Jun 02, 2014 - 1:00pm

Proposed Carbon Rules Would Deliver Blow to Economy

Senior Editor, Digital Content

EPA has released its proposed carbon rules on power plants. The proposed rules may say that they “can inform current and ongoing decision making by states and utilities, as well as private sector business and technology investments." but that’s polite spin for “picking energy winners and losers.”

The reaction from business leaders has been strong.

U.S. Chamber President and CEO Tom Donohue:

Today’s regulations issued by EPA add immense cost and regulatory burdens on America’s job creators. They will have a profound effect on the economy, on businesses, and on families. The Chamber will be actively participating in EPA’s input process on these regulations, and will be educating our members and affiliates about their impacts

Jay Timmons, National Association of Manufacturers (NAM) President and CEO:

As users of one-third of the energy produced in the United States, manufacturers rely on secure and affordable energy to compete in a tough global economy, and recent gains are largely due to the abundance of energy we now enjoy. Today’s proposal from the EPA could singlehandedly eliminate this competitive advantage by removing reliable and abundant sources of energy from our nation’s energy mix. It is a clear indication that the Obama Administration is fundamentally against an ‘all-of-the-above’ energy strategy, and unfortunately, manufacturers are likely to pay the price for this shortsighted policy.

Mike Duncan, president and CEO of American Coalition for Clean Coal Electricity (ACCCE) said:

If these rules are allowed to go into effect, the administration for all intents and purposes is creating America’s next energy crisis. As we predicted, the administration chose political expediency over practical reality as it unveiled energy standards devoid of commonsense and flexibility.  These guidelines represent a complete disregard for our country’s most vital fuel sources, like American coal, which provides nearly 40 percent of America’s power, reliably and affordably.

Partnership for a Better Energy Future:

With this new rule, the Environmental Protection Agency is continuing its push to make U.S. electricity less diverse, less reliable and more expensive. The proposed emissions targets cannot realistically be met without forcing substantial closures of existing plants and taking major energy options off the table in the U.S. The resulting impacts on American jobs and the economy could be devastating.

Last winter showed just how critical a diverse energy mix is to keeping up with demand for electricity and how supplies in many regions of the country are already significantly strained.  Further restricting our largest energy sources will mean even fewer options for affordable electricity for American businesses.

 The Obama Administration had ample opportunity to listen to the concerns of energy users across the country and create a rule that was balanced and supported an “all of the above” approach to energy.  Today’s announcement shows that they chose instead to push regulations that go too far, too fast without consideration of the consequences for American companies and consumers.

On these rules making for a less-reliable electricity grid, as Senator Jim Inhofe (R-OK) writes in an USA Today op-ed:

More EPA regulations like the one that will be proposed Monday threaten the reliability and affordability of our power grid, will weaken our economy, and drive more people into the unemployment lines. In a Senate Environment and Public Works Committee hearing on May 14, committee witness, Marvin Fertel, president and chief executive officer of the Nuclear Energy Institute, testified that EPA regulations are "shutting down the backbone of our electricity system."

And for what? People like New York Times columnist Paul Krugman believe the spin that EPA’s massive shake-up of electricity generation will get other nations on board to limit their carbon emissions. “If we start taking serious steps against global warming, the stage will be set for Europe and Japan to follow suit, and for concerted pressure on the rest of the world as well,” he writes.

No one should assume that. For instance, last month, Japan’s utilities reported the “13th straight month of year-on-year gains for coal consumption” in response to that country moving away from nuclear power after the Fukushima accident three years ago. In Germany, electricity production from coal has risen to its highest percentage since 2007.

Then there are the developing countries like China and India who want to reach the same level of wealth as the developed world. Law professor Jonathan Adler writes at the Volokh Conspiracy:

Well over a billion people around the world lack access to electricity, and much of this demand will not be met with carbon-free technologies.  Addressing emissions worldwide is essential to atmospheric stabilization, and this requires developing technologies that will enable people around the world to have access to affordable electricity without increasing GHG emissions.

Wonkblog noted that in 2013, China “added far more fossil-fuel [electrical] output capability than it did solar, wind, hydro and nuclear power combined.” The BP Energy Outlook 2035 sees China as the world’s largest consumer of coal for decades to come.

News of EPA’s proposed regulations was met with “muted applause” from international observers. It is wishful thinking to believe that a tiny reduction in global carbon emissions as a result of EPA carbon regulations will get other countries to join the U.S.

Read more at memeorandum.

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.