Obama Unveils Tougher Climate Rules for States Than Expected

If the rule survives the inevitable legal challenges, it will mark the first time the federal government limits air pollution from carbon dioxide.
by | August 3, 2015

President Obama unveiled finalized regulations Monday that would force states to make dramatic reductions in carbon dioxide emissions from coal power plants. The "Clean Power Plan" calls for states to curb emissions 32 percent below their 2005 level within the next 15 years -- a slightly more aggressive target than what was proposed under draft regulations from the U.S. Environmental Protection Agency (EPA) last year.

Obama called the plan "the single most important step America has ever taken in the fight against global climate change." If the rule survives the likely legal challenges from states and other stakeholders, it will mark the first time the federal government limits air pollution from carbon dioxide.

Carbon dioxide accounts for more than 80 percent of the United States' greenhouse gas emissions. The EPA estimates that the total cost of complying with the rule would be $8.4 billion through 2030. But the environmental and health benefits would outweigh that and range anywhere from $34 billion to $54 billion, leading to fewer premature deaths, heart attacks and asthma attacks. Overall, the rule is projected to cut 870 million tons of carbon dioxide emissions by 2030, which is equal to removing about 166 million cars from the road.

States will have to present at least an initial plan for how they'll achieve reductions by Sept. 6, 2016, and a final version by 2018. 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 (also known as cap and trade). If states refuse to submit a plan, as some governors have already threatened to do, then the EPA will impose a federal plan instead.

The final rule offers some relief for states by pushing back the first deadline for meeting carbon reduction targets to 2022, two years later than what was proposed in the draft regulations. It also includes a new "clean energy incentive program" that will award credits to states that choose to invest in solar and wind energy projects, or energy efficiency projects in low-income communities. Three Southeastern states -- Georgia, South Carolina and Tennessee -- benefit from a change in the final rule that no longer counts under-construction nuclear power plants in the target-setting formula, but does give credit for the electricity the plants generate.

Some experts have predicted that the rule will result in new state or regional cap-and-trade marketplaces, much like the ones that already exist in California and nine states in the mid-Atlantic and Northeast.

In his announcement, Obama referenced several other state and local initiatives aimed at addressing climate change, such as the energy efficiency targets that about half of states have set. He also mentioned the Mayors' Climate Protection Agreement, signed by more than 1,000 mayors between 2005 and 2014, that called for a reduction in carbon emissions in cities.

The final rule is certain to spark legal challenges. At least a dozen attorneys general -- especially from states where coal is an important part of the economy -- already filed lawsuits before the rule was finalized. In June, a federal appeals court dismissed one of those lawsuits filed by West Virginia Attorney General Patrick Morrisey that sought to preempt the EPA rule. The ruling, however, said little about the merits of a case against the rule itself because the court concluded that states couldn't challenge the regulation until it had been finalized.