Politics & Policy

Obama's Tepid Attempt to Crack Down on Carbon Emissions


Obama's Tepid Attempt to Crack Down on Carbon Emissions

On June 2, the U.S. Environmental Protection Agency announced it will seek to require the nation’s power plant operators to cut their combined carbon emissions 30 percent by 2030. Although the EPA already regulates air pollutants such as mercury and sulfur, this is its first crack at limiting carbon dioxide, a key greenhouse gas. The rule essentially singles out the 600 or so coal plants in the U.S., which produce 40 percent of the country’s electricity and account for about a third of all CO2 emissions. Unsurprisingly, EPA Administrator Gina McCarthy hailed it as a sweeping measure that will spur a “clean-energy revolution.” Unsurprisingly, industry groups decried it as regulatory overreach that will kill jobs and raise people’s electricity bills.

The truth is, it’s neither. The proposal isn’t as bold as the Obama administration makes it out to be, nor is it as draconian as the energy industry claims. The story of how it came to be is one of a piecemeal approach, a second-best solution, and a lost opportunity to achieve far greater limits on pollution.

A 30 percent cut over 15 years sounds like a big deal, until you check the fine print. The rule doesn’t say power plants have to cut their emissions by that amount from current levels, but from 2005 levels. By turning back the clock nine years, the administration can claim reductions that look about twice as large as they actually are. Back then, plant emissions were far higher than now. From 2005 to 2012, the power industry cut its CO2 emissions by 15 percent, in part by switching over to cleaner-burning natural gas.

In other words, half the reductions that the EPA’s mandate requires have already been reached, and the rule hasn’t even taken effect. (That was easy!) The agency says 2005 is a standard international benchmark used to set climate goals. The EPA could have called for a 20 percent reduction from 2012 levels; the result would’ve been roughly the same. But the headline wouldn’t have had as much oomph.

The rule also isn’t the death blow to coal that the industry makes it out to be. “The administration has set out to kill coal and its 800,000 jobs,” Republican Senator Mike Enzi, whose home state of Wyoming is the largest coal producer in the U.S., said on May 31. In fact, the EPA estimates that by 2030, coal will still provide 30 percent of the country’s power.

States won’t all be required to cut plant emissions by the same amount. Instead, the rule gives each one a target based on the EPA’s estimate of the state’s ability to reduce emissions. The agency took into account which states have natural gas capacity to use in place of coal, which can make their existing coal plants more efficient, and which are further along in using wind and other renewable sources of power. The result is a hodgepodge of state goals. Some have to cut pollution a lot; others not nearly as much. According to EPA estimates, Texas could have to reduce its emissions by 39 percent from 2012 levels by 2030, whereas California, which has aggressively cut power plant pollution, would have to reduce its emissions by only 23 percent. Because natural gas is the top source of electricity in Texas, the EPA calculates that the state has the ability to run those plants more while running coal plants less. Coal-dependent Kentucky and West Virginia are less able to cut emissions, in the EPA’s estimation; their respective targets are 18 percent and 19 percent. “We realized that every state is in a different place,” McCarthy says.

This was not how Obama envisioned attacking climate change. Early in his first term, he pressed for sweeping legislation to cut carbon emissions across all sectors of the economy. That seemed plausible: Democrats controlled the House and Senate. In June 2009 the House passed an ambitious cap-and-trade bill that sought an 80 percent reduction in all U.S. CO2 emissions by 2050. It won support from some power-industry groups because it set aside billions of dollars for utilities to invest in clean-coal technologies. But the bill was poison to many Democrats, especially in the industrial Midwest, and it died in the Senate in 2010.

Some Democrats who’d supported the bill became targets of the nascent Tea Party movement that helped the GOP take back control of the House that year. Since then, there’s been no chance of a major environmental bill making it through Congress. “It was a setback, no question,” says Phil Barnett, minority staff director for the House Energy & Commerce Committee and an aide to Democratic Representative Henry Waxman of California, who co-sponsored the House bill. “We missed out on a solution that would’ve solved the country’s carbon emissions problem for two generations.”

The president set about finding a way to cut pollution on his own. He found an important ally: the Supreme Court. In 2007 the justices ruled that under the Clean Air Act, the EPA was obligated to regulate carbon emissions if the agency deemed they were harmful to public health, which it did in 2009. “It’s no secret that everyone preferred having Congress draft climate legislation,” says Jody Freeman, Obama’s former counselor for energy and climate change. Using the Clean Air Act “was always Plan B.”

One reason is that rules are weaker than laws. When finalized next year, the EPA’s mandate will certainly face court challenges by the coal industry, not to mention states such as Texas that might refuse to comply. And if a Republican is elected president in 2016, he could simply reverse it. The EPA’s McCarthy concedes that’s a risk. “I cannot control what the political winds bring,” she says. “All I can control is what’s in my universe here.”

The bottom line: Although the EPA says it will require power plants to cut carbon emissions by 30 percent, the real number is half that.

With Mark Drajem
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Philips is an associate editor for Bloomberg Businessweek in Washington. Follow him on Twitter @matthewaphilips.

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