carbon pollution standards
The finalization today of EPA’s Clean Power Plan offers Americans a clear, realistic roadmap for addressing planet-warming emissions that threaten the environment and the U.S. economy.
Most importantly, it puts states in the driver’s seat to devise innovative strategies to reduce emissions efficiently and cost-effectively. Now it's time for states to work together with businesses and cities to craft the approaches that work best for them.
Climate change is a critical challenge, and the impacts will only grow more costly if we fail to act. Last year was the warmest on Earth since we started keeping records over a century ago. During the first half of this year, it got even hotter. Climate change impacts include more extreme heat, which can exacerbate drought and wildfires, more frequent and intense downpours that can lead to destructive floods, and rising sea levels that threaten coastal cities.
New federal standards are already reducing heat-trapping emissions from the second-biggest source, transportation, by increasing the fuel economy of cars and trucks. The Clean Power Plan takes the next logical step by addressing the largest source: the electric power sector, responsible for nearly 40 percent of U.S. carbon dioxide emissions.
The plan will accelerate the trajectory toward cleaner power that is already well underway. This spring, for the first time ever, more U.S. electricity came from natural gas than from coal, which emits about twice as much carbon dioxide when combusted. In the first six months of this year, wind and solar made up 65 percent of new utility-scale electric capacity. Leading energy companies have been working to reduce their emissions and some have already pledged to make further cuts.
We’re on the right track. Now we need states to seize this opportunity to build a clean energy future.
The most exciting part of the plan is that it puts state leadership front and center. The plan offers states the flexibility to determine the best way to meet their own targets. Most states will answer the call and do what states do best: innovate.
The most cost-effective way to cut emissions is through market-based approaches, and the Clean Power Plan encourages these innovative strategies.
Ten states, home to a quarter of the U.S. population, already use market-based approaches.
The nine-state Regional Greenhouse Gas Initiative, a cap-and-trade program, has cut emissions from power plants nearly 40 percent since 2005, lowered consumer electric bills by $460 over the past three years, and generated $1.3 billion in economic benefits for member states. California’s cap-and-trade program, launched in 2013, saw companies covered under the cap cut emissions nearly 4 percent in the first year while the state had one of the highest job growth rates in the nation.
To further move more states to consider market-based approaches, the final rule also includes a new incentive program based on early action credits that will boost renewable power and energy efficiency in the near term, helping the U.S. meet its international carbon-cutting pledges, and laying the foundation for deeper emission cuts in the long term. Giving states the time they need to develop their plans– something C2ES and others recommended – will enable states to look at long-term solutions, such as market approaches, renewables and energy efficiency.
The next step is for states, cities, and businesses to come together to craft commonsense plans.
Carbon Pollution Standards
The U.S. Environmental Protection Agency (EPA) issued final rules in August 2015 to limit carbon pollution from existing and new power plants. Electric power generation accounts for 40 percent of U.S. carbon emissions, making it the largest source.
Reducing power sector emissions is a key part of President Obama’s Climate Action Plan, which aims to reduce overall U.S. greenhouse gas emissions 17 percent below 2005 levels by 2020. In addition, the U.S. contribution to the upcoming international climate agreement in Paris sets an economy-wide target of reducing greenhouse gas emissions by 26-28 percent below 2005 levels by 2025.
Under the Clean Power Plan for existing power plants, each state has its own target (due to regional variation in generation mix and electricity consumption). Overall, the rule is designed to cut emissions 32 percent from 2005 emission levels by 2030.
EPA's “Carbon Pollution Standard for New Power Plants” finalizes a standard first proposed in March 2012 that was modified and proposed again in September 2013. States would apply the standards for new coal- and natural gas-fired plants (measured as tons of greenhouse gas emissions per megawatt-hour of electricity produced) at each regulated plant.
