The Clean Power Plan is an Obama administration policy aimed at combating anthropogenic climate change (global warming) that was first proposed by the Environmental Protection Agency in June 2014. It is widely expected to be eliminated under President Donald Trump, who signed an executive order on March 28, 2017 mandating the EPA to review the plan.
The final version of the plan was unveiled by President Obama on August 3, 2015. The 460-page rule (RIN 2060–AR33) titled "Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units" was published in the Federal Register on October 23, 2015. The Obama administration designed the plan to lower the carbon dioxide emitted by power generators.
The final version of the plan aims to reduce carbon dioxide emissions from electrical power generation by 32 percent within twenty-five years relative to 2005 levels. The plan is focused on reducing emissions from coal-burning power plants, as well as increasing the use of renewable energy, and energy conservation. White House officials also hoped that the plan would help persuade other countries that emit large amounts of carbon dioxide to officially pledge to reduce their emissions at the 2015 United Nations Climate Change Conference.
The plan will require individual states to meet specific standards with respect to reduction of carbon dioxide emissions. States are free to reduce emissions by various means, and must submit emissions reductions plans by September 2016, or, with an extension approval, by September 2018. If a state has not submitted a plan by then, the EPA will impose its own plan on that state.
The EPA divided the country into three regions based on connected regional electricity grids to determine a state's goal. States are to implement their plans by focusing on three building blocks: increasing the generation efficiency of existing fossil fuel plants, substituting lower carbon dioxide emitting natural gas generation for coal powered generation, and substituting generation from new zero carbon dioxide emitting renewable sources for fossil fuel powered generation.
States may use regionally available low carbon generation sources when substituting for in-state coal generation and coordinate with other states to develop multi-state plans.
The EPA estimates the Clean Power Plan will reduce the pollutants that contribute to smog and soot by 25 percent, and the reduction will lead to net climate and health benefits of an estimated $25 billion to $45 billion per year in 2030. That includes the avoidance of 140,000 to 150,000 asthma attacks among children and 2,700 to 6,600 premature deaths. EPA projects that the plan will save the average American family $85 per year in energy bills in 2030, and it will save enough energy to power 30 million homes and save consumers $155 billion from 2020–2030. The plan would create 30 percent more renewable energy generation in 2030 and help to lower the costs of renewable energy. It also would create hundreds of thousands of jobs, according to the NRDC.
According to the Energy Information Administration (EIA), coal in 2015 in the United States produced 1,364,000,000 metric tons of CO2. This amounted to 71% of CO2 emissions from the electric power sector. By switching this coal generation to a cleaner source such as wind power, emissions could be significantly reduced and electric power costs could be reduced. According to some studies, wind power has a lower cost per unit of energy produced than coal or natural gas.
The United States' enactment of the Clean Power Plan was one of the first major global initiatives to curb internal greenhouse gas emissions. Since the plan was established in 2014, there have been various global efforts made to decrease toxic particulate matter emissions by other developed nations. The Paris Agreement was agreed upon in October 2016 and entered into force in November 2016. The Paris Agreement aims to combat global climate change by keeping a global temperature rise this century well below 2 degrees Celsius and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. In order to enact the plan, 194 UNFCCC member nations have signed the treaty, 141 of which have ratified it.
The poorest, most underdeveloped nations emit the lowest levels of carbon dioxide and greenhouse gasses. According to the World Bank, greenhouse gas emissions from large nations such as the United States and China disproportionately affect developing nations who don't have the infrastructure to combat climate change induced drought, famine, and other natural and anthropogenic disasters.
The economic impact of the Clean Power Plan (CPP), not including the impact on employment, can be measured by a multitude of variables including its impact on electricity prices and health expenditures. In four major studies conducted on the economic impact of the CPP, findings varied widely due to the assumptions made and the variables analyzed. Ultimately, the effect of the CPP on households is most influenced by how states decide to meet their emissions goals, allocate the revenue generated by the carbon tax, and collaborate with other states.
