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EPA gives states flexibility in cutting carbon emissions

U.S. Environmental Protection Agency Administrator Gina McCarthy signs new regulations for power plants

The Obama Administration unveiled the first-ever regulation aimed at cutting carbon emissions from existing power plants. The president is using his executive powers to go after the country’s biggest source of carbon pollution.

The draft rule aims to cut carbon pollution from power plants 30% from 2005 levels by the year 2030. The Environmental Protection Agency proposed the rule under the auspices of the Clean Air Act. The proposal also gives states flexibility in how they achieve their cuts.

“It doesn’t tell power plants exactly how to go about reducing emissions. It tells states to figure that sort of thing out,” says Jerry Taylor, who heads the libertarian Niskanen Center in Washington. “So it’s less command and control than one could imagine, but it’s more command and control than most economists would want to see in place.”

To meet their specific goals, the EPA is proposing that states could create compliance plans in which fossil-fuel burning power plants don’t bear sole responsibility for reducing emissions. In other words, states could reduce emissions by creating their own allowance trading programs, partnering with other states, increasing energy efficiency, or using more renewable energy.

The EPA projects that, in 2030, the rule “would result in net climate and health benefits” of up to $82 billion.

Durwood Zaelke of the Institute for Governance & Sustainable Development says the rule won’t solve the climate change problem, but it should spur innovation.

“This is also the best way to get experimentation. It may be that the state of New York, the state of Michigan, the state of California, finds the best way forward faster than another state,” he says.

That innovation, he says, will be crucial to combat climate change in the decades ahead. 

About the author

Kate Davidson is a regular contributor to Marketplace.

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