Fundamental Facts of the EPA’s Climate Protection Proposal
Fundamental Facts of the EPA’s Climate Protection Proposal
Utilities’ gloomy prophecies of exorbitant pollution clean-up costs are unfounded. Electric rates currently are lower than 2008—even with the new mercury emission standard.
On Monday, President Barack Obama and the Environmental Protection Agency, or EPA, plan to release a proposed rule to limit the carbon pollution of existing power plants. Power plants are responsible for one-third of all domestic climate pollution, and while there are reduction requirements for acid rain, smog, soot, mercury, and lead emissions, this will be the first-ever limit on power plants’ carbon pollution. This proposal is the centerpiece of the president’s Climate Action Plan.
In 2007, the Supreme Court ruled that the EPA had the authority to limit climate pollution under the Clean Air Act. The EPA will issue the new power plant standard by employing its authority under section 111(d) of the Clean Air Act “to develop regulations for categories of sources which cause or significantly contribute to air pollution which may endanger public health or welfare.”
While the EPA’s proposal is not yet public, polluting interests have already started to attack it. The National Mining Association is broadcasting radio ads predicting huge rate increases, claims The Washington Post dismissed as “bogus” and “wholly unsupported.” The Chamber of Commerce joined in on the attacks as well: its Institute for 21st Century Energy issued a new report claiming there would be huge economic ramifications and job losses from the EPA’s unreleased rule. The EPA responded, saying “the Chamber’s report is nothing more than irresponsible speculation based on guesses of what our draft proposal will be.”
As the debate begins over the EPA’s power plant pollution-reduction policy, opponents of climate protection will continue to make fatally flawed forecasts. It is critical to a factual and straightforward discussion of the proposed rule that government officials, the media, and the public ignore these phony claims. Instead, they should consider some fundamental facts that are essential to an honest debate about the merits of the EPA’s proposal.
1. Electricity rates are currently lower than when President Obama took office, adjusted for inflation, according to the Energy Information Administration. This rate decline occurred even as the EPA set a new requirement for power plants to slash their mercury pollution by 90 percent by 2015. The generation of electricity from wind and solar power has also doubled since 2008, yet rates are lower than before. Both demonstrate that reducing power plant pollution or switching to renewable electricity does not automatically lead to huge increases in electricity rates or utility bills as opponents contend.
2. Polluting companies’ prior forecasts of rate hikes, job losses, and the effects of other pollution-reduction standards turned out to be wrong. Apocalyptic predictions about pollution limits are an old industry trick. For instance, in 2011, the Chamber of Commerce predicted that reducing mercury from power plants would lead to “rolling blackouts in the future.” These blackouts have not occurred.
In November 2011, Evan Bayh, Chamber of Commerce consultant and former Indiana Democratic senator and governor, predicted that reductions in mercury pollution “will put tens of thousands of jobs in our state [Indiana] directly at risk.” Yet Stats Indiana data indicate that Indiana employment increased by 132,000 people between Bayh’s forecast and April 2014.
Polluting utilities made similar prophecies of doom during the 1980’s debate over reducing acid rain-causing pollutants from power plants. The Edison Electric Institute, a utility trade association, testified in Congress that the 10 biggest coal-burning states would experience “rate shock” due to clean-up costs. A recent Center for American Progress analysis found that, when adjusted for inflation, these 10 states’ average electric rates were lower in 2009 than in 1989, even with several rounds of pollution cuts.
Polluting companies long ago began a messaging campaign equating carbon reduction to inevitable electricity rate hikes, yet many of these companies plan to raise rates anyway according to the Edison Electric Institute and the National Association of Regulatory Utility Commissioners, an association representing state utility regulators.
In March, the National Journal reported that “Your utility bill is going up (and there’s nothing you can do about it). America’s utilities must be upgraded, and it’s the consumers, not the shareholders, who will get the bill.”
FirstEnergy, for instance, “expects customers to pay more for electricity because of the company’s massive rebuilding of its transmission lines and substations.” Utilities expressing grave concern regarding rate increases from carbon pollution reductions are seemingly fine with other hikes that are the result of infrastructure investments or to recoup lost revenue due to lower electricity demand. The companies will raise their rates to maintain their profits at the expense of their ratepayers.
3. There are more than 2,000 more coal miners in 2014 than there were in 2008, according to Federal Reserve data compiled by The Washington Post. This growth occurred despite the worst recession in 30 years, cheaper natural gas replacing coal for electricity generation, and a doubling of wind and solar power. These mining employment figures disprove the claim that there is a “war on coal” decimating rural America.
4. Several years ago, House Energy and Commerce Committee Chair Fred Upton (R-MI) attacked President Obama’s plan to set carbon limits under the Clean Air Act, calling it an “unconstitutional power grab.” In fact, it was the Supreme Court under Chief Justice John Roberts that ruled in 2007’s Massachusetts v. EPA that such an action is constitutional. The Supreme Court held that greenhouse gases are pollutants under the Clean Air Act, and the president must limit them if they endanger public health and welfare.
In his 2013 State of the Union address, President Obama urged Congress to “pursue a bipartisan, market-based solution to climate change … But if Congress won’t act soon to protect future generations, I will.” Since Congress has remained inert, President Obama had no choice but to enforce the Clean Air Act.
In many public policy debates, the side that establishes a credible narrative first often has a significant advantage. As part of their effort to win the debate and block the EPA’s forthcoming carbon pollution rule, polluting interests have already launched their attacks on an unseen proposal. The polluters that profit from the status quo want to establish a simple narrative—that the carbon pollution reductions from power plants meant to slow climate change will cost jobs, raise electricity rates, and cause blackouts.
The public needs to be educated about the relevant facts in this debate. Electricity rates are lower in spite of increased pollution controls and a doubling of renewable power. The utilities that are decrying imagined rate increases from pollution cuts plan to raise electricity rates anyway. There is no war on coal. The Supreme Court ruled that it is the president’s responsibility to limit carbon pollution that will otherwise feed smog, damage lungs, exacerbate extreme weather, and lead to other deadly, costly consequences of climate change. We can have a debate about the most efficient way to reduce climate pollution, but let’s base it on facts and not fallacies.
Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy at the Center for American Progress.
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Daniel J. Weiss