One Key Question on Obama's Push Against Climate Change: Will It Matter?

Many expectations—and many unknowns—surround new carbon standards due Monday.

Can the United States make a difference in fighting the effects of climate change?

That is a key question as the Obama Administration prepares to announce its biggest step toward curbing planet-warming carbon emissions. The Environmental Protection Agency on Monday is expected to announce proposals for new limits on carbon emissions from existing power plants, which the agency says produce about two-fifths of the nation's emissions of heat-trapping carbon dioxide.

President Barack Obama, bypassing a politically divided Congress, is expected to use his executive authority under the Clean Air Act to impose the new rules. Obama's unannounced plan already is fueling talk of legal challenges, debates over whether meeting emissions goals in each state will kill jobs and raise costs to consumers, and questions of whether the world's other major coal-burning nations—particularly China—will follow the United States' lead in trying to curb carbon emissions. (See related story: "Ahead of Proposed U.S. Power Plant Rules, the Spin Scramble Begins.")

It also could ring in a new era of carbon regulation that will be felt especially in coal-burning states such as those in America's rust belt. The president's plan is likely to push states to come up with their own plans for reducing emissions and to encourage regional "carbon trading" programs such as a system Governor Jay Inslee is trying to create in Washington State. Those programs typically put a state cap on emissions but allow utilities to buy and sell permits allowing them to pollute. (Related: "California Tackles Climate Change, But Will Others Follow?")

Obama's move against climate change comes just a few weeks after a White House report described a range of ways in which climate change is increasingly detrimental to how Americans live. Recent studies have separately warned that high levels of carbon dioxide, or CO₂, make crops less nutritious for reasons that are not totally clear, and put shellfish and other key parts of the food chain at risk by making oceans more acidic. (See related story: "Federal Climate Change Report Highlights Risks for Americans.")

The Northern Hemisphere's carbon dioxide levels cracked the symbolic benchmark of 400 parts per million for a whole month for the first time in April, the world's hottest April on record. The Antarctic's glaciers are collapsing, raising the prospect of rising seas and flooded coastlines. "Already," said University of Miami geological scientist Harold Wanless, "there are areas and properties that will become unlivable within a 30-year mortgage cycle."

The new emissions rules probably would not go into full effect for years, but it's expected that they would aim to cut by 2020 existing power plants' carbon emissions by about 25 percent from 2012 levels while giving states flexibility in making that happen. (See related story: "Clean Coal Test: Power Plants Prepare to Capture Carbon.")

Obama's upcoming plan represents "the first time that the United States has taken a concrete step to reduce fossil carbon emissions," said Thomas Ackerman, director of the Joint Institute for the Study of the Atmosphere and Ocean at University of Washington. "Even if it's a small step," he said, "it will be the first time that there will be a deliberate step that, yes, we need to reduce fossil carbon emissions."

Echoing other scientists, climatologists, and analysts, Ackerman said the stakes are high.

"If we don't do something" about slowing the impact of climate change, he said, "we give up any ability to stave off ocean acidification and sea level rise."

"This has to happen," said Ann Weeks, senior counsel for the Clean Air Task Force, a nonprofit group that encourages alternatives to coal-fired power, which accounts for 40 percent of the electricity produced in the United States. "It has to happen that we no longer rely on uncontrolled, 150-year-old technology to generate electricity. We have to find cleaner ways of generating the energy that we all agree we need. We can do that."

No, it doesn't have to happen, argues the coal industry, which says future climate effects are negligible no matter what level of CO₂ emission is required for the electric sector. And the pro-business U.S. Chamber of Commerce says that Obama's plan will kill jobs in utilities and other sectors while raising costs to U.S. consumers.

"The administration is gambling with the livelihoods of hardworking Americans and is threatening to tip our country over the edge in costly and unreliable energy policies," said Laura Sheehan, senior vice president of communications for American Coalition for Clean Coal Electricity, in a statement. "And once we go over that ledge, there's no coming back up."

