Oct 10, 2017

Reality checking the carbon rule debate

The Trump administration is taking the first step Tuesday toward repealing President Obama's signature climate policy, the Clean Power Plan. Let's reality check two big overarching claims about this regulation, including one EPA Administrator Scott Pruitt made Monday.

Data: EIA; Note: 2017 is a 12-month rolling total through June; Chart: Andrew Witherspoon / Axios

Claim: The rule would upend the electricity industry.

Reality: It would moderately accelerate a trend already underway in the power industry to shift away from coal toward cleaner sources of energy, like natural gas, wind and solar.

The above chart by Axios graphics reporter Andrew Witherspoon shows that the power-plant sector is already well on its way to meeting the Environmental Protection Agency requirements for a nationwide average emissions reduction of 32% by 2030 based on 2005 levels. (Shoutout to Bloomberg for creating a similar chart last week and inspiring Axios). Even Obama administration lawyers, defending it in court last September, described the rule as "incremental" and achieving a "moderate degree" of carbon reduction.

Yes, but: The rule itself would have prompted two big changes, experts say:

  1. Control would shift more to governor's offices and away from state public utility commissioners, which oversee most utility investments, according to Travis Kavulla, a commissioner of the Montana Public Service Commission that regulates utilities and other services in that state. The EPA rule would have required governors to submit compliance plans.
  2. The rule would have created a framework to possibly ratchet up emission cut requirements long into the future, according to analysis released Monday by Rhodium Group.

Claim: The rule would eventually compel power plants to use 100% renewables, as EPA Administrator Scott Pruitt said Monday at an event in Kentucky when he announced he would repeal the rule.

Reality: Not even close. Coal would still account for 27% of the nation's electricity by 2030 (compared to 30% today), according to EPA's estimate (page 135) at the time the Obama administration issued the rule. Renewables would account for 20% under the rule by 2030, compared to 15% today.

Yes, but: As I reported in my latest Harder Line column, every little bit of the electricity market matters to companies' bottom lines when the pie isn't growing.

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