Explore the issues and options involved in reducing carbon pollution from power plants through the following resources:
- Bob Perciasepe's Statement on the Clean Power Plan
- Blog Post: EPA’s Clean Power Plan puts states in the driver’s seat
- Q&A on EPA Greenhouse Gas Standards for Existing Power Plants (Updated August 2015)
- Q&A on EPA Greenhouse Gas Standards for New Power Plants (Updated August 2015)
- Graphic: Policy options to reduce carbon emissions in the power sector (June 2014)
- Map: Proposed state emission rate targets (August 2014)
- Map: Renewables in the Clean Power Plan (June 2014)
- Map: Energy efficiency in the Clean Power Plan (August 2014)
- Brief: Modeling EPA's Clean Power Plan: Insights for Cost-Effective Implementation (May 2015)
- Report: Canadian Hydropower and the Clean Power Plan (April 2015)
- Blog: 5 Ideas for EPA's Clean Power Plan (December 2014)
- C2ES Comments on Proposed EPA Rule for Existing Power Plants (December 2014)
- C2ES Comments on Proposed EPA Rule for New Power Plants (May 2014)
- Brief: Cross-State Electricity Load Reductions Under EPA's Proposed Clean Power Plan (November 2014)
- Cornerstone Article: Carbon Pollution Standards for New and Existing Power Plants and Their Impact on Carbon Capture and Storage (September 2014)
- Event: Carbon Pricing: State and Federal Options (May 2014) See video of the event, and presentations by Dallas Butraw, David Bookbinder, Brian Turner, and Jon Brekke
- Jonas Monast et al., Enhancing Compliance Flexibility under the Clean Power Plan: A Common Elements Approach to Capturing Low-Cost Emissions Reductions (Durham, NC: Nicholas Institute for Environmental Policy Solutions, 2015).
- U.S. Environmental Protection Agency, Carbon Pollution Standards webpage.
- Presidential Memorandum – Power Sector Carbon Pollution Standards
- Megan Ceronsky and Tomas Carbonell, Section 111(d) of the Clean Air Act: The Legal Foundation for Strong, Flexible & Cost-Effective Carbon Pollution Standards for Existing Power Plants (Washington, DC: Environmental Defense Fund, 2013).
- Samuel D. Eisenberg, Michael Wara, Adele Morris, Marta R. Darby and Joel Minor, A State Tax Approach to Regulating Greenhouse Gases Under the Clean Air Act (Washington, DC: Climate and Clean Energy Economics Project at Brookings, 2014).
- Georgetown Climate Center, Carbon Pollution Standards for Existing Power Plants: State Opportunities and Potential Benefits (Washington, DC: Georgetown Climate Center, 2013).
- Daniel Lashof et al., Closing the Power Plant Carbon Pollution Loophole: Smart Ways the Clean Air Act Can Clean Up America’s Biggest Climate Polluters (Washington, DC: Natural Resource Defense Council, 2013).
- Daniel Lashof and Starla Yeh, Cleaner and Cheaper: Using the Clean Air Act to Sharply Reduce Carbon Pollution from Existing Power Plants, Delivering Health, Environmental, and Economic Benefits (Washington, DC: Natural Resource Defense Council, 2014).
- Jonas Monast et al., Regulating Greenhouse Gas Emissions From Existing Sources: Section 111(d) and State Equivalency, 42 Environmental Law Reporter 10206 (Washington, DC: Environmental Law Institute, 2012).
- James McCarthy, “EPA Standards for Greenhouse Gas Emissions from Power Plants: Many Questions, Some Answers.” Congressional Research Service (CRS). R43127. November 15, 2013.
- Stephen Munro, EPA's Clean Power Plan: 50 chefs stir the pot (Washington, DC: Bloomberg New Energy Finance, 2014).
- National Conference of State Legislatures, States Reactions to Proposed EPA Greenhouse Gas Emissions Standards webpage.
- Conrad Schneider, Power Switch: An Effective, Affordable Approach to Reducing Carbon Pollution from Existing Fossil-Fueled Power Plants (Boston, MA: Clean Air Task Force, 2014).
- Robert Sussman, Power Plant Regulation under the Clean Air Act: A Breakthrough Moment for US Climate Policy? (Charlottesville, VA: Virginia Environmental Law Journal, 2014).
- Jeremy M. Tarr, Jonas Monast, and Tim Profeta, Regulating Carbon Dioxide under Section 111(d) of the Clean Air Act: Options, Limits, and Impacts (Durham, NC: Nicholas Institute for Environmental Policy Solutions, 2013).
- Gregory E. Wannier et al., Prevailing Academic View on Compliance Flexibility under § 111 of the Clean Air Act, RFF Discussion Paper 11-29 (Washington, DC: Resources for the Future, 2011).
- Dallas Burtraw et al., State and Regional Comprehensive Carbon Pricing and Greenhouse Gas Regulation in the Power Sector under EPA’s Clean Power Plan: Workshop Summary (Washington, DC: Resources for the Future, 2015).
- Franz Litz and Jennifer Macedonia, Policy Pathways for States under the Clean Power Plan (Washington, DC: Bipartisan Policy Center, 2015)
- Karen Palmer and Anthony Paul, A Primer on Comprehensive Policy Options for States to Comply with the Clean Power Plan, RFF Discussion Paper 15-15 (Washington, DC: Resources for the Future, 2015).
- U.S. Energy Information Administration, Analysis of the Impacts of the Clean Power Plan (Washington, DC: U.S. Energy Information Administration, 2015)
This map is based on data from the Clean Power Plan as proposed in June 2014. C2ES will update the map based on the final Clean Power Plan in the coming days.
