- Those costs are certain to be large; that is why the proposed rule is so contentious.
- It is no accident that the states that will bear the brunt of the costs are red politically.
- The Obama "carbon" policy promises to raise costs in the latter states disproportionately.
The Environmental Protection Agency published its Clean Power Plan Proposed Rule last week. By how much would the rule reduce future temperatures? If we apply the climate model developed at the National Center for Atmospheric Research — used by both the United Nations and the EPA —the new rule, even if implemented immediately, would reduce global temperatures in 2050 by less than a hundredth of a degree, and less than two-hundredths of a degree by 2100. Those trivial temperature effects are much smaller than the annual variability (11-hundredths of a degree) of the surface temperature record. They could not be measured reliably.
The supporters of the rule argue that it is just a part of a larger effort to reduce global greenhouse gas emissions by an amount sufficient to limit temperature increases to 2 degrees. But under the assumptions of the plan's supporters, that would require a global emissions reduction of almost 80%, a goal impossible both economically and politically.
In brief, the rule would mandate an aggregate reduction of 30% in power plant emissions below 2005 levels by 2030, with specific reduction requirements imposed on each state. It allows "flexibility" for the states in how they lower emissions (through efficiency standards, cap-and-trade programs, etc.), ostensibly to reduce the costs of meeting the requirements. But it is obvious that a major purpose of the flexibility is to obscure the ways in which implementation will proceed, and thus to hide the true cost of the emission reductions. Those costs are certain to be large; that is why the proposed rule is so contentious. One recent estimate from the U.S. Chamber of Commerce is that the rule will cost more than $50 billion a year in reduced gross domestic product.
More interesting is the wide difference in cost effects across the states. As coal-fired electricity is more emissions-intensive than other kinds of power generation, the rule will increase power costs more in states especially dependent on coal-fired power, and impose higher economic costs in states in which the coal industry is a bigger part of the economy.
It is no accident that the states that will bear the brunt of the costs are red politically. Thus, the effect of the rule will be to increase energy costs in red states relative to those in blue states.
A recent MIT study concludes that under a policy to reduce greenhouse gas emissions, "California, the Pacific Coast, New England and New York generally experience the lowest cost … while [Arkansas, Louisiana, and Oklahoma], Texas and Mountain states face the highest." With the exception of Oregon and Washington state, which have access to large amounts of cheap hydroelectric power, electricity prices are about $150 per megawatt-hour in the former states, and only about $80 in the latter group.
The Obama "carbon" policy promises to raise costs in the latter states disproportionately, because they will have to reduce emissions by far more, thus reducing their advantages in terms of economic competition.
The combination of large costs and zero climate benefits explains why the president argued in a recent radio address that the new rule would prevent "up to 100,000 asthma attacks and 2,100 heart attacks" in the first year, rising thereafter, presumably because of ancillary reductions in such other effluents as particulates, mercury and nitrogen oxides. (Carbon dioxide does not cause adverse health effects even at concentrations many times higher than those current or projected.)
But those pollutants already are regulated under other sections of the Clean Air Act, and the legal requirement is that those regulations "protect the public health" with an "adequate margin of safety," without consideration of costs. Is it the position of the Obama administration that those regulations do not satisfy the requirements of the law? Or is the EPA double-counting the health benefits from other regulations already in force? Or is the EPA assuming further health benefits from reducing pollution levels that already are lower than those at which the epidemiological analyses suggest no adverse effects?
No one knows, because the EPA analytic methodology to a substantial degree is obscure and the EPA's answers to analysts' questions often are unclear.
Given the minuscule effect of this policy on global temperatures under the standard climate models, it is clear that the administration's touting of other health benefits is a political maneuver. As used by proponents of the plan, the terms "carbon" and "carbon pollution" are little more than propaganda. "Carbon" is not carbon dioxide, a natural substance not toxic to humans at many times current ambient concentrations; and to define carbon dioxide as "pollution" is an attempt simply to assume the answer to the central policy question.
The real pollution attendant upon this proposed regulation is that of our political institutions. A Congress unwilling to enact such rules, or a carbon tax, has been shunted aside by raw administrative fiat in pursuit of rewards for friends and punishment for enemies. Will future administrations allow themselves to be constrained by the separation of powers? It is difficult to see why they would.
Benjamin Zycher is a scholar at the American Enterprise Institute.