On Monday, the Obama Administration released what could be the most important element of its climate agenda, dubbed the Clean Power Plan. In it, the EPA proposed a state-centric framework for regulating greenhouse gas (GHG) emissions from existing power plants. The regulation would require states to cut carbon emissions from existing coal- and gas-fired power plants by an average of 30 percent below their 2005 levels by 2030.
It will have widely differing effects on each state, which could choose from many options for complying — including joining cap-and-trade networks, encouraging demand side energy efficiency or relying more on natural gas, nuclear, solar and wind. Depending on the scenario you pick, Pennsylvania will have to reduce carbon emissions by between 25 and 38 percent.
The plan was originally slated to be announced by the President, but after further review, the proposal was announced by EPA Administrator Gina McCarthy early Monday morning. President Obama addressed his comments on the plan in a telephone call with healthcare advocates Monday afternoon, as part of the Administration’s plan to tie public support to potential improvements in public health from reduction of emissions.
The rule may be President Obama’s best hope for a legacy on climate change, and could fulfill environmentalists’ hopes for dramatically lessening the United States’ reliance on coal, but there are several obstacles in the way of implementation: the courts, the states, opponents in Congress and whoever occupies the White House after 2016. This clearly is the beginning of a lengthy public debate, and is the end result of 40 years of public legislation aimed at addressing air pollution.
Pennsylvania is Coal Country
The EPA admits that some power plants are likely to close due to the rule, and it appears likely that some Pennsylvania’s plants would have to be among them.
In a statement on his campaign site, Corbett criticized President Obama and Democratic gubernatorial candidate Tom Wolf (who support similar legislation) for threatening the 62,000 coal-related jobs in Pa, calling it the “job-killing Obama-Wolf cap-and-trade tax.” A link to the statement is included below.
One major energy company that operates in Pennsylvania was cautiously optimistic about the proposal. “FirstEnergy believes it is in a strong position to meet the requirements in the proposed rule” through investments in emissions controls and plant retirements, said spokeswoman Stephanie Walton. She said FirstEnergy, which is based in Akron, Ohio, is still studying the plan, but had already expected to cut carbon emissions significantly next year.
Not surprisingly, both the Pennsylvania Coal Alliance and PennFuture this week released statements on the rule, and also not surprisingly, their takes differed significantly. See links below.
Pressure from Congress
Forty-one U.S. Republican Senators sent a letter to President Obama Wednesday urging him to withdraw the proposed regulation. In addition to the cost concerns, the senators said the EPA’s proposal runs afoul of the Clean Air Act and its limits on executive power.
The GOP is calling the rule a “national energy tax” that will cripple the coal industry, while the coal industry feels shut out of the list of vital energy sources. Both warn that energy crisis and sky-high electricity costs are likely outcomes if the rule is implemented.
Coal-state Democrats have also attacked the rule and its impact on jobs in the coal and electric industries. This has become a major election issue, and the White House has given them a “free pass” to oppose the rule this summer and fall.
While House Speaker Boehner and Senate Minority Leader McConnell plan to try to block or minimize the rule, reality suggests this will be difficult. Next summer, Senate Republicans will undoubtedly try to use a little-invoked law called the Congressional Review Act to repeal the regulation. But Republicans probably wouldn’t have the 67 votes needed to override an Obama veto, even if the GOP takes control of the Senate this fall.
The Next President
The next president could take action to slow down or weaken the standards, as well. But by 2017, so many of the legal and political battles will be behind us all that it would be difficult at best, to reverse three years of activity and planning.
Lengthy, Costly Battles
The administration’s proposal first faces a 120 day public comment period, and will not be finalized for at least another year. The EPA will be holding several public hearings on the proposal, including one scheduled for Pittsburgh July 31 from 9 a.m. till 8 p.m.
Once the rule is finalized, you can expect that court cases will begin in earnest, with coal companies, electric generating companies and state governments arguing that the rule goes far beyond the scope of the Clean Air Act which was its justification.
