Obama Unilaterally Pushes Cap-And-Trade On Unwilling States

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Michael Bastasch DCNF Managing Editor
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The Obama administration’s new climate rule will force states to cut carbon dioxide emissions through a variety of policy options, including imposing a cap-and-trade program on their existing power plants.

The White House is trying to sell the proposed Environmental Protection Agency rule as “flexible” by highlighting that states can choose from a menu of policy options to cut emissions. The EPA’s rule, which will be proposed Monday, seeks to cut emissions from existing power plants in a bid to fight global warming.

“Rather than immediately shutting down coal plants, states would be allowed to reduce emissions by making changes across their electricity systems — by installing new wind and solar generation or energy-efficiency technology, and by starting or joining state and regional ‘cap and trade’ programs, in which states agree to cap carbon pollution and buy and sell permits to pollute,” the New York Times reported of the proposed rule.

The coal industry and energy states have already vowed to challenge the rule if the EPA’s new regulation goes too far and impose onerous burdens that could cause more coal-fired power plants to shut down.

Coal provides 40 percent of the country’s electricity supply and already more than 300 coal plants have been slated for shutdown, in part, due to EPA regulations. A U.S. Chamber of Commerce study released last week estimated the EPA’s climate rule could cost $50 billion annually and about 40 percent of the U.S. coal fleet could be retired by 2030.

The Chamber study also found that shutting down coal plants would mean more natural gas would have to be used to generate power, driving up gas prices and forcing people to pay $17 billion more for electricity per year.

“You can’t regulate your way to prosperity,” said the Electric Reliability Coordinating Council, energy industry group. “EPA and its allies argue that the rule will create jobs by pointing to people that would be hired to install insulation and build more renewable power plants.”

“But they ignore the many jobs that will be destroyed by closing down existing power plants and mines,” ERCC said. “And more importantly, they ignore the jobs that would be lost due to higher energy costs for industrial users.”

Some states are preparing their own emissions plans to make sure the EPA rule doesn’t unnecessarily shut down coal-fired power and imperil the electrical grid and drive up energy prices.

The Midwest and Southeast regions of the country will be some of the hardest hit regions due to EPA regulations as much of the power in these regions comes from coal. Missouri, for example, gets 83 percent of its power from coal.

“The concern is that the federal standards — if they come out the way that most people expect them to — are going to drive the cost of electricity up for every single consumer in the state,” Missouri Republican state Rep. Todd Richardson told the Associated Press.

President Obama himself touted the rule in his weekly address Friday, saying it was essential to preserving the climate for future generations. He also tried to preempt any attacks by the coal industry on the EPA’s climate rule.

“So the idea of setting higher standards to cut pollution at our power plants is not new,” Obama said at the Children’s National Medical Center in Washington, D.C. “It’s just time for Washington to catch up with the rest of the country.”

“Now, special interests and their allies in Congress will claim that these guidelines will kill jobs and crush the economy,” Obama said. “Let’s face it, that’s what they always say.”

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