The fate of the Clean Power Plan, the federal regulation of carbon dioxide from fossil fuel electric power plants, has taken a turn for the worse this month. The EPA has issued a notice of proposed rulemaking, beginning the process to repeal the rule.
The proposal would change the EPA’s interpretation of the Clean Air Act and reflects the position of the current administration that the Clean Power Plan exceeded EPA’s authority. Litigation over this action is certain, and it will feature a debate over the legal limits on EPA regulatory power balanced against the legal mandate for EPA to regulate carbon dioxide as a pollutant endangering public welfare, as found by the Supreme Court in 2009.
Market shifts away from fossil fuels
Whatever the fate of the plan, the U.S. power sector is already shifting toward less carbon-intensive energy sources. The 2017 Sustainable Energy in America Factbook reported that since 2005, the power sector has shrunk its carbon footprint by 24 percent. A new analysis suggests that the sector’s emissions are already on track to meet the Clean Power Plan’s target of 32 percent by 2030, with a projected 27 to 35 percent reduction below 2005 levels.
This decarbonization is all without the Clean Power Plan having come into effect—but how? The power sector has been influenced by state policies and shifts in relative costs among energy sources, including cheaper natural gas, which has a significantly lower carbon impact than coal. From 2005 to 2016, according to the Factbook, the U.S. added 78GW of wind, 39GW of solar and 104GW of natural gas, while retiring 49GW of coal-fired power plants.
In the void—whether temporary or permanent—left by the federal Clean Power Plan regulation, we will continue to see market forces pushing decarbonization of power generation. Some states will move ahead with steps to accelerate that transition and to use power more efficiently, with approaches ranging from California’s cap and trade program, to a diverse set of states, including Ohio and Illinois, leveraging renewable portfolio standards. Some utilities will continue to increase their investments and transition to lower carbon generation.
States left without a critical mechanism for efficiency
Under a Clean Power Plan repeal, we will be missing a key, if imperfect, tool to incentivize robust energy efficiency programs in every state. The rule would have allowed states to leverage energy efficiency for credit by avoiding the need for electricity generation and the associated emissions, with special emphasis on low-income communities.
Although leading states have adopted policies to push efficiency and its financial benefits to various sectors, other states have lagged, especially those in the Southeast and Midwest. (See, for example, ACEEE scorecards ranking energy efficiency policies in states and major utilities.) Without state and utility structures supporting efficiency, business and residential customers will continue to spend more money on electricity than they need to, and miss out on co-benefits to health and comfort. USGBC is concerned in particular about the disproportionate impact of energy costs on low-income households.
The Clean Power Plan story is not over yet, but with or without the plan, we will continue to advocate for strong, effective state and utility policies and programs to drive improvements in energy efficiency that supports jobs, businesses and families.
To learn more about how you can support low income efficiency, contact the Advocacy and Policy staff at USGBC.