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EPA proposes new guidelines to curb emissions

World Coal,

At the direction of President Obama, the US Environmental Protection Agency (EPA) today releases the much-discussed Clean Power Plan proposal, which looks to cut carbon pollution from existing power plants.

While many advocates of the coal industry have railed against the plan, which is seen as part of Obama’s so called ‘War on Coal’, the EPA claims its measures will protect public health, move the US toward a cleaner environment and fight climate change while supplying Americans with reliable and affordable power.

"Climate change, fuelled by carbon pollution, supercharges risks to our health, our economy, and our way of life. EPA is delivering on a vital piece of President Obama's Climate Action Plan by proposing a Clean Power Plan that will cut harmful carbon pollution from our largest source--power plants," said EPA Administrator Gina McCarthy. "By leveraging cleaner energy sources and cutting energy waste, this plan will clean the air we breathe while helping slow climate change so we can leave a safe and healthy future for our kids. We don't have to choose between a healthy economy and a healthy environment--our action will sharpen America’s competitive edge, spur innovation, and create jobs." 

Power plants account for roughly one-third of all domestic greenhouse gas emissions in the United States. While there are limits in place for the level of arsenic, mercury, sulfur dioxide, nitrogen oxides, and particle pollution that power plants can emit, there are currently no national limits on carbon pollution levels. 

The EPA’s plan follows through on the steps laid out in President Obama’s Climate Action Plan and the June 2013 Presidential Memorandum.

The plan will look to cut carbon emissions from the power sector by 30% nationwide below 2005 levels. It will also look to cut particle pollution, nitrogen oxides, and sulfur dioxide by more than 25%.

In terms of financial benefits, the EPA claim its plan will provide up to US$ 93 billion in climate and public health benefits, by reducing 6600 premature deaths, 150,000 asthma attacks in children and up to 490,000 missed work or school days. The plan will also reduce electricity bills by up to 8%, according to the EPA.

Claims refuted

However, reports on the proposed plan have suggested it will not provide the financial benefits it claims. The US Chamber of Commerce commissioned a study on a hypothetical policy that would meet Obama’s stated emission goals. The study indicated that rather than providing financial benefits to the US, the EPA’s plan would result in:

  • 224,000 jobs lost on average each year through to 2030.
  • More than US$ 50 billion in average annual GDP loss through 2030, with a peak GDP loss of almost US$ 104 billion in the year 2025.
  • US$ 289 billion in additional cumulative electricity payments by consumers from 2014 through 2030.
  • A cumulative reduction of US$ 586 billion in disposable income from 2014 through 2030.
  • US$ 480 billion in cumulative compliance costs by electricity providers through 2030.
  • An average undiscounted economic cost of US$ 143 per ton of carbon dioxide reduced, much more than EIA estimated for the failed Waxman Markey proposal several years ago.

The chamber’s report also said that the new rules would likely only reduce global CO2 emissions by “just 1.8% during a period when global carbon dioxide emissions are expected to rise by 31%.”

The effect of the plan would also likely impact the Southeast and Mid-Atlantic regions of the US to their detriment, as both regions would be placed under a severe economic burden, according to the chamber of commerce.

American citizens wary of Obama’s plan

As Simon Jenkins opines in a piece for the Guardian, such financial figures and outlooks are often skewed one way or another, and the real cost or value of a proposal lies likely somewhere in between two sets of extremes. As Jenkins points out “modern economists are mercenaries, the makeup artists of political prejudice. Before listening to an economist always ask who is paying the fee.”

However, it seems that the media-storm surrounding the EPA’s proposals has created a sense of wariness among the US populace regarding the pending plan. Most Americans (76%) are at least somewhat worried that new regulations proposed by the Environmental Protection Agency (EPA) to remove coal-powered electricity from the nation's energy mix will lead to higher prices for consumers, according to an online survey of 2,058 adults conducted in April, 2014 by Harris Poll on behalf of the National Mining Association (NMA).

The national poll also reveals that concern is greatest (88%) among retirees and these are people living on fixed incomes who are particularly sensitive to cost increases.

According to NMA data, EPA's far-reaching regulations will result in over 20% of the country's coal-powered electricity – the nation's largest component of electricity generation -- being removed from the energy grid by 2020 if not sooner, which puts greater price pressure on natural gas and alternative fuels to fill the gap.

"Unfortunately less diversity of our power resources will endanger utilities' ability to provide a reliable supply of energy at the lowest cost to consumers," Hal Quinn, NMA president and CEO, said.

How the plan will be put into action

The Clean Power Plan will be implemented through a state-federal partnership under which states identify a path forward using either current or new electricity production and pollution control policies to meet the goals of the proposed program. The proposal provides guidelines for states to develop plans to meet state-specific goals to reduce carbon pollution and gives them the flexibility to design a program that makes the most sense for their unique situation. States can choose the right mix of generation using diverse fuels, energy efficiency and demand-side management to meet the goals and their own needs. It allows them to work alone to develop individual plans or to work together with other states to develop multi-state plans. 

In a statement, the EPA said that today’s announcement marks the beginning of the second phase of the agency’s outreach efforts. EPA will accept comment on the proposal for 120 days after publication in the Federal Register and will hold four public hearings on the proposed Clean Power Plan during the week of 28 July in the following cities: Denver, Atlanta, Washington, DC and Pittsburgh. Based on this input, EPA will finalise standards next June following the schedule laid out in the June 2013 Presidential Memorandum. 

Written by Sam Dodson

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