EPA carbon limits: an 'Obamacare' for climate change

In an effort to slow the release of heat-trapping gases into Earth’s atmosphere, the world’s second-largest carbon polluter will propose rules Monday to cut emissions from the most carbon-heavy sector of its economy by 30 percent by 2030.

The first-of-their-kind standards will cap carbon dioxide emissions from existing US power plants, leaning on a little-used provision of the 1970 Clean Air Act.

The sweeping cuts and accompanying rules that give states options for reaching their individual targets suggest an "Obamacare" of climate policy – bold, signature, and controversial action on complex challenges of global and historic consequence. The rules are seen as integral to accelerating innovation of clean-energy technologies and meeting emissions-reductions commitments ahead of next year’s international climate negotiations in Paris. Critics say more regulations on the power sector will raise energy costs while scarcely reducing global emissions – placing undue stress on the economy for little or no environmental benefit.  

Originally expected to unveil the rules himself, President Obama instead touted the carbon standards in his weekly address Saturday, stressing the transition to low-carbon energy as a defining issue of our time. 

"One of the best things we can do for our economy, our health, and our environment is to lead the world in producing cleaner, safer energy," the president said Saturday. "The shift to a cleaner energy economy won’t happen overnight, and it will require tough choices along the way.  But a low-carbon, clean energy economy can be an engine of growth for decades to come." 

A 30 percent cap on emissions from the utility sector is likely to have a far greater climate impact than any other action Obama can take in the time he has left in the White House, experts say. Existing power plants make up 40 percent of the country’s carbon dioxide emissions – the primary source of human-caused climate change. That makes the power sector a bigger target for climate action than the controversial Keystone XL pipeline or other high-profile issues.

Not everyone is on board with the administration’s climate initiatives. Business and fossil fuel groups warn of ballooning energy costs and steep job cuts as plants shutter in communities that rely heavily on coal for electricity and economic activity. The American Coalition for Clean Coal Electricity, an industry lobby group, has raised concerns that a rapid shift away from coal – which supplied 39 percent of the nation’s electricity in 2013 – would make the grid more vulnerable to power shortages, particularly in the case of extreme weather. Critics challenge the environmental benefits, too: Even the most dramatic cut in US carbon emissions would be a small fraction of the world total necessary to keep global warming within a safe range.

The US Chamber of Commerce’s Institute for 21st Century Energy released a report last week projecting that the new rules will costs tens of billions in economic losses and hundreds of thousands of jobs each year. Senior administration officials and other analysts have criticized the report, saying it makes inaccurate projections based on proposals that may or may not end up in the final rules. No one can say for sure what the exact costs or benefits of the rules will be, but the Chamber’s Energy Institute and others say more time is needed to analyze the effects.   

“[The administration is] moving fairly quickly here, and we’re saying, ‘Let’s get it right,’ ” Matt Letourneau, the institute’s senior director of communications, says in a telephone interview.  “Let’s slow down and figure out what the actual costs are, and not put this in place and say, ‘We’ll fix it later if it doesn’t work.’ ”

Advances in efficiency and new energy technologies have helped communities, businesses, and nations ease the tension between economic development and environmental stewardship. Many utilities across the country have made significant progress toward decarbonizing their power fleet, and overall US emissions have remained in check or even declined in recent years as the economy has grown. The administration's hope is that Monday’s rules will bolster that positive trend without undermining an economy that is still shaking off the effects of a global recession.  

“There’s an opportunity to develop a lot of win-wins where we will introduce policies that both help us meet goal of delivering diverse, reliable power to citizens, and at the same time reduce greenhouse gases from generation of power,” says Tim Profeta, director of the Nicholas Institute for Environmental Policy Solutions at Duke University in Durham, N.C.

Many of the tools utilities use to manage the risks of delivering reliable power are actually the same tools that will reduce greenhouse gas emissions, Mr. Profeta says in a telephone interview. Those include increasing energy efficiency, using "smart grid" technologies to better manage energy demand, and incorporating a diverse range of power generation technologies.

The administration has already implemented or proposed ambitious carbon-reduction schemes for vehicles and future power plants. Last summer, Mr. Obama unveiled his Climate Action Plan (CAP) – a portfolio of executive orders and cabinet-level actions intended to sidestep congressional gridlock over climate and energy. The proposed rules are the administration's most aggressive climate action yet – the cornerstone of the CAP.

“Everyone is waiting with bated breath to figure out what the content of rules is,” says Conrad Schneider, advocacy director at the Boston-based Clean Air Task Force, an environmental coalition that promotes clean energy, in a telephone interview. “But I don’t think there’s any question that [Obama’s] legacy rests on what happens with them.”

The EPA's top-level emissions reductions will primarily affect coal-fired power plants. Because electricity mixes vary widely across the country, some states will have to cut emissions more than 30 percent, others will cut them less. It will be up to states to come up with their own plans to meet those goals. Strategies could include retiring coal plants, making existing plants more efficient, or creating regulatory cap-and-trade systems that allow utilities to buy and sell pollution permits. Eventually, some plants may install new technologies that capture carbon emissions and store them underground. After being proposed Monday, the rules will go through a period of review and comment before being finalized next June.   

A dramatic transition is well under way in the energy sector with or without the rules. Booming natural gas production and the rise of renewables are slowly edging out coal’s longstanding dominance of US electricity. That shift – combined with efficiency measures and zero-carbon nuclear power – have allowed many utilities to get a head start on reducing carbon output. Power plant emissions from the nation’s top 100 power producers fell 13 percent between 2008 and 2012, according to a new report from a group of contributors led by Ceres, a Boston-based sustainability advocacy group. But emissions cuts vary widely by region because of the wide range of resources, economies, and politics across the country.

Entergy Corp., which delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi, and Texas, was among the major power producers to achieve the deepest emissions cuts, according to the report (on which Entergy collaborated with Ceres). Chuck Barlow, Entergy's vice president of environmental strategy and policy, says the company accomplishes those cuts by making plants more efficient and relying heavily on nuclear power, which does not directly emit carbon dioxide. That has put the company in a better position to comply with the rules to be outlined Monday.

“For our company, it’s been a good story; It’s been a pretty good process,” Mr. Barlow says in a telephone interview. “I’m sensitive to the fact that it’s harder to do for some of our brethren in the industry. If you’re heavily reliant on coal, in a region that’s reliant on coal, then this is not as easy, and it’s not as easy for their customers. I’m not saying everyone should have done what Entergy did, but this is what we did, and it has worked in our part of the country.”