A couple of weeks ago, I wrote about energy efficiency and the Clean Air Act section 111(d) provisions in anticipation of the SPEER Second Annual Summit, a gathering of top energy efficiency industry leaders from Texas and Oklahoma. At the Summit, I co-led a session on Environmental Protection Agency’s (EPA’s) push to regulate power plant emissions. Session attendees agreed that Texas would be an unlikely leader in developing innovative ways to comply with carbon pollution standards for existing power plants.
This is a missed opportunity on Texas’ part, as states will get the first crack at drafting plans to comply with new federal standards. This is an important opportunity because individual states are in the best position to craft frameworks that enable maximum flexibility and are appropriately tailored to local circumstances. So, this begs the question: is there an alternative, more constructive path that is most beneficial to Texas?
The Kentucky Way
Texas should take a serious look at Kentucky – another unlikely leader in climate policy. Last year, Kentucky sent a report to EPA’s Administrator, Gina McCarthy, laying out Kentucky’s proposed framework to guide its discussions with the Federal Government. State officials clearly had some concerns about the impending standards, but they also demonstrated commitment to meeting President Obama’s emissions reductions goals and improving the health of Kentuckians.
The state leaders advocated for an approach that allows for maximum flexibility to comply based on the state’s unique energy portfolio and economy. Among a suite of compliance options, the Kentucky report included two noteworthy techniques. First, the state asked EPA to develop a mass-emission reduction standard (reduction of total average carbon dioxide (CO2) emissions) as opposed to a rate-emission standard (reduction of CO2 emissions per unit of energy produced). This approach opens the door for more easily measured and verified energy savings. Secondly, Kentucky proposed participating in a regional or national market-based CO2 credit trading program (similar to the Regional Greenhouse Gas Initiative adopted by nine states), which would enhance electric reliability while also allowing for more flexibility in meeting clean air standards.
All told, Kentucky’s roadmap found that a significant reduction in emissions (nearly 30 million metric tons worth of CO2) could be achieved by 2020 at a very reasonable cost. Moreover, customer-facing energy efficiency would yield significant net savings for consumers – making it by far the most cost-effective means to reduce emissions for the state.
Proactive, Realistic Approach
This proactive and constructive stance is smart, and Texas should take note. Rather than spending millions of taxpayer dollars suing EPA to try to stall implementing life-saving standards, as Texas has done in the past, Kentucky’s state leaders have developed a realistic approach. The result is a proposal that aims to achieve significant, cost-effective reductions in carbon pollution – while simultaneously setting an example of robust, state-federal collaboration. This mutually beneficial plan will improve air quality, save lives, and spur a clean energy economy.
On that note, I have a few recommendations as other states begin creating their own plans:
- Water should be a part of the discussion. States’ energy choices should consider water usage in addition to air emissions. In many drought-stricken regions of the country, continued reliance on fossil fuel power generation may become unsustainable given that many existing power plants use substantial amounts of water for cooling. As temperatures increase and drought conditions continue to intensify, fossil fuel power plants will likely welter and eventually shutter under these conditions. States need a holistic outlook, one that harnesses water-free wind and solar PV, in order to advance a more sustainable energy future.
- EPA should consider regional solutions for compliance. Historically, EPA has evaluated state plans on an individual basis. However, there may be advantages to regional approaches for compliance with the Carbon Pollution Standards, as multiple states (or utilities located in multiple states) could establish regional emissions trading programs or other flexible approaches that lead to healthier air quality.
- States should see the Carbon Pollution Standards as an opportunity to improve human health. Strategies to reduce carbon pollution are also expected to reduce other harmful pollutants emitted by the power sector, including pollutants that contribute to ground-level ozone (“smog”), dangerous particulates, and mercury. EPA has already proven that the Clean Air Act protects human health and saves billions in health care costs; this standard will help bring a breath of fresher air to states around the county.
- Energy efficiency must be a part of the solution. Energy efficiency is one of a few compliance mechanisms that is an investment, not a cost. Energy efficiency saves money for consumers and enhances economic growth, while helping reduce a suite of harmful pollutants. A mass-emissions standard (as Kentucky proposed) makes monitoring and verification of emissions reductions more straightforward, because it gives appropriate credit to all energy efficiency efforts based on actual emissions reductions.
And for Texas, I have this to say: rather than spend taxpayers’ dollars suing EPA over clean air standards, state leaders should think about how best to protect the health of their citizens and the economy to ensure a robust, healthy future. Texas already leads the nation in terms of wind energy production and solar energy potential – both of which create affordable power to fuel the state’s bustling economy and reduce air pollution to safeguard Texans’ health. Investing in clean energy and technologies that reduce emissions and water use from fossil fuels means state leaders are investing in a cleaner environment for this and future generations.