President Obama’s Clean Power Plan, designed to cut carbon emissions from power plants, seems pragmatic and moderate, certainly by European standards. Yet for US observers it “makes history”, because it is the first time the federal government puts limits on “carbon pollution”.
On 3 August, President Obama announced the finalisation of the Clean Power Plan drafted by the US Environmental Protection Agency (EPA).
The Clean Power Plan is aimed at reducing carbon emissions from existing power plants. The plan, said Obama, is needed, because power plants are “the largest single source of carbon pollution in the US”, generating “about a third of America’s carbon pollution. That’s more pollution than our cars, our airplanes, and our homes generate combined.”
Obama noted that up to now “there have never been federal limits on the amount of carbon that plants can dump into the air”. The Clean Power Plan will finally, for the first time, change that.
Justifying his plan, Obama said that carbon “contributes to climate change, which degrades the air our kids breathe” and compared carbon pollution to “toxic chemicals like mercury, sulphur and arsenic”, for which there are federal limits already. This comparison might seem forced: carbon dioxide is after all not a “toxic chemical” that “degrades the air”. It is the stuff that plants use to grow.
But the comparison is probably no coincidence. The important point about the Clean Power Plan is that it’s a regulation from the Environmental Protection Agency (EPA) based on the EPA’s authority under the Clean Air Act (CAA). In other words, it is not a legislative proposal that will be submitted to Congress. It is a federal rule based on existing air pollution legislation. The opposition to it will therefore have to take a legal rather than a political form.
Indeed, most observers agree that the legal challenges which opponents are sure to issue will end up in the Supreme Court.
According to Cara Horowitz of the UCLA School of Law at the University of California, the legal counterarguments will be focused on two issues. First, the Clean Air Act contains a highly unusual inconsistency. It has two versions, one adopted by the Senate, one by the House of Representatives. One of them allows regulation of carbon dioxide from power plants, the other does not. This contradiction has not yet been resolved in court.
The second problem is that the language of the Clean Air Act is “inherently ambiguous”, as Horowitz puts it. It calls for the EPA to set standards for pollution reduction that are based on the ‘best system of emission reduction’ that has been ‘adequately demonstrated’,” but what does this mean? How do we know what the best system is, or when it’s adequately demonstrated?
The EPA tends to take a “broad view” of its authority, but industry opponents and critics of federal power argue that it is thereby acting beyond its legal bounds. This is such a fundamental issue that the fight over the Clean Power Plan will, again, almost certainly continue until it reaches the Supreme Court.
Still the Plan seems to stand on fairly solid legal ground. Already in 2007 the Supreme Court ruled, in Massachusetts v. EPA, that greenhouse gases are covered by the Clean Air Act’s definition of air pollutant. Indeed, some argue that this ruling in fact requires the EPA to take action against carbon pollution.
Although the Clean Power Plan has generated a lot of publicity, it should be noted that it is only one element in the Obama administration’s climate policy, as put forward in Obama’s Climate Action Plan launched in June 2013.
Other elements of Obama’s climate policy are, among other things:
- emission standards for new power plants
- vehicle efficiency standards and fuel-economy standards
- a program to limit methane emissions
- a permitting scheme for large industrial facilities (which must adopt “best available technologies” to obtain permits)
- energy efficiency standards for appliances and buildings
These actions together are intended to cut US greenhouse gas emissions by 26-28% in 2025 compared to 2005, as the US has pledged in its “ Intended Nationally Determined Contribution” (INDC), which it has submitted to the United Nations Framework Convention on Climate Change (UNFCCC) for the Paris conference in December. (The EU has pledged to cut emissions by 40% in 2030 against a 1990 baseline.)
How it works
The goal of the Clean Power Plan is to cut emissions from the power sector by 32% in 2030 against a 2005 baseline. How will this work? The plan gives different 2030 targets (in emissons per MWh of electricity use) for each of the US States (except Hawaii, Alaska and Vermont – the latter because it has no fossil fuel power plants).
The targets are based on specific carbon pollution standards for gas and coal power plants, called carbon dioxide (CO2) emission performance rates. They are calculated for each State by taking a blend of the performance rate for coal and the performance rate for gas weighted by the number of coal and gas plants in the state. The standards are chosen in such a way as to result in a 32% nationwide carbon emission reduction.
However, States then have a choice in how they want to meet their target. They can make existing coal plants more efficient, or run existing gas plants longer, but they can also take other measures that will have the same results, for example, increase electricity generation from renewables. They may also take demand-side energy efficiency measures, participate in carbon trading markets with other States, set up carbon capture and storage (CCS) projects, or increase the share of nuclear power.
In this sense the US approach seems more flexible and comprehensive than the EU one. In the EU the energy sector (and the energy-intensive industry) have to reduce CO2 emissions under the EU Emission Trading Scheme (ETS). States cannot relieve them by taking other measures – as a result of which they try to protect them in other ways, undermining the effectiveness of the ETS. In addition, the EU imposes renewable energy targets on States, which, again, cannot meet these targets by taking other measures.
In the US States can make comprehensive plans and choose how to reduce their emissions. Like in the EU, each State has to develop its own plan which it has to submit (to the EPA) in September next year. The emission limits will only kick in in 2022, so there is ample time for emitters to prepare.
Jobs and benefits
Critics claim the Clean Power Plan will drive up electricity prices and lead to job losses, but the White House claims the exact opposite. According to the EPA, retail prices will stay the same, and bills will even be $85 per year lower thanks to lower energy use. Implementation of the Plan will also lead to “tens of thousands” of new jobs and public health benefits worth $45 billion by 2030, says the White House.
The effects the Plan will have on the energy mix in the US depend of course on the measures the State will take. According to the website Carbon Brief, in an analysis based on EPA figures, a likely result is that coal use will fall by a quarter by 2030 as a result of the Clean Power Plan. Renewables will grow from 12% to 20%, gas will gain a small share and nuclear will stay about the same:
(Source: Carbon Brief)
Despite the loud protests from parts of the energy industry and conservative Republicans, most observers agree that the Clean Power Plan is achievable and affordable. It does not represent a revolutionary change of course; on the contrary, it supports a process that is already happening in the US. As Michael Bloomberg, the former mayor of New York and now the UN secretary-general’s special envoy for cities and climate change, has pointed out: the coal industry has been in steady decline for a decade. The opponents of the Clean Power Plan are fighting a rearguard action, says Bloomberg.
Nevertheless, there is a principled issue involved that may prove contentious. As Obama himself pointed out, the revolutionary part of the Clean Power Plan is that for the first time federal limits on carbon emissions are set in the US. For this reason, David Doniger, Policy Director of the Climate Center of the environmental group Natural Resources Defense Council (NRDC), concludes that the Clean Power Plan “makes history” – from a US perspective of course. The EU began to put limits on carbon emissions in 2005, when the Emission Trading Scheme (ETS) got started.