Wait and see before judging the new rules, the EPA says. "I strongly suggest that folks read the proposal before they cry, 'The sky is falling,' " the EPA's Tom Reynolds wrote in a blog post reacting to the Chamber of Commerce.

So what could prove to be the economic impact of the new rules? And what are the legal, environmental, health, and political implications? Here's a look at what we know and don't know.

A Drag on the Economy, or Not?

The hype on this issue is considerable, particularly from the anti-regulation side.

"Your electric bill will skyrocket with new energy regulation" reads a headline to an Associated Press story at "An 80 percent cost hike" [in utility bills]? "That's something we better get used to," states a National Mining Association ad that was deemed "bogus" by The Washington Post's Fact Checker, which tests claims by politicians and political advocacy groups.

At this point, the full implications of the new rules are unclear. But a report by Resources for the Future, a nonprofit, nonpartisan think tank, estimates that electricity bills could rise negligibly for consumers by a nationwide average of 1.3 percent. Improved energy-efficiency tactics—such as switching to light bulbs that use less electricity—could be required by the new rules and lead to lower costs for consumers and businesses, argues Natural Resources Defense Council (NRDC) in a proposal to reduce carbon emissions, a plan that the EPA's is widely expected to resemble.

Coal-fired power plants have been under pressure to shut down because of pollution rules that have limited things such as mercury emissions, and by a formidable competitor in the energy marketplace: cheap natural gas. A shift by utilities away from coal and toward natural gas during the last 15 years has helped make carbon emissions from power plants 23 percent lower than they otherwise would have been, said research scientist Joost de Gouw of the Cooperative Institute for Research in Environmental Sciences at University of Colorado at Boulder.

Coal accounts for nearly 75 percent of CO₂ emissions by power plants, according to the Energy Information Administration, yet produces 37 percent of the nation's electricity. Under the EPA's expected new rules, de Gouw expects carbon savings to continue.

"The real war on coal is not being waged by the Obama Administration. It's being waged by cheap natural gas," Ted Nordhaus, chairman of the energy and environmental think tank Breakthrough Institute, told American Public Media's Marketplace radio program.

But the electricity industry would see costs rise if energy economists such as Chris Knittel of MIT's Sloan School have their way, and a carbon tax or cap-and-trade system were instituted. The new EPA rules could encourage carbon-trading programs on the East and West Coasts, in which the government issues tradable and salable permits for carbon pollution to current polluters, then over time ratchets down the amount of carbon allowed under each permit. The idea is to provide an economic incentive to reduce the emissions of, say, a given power plant, because then the holder of the permits can sell some of them to improve the bottom line. It's supposed to ensure that the cuts made are the ones that are least harmful economically.

The federal government estimates the negative consequences of carbon emissions amounts to $37 a ton. Economists such as Knittel say it's time for coal-fire power plants to pay that cost, which would add about three to four cents per kilowatt hour, essentially doubling the per-kilowatt hour cost.

"It's going to add costs to the electricity industry," Knittel says. "But—and this is a very important 'but'—now there are gases causing damage that are not paid for. It's now free to emit pollution in the air, and that creates inefficiencies in the marketplace." Costs for coal-fired power need to rise, he said, which would further encourage a shift toward cleaner ways to generate electricity, including solar and wind. "Raising the cost of burning coal or any other fossil fuel isn't a bad thing," Knittel says. "That's actually the point of the regulation."

Incentives to Improve the Environment and Health

The new rules are widely expected to cut carbon emissions from existing power plants by about 25 percent from 2012 levels by 2020, in part by encouraging more customers to buy energy-efficient appliances and use weather stripping on buildings. Will that be enough to make the planet healthier?

The reality is that even in the wildly inconceivable event that every single electricity power plant in the United States were to shut down, too many greenhouse gases still would escape into the atmosphere from around the world for the U.S. action to make much of a difference, as this graphic suggests.

