By Mike Duncan - 06/18/14 06:49 PM EDT
When the Environmental Protection Agency recently announced its rule to cut carbon emissions 30 percent by 2030, it did so based on several unsubstantiated claims and questionable facts. The impact of the Obama administration’s politically motivated mandate is too consequential to our economy to ignore the many inconsistencies and errors.
First, contrary to its claims, the 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 4 percent, of global greenhouse gas emissions. Meanwhile, China and India together emit more than 20 percent of all greenhouse gas emissions. The EPA’s proposal, if enacted, would reduce global greenhouse gas emissions by less than 1 percent but, according to the agency, cost Americans, up to $8.8 billion per year.
Third, it seems as if 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, the EPA acknowledges in its own proposal that nationwide average electricity rates would increase by roughly 6 percent in 2020 and 3 percent in 2030. Consumers, however, will have to pay $25 billion on ways to use less energy. At the same time, the 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, the 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 the 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, the 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, the EPA made critical assumptions about each state with limited input from, or coordination with, the states. The 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 the energy policy of Congress and the Department of Energy and now is determining state regulatory policy, a massive mission creep. If states disagree with the EPA, they have only 120 days to understand, analyze and rebut the EPA’s analysis.
Under any standard, clearly the EPA’s proposal is not what it seems. In each scenario, American businesses and families end up being the victims of the 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.