President Obama Unveils First Ever Federal Limits on Power Plant Emissions

Policy Watch

• President Obama unveiled the first-ever federal limits on power plant carbon emissions, which aim to change the way Americans make and consume electricity and accelerate the existing shift toward cleaner fuels, renewable energy, and consumer-generated power. The regulations are part of a broader push by the Obama administration to position the U.S. as a leader in tackling climate change. But industry officials say they are worried about the plan’s costs and timetable, casting doubt on its feasibility. More than a dozen states and the coal industry have vowed to sue the EPA, and several states have threatened to refuse to comply with the rule, which would require a 32% cut in power-plant carbon dioxide emissions by 2030 from 2005 levels. EPA administrator Gina McCarthy says the rule will result in an estimated annual cost of $8.4 billion by 2030 and have total benefits, including public health benefits, of $34 billion to $54 billion per year. [WSJ]

• U.S. colleges and universities have been increasing tuition costs by 2% to 5% per year over the past 30 years, but education spending is flat or falling at many public and private institutions. As the economy slowly rebounded from the recession, tuition costs continued to increase at the same pace. With revenue streams like state subsidies drying up, colleges aren’t relying as heavily on those means to pay for the costs of education; they’re making students and families pay for more of it themselves. And this change is especially apparent at public institutions. [Forbes]

Economic Indicators & News

• U.S. stocks declined on Monday as oil prices, which have tumbled more than 50% since last summer, continued to fall. The steep decline in oil prices over the last year should act as a driver for spending, many investors say, as consumers direct the money they’ve saved on gas elsewhere. [WSJ]

• Speaking of which, consumer spending rose 0.2% in June, which is down from a revised spike of 0.7% in May. Personal income, boosted by gains for rents and transfers that offset slight slowing in wages, rose slightly more than expected at 0.4%. The key inflation reading rose only 0.1% for a 1.3% year-on-year rate. The savings rate is below 5% but remains on the high side, which points to consumer health and hints at underlying spending strength. [Bloomberg]