A major point of contention will be the EPA’s decision to set emission-reduction goals for each state that lump all their coal- and gas-fired plants into one system, rather than setting plant-by-plant targets. EPA’s approach can achieve much bigger pollution cuts, for instance by encouraging statewide efforts to reduce the demand for power, but opponents will argue that the agency is overstepping its legal authority.
Opponents note that a related rule for greenhouse gases from future power plants would almost certainly have to be done before the agency can finish the new rule, and the September rule is in a bitter legal battle over requirements for capture of carbon emissions, which may run afoul of the 2005 EPACT.
The courts can also slow the entire process down, perhaps until a new president and Congress can chime in. Environmental officials in North Carolina, Alabama, Michigan, Kansas, West Virginia, Indiana, Ohio, Arizona and Wisconsin wrote the EPA last month, asking for more time to submit implementation plans, given the almost certain litigation over the rule.
Political and legal battles will be fought at the state level too, with both state governments and regulated companies using local and state processes to oppose the impact of the regulations. The Clean Power Plan as proposed now will require states to begin hitting reduction targets in 2020, but given the timing, it’s very possible that many states will still have legal issues and state regulatory plans in legal limbo until much later.
Interstate cap-and-trade systems, including the Regional Greenhouse Gas Initiative in the Northeast, are likely to gain momentum, for better or for worse. (Tom Wolf has called for Pennsylvania to join the RGGI.)
In short, the proposal of the Clean Power Plan sets the scene for a long struggle that will unfold over many years and Presidential administrations, and that can only be resolved with real certainty by new congressional action. Settle in for the fight—it’s likely to go the distance.
EPA and Obama cite Health Concerns
The EPA framed the rules as having a “potentially dramatic improvement on public health,” saying that for every dollar the government invests in the new climate initiative, families will see $7 in health benefits.
“Today, climate change-fueled by carbon pollution-supercharges risks not just to our health-but to our communities, our economy, and our way of life,” McCarthy said. “That’s why EPA is delivering on a vital piece of President Obama’s Climate Action Plan.”
The EPA projects that the new rules will:
- Cut carbon emission from the power sector by 30 percent nationwide below 2005 levels, which is equal to the emissions from powering more than half the homes in the United States for one year;
- Cut particle pollution, nitrogen oxides, and sulfur dioxide by more than 25 percent as a co-benefit;
- Avoid up to 6,600 premature deaths, up to 150,000 asthma attacks in children, and up to 490,000 missed work or school days—providing up to $93 billion in climate and public health benefits; and
- Shrink electricity bills roughly 8 percent by increasing energy efficiency and reducing demand in the electricity system.
Costs and Benefits
The regulations are projected by the EPA to generate more than $90 billion in climate and health benefits compared to $7.3 billion to $8.8 billion in costs. Under the first year alone, the EPA claims enforcement of the rule will avoid up to 150,000 asthma attacks and 2,100 heart attacks.
States will be given a year to design their own implementation plans that will comply with the rule. Certain states may be given up to 2018 to implement a plan.
“This plan is all about flexibility,” McCarthy said. “The glue that holds this plan together, and the key to making it work is that each state’s goal is tailored to its own circumstances, and states have the flexibility to reach their goal in whatever way works best for them.”
Chaos Theory
The EPA often struggles with meeting deadlines, and getting the rule finished before Obama leaves office is critical to having it turn out the way he wants. The EPA already added unexpected delays into the proposed standard Monday, pushing back requirements for states to file plans until as late as 2018, and giving itself a full year to review them. That pushes the endgame well into the next president’s term.
The states will have between one and three years to submit plans showing how they’ll meet the requirements. The EPA will have a year to approve or deny the plans. If a state refuses, the agency can implement a federal plan in its place.
But the rule offers no details on how the EPA would choose such a plan, and no “model” for any federally run program.
EPA officials insist that states would rather craft their own plans. But experience with the Affordable Care Act suggests this could be a problem. When it came to states setting up health care exchanges, 36 states chose instead to rely on federally run programs to save money.
More Information
EPA fact sheets and details about the proposed rule
President Obama’s Climate Action Plan
Corbett Statement on the Proposed Rule
PA Coal Alliance Statement on the Proposed Rule
PennFuture Statement on Proposed Rule