Update, Monday June 2: The EPA's new climate rules are out — here is our newest, updated overview of the policy.
On Monday, June 2, the Obama administration will announce its most sweeping policy yet to address global warming — a new rule to cut carbon-dioxide emissions from coal- and gas-fired power plants across the United States.
But wait! How can Obama do this without Congress? The trick is he'll be working through the Environmental Protection Agency (EPA), which already has the legal authority to regulate US greenhouse gases.
Now the administration is going even further. On June 2, the EPA will propose a rule to cut carbon-dioxide emissions from the nation's existing coal- and natural gas-fired power plants. The Wall Street Journal reports that the rule will require power plants to reduce their emissions up to 30 percent below 2005 levels by 2030. (That's a roughly 17 percent cut from current levels.)
The EPA has a fair bit of leeway in designing this rule, and the precise details will matter a lot. A strict rule that cuts power-plant pollution sharply could help the Obama administration achieve its goal of cutting overall US greenhouse-gas emissions 17 percent below 2005 levels by 2020. Officials hope that meeting this goal will help persuade other countries like China to do more to address climate change.
But there are risks, too. A rule that's too stringent or badly designed could impose high costs on power plants and hike consumers' electric bills. That, in turn, could trigger a backlash from Congress — which has the power to take away the EPA's authority. What's more, the EPA is entering uncertain legal territory with this rule, and there's always a chance that the courts decide the agency has exceeded its legal mandate and strike down the regulation.
So here's a rundown of what we know about the existing power plant rule so far — and why they're likely to be so controversial:
Give me the basics. What is the EPA doing?
On June 2, the EPA will propose a new rule to regulate carbon-dioxide emissions from the nation's existing coal- and gas-fired power plants.
For now, this is only a proposal. The EPA will spend the next year gathering comments from electric utilities, environmentalists, and anyone who cares to weigh in. It will then issue a final regulation that takes effect in 2015. States will then have until 2016 to draw up plans to implement the rule.
Early reports suggests that the EPA will set overall emissions limits for each individual state. Power companies in those states will then have a variety of options for cutting their emissions — using more efficient technology, boosting their use of solar or wind or nuclear, or even joining regional cap-and-trade systems that require companies to pay to emit carbon-dioxide.
There's a lot at stake here. Coal and natural gas plants were responsible for about 38 percent of all US carbon-dioxide emissions in 2012:
Sources of US carbon dioxide emissions 2012
So, if you like, this is equivalent to a roughly 6 percent cut in overall US emissions. (Or about 1 percent of global emissions.)
Why is the EPA regulating carbon-dioxide?
Technically, the agency is required to by law. Back in 2007, the Supreme Court ruled that the EPA had to regulate carbon-dioxide under the existing Clean Air Act so long as there was evidence that the gas endangered public health. Most scientists agree that it does — and, in 2009, the EPA issued an "endangerment finding" to that effect.
That finding set in motion a complex chain of events: The EPA first began regulating carbon-dioxide emissions from cars and light trucks — ratcheting up fuel-economy standards to 54.5 miles per gallon by 2025. Next, the agency required all future coal- and gas-fired plants to meet certain carbon standards. That rule will effectively make it impossible for anyone to build a new coal plant in the United States unless the plant can capture its carbon emissions and store them underground (a technology that's still in its infancy).
Now the EPA is turning its attention to existing power plants, using section 111(d) of the Clean Air Act. This is a relatively untested section of the Clean Air Act, and the agency has a fair bit of leeway in how to apply this section to carbon-dioxide.
How will the EPA's power plant rules work, exactly?
At a basic level, the EPA will propose a "performance standard" requiring a certain level of emissions cuts from power plants. Each state will then have to come up with a plan to implement those standards.
We still don't know the full details, but it looks like the EPA will set overall emissions limits for each state — and give states plenty of flexibility in how to keep their power plants under that limit.
So, for instance, coal power plants could adopt more efficient technology. Or maybe electric utilities could switch from coal to slightly cleaner natural gas. Or perhaps they could boost their supply of wind or solar or nuclear power. Or promote energy efficiency in homes. Or power plants could join some sort of emissions-trading scheme. (Nine states in the Northeast already have a program like this, called RGGI.)
One key challenge: The agency will likely set different goals for each state, since every part of the United States has a different energy profile. The Great Plains region, for instance, uses a lot of coal, while the Pacific has very little:
Many environmental groups, including the Natural Resources Defense Council, favor this "systems-based" approach, since the flexibility will allow electric utilities to make the steepest cuts at a lower cost.
