Well-Designed Power Plant Carbon Standards Can Reduce Emissions and Increase Renewable Energy

February 6, 2013 | 4:31 pm
Rachel Cleetus
Policy Director

The Environmental Protection Agency (EPA) is expected to soon finalize carbon standards for new power plants, bolstering the existing market trend away from building new coal-fired power plants. Next up is the carbon standard for existing power plants – a major source of U.S. global warming emissions. Designing this standard with the flexibility to include renewable energy and efficiency as compliance options can help achieve deep emissions reductions at an affordable cost.

This post is part of a series on Ramping Up Renewables: Clean Energy Policies to Watch in 2013.

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Power plant carbon standards must be a top priority for the Obama Administration

In his inaugural address President Obama signaled that his Administration is committed to taking serious action to address climate change. One clear early way to deliver on that promise is to finalize the standard for new power plants that was proposed last year.

The EPA should also make a proposal for a carbon standard for existing power plants by the end of this year and ensure that it too is finalized as soon as possible thereafter. News reports indicate that the President might make mention of the carbon standard in his State of the Union address on February 12. Specifics will be important.

Why we need strong carbon standards

The EPA released its latest greenhouse gas (GHG) data yesterday, which show that fossil-fired power plants remain the largest source of U.S. global warming emissions, producing approximately a third of total U.S. emissions. These emissions have dropped in recent years as the electric sector has moved away from coal and toward more natural gas-fired power plants and renewable energy, as well as because of lower energy demand due to energy efficiency measures and a slack economy. The data show power sector emissions were 4.6 percent lower in 2011 than the previous year. However, these reductions are nowhere near enough to help drive overall U.S. emissions down in line with climate goals.

It’s also worth noting that the data show that refineries were the third largest source of GHG emissions in 2011. The EPA was supposed to set carbon standards for refineries by December 2011 under a settlement agreement reached in 2010. We have yet to hear a new schedule for these standards.

World Resources Institute just released a report today that emphasizes the importance of carbon standards in helping the U.S. reduce its emissions 17 percent below 2005 levels by 2020, a commitment that the U.S. articulated at the Copenhagen climate talks in 2009. According to the report authors, emissions reductions from power plants and natural gas systems under the Clean Air Act represent “two of the top opportunities for substantial GHG reductions between now and 2035.”

How renewable energy can help achieve a strong carbon standard

A carbon standard for existing power plants must help ensure that over time we transition away from fossil fuel-fired generation sources such as coal and natural gas to clean, renewable forms of energy such as wind and solar power (alongside strong energy efficiency measures). To accelerate that transition, we need a strong standard that will level the playing field for low carbon sources like renewable energy. But we also need some flexibilities that could provide extra incentives to ramp up renewable energy and energy efficiency, while keeping costs affordable.

One way the EPA could do that is to allow renewable energy and energy efficiency to count as compliance options to help meet a strong carbon standard. This would, for example, give power plant owners the option to reduce their overall emissions rate by investing in new renewable energy generation. To ensure that this flexibility delivers additional emissions reductions beyond what would have happened anyway, the investments must be over and above what would be required to meet existing state renewable energy or energy efficiency standards (RES and EERS). This could be a way to encourage states to build on existing RES and EERS policies.

NRDC recently published an innovative proposal that has some of these elements, with a focus primarily on energy efficiency investments as an alternative compliance mechanism.

Renewable energy is here and ready

As my colleague Jeff Deyette pointed out earlier this week, renewable energy is already being ramped up at record levels. 2012 saw over 13 gigawatts of wind and an estimated 3,200 megawatts of solar PV capacity installed. What we need now are enhanced policies and incentives to further decarbonize our electricity sector, including carbon standards, a national renewable energy standard, tax incentives, and a price on carbon.

Congress and fossil fuel lobby likely to continue to obstruct progress on climate change

Even though the proposed carbon standard for new power plants is simply underlining a market-driven shift away from coal that is already underway, there is bound to be opposition from the usual foes of climate action in Congress. It is very likely that when the carbon standard for new power plants is finalized there will be an immediate push in Congress to block it using provisions of the Congressional Review Act (CRA). Originally intended to protect the interests of small businesses, the CRA was regularly abused by the last Congress (and likely will be with the new one) to promote highly partisan ideological agendas. In particular, it has been used to attempt to block the EPA from taking action to reduce pollution under the Clean Air Act.

The American Legislative Exchange Council (ALEC), a political group funded in part by fossil fuel interests, has gone as far as proffering “model legislation” targeting EPA regulation of GHGs on the basis of a claim that there is a “lack of evidence that human-caused emissions of greenhouse gases will endanger public health or welfare.”

Bipartisan action on climate

Recent extreme weather events — including Hurricane Sandy and the ongoing drought in the Midwest — highlight the fact that climate change and its impacts are of critical importance to the health and economic well-being of Americans. We need our Senators and Representatives to show some backbone and be willing to work across party lines to ensure that carbon standards for power plants can move forward quickly. Regardless, it is the administration’s responsibility to show leadership, stand strong, and deliver on these standards alongside other actions to lower emissions and prepare for climate change.