But that doesn't mean the EPA shouldn't order emissions cuts, said resource economics associate professor Meredith Fowlie of the University of California, Berkeley. If the new rules spur innovation, then China and other emerging economies with increasingly high greenhouse-gas emissions could adopt the new technology and cut their emissions. And a new study from Harvard and Syracuse Universities suggests that the EPA's plan could carry some health benefits by reducing more than 750,000 tons of other pollutants from coal-fired power plants, reducing the risk of asthma and heart attacks in areas near the plants.

Giving away energy-efficient light bulbs or otherwise encouraging energy savings is the cheapest way to reduce planet-warming emissions, because it can help lessen the need for new power plants, many analysts say.

Fowlie warns, however, that it's easy for, say, light-bulb giveaway programs to exaggerate their success or use overly generous assumptions. An appliance-replacement program in Mexico found that replacing air conditioners actually increased electricity consumption, according to research by the UC Berkeley's Energy Institute at Haas, and new refrigerators reduced electricity consumption by only 7 percent, about one-quarter of what was predicted.

A Test of U.S. Influence

Unable to push major legislation through Congress, Obama knows that ordering carbon restrictions through the EPA is his best chance at building a legacy addressing climate change.

The strength of the regulations to be released Monday, and whether they withstand the likely legal and political challenges ahead, will send a critical signal not only to Americans but to the rest of the world about whether the U.S. government can take meaningful action on emissions.

Other countries "are watching this closely as one of, if not the, greatest indicators of the ambitions the U.S. has," said David Waskow, director of the international climate action initiative at the environmental research group World Resources Institute. "If the administration does propose rules that are ambitious, it will demonstrate leadership about their broader global commitment." (See related story: "How Much Is U.S. to Blame for Made-in-China Pollution?")

U.S. action will have major implications for international climate negotiations planned for this year and next in Lima and Paris, particularly with regard to China, the world's largest emitter of carbon. Sarah Ladislaw, a director and senior fellow of the energy program at the Center for Strategic and International Studies, said that what's key "both in terms of the next negotiation, and also in terms of just encouraging other countries to be doing things on climate change, is being able to exhibit some level of ambition."

With Europe facing its own problems in reaching emissions targets and Japan strapped by costs associated with making up for nuclear power capacity that was lost in the disaster at the Fukushima power plant in 2011, Ladislaw said, "It's really about the United States and China trying to show—and actually define—what leadership is on this issue."

Legal Challenges Expected

Some lawsuits from advocates on both sides of the issue are anticipated once the new carbon rules are proposed.

Obama's plan is expected to take the unusual tactic of giving credit to power plants for programs to reduce electricity use outside of their property boundaries. For example, a power plant could continue to emit the same level of carbon as it does today, so long as it can show that the utility had caused carbon emissions to go down elsewhere, such as through programs that get consumers to use energy-efficient appliances. In the past, utilities traditionally had to show that levels of a targeted pollutant had actually been reduced coming out of its smokestacks.

Some critics are likely to see that tactic as illegal, although EPA administrator Gina McCarthy called the upcoming proposal "legally sound."

"Will there be a lawsuit? Probably, but so what?" says Ann Weeks, senior counsel for the Clean Air Task Force, who said that in her 20 years in the field, someone always sues over new pollution rules and the rules typically wind up being upheld, as was the case with rules regulating power plants' mercury emissions.

"Lawsuits are a part of the normal business. The track record of [challengers to EPA carbon standards] is abysmal. They have lost everything so far," David Doniger, director of NRDC's climate and clean air program, said at a briefing Wednesday. (Take the quiz: "What You Don't Know About Climate Change Science.")

Weeks said that "what these standards will do is say to the industry: 'You must step up to the plate and help us solve this problem. It's your responsibility and duty to do that.' That's what we need."

Additional reporting by Christina Nunez

This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.

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