This is also far different than the EPA's usual approach to pollution. Usually, the EPA sets emissions limits for power plants, and each plant has to meet the goal on its own by installing control technology (or shutting down). This time, however, the agency seems poised to allow power plants to meet the emissions limits through changes "beyond the fenceline" — that is, power companies can use wind generation or efficiency programs elsewhere (say) to meet the standard.
How much will the power plant rules cut emissions?
As much as 17 percent between now and 2030.
The Wall Street Journal reports that the EPA is looking to reduce carbon-dioxide emissions from the power sector up to 30 percent below 2005 levels by 2030.
But the baseline matters here. Emissions from power plants have already fallen roughly 15 percent between 2005 and 2012 — in part because cheap natural gas has edged out dirtier coal power in the past decade.
So this rule would effectively require another 17 percent cut in emissions from 2012 levels between now and 2030.
That's considerably less than environmentalists wanted. The Natural Resources Defense Council outlined an approach to power-plant regulation that would cut emissions up to 31 percent below 2012 levels by 2020.
So what's Obama's goal with these rules?
As part of ongoing international climate talks, the Obama administration has pledged to cut overall US greenhouse gas emissions 17 percent below 2005 levels by 2020. We're not quite there yet:
Right now, US carbon-dioxide emissions are roughly 11 percent below 2005 levels — thanks in part to the recession, to stricter fuel-economy rules, and to a glut of cheap natural gas that's pushing out dirtier coal in the power sector.
But those emissions are starting to rise again as the economy recovers, and the United States is unlikely to meet that 17 percent target without further regulations. These new power plant rules will have to be fairly ambitious to hit that goal.
Why the obsession with this target? Administration officials hope that meeting the goal will help convince other nations to resuscitate flagging global climate talks and spur countries like China into taking further action. As Coral Davenport reported in The New York Times, China's energy experts will be watching these rules closely.
How much will these new rules cost the economy?
Depending on how they're structured, the rules could impose extra costs on power plants — and that, in turn, may mean higher electric bills. But, again, we're still waiting on the details.
Take the Natural Resources Defense Council plan — which was much more stringent than the EPA rule. The NRDC estimated that this will cost electric utilities as much as $14.6 billion by 2020. That's not nothing. On the flip side, the group says these costs are still lower than the benefits of the rule — lower pollution, (some) avoided climate change — which run from $28 billion to $63 billion.
Industry groups, for their part, will argue that the costs will be higher. The Chamber of Commerce is already putting out estimates that Obama's climate rules could cost as much as $50 billion each year between now and 2030. (Jonathan Chait dissects that estimate here.)
But no one's seen the final rule yet, so it's all just guessing at this point. The EPA will offer its own estimate of costs and benefits on June 2.
Is there any way to stop these power-plant rules?
Sure. Congress has the ability to repeal the EPA's authority to regulate carbon-dioxide emissions under the Clean Air Act.
Most Republicans would like to do so, but so far they've only attracted a few Democratic votes. You'd need 67 votes in the Senate — every Republican plus a hefty chunk of Democrats — to override an Obama veto and nix this program.
That seems implausible, although many Democrats in conservative red states are going to face heavy political pressure over these rules.
Alternatively, the regulations could get knocked down in court. Industry groups and conservative states are sure to challenge the power-plant rule as soon as humanly possible. Environmentalists, for their part, argue that an ambitious program like the NRDC's is legally sound. Other legal experts think it's a closer call. But it would all come down to whatever the DC Circuit Court or the Supreme Court decided.
If the EPA's power-plant rule did get struck down in court, the agency would have to start all over again — and probably wouldn't get to crafting a new rule until Obama was out of office.
Will this rule solve global warming once and for all?
Of course not. The United States is only responsible for about 17 percent of the world's annual greenhouse gas emissions. So even if Americans stopped polluting altogether, that wouldn't be enough to stop climate change altogether.
That's why US negotiators are trying to revive international climate talks with countries like China and India, which have been flagging of late. After all, it's impossible to solve climate change unless two of the world's fastest-growing emitters sign on.
White House officials have suggested that hitting their 17 percent target by 2020 will help push global talks forward — and they're optimistic about further progress, citing a recent breakthrough with China to curtail hydrofluorocarbons (HFCs), a potent greenhouse-gas.
But, for now, these rules are only one step in a much larger process.
What else should I read on these rules?
- If you like wonky technical details, check out this brief from the Center for Climate and Energy Solutions.
- The Bipartisan Policy Center highlights five key questions about the upcoming power-plant rule.
- Coral Davenport of The New York Times has a smart report about what other countries will be looking for.
- This piece offers a big-picture look at climate change and international efforts to stop it.
- Here's our overview of Obama's broader climate plan.