Why Yes–Obama’s Clean Power Plan Punishes Red States And Pretty Much Everyone Else

Matt Vespa
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Posted: Aug 14, 2015 1:08 PM
Why Yes–Obama’s Clean Power Plan Punishes Red States And Pretty Much Everyone Else

So, another major policy battle is brewing. It pits the president against GOP governors once again, with some presidential candidates possibly weighing in as this regulatory nightmare draws nearer. Carly Fiorina was the only 2016 Republican candidate who mentioned the Environmental Protection Agency’s new policy aimed at combating the non-threat of global warming during the "happy hour" debate on August 6.  Remember, ever since Malia had an asthma attack, fighting global warming has become personal to Obama. The policy has been announced; it aims to cut greenhouse gas emission by nearly 30 percent from 2005 levels by 2030; it will gut millions of jobs for blacks and Hispanics; and will burden rural Americans. So, we shouldn’t be surprised that the Clean Power Plan punishes red states (via Politico):

The original draft took it easiest on states with the heaviest reliance on dirty fossil fuels—states that nevertheless complained the most about Obama’s supposedly draconian plan. The final rule cracks down much harder on those states, while taking it much easier on states that are already moving toward cleaner sources of electricity.

Check out this excellent chart compiled by my colleague Alex Guillen. North Dakota would have been required to cut emissions just 10.6 percent to comply with the draft rule, the least of any state; it will have to cut emissions 44.9 percent to comply with the final rule, the most of any state except for similarly fossil-fueled Montana and South Dakota. Coal-rich Wyoming, Kentucky, West Virginia and Indiana were also among the biggest losers in the revised plan. Meanwhile, the states that are already greening their grid—led by Washington, Oregon and New York—were the biggest winners in the final rule.

That is a radical change. The EPA acknowledged in the plan that it “rectifies what would have been an inefficient, unintended outcome of putting the greater reduction burden on lower-emitting sources and states.” As EPA air quality chief Janet McCabe explained to me in an interview: “We got a lot of comments making the same point you did.” But it hasn’t gotten attention, perhaps because coal-state politicians cried wolf so loudly about the draft. It’s the result of a decision to calculate emissions according to a uniform measurement for every power plant rather than a weirdly calibrated analysis of what’s reasonable for individual states.

But whether or not the new approach is more technically or legally defensible, getting tougher on dirtier states could have a dramatic effect on results, because states like Kentucky and West Virginia were always unlikely to do any more than the legal minimum, while states like California and Massachusetts are unlikely to stop their transitions to cleaner energy once they achieve compliance.

After reading that this plan will increase electricity costs by 10-15 percent, which would torpedo any hope of reviving manufacturing in this country, which is a sector that usually carries seven support jobs, you can see on paper that this administration, nay, this Democratic Party has no interest in creating a serious jobs program.

Diana Furchtgott-Roth of the Manhattan Institute noted that this policy is cap-and-trade by another name:

Of the ten states that will have to reduce emissions the most, seven voted for Romney in 2012, and the others all voted for Obama by a margin of less than 10 percent. Of the ten states that will have to reduce the least (or have leeway to increase emissions), eight voted for Obama in 2012. The Clean Power Plan is thus a way of punishing the states that did not vote for Obama. What better revenge than to slow their economies and make them purchase credits from Democratic states such as California and Washington.

EPA gives states choice between a “rate-based approach,” where states reduce emissions from their power plants, and a “mass-based approach,” where other sources of carbon — from manufacturing, for example — can be lowered to count toward the reductions that power plants would otherwise have to make. States can combine in regions for the “mass-based approach,” and it is less expensive to follow. The Clean Power Plan moves beyond regulation of power plants to regulation of regional emissions. If emissions from a power plant exceed the EPA’s requirements, a state, or group of states, would be required to shut down other energy-intensive manufacturing in order to allow the power plant to continue its emissions.

This is “cap-and-trade” by another name. The Clean Power Plan is the same program — advanced by former senators John Kerry (D., Mass.) and Joe Lieberman (D., Conn.) and former representatives Henry Waxman (D., Calif.) and Edward Markey (D., Mass.) — that did not pass the Democratic House and Senate in 2010. It failed to become law because cuts in carbon emissions slow economic activity by raising the cost of electricity and American-manufactured goods. Obama has shown that Congress is not needed for cap-and-trade. Now his EPA is instituting the scheme by regulation. No need for congressional legislation; Obama is taking matters into his own hands.

Coal production is expected to decline by 48 percent under this new regime of regulations. That, in turn, has labor unions involved in coal production rightfully uneasy. Cecil Roberts, President of United Mine Workers of America, said, “This is the worst period of time in our history with respect to coal.”

The plan requires states to reduce emissions from coal-fired power plants by 30 percent in 15 years. The federal government is promoting retraining for coal communities. That response is unacceptable, West Virginia Coal Association President Bill Raney said on ‘Talkline’

“We’ve lost jobs and now (the federal government) is going to send all of this money in to retrain coal miners and diversify the economy? You talk about the height of hypocrisy. I tell you brother, that’s it,” Raney said.

Thousands of coal mining jobs were eliminated in the 1950s with mechanization improvements but Roberts said those miners went to places like Detroit and Cleveland for work. He said those options are no longer available for the laid off miners of today.

