greenhouse gas emissions
Q&A: EPA Regulation of Greenhouse Gas Emissions from Existing Power Plants
On August 3, 2015, the U.S. Environmental Protection Agency (EPA) adopted Carbon Pollution Standards for Existing Power Plants, known as the Clean Power Plan.
Adopted pursuant to EPA’s authority under the Clean Air Act, the Clean Power Plan establishes unique emission rate goals and mass equivalents for each state. It is projected to reduce carbon emissions from the power sector 32 percent from 2005 levels by 2030. Individual state targets are based on national uniform “emission performance rate” standards (pounds of CO2 per MWh) and each state’s unique generation mix. See more resources and maps at the C2ES Carbon Pollution Standards Resource Page.
Q: Why is EPA regulating carbon dioxide?
Under the Supreme Court decision in Massachusetts v. EPA, greenhouse gases meet the definition of air pollutants under the Clean Air Act, meaning they must be regulated if they could be reasonably anticipated to endanger public health or welfare. EPA made this determination in 2009. In June 2013, President Obama directed EPA to work closely with states, power plant operators, and other stakeholders in developing carbon standards for existing power plants, and to finalize the standards by June 2015. EPA released its proposed rule in June 2014 and the final rule in August 2015.
Q: Why do we need to regulate power sector carbon emissions?
The power sector is the largest source of U.S. carbon emissions, which are contributing to global climate change.
Many businesses, cities and states are cutting emissions, increasing renewable energy, and improving energy efficiency. In addition, newly abundant natural gas has begun to displace coal (which emits twice as much carbon) in the U.S. electrical generation mix. But in the absence of major new policies, U.S. emissions are projected to rise as the economy grows, and as natural gas prices rise. Stronger policies are needed to increase energy efficiency, thereby reducing electricity consumption, and to expand the use of low- and no-carbon energy sources. Under a business-as-usual forecast, fossil fuels are projected to provide 66 percent of the U.S. fuel mix in 2030 compared with 60 percent under the Clean Power Plan, with most of the reduction coming from higher-emitting coal plants. Therefore, under a business-as-usual scenario, carbon dioxide emissions from the power sector are expected to increase around 6.5 percent (from 2014 levels) to 2,177 million metric tons in 2030, while under the Clean Power Plan carbon dioxide emissions would fall more than 19 percent (from 2014 levels) to 1,644 million metric tons in 2030.
Figure 2: Projected Electric Power Sector Carbon Dioxide Emissions under Business-as-Usual Scenario
Q: What is in EPA’s Clean Power Plan?
Typically, under the Clean Air Act, EPA sets standards and states implement them. The Clean Power Plan:
- Sets unique emission rates goals and mass equivalents for each state, reflecting the variation in their electricity generation mixes, to be met starting in 2022;
- Provides states significant flexibility in choosing how to meet their targets;
- Provides incentives for early deployment of renewables and efficiency measures benefiting low-income communities;
- Provides tools to assist states choosing to implement market-based approaches; and
- Contains a Federal Implementation Plan that EPA would use in states that do not accept adequate implementation plans.
EPA set interim and 2030 targets for each state based on uniform emission performance rates (application of BSER) and its unique generation mix.
Q: How was each state’s target calculated?
Uniform, national emission performance rates for affected power plants are based on the “best system of emission reduction” (BSER), using three “building blocks” or potential pathways applied regionally to reduce CO2 emissions:
- Make affected fossil fuel power plants more efficient;
- Increase generation from lower-emitting natural gas combined cycle plants; and
- Increase generation from new zero-emitting renewable power sources.
See a map of state targets for a more detailed explanation.
Q: What are the big differences between the proposed and final plans?
States will have more time to submit their implementation plans (they can get extensions to 2018) and two more years (until 2022) to begin phasing in pollution cuts. C2ES and others encouraged allowing states more time so they could take a longer view on planning and investment.
The final plan also proposes a voluntary Clean Energy Incentive Program (CEIP) to encourage early installation of renewable energy projects and energy efficiency programs for low-income communities before the 2022 compliance start date. EPA has invited comments on the CEIP and will address design and implementation details in a future action.
Market-based mechanisms are more explicitly encouraged in the final rule. The proposed federal implementation plan includes an option for states to join an interstate cap-and-trade program. It also outlines how states could participate in emissions credit trading without the creation of interstate compacts.
In calculating individual state targets, EPA had proposed taking into account each states’ energy efficiency potential, but it chose not to do so in the final rules. However, like the proposal, the final plan allows states to use energy efficiency programs for compliance.
