03 June 2014

Some Perspective on the US EPA Carbon Regulations

The graph above shows the mix of US electricity sources for 2012 and for 2020 and 2030 under the EPA carbon regulations which were proposed yesterday by the Obama Administration. (You can click on the graph for a bigger version). Sources can be found at the bottom.

Some points:
  • First, lest there be any confusion, I support the regulations and hope that they are implemented. My general views on using technology standards to stimulate innovation can be found, for example, here. I'd also encourage a close look at Japan's "Top Runner" programs.
  • The rhetoric surrounding the regulations is tempered by this data, on both sides. 
  • If implemented, they would represent a significant reduction in coal generation from about 39% of the mix to about 33%, a drop of about 15% from total 2012 coal generation (and under different scenarios it could be a bit more or less). The US economy has already seen a larger reduction in coal electricity generation -- a 25% drop from 2005 to 2012 -- and the economy appears to have survived intact. 
  • However, despite this reduction, the overall change to the US electricity mix is best characterized as marginal, rather than revolutionary. This is especially the case from 2020 to 2030 where there is very little projected change in the mix.
  • In order to stabilize atmospheric concentrations of carbon dioxide at a low level (say 550 ppm or lower) requires that the carbon-free proportion of the global energy mix (not just electricity) increase from about 13% carbon free to more than 90%, regardless of how much energy the world ultimately consumes. The US in 2012 was about 13.5% carbon free. These regulations mainly switch electricity from coal to gas and thus do very little to increase the US proportion of carbon-free electricity generation.
  • The so-called climate benefits of the regulations are thus essentially nil, though I suppose one could gin some up via creative but implausible cost-benefit analyses. Atmospheric carbon dioxide is a stock and flow problem and these proposed regulations make a only a very tiny contribution to the flow side of the equation. That is just math.
  • The US carbon regulations won't influence future extreme weather or its impacts in any detectable way. Hard to believe I felt compelled to write that.
  • The non-carbon public health benefits of decreased reliance on dirty coal are the most compelling reasons for the regulations, and they are considerable. 
The bottom line is that the regulations are an important step to help motivate the electricity generating sector to move closer to the technological frontier. There will of course be winners and losers, and thus heavy politics. In addition, people love to fight about climate, and to use the climate debate as a political wedge as well as a sledgehammer for all sorts of interests. The proposed EPA regulations will be no different. The reality, at least with respect to the effect of the regulations on the energy sector, will be far more prosaic than the rhetoric. 

Sources: EPA, 2014. Regulatory Impact Analysis for the Proposed Carbon Pollution  Guidelines for Existing Power Plants and Emission Standards for  Modified and Reconstructed Power Plants. Specifically, Panel 1, Table 2-2 here (PDF). Panels 2 and 3 are from the Option 1 (regional) scenario in Table 3-11 in the same source. 

12 comments:

  1. Besides, no one cares about the coal miners, their families and towns. They're a bunch of bitter clingers. Compared to the importance of a billionaire like Tom Steyer they're worthless junk.

    ReplyDelete
    Replies
    1. To a politician of either party, if you aren't making significant campaign contributions, you don't exist.

      Delete
  2. - First, the market is a far better innovator than government. It is far more effective at introducing new technologies that work AND are econonic. As gas is heading that list now, the transition will happen naturally, it doesn't need government interference.

    - Having regulations that limit particulates and noxious gas emissions from coal power stations is sufficient to ensure 'clean air'. CO2 is NOT pollution and its reduction does nothing whatsoever to improve air quality. If rising CO2 was damaging to the environment, why is the planet greening, and if the higher emitters of CO2 are the non-industrialised regions (ref: JAXA satellite data), then it's not man's CO2 that we need to worry about.

    - Who decides what is a 'stable' atmosphere or climate? There is no such thing. There's what is 'convenient' for man's habitation, but never has the climate been 'stable', it's always changed, and always will.

    - What sort of presidential intellect is present that cannot see that the EPA regulations will be of no benefit, but at great cost? Answer: None! As Gene Hackman said to Will Smith in Enemy of the State, "You're either very smart... or incredibly stupid." For Obama, I would opt for the latter.

    - If the beating up of coal producers has no benefit to the climate, then why not let the market decide its own course, and naturally let gas replace coal as it is already doing, with the consequential drop in CO2 emissions (not that lower CO2 matters, you only have to look at the flatlining global temps to see that).

    - The big benefit of increased CO2 in the atmosphere is enhanced crop and greenery growth, including the shrinking of deserts. This is supported by the fact that many glasshouse crop growers artificially raise the CO2 levels to 3 or 4 times atmospheric, and other studies have shown that increased CO2 levels have the beneficial effect of reducing water stress in plants.

    The bottom line is not that these regulations will have no effect ion climate, but that Obama is deliberately lying by saying it will (and inventing other CO2-caused adverse health effects, e.g. asthma), and turning into a dictator by bypassing democratic government.

    ReplyDelete
  3. Roger, does this mean you would classify this regulation as a "no regrets" policy?

    ReplyDelete
  4. This comment has been removed by the author.

    ReplyDelete
  5. Roger,
    If your support of these regulations is that they will provoke innovation, could you expand on what the character of this innovation might be? In other words, what is it that will be done differently; generation of electricity formerly fueled by coal? Would a switch to gas constitute innovation?

    Saving some wild possibility that some sort of innovation might result, I guess I cannot see any benefit from this body of regulation whatever, but that there will surely be some cost to the rest of us.

