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The Clean Power Plan: NRDC's Initial Analysis of EPA's Landmark Proposal to Curb Carbon Pollution from the Nation's Power Plants

David Doniger

Posted June 7, 2014 in Curbing Pollution, Health and the Environment, Solving Global Warming, U.S. Law and Policy

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On June 2nd, the Environmental Protection Agency proposed the nation’s first limits on carbon pollution from the nation’s fleet of more than 1600 fossil fueled fired electric power plants.  The Clean Power Plan, as it is called, is the centerpiece of President Obama’s Climate Action Plan aimed at cutting the carbon pollution that is driving dangerous climate change. 

EPA’s proposal is a giant leap forward in protecting the health and well-being of all Americans and future generations.  The proposal has drawn praise and support from many quarters, but it will also face stiff opposition from factions of the fossil fuel industry desperate to hold onto the status quo. 

EPA now begins a year of taking public comment and working with states and other stakeholders to refine and improve its proposal before finalizing it in June 2015.  Now that EPA has issued the Clean Power Plan, it’s our job to make it stick and make it stronger.

NRDC’s team of clean air, climate, and energy experts have spent the week analyzing the proposed standards and EPA’s extensive supporting materials, which you can download here.  

The following is our initial summary and analysis of EPA’s proposal. NRDC has also developed a more detailed fact sheet on the proposal, available here.  And we’re posting blogs on the Clean Power Plan, how it affects individual states, and many other topics.  You can find all of those blogs collected here.

Highlights of the Clean Power Plan

EPA has developed a flexible approach that allows for significant emissions reductions at low cost.  It is an approach that draws on a wide range of tools to reduce carbon pollution, and we are confident that the final standards, when issued next June, will pass legal muster. Under this part of the Clean Air Act – section 111(d) – EPA sets targets for each state to reduce the “carbon intensity” of the state’s power plant fleet (Carbon intensity is measured in pounds of carbon dioxide (CO2) emitted per megawatt-hour of electricity generated).  Targets are set in two phases, one beginning in 2020 and another in 2030.

EPA estimates the national impact of meeting the state targets will be to reduce national power sector CO2 emissions 26% below 2005 emissions by 2020 and 30% by 2030. That is equivalent to:

  • 18% below EPA’s forecast of what would happen without the standards (i.e., business-as-usual) by 2020 and 25% by 2030 or
  • 13% below 2012 emissions by 2020 and 17% by 2030.

These are significant carbon pollution reductions. By comparison, the Clean Car Standards set in 2010 and 2012 are projected to reduce CO2 emissions by 4,140 million metric tons from 2020 to 2030. This Clean Power proposal would reduce CO2 emissions by 5,344 million metric tons over the same period --almost 30% more.

Fig1-Emissions.jpg

In addition to these cuts in climate-changing carbon pollution, EPA estimates the proposal will also cut pollution that leads to soot and smog by over 25 percent in 2030 and lead to climate and health benefits worth an estimated $55 billion to $93 billion in 2030, including avoiding 2,700 to 6,600 premature deaths and 140,000 to 150,000 asthma attacks in children.

Important as these gains will be, EPA’s proposal can and should be strengthened. EPA is taking comments for 120 days on all aspects of the proposal, including the approach it used and the data and assumptions it employed to develop the state standards.  NRDC believes the final standards can achieve greater pollution reductions at a reasonable cost. In particular, states could do more to increase energy efficiency and the use of renewables than EPA assumed in setting the targets in its current proposal.

EPA’s proposal calculates an emission target for each state that respects differences in states’ power generation mix and utilizes a wide range of effective tools to cut carbon pollution.  EPA used four basic building blocks to determine the “best system of emissions reduction,” including a wide range of cost-effective methods to reduce emissions. The building block analysis does not prescribe how each state must meet its target.  Instead,  each state is free to develop its own plan to meet the target. The states asked for flexibility and EPA has provided it. This  approach – where EPA sets the targets and states develop implementation plans to meet them – has been used repeatedly over four decades to successfully cut pollution under the Clean Air Act.

EPA has set modest and achievable targets for each state based on that state’s current electricity generation mix. EPA started with each state’s 2012 generation mix and determined the state’s current “carbon intensity” – the average CO2 emission rate of its power generators. EPA then analyzed how much each state’s “carbon intensity” could be improved in future years by applying four types of emission-reducing measures that are already in demonstrated use in many states and regions of the country.  EPA determined each state’s emission rate reduction target for 2020 and 2030 by calculating how much the emission reduction tools could reduce a state's emission rate in each target year. Because each state has a unique energy mix, the various pollution reduction techniques achieve significantly different improvements from state to state, and thus the state targets differ significantly. 

The four “building blocks” – the emission reduction tools EPA used to set the state targets – are:

  • Making existing coal plants more efficient. 
  • Using existing gas plants more effectively.
  • Increasing generation from renewables and nuclear plants.
  • Increasing energy efficiency in homes, appliances, buildings, and other end uses.

States do not have to take the specific steps that EPA analyzed in calculating the targets.  They can choose to meet their targets however they choose.  But the target calculation shows EPA’s view of what emission rate improvements are reasonable, and thus required.

EPA is proposing a two-part target structure: an “interim goal” that a state must meet on average over the ten-year period from 2020-2029 and a “final goal” that a state must meet in 2030 and maintain thereafter.

NRDC analysts examine how the targets work out for specific states in a series of blog posts here.

Adding another important degree of state choice and flexibility, EPA’s proposal provides that a state may adopt the “carbon intensity” target set by EPA, which is stated in terms of the amount of carbon dioxide per megawatt-hour of power generation), or alternatively the state may choose a “mass-based” target – a total number of tons of CO2 emissions allowed per year – at an equivalent or lower level.   

