The Obama administration’s new climate rule will force states to cut carbon dioxide emissions through a variety of policy options, including imposing a cap-and-trade program on existing power plants.
The White House is trying to sell the proposed Environmental Protection Agency rule as “flexible” by highlighting that states can choose from a menu of policy options to cut emissions. The EPA’s rule, which will be proposed Monday, seeks to cut emissions from existing power plants in a bid to fight global warming.
“Rather than immediately shutting down coal plants, states would be allowed to reduce emissions by making changes across their electricity systems — by installing new wind and solar generation or energy-efficiency technology, and by starting or joining state and regional ‘cap and trade’ programs, in which states agree to cap carbon pollution and buy and sell permits to pollute,” the New York Times reported of the proposed rule.
The coal industry and energy states have already vowed to challenge the rule if the EPA’s new regulation goes too far and impose onerous burdens that could cause more coal-fired power plants to shut down.
Coal provides 40 percent of the country’s electricity supply and already more than 300 coal plants have been slated for shutdown, in part, due to EPA regulations. A U.S. Chamber of Commerce study released last week estimated the EPA’s climate rule could cost $50 billion annually and about 40 percent of the U.S. coal fleet could be retired by 2030.
The Chamber study also found that shutting down coal plants would mean more natural gas would have to be used to generate power, driving up gas prices and forcing people to pay $17 billion more for electricity per year.
“You can’t regulate your way to prosperity,” said the Electric Reliability Coordinating Council, energy industry group. “EPA and its allies argue that the rule will create jobs by pointing to people that would be hired to install insulation and build more renewable power plants.”
“But they ignore the many jobs that will be destroyed by closing down existing power plants and mines,” ERCC said. “And more importantly, they ignore the jobs that would be lost due to higher energy costs for industrial users.”
While some states are preparing their own emissions plans to make sure the EPA’s don’t unnecessarily shut down coal-fired power and imperil the electrical grid and drive up energy prices.