EPA also changed its methodology for determining incremental renewable energy to better reflect regional technical potential, rather than state-level renewables policies, as in the proposal.
Unlike in the proposed plan, states with nuclear power plants under construction – Georgia, South Carolina, and Tennessee – will be able to count this generation toward compliance instead of having it factored into their targets.
The final rule also takes the interstate nature of the electric system into greater consideration. The proposal calculated state targets by applying building blocks to each state. The final rule uses the characteristics and potential of electric grid interconnections (Eastern, Western and Texas) to determine emission performance rates for units, which are then applied to each state’s unique generation mix to calculate a target.
Q: How can states reduce power sector carbon emissions?
States have wide latitude in designing their strategies to reduce emissions. In most cases, they will rely on a variety of measures. Major options include substituting natural gas for coal; improving energy efficiency; and increasing reliance on renewable energy.
States can implement the Clean Power Plan individually or in cooperation with other states. They also can employ market-based mechanisms, such as averaging or trading, to help power companies identify least-cost emission reductions.
Examples of steps to reduce carbon dioxide emissions in the power sector are illustrated in Figure 3 and Table 1.
Figure 3: Opportunities to reduce carbon dioxide emissions in the power sector
Table 1: Policy options to reduce power sector carbon dioxide emissions
|Power plant performance standard||Each power plant must achieve a set emissions intensity||California, New York, Washington|
|Renewable Portfolio Standard||Utilities must deliver a set percentage of renewable electricity||Colorado, Hawaii, Kansas, Missouri, Nevada, Rhode Island, and others|
|Energy Efficiency Resource Standard||Utilities must cut demand by a set amount by target years||Arizona, Connecticut, Maryland, Minnesota, Texas, and others|
|Decoupling||Reduce utility incentive to deliver more electricity by decoupling revenue and profit||California, Idaho, Massachusetts, Michigan, Oregon, and others|
|Net Metering||Encourage residential solar by paying homeowners to put excess electricity back on grid||Arkansas, Colorado, Georgia, Louisiana, and others|
|Cap & Trade||Issue a declining number of carbon allowances, which must be surrendered in proportion to each plant’s emissions||California, Regional Greenhouse Gas Initiative|
|Carbon Tax||Charge a tax for emitting carbon||British Columbia|
|Grid Operator Carbon Fee||Add a carbon price to grid operator decision over which power plants to run||None currently|
|Appliance Efficiency Standards||Require new appliances sold to meet set electricity consumption standards||California, Florida, New Jersey, and others|
|Commercial & Residential Building Codes||Require new buildings to include electricity saving measures||California, Illinois, Maryland, Mississippi, and others|
Q: How could states use market-based approaches to implement the plan?
Economists consider market-based approaches to be the most efficient way to reduce greenhouse gas emissions.
The Clean Power Plan encourages states to consider using market mechanisms, which could include a cap-and-trade program, a carbon tax, or tradable renewables or efficiency certificates.
EPA intends to set up and administer a program to track trading programs for states that choose to use them. In addition, the Federal Implementation Plan that EPA would employ in states without adequate plans includes market-based programs, which can be used by states as a model for their own plans.
Under EPA’s proposed new Clean Energy Incentive Program, states that act early to cut carbon pollution, either with renewables or energy efficiency, would be rewarded with emission reduction credits (ERCs), which they could use to meet their targets or sell to other emitters.
Q: How can states work together to implement the Clean Power Plan?
States have long collaborated to achieve energy and environmental goals. The successful trading program to reduce sulfur dioxide, which causes acid rain, is an example.
The plan is designed to facilitate interstate compliance strategies, including different forms of trading. The federal implementation plan outlines strategies to determine the equivalence of emission reduction credits in different states. It would also create a national platform that can be used to track the buying, selling, and trading of credits across state lines.
An example of states already working together is the Regional Greenhouse Gas Initiative in the Northeast. A multi-state approach could also be accomplished through another existing authority such as a Regional Transmission Organization (RTO) or Independent System Operator (ISO).
Q: Will states be able to use Canadian hydropower to comply?
Renewable energy from outside of the United States, including Canadian hydropower, can be used for compliance purposes, provided it is incremental and installed after 2012 and meets some other conditions. More than a dozen U.S. states already import a significant amount of Canadian hydropower. According to a C2ES report, importing hydropower from even a modestly sized new Canadian project (250 MW) could help a state bridge the gap between its current carbon emissions rate and its 2030 target.
Q: Will the Clean Power Plan affect the reliability of the electric grid?
In response to concerns raised by EPA’s proposed rule, the final plan includes a “reliability safety valve” temporarily relaxing emission standards on individual electric generating units under extraordinary circumstances where electric system reliability is concerned.
