Last year’s Paris agreement was a significant milestone in finally building the global political will to tackle climate change, and not a moment too soon. The end goal is pretty simple, even if the pathway is difficult: in order to have a good chance of keeping global temperature rise below 2 degrees, a recent study in the journal Nature finds that a third of oil reserves, half of gas reserves, and more than 80 percent of coal reserves worldwide need to be left in the ground.
Here in the US, we are finally beginning to take concrete steps in that direction. The Clean Power Plan (CPP) was finalized by the EPA last August, and sets the first ever limits on carbon dioxide pollution from power plants that burn fossil fuels. While the CPP applies to both coal and gas burning plants, some environmental advocates have expressed concerns that the rule might cause us to invest more heavily in natural gas than in truly clean energy. This is a reasonable concern if one looks strictly at the design of the rule, but taken in the context of broader trends in energy development and technology, it becomes clear that the Clean Power Plan can drive the replacement of coal with truly clean energy, IF we implement it properly at the state level.
A recent analysis by the Rhodium Group looked at the “least cost compliance pathway” for the Clean Power Plan under two scenarios. The first is the CPP only, and as the graphic below shows, coal generation declines significantly (by more than 1/3, compared to 2012 generation). There is a modest increase for wind and solar energy, but the bulk of the replacement generation is projected to come from natural gas.
The second scenario is the CPP plus Tax Extenders. What are the Tax Extenders? At the end of 2015, as part of the omnibus spending bill, Congress authorized an extension of the expiring Production Tax Credit for wind energy, and the Investment Tax Credit for solar energy through the end of the decade, which will increase investment in these technologies by tens of billions of dollars. Although wind and solar are already economically competitive on average in the US (see graphic below), these tax credits make them competitive in just about every region, and will allow them to accelerate their rapid expansion. This will prevent the need for new gas generation to replace the declining coal generation that results as the CPP is implemented. In this scenario, nearly all replacement generation by 2030 is pollution-free wind and solar energy.
It is important to note that in both scenarios, coal generation is decreasing more than the combined increase in other types of generation. That is due to increased energy efficiency, which is by far the cheapest and greenest way to cut our carbon pollution. It is also the most progressive, especially if efficiency programs are targeted at homes and businesses in low-income neighborhoods, as envisioned by the CPP’s Clean Energy Incentive Program.
As hopeful as this is, let’s be honest. First, cutting carbon pollution in the electric sector by 32% by 2030, as the CPP aims to do, is not sufficient by itself to end the threat of climate change. The Sierra Club’s goal is to get to zero carbon pollution in the electric sector by 2030 and a virtual elimination of fossil fuel use by 2050, not because it is easy, but because that is what the science of climate change demands. So this is just one step. Through our continued climate and clean energy advocacy we hope to far surpass the CPP requirements. But the importance of having a law in place that, for the first time, puts actual limits on carbon pollution from the electric sector cannot be understated and we cannot afford to let opponents undo or weaken this important accomplishment.
Second, I’ve done enough modeling in my life (the computer kind, trust me) to know that this analysis only shows what COULD be, not necessarily what WILL be. All models are based on assumptions that may or may not hold true, and the Clean Power Plan is complex with some potential loopholes that could weaken it unless we prevent that from happening. In Pennsylvania, the most important question is whether we will choose to limit carbon pollution from existing coal and gas plants only, or whether pollution from new gas plants will also be subject to the carbon cap.
Under the Clean Power Plan, the EPA does not have the authority to cap system-wide emissions from new power plants. It can only set limits for individual power plants and has done so, but the limits for new gas plants are already being reached by virtually every new combined cycle gas plant. However, the STATES do have the ability to regulate new gas plants just as they regulate existing plants, and that is what we are calling on Governor Wolf to do.
What are the stakes?
If states take the “existing only” approach to compliance, they would indeed be creating an incentive to shift generation away from both existing coal and gas plants to new gas plants, which would not be subject to a system-wide cap. This is called “emissions leakage,” and EPA recognizes that it is a problem, and requires states to include policies to prevent leakage if they opt for existing-only compliance. However, a recent analysis by MJ Bradley & Associates found that EPA’s proposed approach to mitigate leakage is ineffective, and that electric sector emissions could actually increase by 2030 if states choose to only regulate existing sources.
But it doesn’t have to be that way.
If we include new gas plants under the carbon cap, we treat every ton of carbon pollution the same no matter when its smokestack was built. That makes it a REAL cap on carbon pollution. Not only is this the only fair way to do it from an economic perspective, it is the best tool we have for preventing most of the 27 (!) proposed new natural gas power plants from coming online in Pennsylvania. Better still, with a real carbon cap, it won’t matter whether electricity demand increases when electric cars become mainstream. Any additional generation requirement would have to be met with carbon-free electricity, so it offers us the chance to clean up both our electric AND transportation systems.
Tell Gov. Wolf to include new gas plants under the carbon pollution cap. And tell your legislators to work constructively with the Administration and ensure a strong, just, and timely Pennsylvania Clean Power Plan!
Local teams are forming throughout the state, and now is the time to get involved! If you are in the Pittsburgh region, contact Randy Francisco (randy.francisco@sierraclub.org, 412-802-6161). If you are in the Philadelphia region, contact Gary Lytle (gary.lytle@sierraclub.org, 215-776-5358). If you live elsewhere, contact Carli Feldman (carli.timpson@sierraclub.org, 717-232-0101). You can also visit www.cleanpowerpa.org for more information.
