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Less Carbon, More Jobs, Lower Bills: Protecting Americans from Dangerous Power Plant Carbon Pollution

Laurie Johnson

Posted July 2, 2013 in Solving Global Warming, U.S. Law and Policy

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Today, for the sake of our children, and the health and safety of all Americans, I’m directing the Environmental Protection Agency to put an end to the limitless dumping of carbon pollution from our power plants, and complete new pollution standards for both new and existing power plants.

—remarks by President Obama announcing his climate plan June 25, 2013 

Climate change is fueling extreme weather, heat, drought, forest fires, asthma, and many other climate impacts harming our children’s health and their future. Yet one of the largest sources of the dangerous heat-trapping gases driving climate change, our nation’s power plants, emit with no limits whatsoever.

Power plants are central to the climate change problem, responsible for almost 40% of the carbon dioxide pollution in the United States, but they have never faced federal limits on how much carbon pollution they can dump into the air. As President Obama said, “That’s not right, that’s not safe, and it needs to stop.”

So the President is outlining a common–sense step, using a common-sense tool: the Clean Air Act. Just as we used the Clean Air Act to set limits for arsenic, mercury, lead, and other dangerous pollution coming from power plants, we can set limits to efficiently cut the carbon pollution they emit.

For more than 40 years, the Clean Air Act has proved itself an effective, efficient, and flexible tool that has safeguarded public health while fostering economic growth and innovation. A new analysis released by the Natural Resources Defense Council finds that curbing carbon pollution from power plants using the Clean Air Act would have similarly positive results.

In the analysis, “Less Carbon, More Jobs, Lower Bills,” we find that NRDC’s proposal to cut carbon pollution would create new jobs nationally and lower the average American’s monthly electric bill. (The proposal upon which this analysis is based is detailed in our December 2012 report Closing the Power Plant Carbon Pollution Loophole: Smart Ways the Clean Air Act Can Clean Up America’s Biggest Climate Polluters). Specifically, we found that our proposed carbon standards would, in 2020:

  • increase national employment by a net total of 210,000 jobs,
  • lower average residential electricity bills by $0.90 per month, and
  • have essentially no overall impact on GDP.

As Dan Lashof, NRDC's Climate and Clean Air Program Director put it today

For the sake of our children’s future, we have an obligation to fight back against climate change, which is already damaging and disrupting our communities,” said Dan Lashof, director of NRDC’s Climate and Clean Air Program. “The nation must curb the largest source of climate-changing pollution pouring into our skies, without any limits, from coal-fired power plants. And the good news is we can while creating more than 200,000 new jobs, trimming electricity bills and helping our economy.

The analysis

In December 2012, NRDC shared our proposal for how the EPA could set carbon standards for power plants that would achieve big reductions at far lower cost than conventional wisdom would have suggested, all while creating vast benefits for the American people including a surge of investment in energy efficiency. The plan would use the flexibility EPA has under the Clean Air Act to set carbon reduction goals based in part on states’ current electric generation mixes and allow power companies to draw from a wide range of options to meet emissions reduction targets.

With this kind of practical, flexible approach, we showed that EPA could reduce carbon emissions by 26 percent by 2020 (relative to peak levels in 2005) while at the same time lowering electricity prices. The price tag? About $4 billion in 2020. But the benefits—in saved lives, reduced illnesses, and avoided environmental damage—would be worth $25 billion to $60 billion, 6 to 15 times greater than those costs.

That report outlined the big picture. Today, we are releasing a companion analysis  which digs into the details and examines how our proposal would affect jobs, GDP and electricity bills for average Americans.

We also examined how our proposal would look in some states around the country. The figure and table below summarize our results.

Nationally we see a total net gain of 210,000 jobs in 2020. For our states, all but one would experience job growth as a result of cutting carbon pollution from power plants, with the increases ranging from 1,300 to 14,000 jobs. Residents in 11 states would experience lower electricity bills in 2020 under the proposal compared to business-as-usual.

Energy efficiency upgrades are the primary driver of job gains in the analysis, responsible for 236,000 additional direct jobs in 2020. Shifts in other sectors (including not just power plants but also industries that supply inputs to their production) reduce the net increase to 210,000; some job gains are also offset from households spending money on energy efficiency measures instead of other economy-wide goods and services.

Energy bill savings occur because the efficiency program costs included in electricity bills would be lower than the cost of electricity that would otherwise be required. While electricity rates (cents per kilowatt-hour) could go up modestly in some cases, electricity bills (rate times usage) go down, on average, because energy efficiency improvements reduce overall electricity consumption.

Conservative estimates

Our estimates are conservative.

Changes in utility bills capture savings from energy efficiency only for the year 2020, yet energy efficiency upgrades installed up to that point will continue to have benefits for consumers for many years beyond. The bill savings we estimated reflect up-front charges on electricity bills for energy efficiency programs and investments in cleaner generation, minus savings from avoided generation received only in the year of analysis.

We also did not include two positive impacts our proposal would have on GDP, due to modeling limitations. First, we did not calculate productivity improvements to the economy that would result from the $25 billion to $60 billion in health and environmental benefits. These could be significant: a series of studies led by Dale  Jorgenson at Harvard University concluded that the healthier workforce resulting from the Clean Air Act increased GDP by as much as 1.5 percent by 2010. Similar to other environmental damages, climate change disrupts worker productivity because of work days lost to extreme weather (e.g. from damages to homes, businesses, and transportation and other infrastructure) and climate-related illnesses (e.g. exacerbated respiratory illnesses such as asthma and bronchitis, and emergency room visits during heat-waves for various health impacts). Extreme heat also lowers the productivity of outdoor workers.

Second, our proposed carbon standard reduces wholesale electricity prices in the regions we studied in the Eastern part of the country due to reduced electricity demand and the form of the output-based standard, but we did not estimate the positive effect this would have on  businesses and economy-wide production.

Details aside though, the big picture is clear:

The President has laid out a robust plan for tackling climate change, noting that we have an obligation to protect future generations from climate change. The centerpiece of that plan is the task of cleaning up the dangerous carbon pollution from power plants. Power plants are our biggest source of carbon pollution, and while they must observe strict limits for arsenic, mercury, lead and other emissions, they face no federal limits for their carbon dioxide pollution. Our two analyses demonstrate that NRDC’s proposal for reducing carbon pollution from power plants by 26% in 2020 will add over 200,000 jobs to the US economy, save Americans money on their electric bills, and avoid up to $60 billion in health impacts and other climate-related costs. When we consider that climate change is already upon us and already affecting communities all across the nation, it's clear that the path forward to less carbon, more jobs, and lower bills is the right path to take.

 

 


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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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