Data on the economic impact of the Clean Power Plan on electricity prices relies heavily on four prominent studies conducted separately by Synapse Energy Economics, M.J. Bradley & Associates, NERA Economic Consulting, and the U.S. Environmental Protection Agency (EPA). Synapse Energy Economics relied on assumptions from a 2012 U.S. Department of Energy (DOE) study on future potential of energy and reported findings indicating that the CPP will decrease the cost of electricity. M.J. Bradley & Associates rely on data from National Renewable Energy Laboratory (NREL) and reported generally optimistic findings, with large decreases in costs due to the CPP. NERA Economic Consulting, funded by coal lobbyists, relied on U.S. Energy Information Administration (EIA) data with pessimistic assumptions, resulting in pessimistic findings stating that some states may even face double-digit price increases. The EPA drew from the NREL for data and made middle-ground assumptions, ultimately reporting findings that are similarly "middle-ground" compared with other studies. The ability to measure and determine the impact on at-risk communities is confounded by these varying conclusions.
Differences between states aside, three key at-risk groups are low-income communities, high-income communities, and coal miner communities. Low-income households may disproportionately experience increases in expenditures due to a large share of their consumption falling into the energy-intensive category. Conversely, low-income communities are likely to benefit from increased air quality, and therefore decreased health care expenditures. In order to combat any negative impact of the CPP, states may choose to allocate roughly 10% of their carbon pricing revenue to protect low-income communities. High-income communities may be disproportionately affected by the CPP because of decreased income levels, due to greater dependence on capital income, rather than wages. Coal miners, making up 0.057% of the total U.S. employment, may be disproportionately affected by the CPP due to potential layoffs in the coal industry. In contract, coal miners disproportionately benefit from increased clean air and decreased health expenditures. Just one to five percent of the revenue generated from a moderate carbon price would offset any detriment to coal miner communities.
According to Energy Innovation’s Energy Policy Simulator, a repeal of the Clean Power Plan would lead to an increase in carbon dioxide emissions of more than 500 million metric tons by 2030, and by 2050, that figure would rise to more than 1,200 million metric tons.
Furthermore, the EPA's proximity analysis concludes that a higher percentage of minority and low-income communities live near power plants when compared to the national averages, increasing risk of disease and death due to toxic particulate matter emissions and air pollution.
The EPA has determined that greenhouse gas pollution causes global temperature warming, leading to harmful changes to the environment and human health globally such as increased drought and increased famine due to decrease in water supply and agricultural production. According to the EPA fact sheet on the Clean Power Plan, climate change is responsible for everything from stronger storms to longer droughts and increased insurance premiums, food prices and allergy seasons. The populations most vulnerable to the adverse affects of climate change include children, older adults, people with heart or lung disease and people living in poverty. The repeal of the Clean Power Plan will increase greenhouse gas emissions, expediting the damaging environmental changes due to climate change that disproportionately affect subaltern populations around the globe.
As aformentioned, a major part of the Clean Power Plan's mission is to regulate and reduce greenhouse gas emissions from industry. Proponents of the Clean Power Plan have stated that the attempt in reducing these emissions is also going to be reducing the number of jobs in the United States because of the shrinkage in the industry sector. More specifically, there will be a 19% reduction in the iron and steel production, 21% reduction in cement production, and 11% in refining production. On the other hand, those who argue favorably for the Clean Power Plan have addressed the employment concerns of critics of the Clean Power Plan. While jobs will be decreasing in the industrial sector, there has also in been an increase nationwide in the solar sector, wind sector, and energy efficient sector.
While some are skeptical of the Clean Power Plan because of its job loss in the industrial sector, the EPA has made clear that in order for the Clean Energy Plan to be effective community engagement is essential, particularly low income, minority and tribal communities. To ensure opportunities in communities, the EPA is requiring all states demonstrate how they are actively engaging with communities. The EPA has created a Clean Energy Incentive Plan that will reward communities who invest in wind and solar generations; the premise is to increase demand for energy efficient programs in low-income communities. In addition to incentivizing public engagement, they will also be testing air quality evaluations and providing demographic information in order to gauge the impact of air pollution on communities who are located near power plants.
Obama announced the plan in a speech given at the White House on August 3, 2015. In his announcement, Obama stated that the plan includes the first standards on carbon dioxide emissions from power plants ever proposed by the Environmental Protection Agency. He also called the plan "the single most important step that America has ever made in the fight against global climate change."