Oh, and even Native Americans are going to get pinched by the EPA (AZ Daily Sun):

The new goal for the Navajo Nation as part of EPA's Clean Power Plan is more stringent than proposed last year, going from a 6 percent cut in the emissions rate to more than 38 percent. The tribe and the utilities that operate the Navajo Generating Station near Page and the Four Corners Power Plant in northwestern New Mexico said they'll have to look closely at the rule to see if previous and planned shutdowns of units would satisfy the new limits.

The Clean Power Plan sets goals nationwide for reducing heat-trapping gases blamed for global warming. It includes emissions cuts at the Navajo Nation power plants, a natural gas plant on the Fort Mohave reservation in western Arizona and a coal-fired power plant on Ute lands in northeastern Utah.

Because states don't have jurisdiction over reservations, the tribes can create their own implementation plans or defer to the federal government. The limits on the reservation plants won't factor into goals the states must meet by 2030. The nationwide goal is a 32 percent reduction in carbon dioxide emissions.

Navajo Nation President Russell Begaye said a thorough review of the EPA's plan will take time.

The Navajo Nation is hugely dependent on the power plants and the associated coal mines for revenue, and Begaye said transitioning to renewable energy won't happen quickly. Any federal regulation that threatens the coal plants is of particular concern, he said.

"These jobs are extremely difficult to obtain on the nation and are almost irreplaceable," he said in a statement. "Any negative impacts on the power plants and mines will have a severe and direct effect on the tribal economy."

So, let’s go down the list: Native Americans, those living in rural America, blacks, Hispanics, and seniors on fixed-incomes (the spike in electricity will nuke their carefully planned budgets) are going to be thrown into the hurt box thanks to Obama’s Clean Power Plan. I take it we can say that he’s redistributing the economic pain to everyone. Diving a bit more into the pain rural America is going to feel–that 10-15 percent spike in electrical costs equals about 1.2 million jobs by 2021. Five hundred thousand of those are projected to hit the rural parts of the country, according to a study by National Rural Electric Cooperative Association.

Remember when Obama said, "I know how tempting such cynicism may be. But I still think the cynics are wrong. I still believe that we are one people. I still believe that together, we can do great things, even when the odds are long.” Yeah, nothing says cynicism in Washington–and the axiom politics as usual–than crafting greenhouse gas emission regulations that punishes virtually all the states that didn’t vote for you. Of course, lawfare is brewing regarding power plants, with lawsuits expected to be filed challenging the emission rules (via WSJ):

Industry representatives and a group of state attorneys general are preparing to file lawsuits soon to challenge Obama administration rules requiring significant cuts in power-plant carbon emissions.

The move, expected in the coming weeks, would open up a legal battle by contesting the authority of the Environmental Protection Agency on a wide range of grounds, some of them little explored by the courts.

The EPA issued the regulations last week under a seldom-used section of the Clean Air Act. The agency also is confronting a legislative oddity from 1990, when Congress updated the clean-air law but inadvertently enacted differently worded House and Senate amendments that are relevant to the EPA’s carbon rules. How courts interpret the amendments could determine whether the administration’s power-plant rules survive.

And, oh yes; there are legal problems with the EPA’s legal reasoning justifying their authority to regulate power plants, says an attorney who is supportive of the Obama administration’s push to combat CO2 emissions (via Morning Consult):

“I don’t know who’s advising EPA, but they need a better lawyer,” said Brian Potts, an attorney at Foley and Lardner LLP, who specializes in Clean Air Act cases.

[…]

In the 2014 draft rule, EPA contended that under the 1990 update to the Clean Air Act, Congress inadvertently passed two different versions of the relevant provision. A Senate amendment permitted EPA to regulate carbon emissions from power plants. A seemingly countervailing House amendment barred the agency from regulating pollutants already controlled under the Clean Air Act’s toxics program, which regulates pollutants harmful to human health. The amendments were never reconciled, and both were signed into law.

Before the final climate rule was published, EPA said that because the two amendments were conflicting, the administration could rely on the Senate provision for its actions. The Senate language clearly says EPA can regulate carbon emissions from power plants.

But in the final climate rule EPA “changed course dramatically,” according to Potts.

In EPA’s own words: “In light of the comments… EPA has concluded that the two differing amendments are not properly read as conflicting,” the rule reads.

Here’s why their thinking evolved. To justify the Clean Power Plan, EPA needed to cross-reference Sec. 111, which gives the agency the authority to promulgate regulations for any air pollutant, provided those pollutants aren’t already regulated under Sec. 112, which covers “hazardous” air pollutants.

Because power plants are regulated under the toxics program via Sec. 112 of the Clean Air Act, opponents claim that EPA cannot also regulate emissions through Sec. 111, as the Clean Power Plan does.

Now, EPA is claiming that the House provision barring regulations under the toxics program only applies to “hazardous pollutants.” That “does not exclude the regulation of other pollutants,” according to the EPA. Carbon dioxide is a heat-trapping gas, but it’s not classified as a hazardous or toxic pollutant. So, Voila! No conflict.

[…]

“I think that’s a huge mistake,” he said. “EPA has been making this argument [about the conflicting statutory language] for a long time… All of a sudden, they just dropped it.”

We should expect a fight over these new regulations. Millions of jobs and a lot of money are on the line in the Obama administration’s fight to make sure that no more sea ice is lost.