The Environmental Protection Agency’s upcoming climate rule will result in a massive decline in coal-fired power generation that will increase electricity bills and eliminate hundreds of thousands of jobs, according to a report from the U.S. Chamber of Commerce.
The White House is preparing to unveil what could be the costliest environmental regulation ever next week. The rule would limit carbon dioxide emissions from existing power plants, which could result in more coal-fired power plants retiring and layoffs.
The EPA and environmentalists have tried to argue that the rule would be “flexible” and impose cost-effective emissions reductions on the country’s 1,500 operating power plants. But the U.S. Chamber of Commerce study paints a different picture.
The Chamber found that the new EPA climate rule could cost the economy more than $50 billion per year and will dramatically reduce coal-fired power consumption. The report says that an additional 114 gigawatts of coal power could be shut down by 2030 — about 40 percent of existing coal capacity.
Coal’s share of electricity generation falls from 40 percent last year to only 14 percent in 2030. With this decline in coal-fired power comes huge increases in power prices. Americans will pay $17 billion more per year in electricity as coal-fired power is retired.
Moreover, this means huge job losses in the coming decades. The Chamber predicts that U.S. economy will average 224,000 fewer jobs between 2014 and 2030. Employment losses are expected to peak at 442,000 jobs in 2022.
But these effects will not be felt evenly throughout the country. Regions of the country that are more reliant on coal power will feel the brunt of the negative economic impacts of the EPA’s new climate rule.
“Overall, the South Atlantic will be hit the hardest in terms of GDP and employment declines. Its GDP losses make up about one-fifth of total U.S.,” the Chamber’s report predicts. “This region also will have an average of 60,000 fewer jobs over the 2014-30 forecast period, hitting a 171,000 job loss trough in 2022.”
“The West South Central region also takes a big hit, losing on average $8.2 billion dollars in economic output each year and 36,000 jobs,” the Chamber report adds.
Greens fire back
Environmentalists disagreed with the Chamber’s findings and issued their own report this week concluding that there would be net benefits to the EPA’s new rule. The Natural Resources Defense Council reported that the EPA’s rule would save Americans $37.4 billion on their electric bills in 2020 and create more than 274,000 jobs.
NRDC’s report says that the EPA’s rule could cut carbon dioxide emissions by 25 percent from 2012 levels by 2020. The green group says reducing carbon dioxide levels would yield more than $50 billion in environmental benefits — utilizing the Obama administration’s flawed social cost of carbon estimate.
According to NRDC, the rule will only cost $14.6 billion in 2020. The report say the “benefits of the proposal far outweigh the costs.”
“Carbon dioxide from power plants contributes to the severity of heat waves, droughts, floods, and rising sea levels, all of which bring an enormous toll in human lives, environmental devastation, and economic disruption,” the NRDC report says.
What does it all mean?
While the Chamber and NRDC reports tell two sides of the story, both recognize that the EPA’s rule for existing plants would likely be the costliest environmental rule on the books.
Currently, the EPA’s Mercury Air Toxics Standard is the costliest agency rule with a price tag of $9.6 billion per year. The Chamber says that compliance costs for the EPA’s carbon dioxide rules could be more than $50 billion per year and NRDC says the agency’s rule could cost nearly $15 billion in 2020.
But the point of the EPA rules are to stem global warming, which the rules will likely not accomplish. While the U.S. drastically cuts its carbon dioxide emissions, developing countries are not bound by U.S. law and will continue to emit more as they develop economically.
The Chamber’s study notes that “over the 2011-30 forecast period, the rest of the world will increase its power sector CO2 emissions by nearly 4,700 million metric tons (MMT), or 44%.”
“Those non-U.S. global emissions increases are more than six times larger than the U.S. reductions achieved in the Policy Case from 2014-30.2 Considered in light of the challenges and costs associated with approaching 42% power sector CO2 reductions, this international context should be instructive as the U.S. seeks to negotiate a post-2020 emissions reduction agreement,” the Chamber notes.
The NRDC’s report does not mention the dramatic increases in carbon dioxide emissions from other countries, like China and India, that would nullify the cuts made in the U.S.
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