The policy has been described as "[Obama's] most ambitious climate policy to date." In response to Obama's 2015 announcement, hundreds of businesses voiced support for the plan, including eBay, Nestlé, and General Mills. To show support for the Clean Power Plan, 360 other companies and investors sent letters to their governors. The companies and investors signing the letter represent all 50 states. In 2016, 2/3 of electric utilities support the plan.
In the June 18, 2014 proposed rule, EPA argued that because the 1990 Clean Air Act Amendment is ambiguous, EPA's interpretation is entitled to judicial deference. EPA found the statute to be ambiguous because the language in the United States Code is from a May 23, 1990 House amendment that conflicts with a never codified April 3 Senate conforming amendment.
After the U.S. Supreme Court in King v. Burwell upheld the Affordable Care Act on June 25, 2015, however, the EPA adopted a more aggressive statutory interpretation. In the final rule announced on August 3, the EPA argued that the Senate's language unambiguously allows it to regulate, while the House language in the U.S. Code should be ignored because it is unreasonable under the Clean Air Act's "comprehensive scheme."
Opponents immediately declared the Plan was illegal, attempting to sue before the agency finalized the rule. Only ten days after the EPA announced the final rule, twenty-seven states petitioned the United States Court of Appeals for the District of Columbia Circuit for an emergency stay. Peabody Energy hired Laurence Tribe, President Obama's mentor at Harvard Law School, to author a brief which was later acclaimed on the Senate floor. Professor Tribe would go on to testify before the House Energy and Commerce Committee that the EPA's energy policy was "burning the Constitution."
Challengers argue that EPA overstepped its legal authority in issuing the CPP, in regards to the power plants covered by the plan, and that the scope of the "building blocks" for action go beyond standards applied to specific electric generating units, as called for by the Clean Air Act. Eighteen states have joined the litigation in support of the EPA's plan.
On February 9, 2016, the United States Supreme Court ordered the EPA to halt enforcement of the plan until a lower court rules in the lawsuit against the plan. The 5–4 vote, split along ideological lines, was the first time the Supreme Court had ever stayed a regulation before a judgment by the lower Court of Appeals.
As of July 2016, several states – including Republican-held ones such as Wyoming, South Carolina, Virginia, Arizona, Idaho, and New Jersey – are moving forward to meet the Plan's requirements although sometimes indirectly, regardless of open opposition.
On September 27, 2016, the case against the CPP was heard in the United States Court of Appeals for the District of Columbia Circuit. The chief judge of the court, Merrick B. Garland, recused himself, as he was also President Obama's US Supreme Court nominee.
The argument has sparked debate about both the constitutionality and the political effects of the Clean Power Plan. The New York Times Editorial Board published an editorial arguing that the D.C. Circuit should uphold the plan.
President Donald Trump's proposed 2018 United States federal budget defunded the Clean Power Plan. On March 28, 2017, President Trump signed an executive order directing EPA Administrator Scott Pruitt to review the Clean Power Plan. EPA will need to go through the formal rulemaking process to change the existing rule, and in 2007, the U.S. Supreme Court ruled in the case Massachusetts v. Environmental Protection Agency that EPA regulation of carbon dioxide is actually required by the Clean Air Act, which is still in effect. Trump explained this decision calling the Clean Power Plan a "job-killing regulation" which some see as false, saying "the potential for job growth in the clean energy sector dwarfs any potential job growth in the fossil fuel economy".
Opposition argues that with the repeal of the Clean Power Plan, the United States will not be able to meet the greenhouse gas emission standards agreed to under the Paris Agreement, and in turn, will have to withdraw from the agreement. Without it, the United States is projected to fall over 20% short of its pledge. Because the Clean Power Plan was a significant part of how the United States intended to meet the emission targets it set for the Paris Agreement, this action may discourage other countries from upholding their own commitments. Janet McCabe, an Obama Administration EPA department head, stated that the decision completely disregards the impacts of climate and the cost and benefits associated with the started programs. According to her it will lead to several more years of uncertainty and potentially lost opportunity as well as a worsening public image of the United States internationally. However she is hopeful that the decision's impact on the industry's direction toward a cleaner energy system won't be severe as several states already meet the 2022 target carbon dioxide emissions established in the Clean Power Plan.
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