This week’s National Journal energy insiders blog poses the question: “Should Obama Go Big on Climate Agenda?” What I’m about to post here is I would have posted there, except that I don’t know how to operate the new and improved self-publication program!
My title would have been: “Obama Should Upend Climate Agenda.” Here goes.
In his address tomorrow at Georgetown University, President Obama is expected to lay out a climate change action plan featuring carbon dioxide (CO2) emission limits for existing power plants, tougher efficiency standards for homes and appliances, and more renewable energy development on public lands.
There are strong reasons to oppose each element of this plan.
Renewable energy is costly, intermittent, and unreliable. If it weren’t a bad buy for consumers, Congress would not need to subsidize it (in perpetuity – if President Obama gets his wish), nor would 30 states and the District of Columbia need to mandate it.
Before environmentalists start cheering, they should remember that subsidized, mandated wind energy slices and dices vast numbers of bats and birds, including endangered species. The Obama administration has never fined or prosecuted a wind farm for killing a protected bird. As one former Fish and Wildlife official described the administration’s policy: “If you electrocute an eagle, that is bad, but if you chop it to pieces, that is OK.” Accelerating renewable energy development on federal lands will likely lead to more bat and avian mortality and a further retreat from honest enforcement of the Migratory Bird Treaty Act and the Bald and Golden Eagle Act.
As for appliance efficiency standards, the one thing they invariably do is limit consumer choice. From toilets that don’t flush to washing machines that don’t get clothes clean to automobiles that provide less protection in crashes, efficiency standards can make products less valuable even while making them more costly.
Proponents claim the payback in reduced electricity and fuel expenditures more than offsets the increase in purchase price. But if these technologies will save us money, why do we need a law forcing us to buy them?
Ironically, energy efficiency standards are an inefficient climate mitigation strategy. A major review by the Breakthrough Institute concluded: “There is a large expert consensus and strong evidence that below-cost energy efficiency measures drive a rebound in energy consumption that erodes much and in some cases all of the expected energy savings.”
The administration’s proposed CO2 emission limits for existing power plants pose the biggest risk to consumer welfare and the economy. Like it or not, coal still provides the largest share of U.S. electric power. At best, CO2 emission limits make electricity more costly. At worst, they can destroy coal as an economically-viable electricity fuel and force coal power plants to shut down.
Let’s briefly review the unsavory history of this policy.
In December 2010, the EPA entered into a sue-and-settle agreement with a gaggle of state attorneys general, the Natural Resources Defense Council, Sierra Club, and Environmental Defense Fund. In closed-door negotiations from which the affected industry was excluded, the EPA committed to establish greenhouse gas new source performance standards (NSPS) for new and modified coal-fired power plants and emission “guidelines” for existing (i.e. non-modified) power plants. So much for the administration’s commitment to transparency and equal access to federal decision makers!
In March 2012, the EPA’s so-called carbon pollution rule proposed to establish an NSPS of 1000 lbs. CO2/MWh for fossil-fuel power plants. The standard effectively requires utilities planning to build new coal power plants to “fuel switch” and build natural gas combined cycle (NGCC) power plants instead. About 95% of new NGCC plants already meet the standard whereas the most efficient commercial coal power plants emit 1,800 lbs. CO2/MWh (77 FR 22417).
Congress considered and rejected a similar NSPS proposal – section 116 of the Waxman-Markey cap-and-trade bill – when Senate leaders pulled the plug on companion legislation. More to the point, if the administration had introduced the NSPS as a freestanding bill, it would have been dead on arrival. The “carbon pollution” rule and subsequent emission guidelines flout the separation of powers.
In both oral remarks and agency documents, the EPA in 2010 and 2011 assured Congress and industry stakeholders it would not use greenhouse gas regulation to require fuel switching from coal to gas. That, however, is exactly what the proposed “carbon pollution” rule would do.
Had the EPA been straight with Congress about its anti-coal agenda, Sen. Lisa Murkowski (R-Alaska) and Sen. James Inhofe (R-Okla.) might have garnered more support for their legislative initiatives to rein in the agency. Agencies are not supposed to provide false information to influence how lawmakers vote.
The proposed “carbon pollution” rule bizarrely assumes that a gas turbine is an “emission reduction system” for a coal boiler. That is so contorted courts would likely overturn the NSPS as arbitrary and capricious. So the final rule may have separate NSPS for coal power plants and NGCC plants. Nonetheless, in all likelihood it will still deter investment in new coal generation.
We’ll have to see what the CO2 emission guidelines entail. This much is obvious. The parties who sued and settled with EPA hope and expect the guidelines will accelerate retirements of existing coal power plants.
Although anti-coal regulations will raise the cost of energy and put another drag on our anemic economy, they won’t provide any detectable benefit for either people or the planet, even if one assumes global warming is a big problem.
Using IPCC assumptions, Cato Institute climatologist Chip Knappenberger calculates that even if the U.S. stops emitting CO2 immediately, “the ultimate impact on projected global temperature rise would be a reduction, or a ‘savings,’ of approximately 0.08°C by the year 2050 and 0.17°C by the year 2100—amounts that are, for all intents and purposes, negligible.” The “carbon pollution” rule and associated guidelines would do even less. They are an exercise in futility.
Besides, the notion that climate change is a crisis requiring immediate action is contrary to the best available science. The substantial gap between observations and climate model projections suggests that the “consensus” has been wrong about the key scientific issue: climate sensitivity. Equally important, a slew of recent studies of climate-change impacts discredit the “planetary emergency” narrative. For example, sea-level rise in the 21st century is more likely to be measured in inches rather than feet or meters.
The President’s top priority should be to help restore prosperity and robust economic growth. He should open his eyes to what’s happening in North Dakota, Texas, Pennsylvania, Ohio, and other states that allow Americans to use their ingenuity and capital to develop domestic energy resources.
As Manhattan Institute scholar Mark Mills argues, unleashing the “North American energy colossus” could revive the economy, create millions of new jobs, and generate hundreds of billions in tax revenues for state and local government without raising taxes.
The President should get with the program! The most important contribution he could make would be to abandon a regulatory agenda the core premise of which is that fossil fuels are bad and should be suppressed.