EPA tees up 30% emissions cut as Obama promotes health benefits

Source: Jean Chemnick, E&E reporter • Posted: Monday, June 2, 2014

President Obama raised the curtain this weekend on U.S. EPA’s new proposal for existing power plants’ carbon dioxide by making a public health plea, especially for children suffering from asthma and other respiratory illnesses.

“Often, these illnesses are aggravated by air pollution — pollution from the same sources that release carbon and contribute to climate change,” the president said in a message taped Friday during a surprise visit to Washington, D.C.’s Children’s Hospital. “And for the sake of all our kids, we’ve got to do more to reduce it,” he said.

The message was released Saturday ahead of this morning’s unveiling of the draft rule, which would limit emissions from the sector responsible for 40 percent of U.S. CO2.

In his remarks, Obama sought to head off arguments that are already flowing in from EPA critics that carbon restrictions will drive up energy costs and hurt industry. These same arguments were made when EPA moved to limit other emissions in the past — such as sulfur dioxide and lead — and they were not proved out, he said.

“These excuses for inaction somehow suggest a lack of faith in American businesses and American ingenuity,” said the president. “The truth is, when we ask our workers and businesses to innovate, they do. When we raise the bar, they meet it.”

Also this weekend, Obama called a group of House and Senate Democrats to thank them for their support in advance of the proposal’s release. “It was a good call, and the group was excited for [today’s] announcement,” said a White House official.

Obama will follow the address with a call today hosted by the American Lung Association and other health organizations, where he will argue that new utility sector regulations will help reduce smog and soot linked to respiratory illnesses and protect Americans from heat stress.

He will not be part of the official Washington, D.C., rollout for the proposal, however. EPA chief Gina McCarthy will unveil it at 10:30 a.m. at her agency’s headquarters.

The administration has been very tight-lipped about the rule in the run-up to today’s announcement, but the stakeholder rumor mill had some new grist this weekend.

After weeks of reports that the rule would reduce overall utility-sector emissions by an eventual 25 percent compared with an unspecified base line, those familiar with the proposal now said it would aim for 30 percent compared with 2005 levels by 2030.

That would be a 17 percent reduction compared with 2012 levels, according to the U.S. Energy Information Administration. But those who track the issue expect EPA to propose targets that are higher and lower than that level and to take comment on all of them.

Some of those options might propose later base-line years, which would lead to a more stringent rule.

Thomas Lorenzen, a partner with Dorsey & Whitney who previously defended EPA rules at the Department of Justice, said late last week that EPA might use an average of the three years between 2010 and 2012 to set a benchmark for emissions reduction. But such a standard might not offer credit for states that made substantial emissions cuts earlier in the decade, Lorenzen said.

“You do not want to penalize those early actors, and my expectation is that there will be something in the proposal that addresses that issue,” he said.

The draft might also propose ratcheting down emissions in two phases — a less stringent period in the early years with tougher requirements phasing in sometime after 2020. The early phase would focus on efficiency improvements at individual power plants, leaving a broader “beyond the fence line” measure to ramp up further down the line.

Washington Post article compared the reported EPA proposal to one offered in 2012 by the Natural Resources Defense Council, which would set a state-by-state emissions standard based on current fuel mix and then allow it to be met through reductions on both the demand and supply sides.

But NRDC’s David Doniger said last week at a briefing with reporters that the proposal he helped develop would achieve 35 percent reductions compared with 2005 levels by 2020 — a far cry from the reported EPA central target.

As they waited for certainty on the proposal, Obama’s allies in the advocacy community praised his message linking climate change to public health.

“President Obama is highlighting public health because unchecked climate change will worsen smog, tropical diseases and allergies,” said Daniel Weiss, senior fellow at Center for American Progress. “Reducing these health threats and slowing climate change are major benefits of his carbon pollution standard for children and future generations.”

American Lung Association President and CEO Harold Wimmer said the link between power plant emissions and respiratory illness is clearly established.

“For the 147 million — nearly half of all Americans — already living in areas with unhealthy levels of ozone or particle pollution, curbing carbon pollution emissions is a critical step forward for protecting public health from the impacts of climate change happening today,” he said.

Battle lines being drawn

But Senate Republicans previewed the messages that opponents of the rule are likely to deliver in the weeks and months ahead. Sen. Mike Enzi (R-Wyo.) said in his rebuttal of Obama’s weekly address that the rule is just another front in the president’s war on coal.

“If it succeeds in death by regulation, we’ll all be paying a lot more money for electricity — if we can get it,” said Enzi, who represents a heavy coal-producing state. “Opponents of EPA carbon rules have said they could have serious impacts on grid reliability as needed coal-fired power plants retire early to avoid having to retrofit.”

