Energy & Environment

EPA Rule Requires Major Carbon Reductions from States

The U.S. Environmental Protection Agency is making states put plans in place that would reduce carbon emissions to 30 percent below 2005 levels by 2030.
by , | June 4, 2014
Environmental Protection Agency Administrator Gina McCarthy signing new emission guidelines to cut carbon dioxide emissions from power plants by 30 percent by 2030. AP/Evan Vucci

In what could spur some of the most significant climate action in decades, states will have to develop long-term plans to sharply reduce emissions of carbon dioxide under a new rule presented Monday by the U.S. Environmental Protection Agency.

Targets vary by state, but the EPA predicts that, by 2030, the level of carbon emitted nationally would be 30 percent below 2005 levels. That reduction is equivalent to the amount of energy it now takes to power half of U.S. houses per year. States will have to present at least an initial plan by June 30 of 2016, but they’re allowed to choose from a variety of methods, from expanding the use of renewable energy to setting up market-based systems for carbon trading.

“It’s up to states to mix and match to get to their goal,” said EPA Administrator Gina McCarthy. “If states don’t want to go it alone, they can hang out with other states and join up with a multi-state market based program, or make new ones.”

The EPA rule targets power plants that produce high levels of carbon dioxide, which the vast majority of scientists consider a top contributor to global warming. About 30 percent of energy will still come from coal in 2030, down from about 40 percent now, according to the EPA.

The announcement sparked immediate reaction from governors and attorneys general, much of it along party lines, though Democrats in coal-rich states lashed out against the rule. Gov. Earl Ray Tomblin, a Democrat from West Virginia, said “at first glance” the 645-page EPA rule contains “several proposals that cause us great concern. "If these rules are put into place, our manufacturers may be forced to look overseas for more reasonable energy costs, taking good paying jobs with them and leaving hardworking West Virginians without jobs to support their families,” he added.

Gov. Matt Mead of Wyoming, a Republican, called the approach “heavy-handed” and vowed to “take steps to fight for coal” if his administration finds the new rule excessive.

It’s likely the rule will face legal challenges from states and companies under the premise that the Obama administration has exceeded its authority. The U.S. Supreme Court, however, has repeatedly upheld EPA efforts to regulate pollutants under the Clean Air Act, most recently in April.

A power plant in Thompsons, Texas.

A power plant in Thompsons, Texas, that operates natural gas and coal-fired units.

States will have 120 days to comment on the rule and argue for an adjustment in their proposed target. The EPA is expected to finalize the regulation in June 2015. After that, they’re required to submit a plan for meeting those targets by June 2016, but they can request an extension of up to two years, depending on whether they're forming a multi-state plan. The EPA will design plans for any states that refuse to create their own or submit a plan that the agency doesn’t consider adequate.

Peter Shattuck, of the research and advocacy organization Environment Northeast, called the timeline “fairly ambitious.” Shattuck said it reflected the Obama administration’s desire to solidify the policy before a successor takes over.

The EPA determined each state’s reduction target by taking 2012 levels of carbon emissions from power plants and dividing that figure by total electricity generated, which includes low-or-zero-emission sources as well. The number set by the agency also reflects the strategies states are currently using and their capacity to substitute energy sources that produce less carbon, such as natural gas, for more harmful sources. Agency officials said the targets were meant to be goals that states can reasonably achieve.

“We can definitely say that EPA is accounting for state by state variation, and that’s definitely a good thing,” said Kyle Aarons, a senior fellow at the Center for Climate and Energy Solutions. “Whether they specifically got the details of each state right remains to be seen.”

To meet the goals states can develop their own plan or a multi-state solution along the lines of the Regional Greenhouse Gas Initiative (RGGI), a program that trades credits for carbon pollution among nine states along the east coast. Strategies could include everything from incentivizing consumers to use less electricity to phasing out aging plants or relying more on natural gas. About 38 states already require that a certain amount of energy be produced with renewable sources, and 10 have market-based programs that cap carbon and require permits for its emission.

California has cap-and-trade system, and analysts say the new EPA rule could lead Oregon and Washington to join. RGGI started its system four years before California, and the group’s backers argue its experience so far has disproven concerns about rising energy prices or economic stagnation.

Since the initiative started in 2009, electricity prices have dropped an average of 8 percent across all participants. While emissions dropped 2.7 times faster than the rest of the nation, the economies of RGGI states also grew 2.5 times faster than those of other states, according to a May report.

“We’ve proven that you don’t have to choose between economy and environment,” said Kelly Backman, commissioner of the Maryland Public Service Commission and a member of RGGI’s board of directors.

Proponents of regional market-based systems argue they’re ultimately cheaper because they spread risk across a broad area and provide more ways to offset emissions or shift power production efficiently across state lines. The EPA has given the idea its blessing, but whether states choose to adopt regional approaches--or stake out intransigent positions in step with the politics of the Affordable Care Act--remains to be seen.

“EPA has made it clear that they would encourage and allow those types of regional approaches, and I think it’s in the states’ benefit,” said Christopher Van Atten, senior vice president for M.J. Bradley and Associates, an environmental consultant. “Whether they follow through is still an open question.”

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