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The Clean Power Plan: Economic or Environmental?

14 October 2016

 

On August 3, 2015, President Barack Obama introduced the highly controversial Clean Power Plan (CPP) as part of the U.S. Environmental Protection Agency’s (EPA) attempt to combat climate change.  While the actual text of the CPP is extensive and complex, the general idea itself is fairly simple: each US state has been given a target for carbon emissions reductions by the year 2030, based on each state’s fossil fuel based power industry.

On the day of its announcement, EPA Administrator Gina McCarthy stated in a press release that the CPP is flexible and allows states to customize individual plans to achieve their reduction goals.


Every state, with the exception of Vermont and Washington, D.C. which have no fossil fuel-based power plants, is expected by the EPA to submit a final compliance plan by September 6, 2016.  


Alternatively, those states that request a 2-year extension can submit their initial plan at that point.


In addition, the EPA has introduced the Clean Energy Incentive Program, a voluntary addition to the CPP which provides states with emission reduction credits if they invest in wind or solar energy during 2020 and/or 2021.


The CPP received a slew of opposing reactions.  Legally speaking, at least 29 states and state agencies have filed in opposition of the EPA and the CPP.  In contrast, 18 states plus Washington, D.C. have filed in support, while 5 states (Alaska, Idaho, Nevada, Pennsylvania, and Tennessee) have taken no legal position.


Proponents of the CPP argue several environmental, economic, and health advantages stemming from the requirements of the plan.  


Administrator McCarthy listed six major advantages:

  • it reduces carbon pollution that causes climate change

  • it protects public health, especially that of children

  • it gives states the power to create their own plans

  • the EPA took input from millions of American citizens before announcing the CPP

  • it will save billions of dollars every year as a result of lower health and energy costs

  • it makes the U.S. a leader in climate action


In February 2016, the Supreme Court halted implementation of the CPP while it pends judicial review.


Following the ruling, Minnesota’s Governor Mark Dayton released a statement emphasizing their intentions to continue to invest in clean energies. Vermont’s Governor Peter Shumlin conveyed his disappointment in the ruling.


In contrast, Utah Governor Gary Herbert announced his state’s halt of the CPP’s implementation, so as not to waste taxpayer dollars in case it does “not survive judicial scrutiny.”  Similarly, the Colorado State Senate passed legislation to suspend CPP implementation.


The U.S. House Environment Subcommittee held a hearing in May 2016 to address concerns regarding the CPP’s requirements.  At the hearing, subcommittee Chair Jim Bridenstine (R-OK) said, “The Clean Power Plan does nothing to avert future temperature rise or prevent further sea rise. However, the economic costs to Americans will be approximately $29-$39 billion per year.”


Additionally, officials in some states, such as Oklahoma, are concerned that the CPP infringes on state sovereignty.  The CPP, while flexible on a state-by-state basis, nevertheless requires significant carbon emissions reductions and investment in renewable energy development.  Opponents believe this could be an example of serious government overreach into each state’s right to regulate its own energy industry.


Interestingly, some coal and oil companies do not oppose the CPP.  Some of these companies are even in states that have taken legal action against the CPP.  Texas natural gas companies Austin Energy and Calpine see the CPP as an advantage for the expansion of their renewable energy sectors.


According to the World Research Institute, the CPP could be beneficial to state economies, if the states put in the work to reach their emissions reductions goals and expand the renewables industry.  


Conversely, Forbes reported that the CPP could destabilize state economies by destroying the natural gas industry along with the coal industry, despite predictions prior to the rule’s final draft that natural gas would be key in the transition to cleaner energy.


Those on each side of the CPP argument are looking at different aspects when arguing their cases.  Economically speaking, proponents argue economic benefits, but only for the renewable energy industry.  However, opponents fear the collapse of long-standing coal, oil, and natural gas companies.  Many of the energy companies in question are optimistic at the prospect of expanding their renewables sector.


Then there is the environmental factor: will the CPP make a significant difference in rising sea levels and temperatures?  


In the end, it comes down to balancing the environmental factors with the economic ones.


Emet Marwell is a 2016 Summer Intern at Vote Smart working in the Profiles Research and Development/Communications Departments.  He is an Environmental Studies major and Data Science minor. For more information on internship opportunities with Vote Smart, contact us at intern@votesmart.org or by calling 1-888-VOTE-SMART.


 

Related tags: blog, climate-change, CPP, environment

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