Sen. James Inhofe (R-Okla.), perhaps the Senate’s most vocal critic of carbon regulation, published an op-ed in USA Today referencing a controversial economic report released last week by the U.S. Chamber of Commerce. The analysis was not based on the EPA proposal but used a separate model proposal to estimate that it could cost an astronomical $51 billion and 224,000 jobs annually.

“These numbers are just the tip of the iceberg,” Inhofe wrote in his column. “More EPA regulations like the one that will be proposed Monday threaten the reliability and affordability of our power grid, will weaken our economy, and drive more people into the unemployment lines.”

The Chamber of Commerce Institute for 21st Century Energy drew fire last week from EPA, which called its cost assessment “irresponsible speculation based on guesses.”

House Democrats received one of the first briefings on the rule Thursday, but they said that White House adviser John Podesta shared few details. Instead, Podesta assured caucus leaders and a handful of rank-and-file members that the rule would not trample state programs but instead would encourage states to use existing renewable energy, carbon reduction and efficiency policies to comply.

Rep. Scott Peters (D-Calif.), the chairman of the Sustainable Energy & Environment Coalition’s climate task force, said he was encouraged to hear that EPA would not seek to pre-empt California’s climate laws.

“I think the last thing we would want would be for something to get in the way of that or try to hold us back,” he said. “California is very well served by having the chance to meet these requirements on its own, and I think other states can be laboratories for climate action, as well.”

Rep. Paul Tonko (D-N.Y.), a co-chairman of the coalition, said the meeting with Podesta stayed on general topics. But he said part of the discussion focused on the positive economic impacts the rule could have.

“As we transition, I would see career opportunities transitioning people from one role in a utility perhaps to a new one that is driven by this clean energy economy,” he said.

Greens have questions but are ready to mobilize

Environmentalists said they had more questions than answers as they waited to be briefed.

Sierra Club Executive Director Michael Brune said Friday that first and foremost he would be looking for EPA to set a reduction target of 20 to 30 percent below 2012 levels by 2020. It’s an ambitious target but an achievable one, he said, in light of changes that are already occurring as gas, wind and solar displace coal in the power mix.

“The reason why we feel comfortable setting very high expectations is because we need to do it and because we can do it based on the low cost of clean energy,” he said.

Brune said a strong standard would also cap emissions from all fossil fuels power plants, a position that may put the Sierra Club at odds with other environmental groups that have urged adaptation of regulatory models that allow for more averaging and banking of emissions.

Megan Ceronsky, Environmental Defense Fund’s director of regulatory policy, echoed this sentiment.

“It’s very important that the standard reflect the fact that states and companies across the country have had tremendous success in seeking reductions in carbon pollution,” she said on a call with reporters. “How that is done is a technical question.”

Greens are already gearing up to support the rule this week and throughout the summer. Brune said the Sierra Club planned a daily “war room” for this week in which to strategize about the rule.

Sierra Club will have organizers on the ground in 26 states to mobilize public support for the standard, or push for a stronger one if EPA’s proposal is too lax. The group also plans to comment on the rule formally.

Sierra Club and several other environmental groups participate in the Climate Action Campaign, which will be holding additional events.

The Natural Resources Defense Council plans a “climate summer” aimed at landing a strong power plant rule, which has been a top priority for years. It’s joining with allies to host more than 300 events in 36 states aimed at boosting support for the rule.

But the coal industry in particular has signaled that it plans to do everything it can to prevent EPA from promulgating rules it deems burdensome.

The National Mining Association has already sponsored ads blasting the rule for its potential to increase electricity rates. And the American Coalition for Clean Coal Electricity said over the weekend that by helping to unveil the proposal, Obama is also acknowledging responsibility for any economic damage the rules cause.

“The White House is distorting the truth by using public health as a distraction from the real motivation for its politically driven climate agenda,” said Laura Sheehan, ACCCE’s senior vice president for communications. She predicted that the rules would have a “calamitous” effect on power reliability and cost, affecting hospitals’ ability to treat the sick.

Scott Segal, director of the industry-backed Electric Reliability Coordinating Council, said that while it might fall short of what some green groups have proposed, the “30 by ’30” standard is still “aggressive.”

This is particularly true, he said, because the most cost-effective reductions have already been gleaned since 2005.

“What is left on the road to 2030 is increasingly more expensive and less tested alternatives,” he said in an email yesterday. “Further, I am certain that EPA will be looking for particular benchmarks in anticipation of 2030 as it goes through the process of reviewing state implementation plans.”

States will have the task of determining how EPA’s rule would be implemented, but in the past, the agency has imposed federal plans on states that failed to submit rules it deemed approvable.