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POLITICS: PennAve

Why opponents don't like the EPA's climate-change math

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Politics,Climate Change,PennAve,Energy and Environment,Coal,Global Warming,Zack Colman,Electricity,Greenhouse Gases,Power Plants

On paper, the Environmental Protection Agency's proposed power plant rule is an obvious bargain: A cost of no more than $8.8 billion, with benefits reaching between $55 billion and $93 billion by 2030.

But opponents of the rule have complained that those numbers aren't exactly comparable.

The EPA calculated the costs by focusing only on domestic effects of the rule, while measuring the benefits on a global scale using an approach called the "social cost of carbon" that includes things like the effects of drought on corn fields or flooding in coastal cities.

To opponents, the formula is representative of their concerns about the rule overall.

"The United States is paying all the cost while other people benefit. That's the point," Paul Bailey, the senior vice president of federal affairs with coal industry group the American Coalition for Clean Coal Electricity, told the Washington Examiner. "The benefits are flowing to the rest of the globe."

Whether the calculations will hold true is anyone's guess. The rule won't be finalized until next June, so there's been little analysis to date of what the EPA proposed.

The EPA says its proposal, which would push states to get less power from carbon-heavy fuels, like coal, to cut national electricity emissions 30 percent below 2005 levels by 2030, would yield global climate benefits of up to $31 billion in 2030.

The rest would come from health gains, such as reducing exposure to pollutants that aggravate asthma and heart conditions.

On other issues, the EPA keeps its focus within the U.S. Its analyses of rules on hazardous pollutants, for example, assess costs and benefits purely on a domestic basis.

But climate change crosses all borders. Supporters of the EPA's calculations note that taking a global view of the benefits of fighting it is only appropriate.

"If every country based its carbon policy just based on domestic benefits, it would reduce carbon too minimally," Kyle Aarons, senior fellow with the Center for Climate and Energy Solutions, told the Washington Examiner.

Focusing on the global benefits also helps the U.S. sell the power plant rule to another audience: other countries.

The Obama administration is hoping to promote the proposed rule — the most significant climate regulation in U.S. history — to the rest of the world ahead of international climate talks next year in Paris. Nations there want to lock in enough carbon-cutting commitments to avoid a global 2 degree Celsius temperature rise by 2100.

Pointing out a $93 billion benefit is a way to get other nations to follow suit with their own plans.

Still, the social cost of carbon has sparked criticism from the Right because they say it inflates the perceived benefits from regulating greenhouse gases. They also say federal agencies haven't been forthcoming about the data behind it.

While the rule's opponents have accused the Obama administration of being too aggressive in its calculations, outside environmental groups and scientists actually say the social cost of carbon estimate is too timid based on the body of evidence available.

If the Obama administration had based its calculation purely on domestic, rather than global, benefits, then the figure would be much lower.

Take, for example, vehicle emission standards the Obama administration finalized in August 2012. The Transportation Department was considering both a domestic and global benefit — the domestic clocked in at $2 per ton of carbon dioxide emissions, while global hit $33 per ton. Ultimately, the agency went with the global number.

Doing so makes sense given the unique nature of climate change, the EPA argued in its regulatory impact analysis for the proposed carbon rule.

"[E]missions of most [greenhouse gases] contribute to damages around the world even when they are emitted in the United States. The [social cost of carbon] must therefore incorporate the full (global) damages caused by [greenhouse gas] emissions in order to address the global nature of the problem," the agency said, adding, "[C]limate change presents a problem that the United States alone cannot solve."

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