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EPA proposes new regulations governing carbon emissions

On June 2, the Environmental Protection Agency (EPA) proposed a regulation that would cut carbon dioxide emissions from existing coal plants by 30% compared with 2005 levels. States and utilities would be able to use any of four main options to meet the new standard: 1) improving energy efficiency; 2) shifting to natural gas; 3) increasing the use of renewables; and 4) upgrading the coal plants. Another possible method would be offering discounts to encourage people to shift electricity use to off-peak hours.

“This proposal is all about flexibility. That’s what makes it ambitious, but achievable,” said Gina McCarthy, the EPA Administrator. “For the sake of our families’ health and our kids’ future, we have a moral obligation to act on climate.”

States also have the option of working together. As McCarthy put it, "If states don’t want to go it alone, they can hang out! They can join up with a multi-state market based program, or make new ones. They’re doing it now.” Nine states in the northeast formed the Regional Greenhouse Gas Initiative in 2008. It's a cap-and-trade system that limits the amount of carbon dioxide its member states can emit -- and it lowers the cap by 2.5% every year.

The new regulations would be the first of their kind for the country's 500+ coal power plants, which currently produce 39% of U.S. emissions. The EPA believes the new regulations would provide $90 billion in climate and health benefits, and reduce hospitalizations caused by asthma and other disorders linked to or exacerbated by pollution. While carbon itself isn't linked to asthma, coal plants also produce pollutants that are. Closing coal plants could reduce such pollutants like soot, sulfur, and nitrogen by as much as 25%.

The new regulations would cut 500 million metric tons of carbon dioxide annually by 2030, which would probably lead to upgrades in many coal plants, as they produce much of the carbon pollution. The average U.S. coal plant is 42 years old, which means most of them are not as efficient as newer plants. Some coal plants are even older and date back to the Eisenhower administration. Natural gas plants are both newer and more efficient than coal plants. The average gas plant is 14 years old and produces half as much green house gases as does a coal plant.

The EPA is expected to finalize its proposal sometime in 2015. After that, it will give states a year to design their implementation plans, using any combination of the methods mentioned earlier. If a state fails to come up with a plan, the EPA can impose a federal plan. States would have to reduce their carbon emissions from coal plants by 25% by 2020 and another 5% by 2030. The first drop is significant, as it would result in 300 million tons less carbon per year.

The EPA's proposed regulations resemble a plan suggested by the National Resources Defense Council (NRDC), which also encourages states and companies to use a multitude of methods to reduce carbon emissions. The NRDC plan would drop emissions by 20 to 30 percent by 2020 from 2012 standards, which would equal roughly 1.4 billion tons of carbon dioxide. NRDC also estimated that their plan would cost $21 billion dollars -- but that would be paid back since the plan would save U.S. citizens $51 billion in health costs and avoided climate impacts by 2020. The EPA estimates that the proposed rule will yield "net climate and health benefits of $48 billion to $82 billion." In other words, paying now to implement the rule would mean not paying for a lot of hospitalizations or another major hurricane later on.