At Long Last, EPA Proposes Regulating Power Plant Carbon Emissions
The U.S. Environmental Protection Agency (“EPA”) has proposed new Greenhouse Gas Standards and Guidelines for Fossil Fuel-Fired Power Plants (the “proposed regs”). Power plants generate approximately 25% of all U.S. greenhouse gas (GHG) emissions. That total is second only to the transportation sector, for which the Administration recently promulgated tougher emission standards (see Verde Impact Blog – Decarbonizing the Transportation Sector).
The proposed regs are the second of the one-two punch aimed at the largest polluting sectors and would go a long way in advancing the Administration’s pledge to halve GHG emissions by 2030 and build a net-zero economy by 2050 (see Verde Impact Blog – State of the Union: ESG Edition). Taken together, they are part of the comprehensive plan by an Administration that understands the interplay of executive action and regulatory frameworks as well as the carrot of support for innovation. I wrote my Master’s thesis, entitled Applying Market Mechanisms to Address Environmental & Social Cost, nearly 30 years ago focusing on harnessing that intersection to resolve what are still current issues like air pollution. EPA estimates that the proposed regs will yield health and climate benefits of about $85B. It is past time to address our pressing environmental and social problems, and in a way that advances our economy, protects public health and mitigates disparate impacts.
The proposed regs mark the first time the federal government would regulate carbon emissions from power plants and will meaningfully propose advancing new technologies to do so. The proposed regs would set emissions limits for new gas-fired combustion turbines, existing coal, oil and gas-fired steam generating units, and certain existing gas-fired combustion turbines. The limits are based on cost-effective and available control technologies with an emphasis on more efficient generating practices, including carbon capture and sequestration (“CCS”) and low-GHG hydrogen co-firing. If finalized, the regs could accelerate the carbon transition in encouraging adoption of CCS and other technologies, as well as the use of hydrogen.
Protecting public health from the hazardous effects of air pollution was a primary driver of the original Clean Air Act and its subsequent amendments, the most substantive of which became law in 1990. The caption for the EPA Press Release announcing the proposed regs reads:
New proposed standards for coal and new natural gas fired power plants would avoid more than 600 million metric tons of CO2 pollution, while also preventing 300,000 asthma attacks and 1,300 premature deaths in 2030 alone
EPA also noted that 600 million metric tons is the equivalent of taking roughly half the cars in the country off the road and that there would be “negligible impact” on electricity prices, particularly given the planned compliance timeframe. Agencies undertake a rigorous review and cost-benefit analysis before proposing regulatory action. EPA has set a 60-day public comment period to run from the date the proposed regs are published in the Federal Register, which is common administrative procedure.
The opponents of the proposed regs as well as of the prior attempts to regulate carbon dioxide emissions from power plants tend to recite the common refrain used against all new regulatory regimes: (1) the cost of compliance to the industry; and, (2) the regulatory action is beyond the scope of agency authority delegated to it by Congress. It is expected that the regs will be challenged in court. Challenges to scale back policies and regulations to protect human health and the environment used to be referred to colloquially with the socio-economic phrase race to the bottom given the consequences. Recent progress has positioned us in a race to the top to collaboratively resolve the global climate crisis so let’s keep going.