The Clean Power Plan and the Economy
by Elena Kazarov -- June 13th, 2014
Today I tuned in to a monthly webinar put on by one of our partners, Environmental Entrepreneurs (E2), about the new Clean Power Plan and its implications for businesses. The talk was entitled “More Jobs, Less Carbon: A Briefing for Businesses on the Plan to Tackle America’s Largest Source of Carbon Pollution.”
Environmental Entrepreneurs is “a national community of business people who believe in protecting the environment while building economic prosperity. Working with NRDC (Natural Resources Defense Council), E2 serves as a champion on the economic side of good environmental policy by taking a reasoned, economically sound approach to environmental issues. E2 works at both the state and national levels through its nonpartisan efforts.”
The webinar featured experts from the Obama Administration, state government, and private sector, namely:
- Dan Utech, Special Assistant to the President for Energy and Climate Change, White House Domestic Policy Council, who provided an overview from the White House
- Benjamin Longstreth, Senior Attorney, NRDC Climate Center, gave us a run down of how the new plan will work
- Doug Scott, Chairman, Illinois Commerce Commission, who offered a perspective from the states where the plan will be implemented
- Sheeraz Haji, CEO, Cleantech Group, who shared his views on how the rules will effect business
- Geoff Chapin, CEO, Next Step Living, who spoke from the position of a company working in the sector that will grow as a result of the new rules
What’s the Fuss About?
As many of you know, on June 2nd the Obama Administration announced a proposal to reduce CO2 emissions from existing power plants. This is our largest source of emissions — electricity generation contributes 40% of our CO2 pollution. The proposed target requires emissions reductions of 30% below 2005 levels by 2030. Each state has its own target, determined by the EPA. States are required to develop their own STIPs (state implementation plans) or accept a federally crafted plan. This encourages states to find the approach that works best for their unique fuel mixes, energy markets, and economies. There are four ways for states to reduce carbon emissions:
- Make existing coal plants more efficient
- Use existing gas plants more effectively
- Increase renewable and nuclear energy
- Increase end-use energy efficiency
What Will This Do For Us?
According to the EPA…
- Climate and health benefits will amount to $55 — $93 billion in 2030, avoiding 2,700 to 6,600 premature deaths and 140,000 to 150,000 asthma attacks in children
- This far outweighs the costs, which will be $7.3 – $8.8 billion in 2030
- Pollution leading to soot and smog will be cut by 25% in 2030
- Electricity bills will be about 8% lower because of energy efficiency improvements
EPA will issue final standards by June 2, 2015. There will be a comment period of 120 days. Then state plans will be due in June 2016. And VOILA! Fewer sick babies and grandmas, more workers installing solar panels.
Want to rummage around yourself? Here’s the proposal.
A Push Towards a Green Economy
Dan Utech, Special Assistant to the President for Energy and Climate Change, emphasized that businesses have risen to the challenge, and we will see big growth in the clean energy economy. Doug Scott of the Illinois Commerce Commission echoed this statement, saying that almost 100,000 jobs in his state are tied to the clean energy economy (energy efficiency installations, component parts, etc). When the Illinois Commerce Commission ran models for the proposals a few years ago, they found that more jobs were gained than lost. Will coal workers lose their jobs? Some will, and in my opinion, isn’t that kind of the point. We want less coal workers to process less coal to go into fewer coal-fired power plants so that we all breathe less pollutants and less CO2 is released into our atmosphere. Makes sense! But there is no reason that they should be thrown on the streets; these workers are not one-trick ponies. They can be re-employed in new, green collar jobs, which are more stable and safe that jobs in coal mines. Want to see how people are being retrained for jobs in the green economy? Read about this initiative in India, or watch the Ted talk, wherein grandmas in rural villages are being retrained to fabricate, install, use, repair and maintain solar units in their communities, among other trades.
The Clean Power Plan will also stabilize energy prices and save businesses and residents money on energy. And guess what? Since we’re great at spending what we save…this money goes back into the economy, doing pretty things like stimulating more growth and making more jobs.
Sheeraz Haji, CEO of the Cleantech Group, gave us a savvy investor perspective. According to him, investors have three concerns: 1) Will the EPA’s rules increase clean tech investment? 2) Which sectors are likely to benefit? 3) Which states will benefit?
Logically, businesses and investors want a predictable, stable climate in which to work. Lack of national policy is confusing to them. The new plan coordinates reductions across 50 states, and reinforces the administrations dedication to reductions of CO2 emissions. These are good signals for investors to allot funds to clean energy technology and business.
Those that have anticipated legislation and made plans to prepare for it will, unsurprisingly, experience the smoothest transition to the new regulatory landscape. States like California and Illinois that have been working on ways to reduce emissions before the proposal came out will be ahead of the pack. So will utilities that have been working on increasing their clean portfolio. The natural gas industry, and renewables of course, will benefit as well. Companies working on energy efficiency and retrofitting will be seeing more orders come in. Overall, Haji seemed optimistic about a change in sentiment in the investor community, towards embracing the clean economy and seeing opportunity in helping it grow.
Geoff Chapin, CEO of Next Step living, a New England based company working in energy assessments, retrofitting, and solar energy can attest to the positive impact of such legislation. RGGI (the Regional Greenhouse Gas Initiative), operating in New England, serves as a microcosm for the kind of benefits that the national legislation will bring. RGGI is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector. Chapin has seen the clean tech sector grow by 11% a year in the region, and the population has increased while energy use has been declining. He stressed that ecology and economy is not a tradeoff.
A Piece of the International Puzzle
I’m staying true to the “international” part of my “international climate policy” blog in writing about this proposal. What the United States does to address pollution from power plants – its biggest source of emissions – has huge global implications. Many countries look to us, and wait for action on our part, before committing to measures themselves. I’m so proud that we finally got this on the table, and I hope to see even more ambitious legislation in the future.