Last week President Barack Obama announced the new rules to reduce the carbon pollution from power plants, a leading contributor to climate change. The plan calls for a 32 percent reduction in carbon emissions over 2005 levels by 2030. The first deadline for partial compliance is 2022.
The new Rules loosen emissions targets for 31 states, but they are more stringent for the others that have not established Renewable Energy Standards, or other programs. Montana’s new target, for instance, is now a 47 percent reduction. Wyoming, Pennsylvania, North Dakota, Kentucky, West Virginia, Indiana, Missouri and Kansas are the other states among the 16 that will have to reduce their carbon dioxide emissions further.
Kansas Governor Brownback is vowing to oppose the regulations. Wyoming Gov. Matt Mead said the regulations exceed the government’s authority, while North Dakota Rep. Kevin Cramer said he was looking for a judicial block that would allow Congress to repeal the rule. Republicans in Congress are attempting to pass legislation preventing the EPA from regulating carbon pollution at all.
The EPA, however, is offering states an incentive to reduce carbon faster by using more renewable energy or adopting energy conservation programs. The new proposal is called the Clean Energy Incentive Program. Details have not yet been fleshed out, and it won’t be finalized until after a period of public review and comment. It is an enticement to states and power companies to get a quicker start toward the steep emissions targets.
The basic idea is to grant extra emissions credits, up to a cap, for programs that either spurs investments in solar or wind power or that target low-income communities for energy efficiency projects. The credits could be used later, after the emissions limits take effect. The EPA said the program will be voluntary— no state would be required to participate, and no electric utility company would be forced to go along.
The enticement of extra credits might reduce opposition from states who are inclined to challenge the regulations in court or threatening to ignore them. The incentives would only become available once a state has an approved implementation plan in place.
Another advantage of the wind and solar energy incentive program is that it would also help bolster those industries against the risk that Congress lets existing tax credits expire. Unless extended, a key wind subsidy would expire at the end of this year and a solar subsidy would be reduced a year later. Anything that favors the thriving renewables industry and its rapidly expanding workforce helps sell this regulation.
One reason the Obama administration decided to offer the new incentives is that the wind and solar energy industries have been experiencing dramatic growth. In fact, the renewables boom is so strong in the U.S. that it actually allowed the Obama administration to make the final Clean Power Plan more ambitious than its draft version, released a year ago. The final rule will achieve a projected 32 percent reduction in U.S. power sector greenhouse gas emissions as opposed to a 30 percent reduction in the 2014 proposed rule.
The EPA now expects that 28 percent of U.S. electricity capacity will be provided by renewable sources like solar and wind in 2030, up from 22 percent in the 2014 rule, according to an administration fact sheet.
“Our country’s clean energy transition is happening faster than anyone anticipated — even as of last year when we proposed this rule,” said EPA administrator Gina McCarthy on a press call with reporters Sunday. “The accelerating trends toward clean power, and the growing success of energy efficiency efforts, mean carbon emissions are already going down, and the pace is picking up.”
The Solar Energy Industries Association released a press release that summed up some of the trends, including the fact that the industry now employs almost 174,000 people in the United States, and that the cost of installing residential solar has dropped by half since 2010 alone.
The shift from coal will cost some workers their jobs, but the shift to solar and wind will more than offset those jobs. But, unless coal companies diversify into clean energy, their profits will decrease. That is the real crux of the debate—who profits and who hands out the most campaign contributions.