EPA's New Plan - Feasible & Economically Beneficial?
The Environmental Protection Agency’s proposed rule to cut carbon pollution from power plants is a critical step in avoiding the worst consequences of global warming. Without significant reductions from the power sector—America’s largest source of greenhouse gas emissions—the country cannot meet its goal of reducing its emissions 17 percent below 2005 levels by 2020. EPA’s proposal provides a flexible framework that puts those reductions within reach.
Here’s a look at how the proposed rule would impact states and the future of U.S. climate action.
Short-Term Climate Mitigation Goals Are Now Within Reach
The rule provides a major boost forward for the United States to achieve its 2020 emissions-reduction target. Given current cost trends for renewables and the potential for increased energy efficiency, even deeper reductions are possible by 2030. Importantly, there are opportunities for the final version of the rule to tap the full potential of efficiency and renewable energy throughout the country. Strong and ambitious rules under the Climate Action Plan to reduce emissions throughout all sectors of the economy—such as reducing methane leakage from natural gas, phasing down hydrofluorocarbons, and improving energy efficiency--can ensure that the US reaches the 2020 target and goes even further in the post-2020 era.
The Standards Are Achievable—and Beneficial—for States
Rather than requiring emissions cuts at each individual power plant, the proposed standard offers states broad flexibility in how they can comply. This includes the ability to take local circumstances into account and to choose the most cost-effective mix of options for each state’s electricity consumers.
EPA took individual state circumstances into account when setting state-specific targets, meaning that while some states are being asked to reduce emissions further than others, every state’s target is achievable. Our analysis of 10 states (to date) finds that many are in a good position to comply with the EPA standard simply by capitalizing on existing policy and infrastructure opportunities.
In fact, many states can cost-effectively achieve the level of emissions reductions the EPA is calling for almost a decade before the proposed rule would require. For example:
- Wisconsin: The proposed standard calls for the state to reduce its emissions rate (a measure of the carbon intensity of its power supply) to an average of 1,280 pounds per Megawatt-hour (lbs./MWh) between 2020 and 2029, en route to a goal of 1,203 lbs./MWh by 2030. Yet our Wisconsin fact sheet finds that the state could get to 1,120 lbs./MWh by 2020 – deeper reductions than EPA is calling for by 2020.
- Pennsylvania: EPA’s proposal calls for an emissions rate of 1,052 lbs./MWh by 2030; our analysis finds that Pennsylvania can get to 875 lbs./MWh by 2020.
- Michigan: EPA proposes a target emissions rate of 1,161 lbs./MWh by 2030; WRI analysis finds that the state could achieve an emissions rate of 960 lbs./MWh by 2020.
While EPA’s state goals take a variety of factors into account that our analysis does not, such as at-risk nuclear power plants, our findings demonstrate that ample opportunities exist in many states to meet or exceed the proposed targets.
EPA’s Strong Framework Is Economically Beneficial
Not only is the new rule achievable for states, but research shows that it could be economically beneficial. Michigan’s energy efficiency standard saved the state $1 billion in its first three years. In 2012, Wisconsin’s wind industry generated more than $1 billion in investments within the state and more than $2 million per year in lease payments to local landowners.
The rule can also help strengthen the clean energy sector. Renewable energy is increasingly competitive with fossil fuels, and is growing quickly – Texas alone has more wind capacity than all but five countries. As utility planners, clean energy providers, and investors take into account the limits on carbon pollution that EPA is establishing, this proposal sends a signal that will spur further investment in clean energy, increasing economies of scale and driving prices down even more.
As we delve into the state-level modeling EPA did to inform the targets in the proposal, we look forward to working with EPA and others to make sure that the rules accomplish the full scope of what’s possible through this type of cost-effective, flexible approach. We see significant opportunities from energy efficiency and the continuing decline in the cost of renewables, and will work to ensure that those opportunities are reflected in a strong, final rule next year. This target should be closely aligned to the level of reductions scientists tell us is necessary, and that we know we can achieve.
Furthermore, we hope that this proposal will spur additional action by countries around the world that look to the United States for leadership on this critical issue.