To mitigate reliability issues, states are required to address reliability in their compliance plans. Importantly, the plan gives states up to seven years before interim targets must be met, providing time for state regulators and reliability entities to work with utilities and other key stakeholders.
The plan is also expected to encourage energy efficiency, which helps lower demand growth and improve reliability.
Q: How much will implementing the plan cost?
EPA calculates that savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing household electric bills by about $7 per month by 2030. The agency estimates compliance costs of $5.1 billion to $8.4 billion and total benefits of $34 billion to $54 billion.
Q: How does the plan address nuclear power?
Nuclear provides nearly 20 percent of the nation’s power and is the largest source of carbon-free baseload electricity. Five reactors are now under construction in Tennessee, Georgia and South Carolina and are expected to be online by 2030.
Unlike the proposal, the final rule does not consider existing or new nuclear power for the purposes of setting state targets. Therefore, the five reactors under construction and any new units or upgrades can count toward compliance.
Q: How is natural gas treated in the plan?
Both the proposal and the final plan envision about a third of U.S. electricity coming from natural gas in 2030. However, under the final plan, less new natural gas generation capacity is anticipated.
Natural gas demand was expected to grow more quickly under the earlier compliance date called for in the proposed rule. Proposed incentives for early deployment of renewables may encourage more investment in renewable energy in the short term.
Q: What does this plan mean for coal?
Demand for coal in the U.S. has been decreasing for many years because of the availability of relatively less expensive natural gas to meet baseload power demands and because of other environmental and safety regulations. Even before the Clean Power Plan, very few new coal plants were expected to be constructed. According to EPA’s IPM modeling of the final rule, coal is expected to make up 27 to 28 percent of the electric generation mix in 2030. Under a business-as-usual scenario, coal is expected to deliver 36 percent of U.S. electricity in 2030.
Figure 4: Distribution of Fossil Fuel Power Plants across the Contiguous United States
Q: What is the timetable for implementing the plan?
States have one year to either submit a plan or request an extension. All final plans are due by September 2018. EPA will approve or disapprove a final plan within a year.
The Clean Energy Incentive Program begins on January 1, 2020. States that have expressed their interest in participating in this program in their final plans are eligible. This program runs throughout 2020 and 2021.
On January 1, 2022, states must begin complying by meeting their interim targets. On January 30, 2030, states must meet their final CO2 reduction goals.
Q: Won’t this end up in the courts?
A number of states have already brought legal actions challenging the rule (some of these states are simultaneously working on their implementation plans).
Section 111(d) of the Clean Air Act – the section under which the Clean Power Plan was adopted – has not been used often in the past, so EPA has few precedents to rely on. However, the courts historically have granted EPA a fair amount of discretion in implementing the act, and some of the changes made in the final plan will make it better able to withstand legal challenge.
Q: What happens to states that fail to comply?
States now have up to three years to write implementation plans, applying their knowledge of their utilities and the programs that have worked in the past.
Under the Clean Air Act, any state that fails to submit a plan or get EPA approval for its plan will be subject to a federal implementation plan. The current proposals for the federal implementation plan would use flexible, market-based solutions for compliance.
The proposed Clean Power Plan to reduce carbon emissions from existing power plants is a long overdue turning point in America’s response to climate change.
EPA’s approach gives the states tremendous flexibility to design strategies that work best for them. States have always been incubators of innovation, and they will drive technological and policy innovation as they encourage low-cost solutions to implement the plan.
We need to encourage that innovation – by cities, states, and businesses -- to show the path forward to a clean energy economy.
C2ES submitted comments today as part of the EPA’s process to seek stakeholder input to the proposed rule before finalizing it in June 2015.
Here are five suggestions that could make EPA’s framework even better.
February 25, 2014
Climate Leadership Award Winners Announced
SAN DIEGO – Fifteen organizations and two individuals are being honored today with Climate Leadership Awards for their accomplishments in driving climate action and reducing greenhouse gas emissions.
The awards are given by the Environmental Protection Agency’s Center for Corporate Climate Leadership, in collaboration with the Center for Climate and Energy Solutions (C2ES), the Association of Climate Change Officers and The Climate Registry. Awardees will be honored this evening at the Climate Leadership Conference in San Diego.
Awardees came from a wide array of sectors, including finance, manufacturing, retail, technology, higher education and local government. Recipients have demonstrated leadership in managing and reducing emissions in internal operations and the supply chain, as well as integrating climate resilience into their operating strategies.
