What is the Clean Power Plan and why does it matter?
- Natural Resources Defense Council published a comprehensive guide to the Clean Power Plan in July 2015.
- C2ES has developed a substantial bank of resources on the Clean Power Plan.
- The Georgetown Climate Center has a wealth of legal and policy resources with information for states and other stakeholders compiled in their Clean Power Plan Tool Kit.
- The Union of Concerned Scientists has a simple, straight-forward guide to the Plan on their website.
What benefits will the Clean Power Plan provide and what will it cost?
- Synapse Energy Economics Inc. found that states can surpass the CPP emissions targets, save the U.S. $41 billion in electric costs in 2030 and save households participating in energy efficiency programs an average of $35 a month on their electric bills in 2030.
- C2ES reviews six different economic modeling studies on the CPP’s projected costs and benefits, and found that “the majority of the studies project either cost savings to power users or increases of less than $10 billion a year.”
- The Natural Resources Defense Council’s (NRDC) analysts found that EPA’s assessment of what the CPP would cost was based on outdated assumptions, regarding the costs of compliance, and that EPA overstated projected costs by $9 billion. NRDC updated cost and performance specifications to reflect current technologies and found that the CPP’s emissions targets could be reached with a savings of between $1.8 and $4.3 billion in 2020.
- A recent study published in Nature Climate Change found that by reducing harmful air pollution the CPP could prevent 3,500 premature deaths, 1,000 hospitalizations and about 220 heart attacks each year following its implementation.
- The Georgia Institute of Technology’s report “Low-Carbon Electricity Pathways for the U.S. and the South: An Assessment of Costs and Options” evaluated a range of approaches states could take to meet CPP targets. They found that a combination of energy efficiency and renewable energy policies combined with a modest price on carbon ($10 to $20 per metric ton of CO2 emitted) is the least-cost compliance pathway states could adopt. By incorporating this three-part approach states could also capture “substantial collateral benefits including lower electricity bills across all customer classes, greater GDP growth, and significant reductions in SO2, NOx, and mercury emissions.”
- The Analysis Group’s States’ Tools for Reducing Costs and Increasing Benefits to Consumers, reviews the ratemaking practices in 25 states to determine how the compliance costs of the CPP would be passed to electricity consumers. The study concludes that impacts on electricity rates should be modest, and would likely result in lower electricity bills for consumers.
- Public Citizen conducted an analysis of the benefits of CPP and found that it could contribute $260 billion to $840 billion over 10 years.
- The U.S. Energy Information Administration’s (EIA) recent analysis of the EPA power plant rules found that while it may initially cause electricity prices to rise, efficiency and price-induced cuts in demand would make any increases effectively null.
How can states meet their emissions reduction targets under the Clean Power Plan?
The EPA’s plan allows states to choose the implementation approach that best fits their local circumstances.
- In their June 2015 analysis, the Union of Concerned Scientists shows that existing commitments to clean energy (pre-dating the CPP) put most states on track to meet the CPP’s emissions reduction targets.
- The Bipartisan Policy Center’s “Insights from Modeling the Proposed Clean Power Plan” explains that implementation approaches that utilize multi-state collaboration or linked trading can significantly lower compliance costs. Consistent with most of the other modeling exercises, the Center’s findings support a strong role for energy efficiency programs in ensuring least-cost implementation.
- Some states may use regional emissions trading programs to meet their goals. The Regional Greenhouse Gas Initiative (RGGI) is a market-based trading program established by Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce carbon emissions from the power sector. Since it was created in 2008, RGGI reports that it significantly reduced greenhouse gas emissions and successfully generated $1.3 billion in benefits for its nine member states from 2012 to 2014. It has also led to the creation of more than 14,000 new jobs and saved consumers $460 million in lower electric bills over the last three years. RGGI may also serve as a model for new regional cap and trade programs that other states are likely to establish under the Environmental Protection Agency’s new CPP.
- California’s cap and trade program is a central part of the state’s AB 32 Scoping Plan. The program will help put California on the path to meet its goal of reducing emissions to 1990 levels by the year 2020, and ultimately achieving an 80 percent reduction from 1990 levels by 2050. Similarly to RGGI in the Northeast, California sells a portion of the emissions permits at quarterly auctions and reserve sales. The legislature and governor use auction proceeds to finance projects that support the state’s long term climate and energy goals. Every homeowner in California is expected to save $200 annually on electricity because of AB 32, and its energy efficiency programs have provided $1.8 billion in net benefits over the last nine years.
- The National Association of Regulatory Utility Commissioners published a guide in May 2015 for states and power companies to align their resources to comply with the Clean Power Plan. The guide aims to lower barriers to coordination between states, particularly between public utility commissions, governors energy advisors, and the lead agencies, generally, the state air pollution control agencies. The guide shows the range of options available to states, from simple awareness of each others’ plans to the transfer of emissions reductions between states that have individual-state plans and targets. The guide offers step-by-step instructions for state governors and other top executives for how to implement clean energy policies and comply with the CPP.
- The American Council for an Energy Efficient Economy (ACEEE) developed a set of resources to help states and stakeholders comply with the CPP and also to understand and assess the energy, environmental, and economic benefits of energy efficiency as a means to reducing pollution. The ACEEE resources include a State and Utility Pollution Reduction (SUPR) Calculator that allows power companies to create a simplified scenario of clean energy options that show the relative costs and benefits. The guide also has a series of templates that states can use to take credit for emissions reductions from multiple energy efficiency policies and programs.
What does the public think about regulating power plant emissions? Do the utilities support the rules?
- A survey from the Yale Project on Climate Change Communications published in April this year found that 70 percent of Americans “support setting strict carbon dioxide emission limits on existing coal-fired plants to reduce global warming and improve public health.”
- In their second annual “State of the Electric Utility” report, Utility Dive shares findings from a survey of 433 utility executives on their views on the present and future of the sector. Among other questions, the survey asked the executives, “How should the EPA move ahead with its plan to reduce carbon dioxide emissions 30% nationwide by 2030?” Over 60% the executives surveyed said that the EPA should hold its current emissions reductions targets and timetable or make the targets and timetable more aggressive.
How will the Clean Power Plan help minority and low-income communities?
- In April, the NRDC released a report detailing the potential health, economic, and energy accessibility benefits to low-income communities. It cites examples of energy programs already implemented in low-income communities. The report is summarized here.
- EPA’s own analysis of the CPP found that it would lower low- and fixed-income Americans electricity bills by an average of 8 percent. The analysis notes that, “From the soot and smog reductions alone, for every dollar invested through the Clean Power Plan, American families will see up to $7 in health benefits.”
- The National Association for the Advancement of Colored People (NAACP) conducted a thorough review of U.S. coal-fired power plants and found that minority and low-income communities are disproportionately affected by the air pollution they generate. The report also highlighted the fact that seventy-eight percent of African Americans live within 30 miles of a coal-fired power plant and this proximity makes them even more vulnerable to health impacts from coal plant emissions.