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Climate Change and New EPA Regulations

June 27, 2014
On June 2, 2014, EPA Administrator Gina McCarthy introduced new regulations on power plants, saying that fighting climate change isn’t just for the polar bears. Real long-term consequences for the United States are inevitable if global temperatures – and sea levels – continue to rise. These regulations have a long-term goal of 30% reductions relative to 2005 by 2030, consistent with the administration’s 2009 Copenhagen goal of overall 2020 emissions being 17% below 2005 emissions.

Author: Sam Kallman, C’15 & W’15

On June 2, 2014, EPA Administrator Gina McCarthy introduced new regulations on power plants, saying that fighting climate change isn’t just for the polar bears. Real long-term consequences for the United States are inevitable if global temperatures – and sea levels – continue to rise. These regulations have a long-term goal of 30% reductions relative to 2005 by 2030, consistent with the administration’s 2009 Copenhagen goal of overall 2020 emissions being 17% below 2005 emissions.  Power plants are responsible for the single largest category (40%) of carbon emissions in the U.S. economy, and therefore this sector is most important in order to meet both goals.

The regulations go on a state-by-state level and leave a lot of flexibility for each state to meet the goals EPA set out for them. However, these are not uniform regulations across the board. Some states, such as Washington, have been given enormous percentage reductions as goals, but always with justification based in a formula consistently applied to each state. In Washington’s case, it is because the only coal-fired power plant in Washington will be partially shut down in 2020 and fully in 2025. Still, some states will bear an exceptionally large share of reductions. Texas, in particular, will need to reduce their CO2 emissions so much that it accounts for nearly ¼ of all the reductions nationwide.

Currently, the EPA is taking public comments on the regulations and will eventually publish a final rule, perhaps not for another year, perhaps shortly after the public commenting period ends. It seems likely that the final rule will take at least a few months to construct, since McCarthy said she “wouldn’t be surprised if we make significant” revisions to the power plant proposal. Although this first proposal is certainly interesting, it is only once it becomes a final rule that the real intrigue begins. The legality of the rule almost certainly will be challenged in court for another few years before it could ever be implemented.

The Supreme Court’s recent decision in Utility Air Regulatory Group v. Environmental Protection Agency shows great uncertainty in how the court views EPA’s authority to regulate greenhouse gas emissions. Although the court ruled against the EPA in part, it left EPA the authority to impose permitting requirements on new and modified power plants, which has been seen by many as precedent to allow restrictions on existing plants too. Still, this regulation draws on a different section of the Clean Air Act than Utility Air did, so it is far from certain that the court would uphold the EPA’s new rule.

After all the legal challenges, maybe three years down the line and under a different administration, even if the rule has been ruled constitutional, who knows if the EPA would even follow through? It certainly seems that a Republican president would have a hard time getting the support of the party, barring a seismic shift in the party platform. In only a few short weeks since the regulations were revealed, many members of the GOP have decried the regulations for killing jobs. Aside from that, a group of 41 Republican Senators wrote a letter (leaving only four who opted not to sign) specifically focused on how the regulations might raise electricity prices, ultimately hurting the bottom line of the poorest Americans who can least afford such a spike. Senate Minority Leader Mitch McConnell called the rules “catastrophic,” while Speaker of the House John Boehner called them “nuts.”

Still, there are some critical Democrats and supportive Republicans, too, showing that maybe a middle ground can be found. Senator Joe Manchin was critical of the plan in his official statement, while Senator Mary Landrieu, chair of the Senate Committee on Energy and Natural resources was adamant that CO2 standards must be set by Congress, not the EPA. On the House side, Representative Nick Rahall co-sponsored a bill with Republican counterpart Representative David McKinley to negate the regulation in its entirety. Furthermore, four former EPA heads appointed by Republican presidents who previously called for stronger emissions regulation recently testified in a Senate committee hearing, where they said the June 2proposal was “a reasonable starting point.” Meanwhile, Henry Paulson, Secretary of the Treasury under President George W. Bush, wrote an op-ed in the New York Times comparing global warming to the financial crisis he faced in 2008.

In any case, for many people on both sides of the aisle, these rules are only the first step. Regulations from the executive branch are insufficient compared to statutes, so they are waiting for both greenhouse gas legislation in Congress and, even more importantly, an international agreement by 2020. A common talking point, and a valid one, is that U.S. climate regulations will be irrelevant in the long run to global climate change if developing countries don’t also curb their emissions. Furthermore, until China or India curbs their emissions, if we curb ours, we will be hampering our ability to compete in the global economy.

Perhaps, however, it is necessary for the U.S. to lead on this issue and then other countries will follow. There are many unanswered questions about how the new regulations will play out in both domestic and international politics, but at least it restarted the conversation.

 

 

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  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

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