Predictably, fossil fuel interests attacked the plan as soon as it was released. House speaker John Boehner claimed there would be inevitable large job losses and substantial hikes in electricity prices, but the figures he relied on were quickly debunked. So who benefits from these new regulations?
Pretty much anyone who currently pays for electricity or breathes air. According to a recent study conducted by the Natural Resources Defense Council, these new carbon standards can save Americans $37.4 billion on electric bills and create 274,000 jobs. Likewise, New England has made significant reductions in power sector carbon emissions, and electricity rates have already gone down 7%. The facts show that renewable energy and the economy go hand in hand.
This same sort of misinformation often rears its head when discussing state renewable portfolio standards. Fossil fuel interests like to claim that these standards will exponentially raise the price of electricity. This should sound familiar: they’re wrong. A study conducted by the Lawrence Berkeley National Laboratory in Berkeley, California shows that estimated RPS compliance costs over the 2010-2012 period were equivalent to, on average, roughly 1% of retail electricity rates, which is flat out miniscule. Plus, all RPS policies have the added benefit of cost protection, so ratepayers are protected from exorbitant rate hikes.
In the regional cap and trade-style system promoted as a solution for these regulations, another group of winners is born: electric utilities companies. Cap and trade system provides a high level of flexibility and opportunities for cost minimization. Many states appear poised to use regional cap and trade systems, similar to the Northeast’s RGGI, to comply with the EPA’s plan. The emissions rate goal varies by state, and states are given the opportunity to meet their goal through a specific emissions rate of CO2 or a mass based limit on total emissions. States are afforded total discretion, provided that they reach their CO2 emissions target, and energy executives have already expressed admiration for the plan. As John McManus, Vice President of American Electric Power, put it “we view cap and trade as having a lot of benefits”. It is very much worth noting that American Electric Power owns coal-fired plants in 11 states.
As the Sierra Club has pointed out in the past, carbon pollution is fueling climate change, which, consequently, is facilitating the not so natural disasters that have been costing Americans billions of dollars. Climate change is spawning more frequent floods, super storms, and other devastating catastrophes. Additionally, excessive carbon emissions are also allowing for a widespread and life-threatening level of particles like soot and smog. EPA officials expect the new regulations to produce $55 to $93 billion worth of health benefits. Other statistics show up to 150,000 asthma attacks will be prevented, and even more importantly, up to 6,600 premature deaths avoided.
Cutting back significantly on carbon emissions will not only fight climate change, but it will speed up our transition to a sustainable, domestic, clean energy economy, creating jobs and saving lives in the process. It doesn’t get better than that.