In its proposed Clean Power Plan to reduce carbon dioxide emissions in the power sector, EPA has set a unique target emissions rate for each state to hit by 2030. To develop this target, EPA first determined a carbon emissions baseline (using 2012 data) based on each state’s level of CO2 emissions from fossil-fired power plants divided by its total electricity generation (including fossil-fired generation, renewable generation, and nuclear generation). Targets for 2030 were then established based on the capacity of each state to achieve reductions using the following four “building blocks” identified by EPA:
- Make coal-fired power plants more efficient;
- Use low-emitting natural gas combined cycle plants more where excess capacity is available;
- Use more zero- and low-emitting power sources such as renewables and nuclear; and
- Reduce electricity demand by using electricity more efficiently.
Since there is a wide variation among states in both emissions baseline and capacity to leverage each of the four building blocks, there is a wide variation in how much each state must cut from current emissions to hit its 2030 target emissions rate. (See Table 1.)
Each state can meet its established target however it sees fit, and does not need to leverage each building block to the extent that EPA projects. States will be able to convert their target emissions rate (pounds CO2 per megawatt-hour of electricity generated) to a mass-based standard (tons of CO2 emitted per year) to enable a cap-and-trade program. States are also free to join together and work toward an aggregated regional target.
Table 1: Building Block Reduction by State
|State||Emissions Rate of Power System, including zero-carbon generation (lbs CO2 / MWh) (2012||Block 1 (Coal-plant Efficiency)||Adding Block 2 (Natural Gas Fuel Switching)||Adding Block 3 (Renewable and Nuclear Generation)||Final Target by Adding Block 4 (Demand-side Energy Efficiency)||Total Emissions Reduction Target by 2030|
|Vermont||No affected sources|
*In the cases of Iowa, Maine, Minnesota, and South Dakota, the emission rate rises when building block three is added. The 2012 renewable generation levels in these states were higher than what EPA's methodology projects for 2030, meaning EPA assumes lower renewable generation, and therefore higher emission rates, for these states in 2030. These increases in emission rates are reflected by negative percentage changes for the effect of building block three when you click on these states in the map above.
Source: U.S. Environmental Protection Agency, Technical Support Document (TSD) for the CAA Section 111(d) Emission Guidelines for Existing Power Plants: Goal Computation, Appendix 5.
The Obama Administration today took a major step toward reducing the carbon dioxide emissions that are impacting our climate. The Environmental Protection Agency (EPA) released its “Clean Power Plan,” which leverages existing authority in the Clean Air Act to propose carbon pollution standards for existing power plants, the largest single source of U.S. carbon emissions. The proposal would cut emissions in the power sector by 30 percent by 2030, based on 2005 levels. We reviewed the basics of the Clean Power Plan with four critical questions in mind:
1. Is the standard based on emission reductions outside the power plant fence line?
The short answer is “yes.” EPA cannot require states or power plant operators to take any specific measures, but it can set the emissions target stringent enough so that it would be challenging to achieve unless certain measures are taken. EPA is proposing state-specific targets based on the capacity of each state to leverage four “building blocks.” They are:
- Make fossil fuel power plants more efficient.
- Use low-emitting natural gas combined cycle plants more where excess capacity is available.
- Use more zero- and low-emitting power sources such as renewables and nuclear.
- Reduce electricity demand by using electricity more efficiently.
Although “outside-the-fence-line” measures are not specifically required under the proposal, states would be hard-pressed to meet their targets without using programs to reduce the demand for fossil electricity, by, for example, increasing energy efficiency and encouraging renewable energy.
Looking to Figure 1, EPA has chosen the System-level Option.
Figure 1: Scope of reduction requirements
On June 2, the Environmental Protection Agency (EPA) is expected to release its proposal to cut carbon dioxide (CO2) emissions from existing power plants. This proposal is a key element of President Obama’s Climate Action Plan, and will be critical to reducing U.S emissions of CO2, the most common greenhouse gas contributing to climate change.
The proposed rule, being developed under EPA’s authority under Section 111(d) of the Clean Air Act, could be groundbreaking for at least two reasons. First, it has the potential to drive major reductions in the highest emitting sector in the United States – the power sector – which is responsible for nearly 40 percent of U.S. carbon emissions. Second, EPA has indicated that the proposal will include a number of novel policy provisions to advance low-emitting generation and energy efficiency.
At C2ES, we’ll be looking for answers to four key questions as we read through EPA’s proposal. These questions are expanded upon in our new brief, Carbon Pollution Standards for Existing Power Plants: Key Challenges.