Following the timetable established under President Obama’s Climate Action Plan last year, EPA is to issue the final standards by June 1, 2015.

Each state then must submit a state implementation plan to EPA by June 30, 2016.EPA is providing for conditional approval of a plan in some circumstances, with additional time allowed where needed to complete state rulemaking or legislative activities, or to develop multi-state plans.

Check out our more detailed fact sheet for more analysis of the proposed standards in EPA’s Clean Power Plan.  As we go forward, NRDC’s analysts will continue to post analysis and commentary in blogs and other fact sheets and reports collected here.

                                                                          This post written with Derek Murrow

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Comments

Craig OrenJun 8 2014 12:27 PM

great job, David. I haven't looked at all the links you provided, but I hope one of them discusses how the proposal can be made stronger.

Michael BerndtsonJun 8 2014 08:46 PM

States with lowest intensity:

Idaho, 244 pounds CO2 per MWh
Washington, 264
Maine, 393
Oregon, 407
New Hampshire, 546

States with highest:

Montana, 1882
Kentucky, 1844
North Dakota, 1817
Wyoming, 1808
West Virginia, 1748

So basically the states that burn coal are the highest. The states using renewables, nuke and hydro are the lowest.

So let's look at Idaho and Montana. States with the lowest and highest carbon intensity respectively. Idaho gets roughly 78 percent of its electricity generated from hydro and renewables. Montana on the other hand gets its electricity from coal and hydro.

Montana with it's big EPA proposed carbon intensity could shut down 1 coal plant and open 2 same size gas plants and stay at the same carbon intensity. Montana could sell its excess capacity to Idaho. Shutting down any incentive for wind in either state.

This EPA proposal may be a boon for energy traders and marketers more for anyone else. Which is probably the goal. I'm skeptical of the proposal setting off a plant efficiency craze or renewables. Unless the state has an already high intensity, where they can shut coal and open a bunch of gas plants.

I'm not sure if this proposal will reverse climate change acceleration. It will screw up the groundwater and the near surface atmosphere, with the proliferation of natural gas production.

David DonigerJun 8 2014 09:57 PM

Michael, thanks for your comment. EPA's proposal would reduce carbon intensity in all states. EPA used the four building blocks to derive the state targets for improvements in carbon intensity, but states don't have to use the same measures to comply. We'll work (1) to strengthen the EPA targets in the final rule, to reflect the full potential of energy efficiency and renewable energy, and (2) to persuade state policy makers to rely predominantly on those two tools in their state plans.

Stan Scobie Jun 9 2014 01:34 PM

Methane (natural gas) is a powerful greenhouse gas - especially over the 20-40 year critical period for reducing GHG to have a meaningful effect on global warming as the temperature approaches a runaway tipping point.

So... it is astonishingly curious why the very politically influential presentations from NRDC, such as the present one, have been astonishingly silent about the very worrisome and fairly massive methane leakages. And also essentially silent about the fact that natural gas itself when burned produces plenty of CO2.

We know youall are aware of both of these points - this makes your near silence very troubling. Very troubling - harking back to NRDC's initial (non) response to the shale gas gale in 2007-2009 - tending to present the very wrong headed view that gas was a benign bridge to a kinder safer renewable energy future.

Stan Scobie, Binghamton, NY

David DonigerJun 9 2014 01:54 PM

Stan, NRDC is extremely concerned about methane leakage. We need to curb methane leakage at the same time we curb power plant carbon. That's why we have joined many other groups pressuring the administration and EPA to set strong standards to stop the leaks up and down the natural gas system. The White House promised in March that methane leak standards will be proposed this fall, and will be in place by the end of 2016, in parallel with the power plant standards. We need to work together to do both.

Michael BerndtsonJun 9 2014 02:59 PM

David,

I'm cautiously jumping on board with this proposal. The circle of folks I intersect with are not going to wait for an explanation longer than 15 seconds. No footnotes and smart people citations. I believe the proposal is pretty simple, when reduced down to its essence: Your state is here (2012). Your state needs to be here (2030). Your state can't add any more coal. [caveat: your state should have been coal heavy going into 2012]

It is a little skewed towards present day coal producers and burners. These states pretty much hate everything Obama does anyway. So I'm not sure why all the coddling. Hell, even if Obama paid miners to dig coal, stage it in piles above ground, place it back in the hole, and continue doing the same again and again - they'd still be against it. Just because Obama.

Michael BerndtsonJun 9 2014 03:11 PM

I made a silly comment about digging/filling a hole. It may not be too silly.

Why not tie surface and deep mined land restoration into the proposal? Smarter people than me could figure out how to pay for it. At least use whatever is left in the trust for land restoration rather than tax breaks. A transition fee or tax could be spread out and almost insignificant. This would keep a lot of miners busy. And not leave a lot of holes unfilled.

Joseph O'SullivanJun 13 2014 08:20 PM

The lawyers at The Center for Progressive Reform have put up a post about how the plan will lean heavily on the EPA's statutory authority under the Clean Air Act, the Chevron v NRDC decision, and flexibility for the states to meet the targets.

This won't stop the lawsuits from polluters and their allies, but it will make it hard for them to prevail. Does the NRDC share this opinion?

David DonigerJun 13 2014 10:01 PM

Joseph, we've published a Questions and Answer on legal issues: http://www.nrdc.org/air/pollution-standards/files/system-based-pollution-standards-IB.pdf

Comments are closed for this post.

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