EPA claims don’t add up

When the Environmental Protection Agency (EPA) recently announced its rule to cut carbon emissions 30 percent by 2030, they did so based on several unsubstantiated claims and questionable facts.  The impact of the administration’s politically motivated mandate is too consequential to our economy to ignore the many inconsistencies and errors.
 
First, contrary to its claims, EPA’s new regulations will have no practical impact on global climate change. This is primarily because U.S. power plants produce such a small fraction, just four percent, of global greenhouse gas (GHG) emissions.  Meanwhile, China and India together emit more than 20 percent of all GHG emissions.  EPA’s proposal, if enacted, would reduce global GHG emissions by less than one percent but, according to the agency, cost Americans, up to $8.8 billion per year.
 

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Second, in its campaign to highlight the benefits of EPA’s new regulations, the Obama Administration has employed public health as a chief selling point, claiming that the occurrence of ailments like asthma and heart attacks will be reduced. However, EPA is claiming health benefits for reducing ozone and particulate matter, pollutants that have nothing to do with the purpose of its carbon proposal. The industry has already invested nearly $120 billion to reduce these emissions 90 percent, and we’re putting in an additional $27 billion between now and 2016.
 
Third, it seems that the administration can’t get its story straight about energy cost increases.  EPA Administrator Gina McCarthy recently pushed back against the notion that “energy bills will skyrocket,” contending that critics of the regulations are “wrong.” Yet, EPA acknowledges in its own proposal that nationwide average electricity rates would increase by roughly six percent in 2020 and three percent in 2030. Consumers, however, will have to pay $25 billion on ways to use less energy. At the same time, EPA claims that the total cost consumers pay for electricity will fall under its proposal. This is a dubious claim based on the flawed assumption that consumers will reduce their electricity consumption by at least 10 percent despite the Energy Information Administration’s recent forecast that U.S. electricity demand will increase more than 20 percent by 2040.
 
Fourth, EPA claims that its proposal will create jobs in the electric power production and fuel extraction sectors of the economy in 2020, but this is due to temporary construction jobs. Closer scrutiny of EPA’s analysis shows these sectors are projected to lose as many as 650,000 jobs by 2030.
 
Fifth, though the rule is not a “cap-and-trade” scheme on the surface, EPA encourages the creation of state and regional cap-and-trade programs by allowing states to convert their emissions rate limits into mass-based limits, which become the caps in a cap-and-trade regime. The proposal goes so far as to encourage states to group together to create regional cap-and-trade programs by allowing groups of states an extra year to develop and submit implementation plans.
 
Finally, although we’ve heard how “flexible” the measure is for states, the proposal sets stringent requirements that states have limited opportunity to change. Many states must reduce emission rates by more than 40 percent by 2030. In setting these requirements, EPA made critical assumptions about each state with limited input from, or coordination with, the states. EPA has decided how much coal, natural gas, nuclear and renewable energy each state should use and how much less electricity consumers should use. The agency is further usurping energy policy of Congress and Department of Energy and now is determining state regulatory policy, a massive mission creep. If states disagree with EPA, they have only 120 days to understand, analyze and rebut EPA’s analysis
 
Under any standard, clearly EPA’s proposal is not what it seems. In each scenario, American businesses and families end up being the victims of EPA’s myth-making.  The administration must come clean about the true economic fallout of these regulations and revise them in a way that helps our country thrive, or Congress and the American people will be forced to put a stop to this outlandish overreach.


Duncan is President and CEO of the American Coalition for Clean Coal Electricity (ACCCE)