On Monday the Senate held a symposium under the auspices of Sen. Tom Carper’s (D-DE) office — “Climate Change Actions under the Clean Air Act: Reducing Power Plant Emissions without Harming the Economy” — bringing together representatives from both clean energy groups and the energy industry to explore how greenhouse gas emissions from new and existing power plants could be regulated under the Clean Air Act.
The Supreme Court has ruled that under that law, the Environmental Protection Agency must regulate carbon dioxide emissions if it finds them to be a danger to public health and the environment — which it has. The EPA is already finalizing rules for new power plants, with rules for existing plants anticipated to be in the works, which brings us to the symposium’s question of just how to apply those powers.
The stand out presentation came from David Doniger of the Natural Resources Defense Council, which lays out a plan for the EPA to cut carbon emissions from power plants 26 percent from 2005′s levels by 2020. The plan was run through the same model used by the EPA and a host of other outfits, and according to the analysis it would prevent 3,600 deaths and thousands of other health incidents by 2020, deliver $25 to $60 billion in savings (depending on your preferred discount rate) by avoiding those health effects and the damage of climate change, and it would do this for a compliance cost of only $4 billion in 2020.
The three main parts are:
- 1. Set a different carbon emission rate for each individual state. This avoids imposing a one-size-fits-all approach. The baseline rate for coal generation would be 1,500 lbs of carbon dioxide per megawatt hour versus 1,000 for natural gas generation. The final rate for an individual state would be a blend between those two baselines determined by its mix of coal and natural gas power generation. (For example, a state that now gets 90 percent of its fossil fuel electricity from coal and 10 percent from gas would be required to hit a rate of 1450 lbs per megawatt hour.) This would be an overall emission rate for the state, meaning individual plants could emit at higher or lower levels. The allowable emission rate would drop again in 2025.
- 2. Allow plants an array of tools for meeting their emission rate. Each plant or company could then decide which mix tools works best for particular circumstances. For example, an individual plant could improve its boiler technology or retrofit with carbon sequestration — assuming, that is, the latter becomes commercially viable. Owners of multiple plants could coordinate running times, or build in more natural gas or renewable capacity to average out to the overall target. Low- or zero-emitting sources would earn generators credits that could then be traded between companies, within states, or even across state lines among states that allow it — essentially creating a kind of cap-and-trade system under the auspices of the EPA rather than an act of Congress.
- 3. Allow energy efficiency to also earn credits. Qualifying efficiency programs run by the states could also earn credits, which generators could then purchase to give themselves added leeway. Increased efficiency would lower costs for consumers and businesses and thus cut demand. To qualify, these energy efficiency programs would have to meet rigorous standards laid out in NRDC’s report.
If states can demonstrate that an alternative approach from the EPA’s model — say, California’s new cap-and-trade system — will deliver equal or better results, they’ll be free to pursue that.
A target of a 17 percent reduction in total carbon dioxide emissions from the 2005 baseline by 2020 was originally laid out in H.R. 2454, the 2009 cap-and-trade bill, and then re-articulated by President Obama. When combined with reductions in carbon emissions due to new car standards, the model of NRDC’s approach (the green line below) suggests it would get the United States quite close to achieving that goal (the dotted white line below.)
The modeling also projected that gas and electricity prices would remain virtually unchanged by this approach.
According to Brad Plumer of the Washington Post, the NRDC’s lawyers say this approach is all perfectly legal under the Clean Air Act. But as it would also break new ground, litigation in the courts is a virtual certainty. And fear of that litigation may be behind recent reports that the Obama Administration is considering delaying the rollout of its standards for existing power plants.
For his part, Doniger said at the symposium that the possibility of delay hardly came as a surprise to him or others in the climate policy world, and that he’s heard no hard evidence that the delay will actually happen. He added that everyone trusts the EPA to work as hard as it can, and that the sources quoted in the Washington Post story may be expressing a wish more than actual knowledge.
But if the delay does happen, “they should expect groups like ours will take legal action to meet their responsibility,” Doniger said.
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