Information highlighting the award winners is here:
Following is EPA's press release:
EPA Honors Corporate Leadership in Reducing Greenhouse Gas Emissions
Release Date: 02/25/2014
Contact Information: Carissa Cyran, email@example.com, 202-564-4363, 202-564-4355
WASHINGTON – Today, the U.S. Environmental Protection Agency (EPA) Center for Corporate Climate Leadership announced the third annual Climate Leadership Award winners in partnership with the Association of Climate Change Officers (ACCO), the Center for Climate and Energy Solutions (C2ES) and The Climate Registry (TCR). Nineteen awards were given to 15 organizations and two individuals in the public and private sectors for their leadership in addressing climate change by reducing carbon pollution.
The 2014 Climate Leadership Award recipients are:
Organizational Leadership Award: City of Chula Vista, Sprint, and University of California, Irvine
Individual Leadership Award: Sam Brooks, Associate Director, D.C. Department of General Services, and Robert Taylor, Energy Manager, Washington Suburban Sanitary Commission
Supply Chain Leadership Award: Sprint
Excellence in Greenhouse Gas Management (Goal Achievement Award): The Boeing Company; Caesars Entertainment; Cisco Systems, Inc.; Ecolab; The Hartford; IBM; Johnson Controls; Kohl's Department Stores; Mack Trucks; and Novelis
Excellence in Greenhouse Gas Management (Goal Setting Certificate): Fruit of the Loom, Inc.; Hasbro, Inc.; and Kohl's Department Stores
“Our Climate Leadership Award winners have made great strides in reducing greenhouse gas emissions, and are providing leadership nationwide in many sectors of our economy,” said Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation. "Their innovative approaches and commitment to reducing carbon pollution demonstrate that efforts to address climate change are repaid by saving money and energy, while supporting more livable and resilient communities, and a healthier, better protected environment now and for future generations."
The national awards program recognizes and incentivizes exemplary corporate, organizational, and individual leadership in response to climate change. Award recipients represent a wide array of industries, including finance, manufacturing, retail, technology, higher education and local government.
“The Association of Climate Change Officers is pleased to recognize another exceptional class of organizations and individuals who are demonstrating leadership in driving climate action into their organizational cultures,” said Daniel Kreeger, ACCO’s co-founder and executive director. “These award recipients are demonstrating critical devotion and leadership to managing and reducing greenhouse gas emissions and adapting to the risks and challenges posed by climate change. These recipients are role models for corporate, organizational, and individual leaders who can and should be responding proactively to climate change risks and opportunities.”
“Communities and businesses are already experiencing the impacts of climate change, and we need to act now to protect both our environment and our economy,” said C2ES President Eileen Claussen. “We join EPA in applauding the winners of the Climate Leadership Awards. These companies, organizations, and individuals demonstrate that we can save energy, reduce emissions, and take decisive steps toward a low-carbon future. We hope their accomplishments will serve as an example for others to follow.”
“The Climate Registry applauds this year’s Climate Leadership Award winners for demonstrating a meaningful, results-oriented response to climate change,” said David Rosenheim, executive director of TCR. “Exhibiting transparency, consistent metrics, and innovative mitigation measures, our deserving award recipients are building a stronger platform for policy, innovation, and business solutions to reducing carbon pollution.”
The President’s Climate Action Plan calls on the federal government to work with all stakeholders to take action to cut the harmful carbon pollution that fuels climate change. These organizations and individuals are working to do just that.
The awards are held in conjunction with the 2014 Climate Leadership Conference at the Hyatt Mission Bay Hotel in San Diego, Calif.
More information about the 2014 Climate Leadership Award winners is available at www.epa.gov/climateleadership/awards/2014winners.html
The EPA's Center for Corporate Climate Leadership was launched in 2012 to establish norms of climate leadership by encouraging organizations with emerging climate objectives to identify and achieve cost-effective GHG emission reductions, while helping more advanced organizations drive innovations in reducing their greenhouse gas impacts in their supply chains and beyond. The Center serves as a comprehensive resource to help organizations of all sizes measure and manage GHG emissions, providing technical tools, ground-tested guidance, educational resources, and opportunities for information sharing and peer exchange among organizations interested in reducing the environmental impacts associated with climate change.
More information about EPA’s Center for Corporate Climate Leadership: www.epa.gov/climateleadership
With the latest round of international climate change talks underway in Doha this week, it’s a good time to check in on the United States’ pledge, made three years in Copenhagen, to reduce greenhouse gas emissions 17 percent below 2005 levels by 2020. Are we on track to meet that?
The short answer: Not yet. But projections depend on assumptions, so let’s look at a few recent projections.