, either would work well. As for the dividend system – that can get very hairy depending on how you distribute it… I’d rather just see the money go into making higher education more affordable, but I’m sure many would disagree with that too…

    • Frank

      A CO2 tax sounds like it would cost consumers, and in the short term it might, but renewables would just take over, and consumers would simply reap the rewards from the reduction in the effects of externalities. I’d vote for it.

      • John Ihle

        It depends on how a tax would be implemented. If the tax is applied at the source and the revenues from the tax are returned to the ratepayers it would/could or should be revenue neutral from the ratepayer perspective. A tax may facilitate a speedier buildout of RE.

        But I believe the utility industry has other problems associated with DG/RE, competition and subsequent revenue streams going into the future.

        The CPP? I agree w some of the others that have posted; it’s a start.

      • Otis11

        Everything costs the consumers in the end – regulations impart additional expenses on the generators which either pass that on to the consumer or go bankrupt (which ends up passing much of that cost on to the consumer in the higher risk profiles of future investments in the same area).

        Typically, the more direct the approach, the lower the uncertainty/risk profiles and the cheaper the entire move ends up being. We need direct approaches with adequate lead time to allow businesses to invest accordingly. Most practical policies would actually be much cheaper if we could just decide on one concretely!

  • JamesWimberley

    The CPP is cautious and unambitious by international standards. Obama and McCarthy were, I speculate, primarily concerned to secure the neutrality – if not the enthusiastic support – of the conservative (small c) utility industry and secondarily to proof the plan against the inevitable legal challenges on proportionality grounds. Once the realization takes hold that coal generation is doomed, change will be faster than the plan requires. President Clinton2 can tighten it up.

    • Bob_Wallace

      I view it as getting the camel’s nose under the tent. Let concerned parties adjust to this change and then push for more.

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