We Know Where the Carbon Pollution is Coming From and Here is How We Get After It

This blog was written by Dan Lashof, director of the Natural Resource Defense Council‘s climate and clean air program.  The blog originally appeared on NRDC’s Council Staff Blog “Switchboard.”  You can find the original post here.

President Obama took a major step forward during his first term by setting carbon pollution standards for the second biggest source in the country—cars and trucks. Those standards will cut carbon emissions from new passenger vehicles in half by 2025. But right now there are no national standards for America’s biggest climate polluters—the 1500 existing power plants which are responsible for 40 percent of U.S. carbon pollution.

On December 5, 2012, NRDC released a report showing how the Obama Administration can use the Clean Air Act to take a big bite out of these emissions. The report overturns the conventional wisdom that relying on the Clean Air Act to address climate change has to be expensive and ineffective.

In fact, the analysis described in the report shows that we can achieve big reductions at low cost, using flexible solutions that drive investment in clean energy to reduce emissions, protecting public health and creating benefits that exceed the costs by more than a factor of 6. To reach these conclusions NRDC developed a specific proposal for setting power plant carbon pollution standards and analyzed it using a sophisticated electricity system planning model also used by industry and the EPA. Here are five key take-away numbers from that analysis:

  • 560 million tons less carbon pollution in 2020; twice the reductions from the clean car standards
  • up to 3,600 lives saved, and thousands of asthma attacks and other health incidents prevented in 2020 alone
  • $90 billion in energy efficiency and renewables investments between now and 2020
  • only $4 billion in compliance costs in 2020 compared to…
  • $25-60 billion value of avoided climate change and health effects in 2020

The key to achieving these benefits is for EPA to set ambitious, fair, and flexible standards to reduce carbon pollution from existing power plants.

EPA has already proposed a standard to limit carbon pollution from new power plantsand the Agency should finalize that soon, but new high-emission coal plants are uneconomic and nearly all plans to build them have already fallen by the wayside, so the action is with existing plants. Under the Clean Air Act, EPA is required to issue an emissions guideline document defining emission standards and compliance procedures for these existing sources. The states are then required to develop and implement plans to meet the standards.

To jumpstart this process NRDC has developed and analyzed a specific proposal for EPA and other stakeholders to consider. Our proposal has two key features.

1.  EPA would set state-specific emissions rate standards (in lbs/MWh), reflecting the diversity of the nation’s electricity sector.

2.  Power plant owners and states would have broad flexibility to meet these standards in the most cost-effective way, through a range of technologies and measures.

For example, a state that now gets 90 percent of its fossil-fueled electricity from coal and 10 percent from gas would be required to reduce its 2020 emissions rate to 1450 lbs/MWh  In contrast, a state with 90 percent gas-fired generation would have a target of 1050 lbs/MWh [(10 percent x 1500) +(90 percent x 1000)]. A state starting with a 50:50 ratio of coal and gas generation (which turns out to be Oklahoma) would have a target of 1250 lbs/MWh. The allowable emissions rate would drop further in 2025. So states that currently rely heavily on coal will not have to meet the same target emission rate as cleaner states in 2020 or 2025, but their emission rates will have to get closer to those of cleaner states over this period.

These standards can be met at low cost because of the second key feature of our proposal: Compliance flexibility. Our proposal is designed so that the full range of emission reduction measures count toward compliance, not just retrofitting each individual power plant with pollution controls. These include:

  • Shifting generation from high-emitting to lower- or zero-emitting plants. Lower emitting sources such as gas, wind and solar would earn credits that other plants could use, to reduce average emissions rates.
  • Expanding energy efficiency. State energy-efficiency programs could earn credits for avoiding power generation and its pollution. Generators could purchase those credits to use toward their emissions targets.

Allowing credit for energy savings will create a powerful incentive for states to strengthen their energy efficiency programs, driving billions of dollars of investments into better lighting, more effective insulation, upgraded motors, and better building management systems. Already state energy efficiency programs are investing almost $7 billion per year, up from less than $3 billion five years ago. Our plan will help ensure that the expansion continues so that by 2020 the average state is achieving what the leading states are achieving today. These investments will create thousands of jobs across the country that can’t be outsourced.

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I’ll admit to being bewildered by Dan’s article. It sounds like it’s aimed at an audience that spends a lot of time on political or legal solutions to energy and environmental issues. I’m generally supportive of a clean environment, reduced emissions, and energy efficiency and I’m more excited by a good energy saving project than I am by political maneuvers.

I’m wondering: if we consider three paths to reduced carbon emissions such as 1) Green Energy options (photovoltaics, windmills, etc.), 2)Boiler stack sequestering options or 3)Energy efficiency and conservation options (solar screens, solar grates, solar film, cfl bulbs,etc), which of these paths provides the best buy? It seems to me each of the three paths could produce sizeable carbon reductions. After reading Dan’s article, I’m not sure which path to prefer. If we try reducing emissions by setting targets and letting the Utilities and States figure it out, aren’t we just shifting the question to them for an answer? Eventually, someone has to do a little project work and comparative economics or maybe we just spend and hope for the best.

Comment by wd on December 9, 2012 2:44 am

@wd – Thanks for the thoughtful comment. I think you’re saying that it would be great if we could just deal with this in a straightforward manner.

Your speculation is right-on, but it is a shame that Dan’s post wasn’t crystal clear that the cost-effectiveness (best buy) of those paths are compared in the research that led NRDC to its proposal. IN addition to your three paths, the fourth path is making day-to-day shifts in how we generate power (a little less coal and a little more of the alternatives). Their proposal is a “political maneuver” (in your terms) to achieve the lowest cost mix of those four solutions.

The problem with picking one over the other is that running a utility is a minute-to-minute business. We can’t store (much) electricity, so the question of how we make electricity is in a very real sense a question that utilities can only answer every minute of every day. What NRDC proposes would affect utility decision making, from both a short-term and medium-term perspective.

I think their report does not appear to claim that their proposal is a long term strategy. But it seems to me a more practical step than I had assumed in listening to general discussion of the idea over the past few years.

Comment by John D. Wilson on December 10, 2012 11:11 am

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