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Costly Climate Impacts Show Why We Need Power Plant Carbon Standards

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Tomorrow the Environmental Protection Agency (EPA) will likely miss a legal deadline for finalizing its draft carbon standard for curtailing carbon emissions from new power plants. Power plants are the single largest stationary source of  U.S. global warming emissions. Cutting those emissions is critical to slowing the magnitude and pace of climate change. Furthermore, an ambitious standard is achievable because we have abundant cleaner forms of energy. So why the delay?

The proposed standard for cutting emissions from new power plants is a good start

The standard the EPA proposed last year (published in the Federal Register on April 13, 2012) was 1000 pounds of carbon dioxide per megawatt-hour of electricity (lbs CO2/MWh) for new fossil-fired power plants. This is a standard that can easily be met by a new natural gas combined cycle (NGCC) plant which produces emissions of approximately 800 lbs CO2/MWh. New coal plants would have to implement carbon capture and storage (CCS) technology to meet this standard. Widely available low- and zero-carbon resources like renewable energy and energy efficiency can also help meet our energy needs and reduce carbon emissions.

A single standard for all fossil-fired power plants is the best way to set this standard. NGCC technology is readily available and in wide use today. The CCS-averaging provision included as a compliance option in the standard also allows for a potential way for coal plants with CCS to comply with the standard over time. Setting a separate standard for coal and natural gas-fired plants would greatly weaken the standard’s ability to ensure a transition away from building high carbon electricity generation sources. This transition is already underway due to market forces and the standard would simply serve as an insurance policy.

We also need a carbon standard for existing power plants because, of course, that’s where today’s emissions come from. The carbon standards for new plants were supposed to be a stepping stone for getting there. Earlier this week, EPA Acting Administrator Bob Perciasepe signaled that the EPA would move forward with the existing source standards in fiscal year 2014 – which is the first time there has been any clarity on that timing – but provided no further details on process or substance.

Our heat-trapping emissions, including those from burning fossil fuels to generate power, are fueling climate change. And if we needed a reminder of the kinds of serious risks and costs climate change could bring, the storm surge from Hurricane Sandy, which rode in on higher seas, more than provided that. Several recent polls show that Americans clearly support actions to address climate change, and they have a growing recognition of the reality of what global warming may mean for our daily lives and pocketbooks.

Recent weather extremes signal growing climate risks and costs

2012 was the hottest year on record for the contiguous United States, and by a significant margin.

The 2012-2013 Drought in America and the coastal flooding and storm damage caused by Hurricane Sandy have had a devastatingly costly effect on Americans. Recent estimates from the insurance industry put economic costs at $65-70 billion for Sandy and $35 billion (so far) for the drought, which continues to persist in many parts of the U.S.

Recent years have also brought intense heat waves, wildfires, torrential rain, flooding, low snowpack in the Western U.S., and record-low water levels in the Great Lakes and the Mississippi River.

In all, the U.S. experienced 11 extreme weather events that cost over $1 billion apiece in 2012 and 14 such events in 2011. Climate change is already an important contributor to many of these events such as heat waves, coastal flooding, extreme precipitation, and drought. Projections of future climate change show that the risks of some types of extreme events and their impacts will continue to increase if our emissions continue unabated.

Power plant carbon standards underscore market trend away from coal-fired power generation

Coal-fired power has long been the major source of electricity generation in the U.S. but that is changing quite rapidly for a number of reasons, including the poor economic outlook for the aging, inefficient, and polluting coal fleet – especially in light of competition from cleaner source like natural gas and renewable energy. Energy Information Administration projections show that very few new coal-fired power plants are likely to be built through 2040. Existing coal-fired power plants are being retired at record rates and our research shows that many more are candidates for closure.

This shift away from coal has been the most important driver for recent falling carbon emissions from energy use in the U.S.  Power plant carbon standards will help ensure that this is a sustained trend and not simply a temporary blip in response to currently low natural gas prices. History shows that those natural gas prices could begin to climb back up – indeed they are a dollar higher now than they were a year ago. It would be foolish to bet the health of our climate system on something so volatile.

Renewable energy and energy efficiency are the best way to lower carbon emissions

Earlier this week, my colleague Steve Clemmer wrote about a new UCS report that shows that renewable energy is ramping up at notable levels in the U.S. As he says: Wind and solar power increased nearly four-fold in the United States from 2007 to 2012, and in 2012 provided more than half of the total new electricity generating capacity installed in the country.

Previously, I wrote about how a well-designed carbon standard for existing power plants that includes investments in renewable energy and energy efficiency as compliance options can further help ramp up those resources.

Looking for leadership from the EPA and White House

The EPA has taken several important steps recently that show its commitment to lowering harmful emissions and addressing the public health burden of our energy use. These include historic new fuel economy standards for medium- and light-duty vehicles and the power plant mercury standard.

But there are still some important steps that remain. Proposing and finalizing power plant carbon standards for both new and existing power plants must be a near-term priority. Delay is bad for the climate, bad for Americans facing the pollution impacts of power plants, and bad for utilities that need to make long-term investment decisions. There is huge public support for these standards – indeed the EPA received a record-setting number (3 million!) supportive comments.

Gina McCarthy, the Obama Administration’s nominee for the job of EPA Administrator, clearly understands the science of climate change and the importance of the EPA’s actions in reducing global warming emissions.

In his State of the Union remarks President Obama spoke powerfully of doing more to combat climate change for the sake of future generations and he made clear that if Congress failed to act soon on climate change, he would. In recent remarks he seemed to indicate that he would also be speaking out more forcefully to explain why tackling climate change is good for our economy.

Heather Zichal, President Obama’s top advisor on climate and energy, recently commented that the power plant carbon standard will be finalized in the “not-too-distant future.”

This is all somewhat reassuring. But only somewhat. Until we actually see the rule for new power plants and a firm timeline for the one for existing power plants, I’ll remain wary. Washington politics and the machinations of the fossil fuel lobby have scuttled progress on climate action before. Clear, unwavering commitment from the highest levels of the Administration will be needed to ensure that the outcome will be different this time.

To quote President Obama: “The most important thing that it’s going to take is people in Washington who are willing to speak truth to power, are willing to take some risks politically, are willing to get a little bit out ahead of the curve.”

Posted in: Energy, Fossil Fuels, Global Warming Tags: , , , ,

About the author: Rachel Cleetus is an expert on the design and economic evaluation of climate and energy policies, as well as the costs of climate change. She holds a Ph.D. in economics. See Rachel's full bio.

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