EPA and Regulation and Energy & Environment and Environment and Environmental Policy

Obama seeks to cut U.S. power plant carbon by 30 percent

June 2, 2014

President Barack Obama is proposing cuts in greenhouse-gas emissions from the nation’s power plants by an average of 30 percent from 2005 levels, a key part of his plan to fight climate change that also carries political risks.

The proposal, issued Monday by the U.S. Environmental Protection Agency, represents the boldest steps the U.S. has taken to fight global warming, with the administration saying it would both boost the economy and cut health woes such as asthma and heart attacks. The effort drew immediate pledges from Republicans to seek to block the rule, as they warned it would severely undercut the economy and raise electricity prices.

“We can raise the common denominator for a cleaner, low-carbon economy that’ll fuel growth for decades to come,” EPA Administrator Gina McCarthy was expected to at a ceremony in Washington, D.C., Monday morning, according to excerpts of her remarks released in advance. “There are still special interest skeptics who cry the sky is falling. They deliberately ignore the risks, overestimate the costs and undervalue the benefits.”

The proposal will list a range of options being considered, and note that the administration prefers an average 30-percent cut over 2005 levels by 2030, according to people familiar with the plan. Because emissions from power plants fell about 15 percent from 2005 to last year, the preferred reduction equates to less than a 20-percent cut from current levels. The EPA said it would lead to $90 billion in climate and health benefits.

Rally support

Obama signaled both the importance of the initiative to his legacy on environmental protection and the bruising fight ahead by joining a call Sunday with congressional Democrats and White House counselor John Podesta to rally support.

Obama dismissed complaints that the rule will hurt the economy by driving up electricity prices, and told the Democrats listening: “Please go on offense” to promote the health impacts of the measure, said two people listening in on the call, including Rep. Gerry Connolly, a Virginia Democrat.

Republicans in Congress criticized the plan.

“The White House scheme will raise costs and destroy American jobs,” said Michael Steel, spokesman for House Speaker John Boehner, an Ohio Republican.

Obama refuted that on the call, telling the lawmakers that the new rule limiting carbon pollution will boost the economy by an estimated $43 billion to $74 billion.

The EPA said its expects U.S. retail electricity prices to rise from 4 percent to 7 percent by 2020 because natural gas will get more expensive as demand increases.

The U.S. Chamber of Commerce said the plan would cost the economy $51 billion and 224,000 job losses every year between now and 2030, all without making a noticible dent in climate change.

State flexibility

The proposed regulation will permit states to achieve the reductions in climate-warming pollutants by promoting renewable energy, encouraging greater use of natural gas, embracing energy efficiency technologies or joining carbon trading markets. The regulations will apply to existing power producers. Separate regulations governing new plants have already been proposed.

The 30-percent reduction represents an average. Individual states may be directed to cut carbon emissions at levels that are greater or less than that overall figure. Because the rule will list options, it will invite both environmental and industry advocates to seek steeper or less onerous reductions over the coming year, when a final version will be issued.

Emissions from power plants were already down 15 percent from 2005 through 2012, halfway to the goal, according to Vicki Arroyo, executive director of the Georgetown Climate Center. The group compiled a list of reductions by state, which showed that many states, including New York, Washington, Virginia and Georgia, have already exceeded cuts of 30 percent.

Climate talks

The plan will also give Obama evidence of America leading by example as he tries to persuade other nations to cut their carbon emissions. Obama pledged five years ago as part of international climate talks that the U.S. would cut its greenhouse gas emissions by 17 percent from 2005 levels by 2020.

“The decision by President Obama to launch plans to more tightly regulate emissions from power plants will send a good signal to nations everywhere that one of the world’s biggest emitters is taking the future of the planet and its people seriously,” Christiana Figueres, the United Nations’ top climate official, said in a prepared statement.

Legislation to require economy-wide cuts to emissions through a cap-and-trade system died in the Senate in 2010 under mounting opposition from Republicans and some industrial state Democrats who worried it would raise the costs of electricity. The new proposal is less sweeping, though still historic. Power plants are the source for about 40 percent of the total U.S. carbon emissions, which most scientists say are contributing to rising global temperatures.

Coal’s role

Plants that burn coal to generate electricity account for about 75 percent of all power-plant emissions. Coal, the most carbon-intensive fossil fuel, provides about 40 percent of the U.S. power. While that’s down from about half, coal is remains the single largest source of electricity generation in the U.S.

The proposed rules are among policies “designed to drive out low-cost electricity and replace it with higher-cost, more expensive and less reliable electricity,” Hal Quinn,CEO of the National Mining Association, said Sunday on ABC’s “This Week” program.

The EPA is counting on coal plants being operated more efficiently and states shifting to natural gas from coal to get modest cuts in the next four or five years, people familiar with it said. Each state will have a target based on its emissions, and in the next decade the overall electric grid will need to become more efficient and use renewable generation to achieve the reductions, they said.

Pollution limits

“President Obama is right to take decisive action to combat this clear and present danger,” Frances Beinecke, president of the Natural Resources Defense Council, said by e-mail. “The proposed standards will limit, for the first time in U.S. history, the unrestricted pollution of our atmosphere by carbon dioxide.”

Some industry observers have said the approach favored by the administration will leave the rule open to legal challenges under the Clean Air Act because it relies on an interpretation of the law that counts emissions reductions that occur outside power plants -- through such things as efficiency measures, greater use of renewable energy and even joining carbon-trading programs. Past regulations have sought to cut pollutants as measured at the smokestack.

Republicans have signaled they intend to make the rule an issue in the House and in campaigns in states where the coal industry is a major employer. Some Democrats have voiced opposition to a plan they worry will hurt them with voters.

“I will continue to fight back by introducing legislation next week on behalf of our coal miners and Kentucky families to stop Obama from imposing this national energy tax -- a failed tax which has already been rejected by Congress,” Senate Minority Leader Mitch McConnell, a Republican, said in an e-mail. He said he would soon introduce legislation in the Senate to block the rules from taking effect.

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