    Roger, show me what I'm missing.

    ReplyDelete
  6. This is a bit like encouraging dumping carcinogens into the environment to encourage technology and innovation in order to find a cure for cancer.

    Let poor people get sick and die from heat or cold because they can't afford energy.

    And the only innovations these regulations encourage is in law and lobbying. they pick winers like A123, Tesla, and Solyndra. Liquid Flouride Thorium Reactors are probably a very good source of energy, but won't be considered - they are losers. There may be even better clean fossil fuels. Those are losers.

    Ethanol is still a winner. It takes a gallon of fossil fuels to produce a gallon of ethanol, but it is considered clean, oxygenates, and gets all kinds of blessing. And we are destroying habitat for marginal cornfields because the subsidy is so high even on land that would never be used. (Of course using Hemp or something else to produce ethanol is a loser).

    We could do more good by banning ethanol as a fuel than these regs, but it will never happen. But I see no difference between the Coal hatred of the owners of Iowa cornfields planted to make ethanol and with bird slaughtering intermittent windfarms and the opposition to coal here - it isn't because of anything bad, but because there is another agenda disconnected from reality or rationality.

    ReplyDelete
  7. Roger I removed my earlier post because I botched the assumptions. It would be nice if you and some of your academic pals could calculate actual CO2 reduction expected by the EPA plan in 2030, and run it on a model to see the actual warming mitigation expected. Will there even be any warming reduction from this plan by 2030?

    ReplyDelete
  8. I wonder what folks in WV and WY are going to see when looking at this. The national politics level makes these decisions, but then offer little to our nation's "Climate Refugees" (the coal miner). Who, through sacrifice to their lives/health, brought America to and through the Industrial Revolution, and now their whole communities must suffer more as, through no fault of their own, their industry goes away via angry pitchforks and they are left in the lurch. No money, no education, no jobs, no infrastructure. I'd say they have a clearer risk to be worse off than folks in the Solomon Islands or whatever.

    ReplyDelete
  9. Dr Pielke, perhaps you do support the Constitution, in particular the separation of powers?

    Section 111(d) of the Clean Air Act clearly states that the Administrator may define a substance as a pollutant and may establish rules to protect health and welfare.

    What is wrong with these rules is that the EPA is not introducing the rules to protect health and welfare but to show the world by example that the USA supports mitigation of climate warming through CO2 reduction.

    The EPA is therefore overreaching the law enacted by Congress by ignoring the purpose of the Clean Air Act, which is to protect health and welfare, not to promote a political agenda, namely to demonstrate to the world that the US supports collective action in climate control.

    More to the point, these new rules are a blatant attempt by the Administration to circumvent the decision by Congress not to engage with the international community in attempting to reduce CO2 emissions.

    The President of the United States is in the process of breaching a fundamental constitutional principle: separation of powers.

    ReplyDelete
  10. "The US economy has already seen a larger reduction in coal electricity generation -- a 25% drop from 2005 to 2012 -- and the economy appears to have survived intact. "

    It is one thing when an the changes are made due to increased economic efficiency (natural gas) and another when it is forced by regulation. Thus the implication (future economy will survive intact) is not supported. Also, this economy is hardly "intact" - the only reason we don't have a very high official unemployment rate now is because a large number of workers simply dropped out. The real unemployment rate, including unemployed who would like to work but have given up, is over 12%.

    As far as health effects - this is very dangerous. If you want to regulate for health, use health regulations, not CO2 regulations. I just heard Obama justify this by improvement in the health of child asthmatics. Maybe this will be the result, but it will be a side effect, not predictable (innovation could, in theory, remove the CO2 and leave the other pollutants), and thus highly dishonest.

    ReplyDelete
  11. One of the criticisms of the EPA's CO2 regulation impact analyses is that they are claiming the same benefits for the CO2 limits as they are claiming for the new limits on mercury and other pollutants. If the CO2 regulation were eliminated we would still be seeing higher standards for the other technologies. I haven't checked this out myself.

    There is only one way by law they can justify their CO2 regulation. They have to show that the benefits outweigh the costs. At least for the new source regulation, they choose a cost of a coal plant with carbon capture that they say represents a cost somewhere between demo cost and mature commercial phase cost rather than the demonstration cost. They don't say what the demonstration cost is, they assume the demos will be done and that there will be cheaper ways to install CCS by the time anyone decides to build a new coal plant (which they won't, but the point of the new source regulation is that it has to be in place before they can regulate existing). Mainstream studies of carbon capture cost say demo prices will be high and require subsidies, but then the early roll-out price will be a little less than half of the demo phase. The mature technology price will be exactly half, based on how other technologies have progressed in terms of cost. The problem is that at least the Texas Clean Energy demo is planned to cost much more than 2x the cost that EPA has in their analysis. So this technology that is supposed to make coal plant exhaust 90% CO2 free is way more expensive than what they are saying. The only way they can justify their regulation is by increasing the social cost of carbon based on new theories of how to compute it that ratchet it up higher and higher. I haven't wrapped my head around how they do the benefit part of it, but I know the costs they have in their RIAs are way off compared to what is actually happening. The Texas demo plant has asked for a year to say why it will cost 3.5 billion not 2.5 billion for a 500MW plant which is $12,500-$17,500/kW and in their RIA they list the cost of this type of plant with carbon capture at $3274/kW cost in 2011 dollars, which is $3463 in 2014 dollars. I don't think I have my numbers wrong, I got them from EPA and Texas Clean Energy Project.

    ReplyDelete