EPA unveils landmark climate rule

Greg Nash

The Environmental Protection Agency on Monday released new rules that call on power plants to cut their carbon emissions 30 percent by 2030.

The new rules, posted on the EPA's website on Monday, are the centerpiece of President Obama's climate change plan, and are set to trigger a major battle with Republicans, coal-state Democrats and business groups.

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EPA chief Gina McCarthy framed the rules as having the potential to dramatically improve public health, saying that for every dollar the government invests in the new climate initiative, families will see $7 in health benefits.

"Today, climate change-fueled by carbon pollution-supercharges risks not just to our health-but to our communities, our economy, and our way of life," McCarthy said. "That's why EPA is delivering on a vital piece of President Obama's Climate Action Plan." [READ MCCARTHY SPEECH.]

The EPA projects that the new rules will cut soot, sulfur dioxide and nitrous oxide by 25 percent.

The EPA will hold several hearings on the rules around the country in July. The rules are not expected to be finalized until mid-2015, and the administration has doubled the public comment period from 60 to 120 days to provide more time for people to weigh in on the rule.

While the administration and green groups say the rules will boost health and address climate change, business groups warn it will hurt the economy. 

Republicans are framing the rules as a "national energy tax" that will shutter coal plants, while coal advocates decried the rule as a political stunt that disregards coal as a vital energy source.

“If these rules are allowed to go into effect, the administration for all intents and purposes is creating America’s next energy crisis,” said Mike Duncan, president of the American Coalition for Clean Coal Electricity. “As we predicted, the administration chose political expediency over practical reality as it unveiled energy standards devoid of commonsense and flexibility." 

While the EPA's proposal notes that coal will remain a crucial part in the nation's energy mix, it also states that roughly 30-40 gigawatts of coal-fired capacity is expected to be "uneconomic to maintain" in 2020.

The rules could be a major issue in the midterm elections, where some coal-state Democrats are likely to run from the administration.
 
Obama on Sunday discussed the new rules with a group of Senate and House Democrats, thanking them for their support. The call was seen as an effort by the White House to get in front of attacks on the rules from his own party.

In a fact sheet provided by the EPA, the agency admits that some power plants are likely to close because of the rules.

The fact sheet said "retirements are expected because of ongoing economics" at power plants. That's due to aging equipment, and the fact that the average coal plant in the United States is 42 years old, the agency states.

But the EPA adds that the regulations will generate more than $90 billion in climate and health benefits compared to $7.3 billion to $8.8 billion in costs. Under the first year alone, the EPA states the rule will avoid up to 150,000 asthma attacks and 2,100 heart attacks.

To comply with the rule, states will be given a year to design their own implementation plans after the EPA finalizes its proposal next summer. In certain cases, specific states may be given up to 2018 to implement a plan. 

"This plan is all about flexibility," McCarthy said. "The glue that holds this plan together, and the key to making it work is that each state's goal is tailored to its own circumstances, and states have the flexibility to reach their goal in whatever way works best for them."

States will be allowed to meet the emissions target multiple ways, including plant upgrades, switching from coal to natural gas, improving energy efficiency, or going "beyond the fence" to renewable energy sources outside the plant site.

McCarthy pushed back at claims during her remarks Monday that the rules will hurt energy jobs, and will harm companies that do not have the ability to adapt.

"Corporate climate action is not bells and whistles-it's all hands on deck. And even without national standards, the energy sector sees the writing on the wall," McCarthy said. "Businesses like Spectra Energy are investing billions in clean energy.  And utilities like Exelon and Entergy are weaving climate considerations into business plans. All this means more jobs, not less."

In what may be viewed as an attempt to compromise with industry, the EPA set 2005 as the baseline year for marking emission cutbacks.

Using 2005 as the baseline makes it easier for the power sector to meet the reductions targets, since emissions are down roughly 10 percent already from 2005. If the base year had been a more recent year, like 2012, it would have made the projected cuts more difficult to meet.

The early baseline year may not have been as stringent a marker as environmentalists were hoping for but so far few are complaining. 

"Today's announcement by the Obama administration to reduce our nation's global warming pollution from power plants is the most important step taken to combat the climate crisis in our country’s history," said former Vice President Al Gore, a staunch advocate of climate change policies said Monday.

National environmental group, the Sierra Club, promised to utilize its 2.4 million members to help promote the new standards, and

Obama is not announcing the new rule, but will participate Monday in a call hosted by the American Lung Association with national health organizations. 

Later, adviser to the president, John Podesta, will host a call with business leaders to argue the economic case for climate action in the U.S.

Senate Minority Leader Mitch McConnell (R-Ky.) is expected to introduce legislation this week that would block the regulations.

This story was updated at 11:05 a.m.