Using Federalism to Reduce Carbon Emissions

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By Mary Duenwald

(Corrects name of council in second paragraph.)

The Obama administration has taken important actions to limit U.S. greenhouse gas emissions, including instituting a 54.5-miles-per-gallon standard for cars and trucks by model year 2025 and working on rules for new power plants. Still, a big step -- one required by the Clean Air Act -- remains to be taken: restricting greenhouse-gas emissions from existing power plants.

Today, the Natural Resources Defense Council offered a way forward: a proposal that the Environmental Protection Agency establish individual emissions limits for each state. The limits would vary according to a state's current mix of coal- and natural-gas-fired power plants. A state with a relatively large share of coal plants would initially be allowed higher emissions than one that already relies more on cleaner natural-gas plants.

Under the NRDC plan, the states, and power companies operating within them, could meet the new standards in any number of ways: retrofitting plants to make them more efficient, running natural-gas plants more than coal plants, using cleaner fuels or renewable energy, even avoiding power generation by encouraging conservation and efficiency.

Because power plants account for 40 percent of U.S. greenhouse gas emissions, the plan would have far-reaching effects. By 2020, the program could reduce U.S. CO2 emissions 17 percent from 2011 levels, according to the NRDC.  It would cost about $4 billion annually, but would yield benefits worth at least six times as much -- including not only a reduction in the climate threat but also a lower incidence of asthma attacks and other medical problems.

According to the NRDC, the plan would be legally defensible -- an important claim, given that every federal action taken against air pollution or greenhouse gas emissions ends up in court.

Energy companies can be expected to balk at this amount of greenhouse-gas reduction, arguing that it is too expensive or simply impossible. Perhaps they have other strategies they'd like to suggest. Ultimately, though, it is the EPA that will need to come up with a good, defensible plan. Next year would not be too soon.

(Mary Duenwald is an editor for Bloomberg View.)

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-0- Dec/04/2012 20:57 GMT