The global COVID-19 outbreak has raised awareness about the link between air pollution and lung health. In that context, a more aggressive federal policy on clean power would provide U.S. business with a platform for promoting their contributions to public health, in addition to supporting global decarbonization and green job creation. Nevertheless, the Trump administration continues to undercut the bottom-line case for clean power, by replacing the Obama-era Clean Power Plan with far less ambitious goals under the new Affordable Clean Energy rule.
The economic impact of the Clean Power Plan
The Obama administration launched the Clean Power Plan in 2015, based on the premise that the U.S. Environmental Protection Agency has the power to regulate carbon emissions from power plants under its Clear Air Act authority.
Rather than establishing new, one-size-fits-all restrictions on carbon output, the plan outlined a flexible approach. In concert with new EPA standards for carbon emissions from power plants, the Clean Power Plan established a national goal of a 30 percent reduction in carbon emissions from power plants compared to 2005, while enabling states to leverage their unique resources in support of that goal.
In addition to addressing the climate crisis, the Clean Power Plan was also an economic development initiative. It emphasized diversifying energy resources to stimulate economic activity and job creation in diverse areas across the country, with a particular focus on rural economic development.
National security was another significant factor in the Clean Power Plan. It expanded upon a 2011 memorandum of understanding between the U.S. Departments of Energy, Agriculture, and the Navy, aimed at stimulating activity in the domestic biofuels sector.
The Clean Power Plan and the bottom line
The Clean Power Plan garnered widespread support in the business community when President Obama launched it in August of 2015, in the runup to the Paris Agreement on climate change. However, it also attracted intense criticism from fossil fuel stakeholders and their allies in government.
The plan was immediately challenged in court and did not go into effect before President Obama completed his term of office in January 2017. Six months later, newly elected President Trump declared that the U.S. would exit the Paris Agreement. On October 10, 2017, EPA Secretary Scott Pruitt also announced that his agency would start the process to repeal its Clean Power Plan regulations.
Progress on decarbonization, with or without the Clean Power Plan
Even without support from the Clean Power Plan, the cost of wind power, solar power, and energy storage has dropped to the point where renewables can challenge both coal and natural gas for market share on a direct bottom line basis. Long term price stability and reliability of supply are two additional advantages for both companies and their customers.
In the meantime, a powerful wave of consumer concern over climate change has spurred the demand for more renewables among commercial energy consumers, including many of the world’s leading global firms. In addition, many of these companies are going beyond decarbonizing their own operations. They are using their buying power to motivate more clean power investments in their supply chains as well.
Adding a new and tragic element of support for the Clean Power Plan is the COVID-19 crisis. The lethal virus has highlighted the connection between pollution exposure, lung health and risk of mortality.
In addition, the economic crisis touched off by COVID-19 has brought renewed attention to the ability of clean tech industries to create thousands of new jobs in a wide range of fields including electric vehicles as well as energy storage and renewables.
Why the Affordable Clean Energy rule falls short
Considering the urgency of action on climate change, public health, and job creation, now would be the perfect time for an aggressive, coordinated national policy that stimulates investment in clean technology.
Instead, the Trump administration is continuing to support a much milder approach to power plant emissions called the Affordable Clean Energy rule, which it proposed last year.
The new proposal drew sharp criticism from environmental and public health advocates, including the American Lung Association. In July 2019, ALA announced its intention to join the American Public Health association in suing the Trump administration over repeal of the Clean Power Plan.
As noted by the ALA, the new rule was worse than a rollback. It would potentially create more pollution than ever before.
“In addition to increasing the carbon dioxide pollution that fuels climate change, independent research from 2019 predicts that the ACE rule will result in some fossil fuel plants running more often and delaying their retirement, which would mean increased emissions of dangerous pollution as compared to the Clean Power Plan, and even as compared to no rule at all,” the ALA explained.
Backing up the ALA is research from the organization Resources for the Future, which receives support from the National Science Foundation, a full slate of Cabinet-level federal agencies, and top academic institutions among other prominent members of the scientific community.
In a 2019 review of the Affordable Clean Energy rule, RFF explained that “an inflexible framework is built into ACE, reversing 40 years of scholarship and regulatory reform aiming to make regulation smarter, more effective, and less expensive.”
“The effect is to restrict the reach of the Clean Air Act in achieving emissions reductions from existing stationary sources,” RFF added.
According to RFF’s analysis, the difference between the Clean Power Plan and the new rule is stark. Using EPA’s own data, RFF estimated that the new rule would reduce carbon dioxide emissions by just 0.1 percent between 2021 and 2050.
“It is difficult to believe that this magnitude of emissions reduction is a sufficient regulatory response to the harms of greenhouse gases confirmed in EPA’s endangerment finding,” RFF concluded.
Of particular interest to the business community is RFF’s point about regulatory reform. RFF noted that the new rule would create new regulatory burdens on states while achieving practically zero benefits, an impact that directly contradicts undermining the Trump administration’s stated goal of relieving the nation from the burden of ineffective federal regulations.
Now is the perfect time for the Clean Power Plan
By August 2020, the Congressional Research Service noted that several environmental advocates, 23 states, seven municipalities and the District of Columbia are also suing the EPA over the Clean Power Plan rollback.
The case has come before a three-judge panel of the U.S. Circuit Court for the District of Columbia, and last week reporter Marianne Lavelle of Inside Climate News took note of the latest development in the legal battle.
Lavelle observed sharp differences in the questions posed by the two Obama-appointed judges on the panel, compared to the Trump-appointed judge. In particular, she noted that both the Trump appointee and at least one of the lawyers representing the Trump administration in the case are both members of the Federalist Society, an influential conservative organization that has worked to stir up doubt over the science behind climate change, and has received significant funding from fossil energy stakeholders. The organization is widely recognized as the lead decision maker on Trump administration judicial appointments.
With the recent nomination of Amy Coney Barrett to the Supreme Court, the case is all but certain to come before a nine-member court packed with three judges endorsed by the Federalist Society.
There are still pathways to progress, but business leaders who advocate for swift, aggressive action on climate change, public health and job creation could find themselves swimming against an even more powerful tide in the years to come, regardless of the results of the November 3 election.
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