What You Need to Know about the EPA's CO2 Plan

  • A barge takes coal up the Monongahela River in Pittsburgh. Coal is the largest source of CO2 emissions created by electricity production. Photo: Reid R. Frazier

July 30, 2014

The Environmental Protection Agency has outlined a plan to reduce carbon dioxide emissions from existing power plants by 30 percent of their 2005 levels by the year 2030. 

Some of those emission reductions have already been achieved, through phasing out coal-fired power plants, switching to alternative energy, natural gas, and improvements in efficiency.

By reducing carbon emissions in the electric power sector, the EPA says these cuts will also reduce soot and smog by over 25 percent, and prevent between 2,700 and 6,600 premature deaths annually by 2030.

Q: How will the new rule be implemented? 

A: Each state must come up with its own plan to meet emission targets set by the EPA, which are different for different states. 

States can meet the targets by switching from coal to natural gas for electricity generation, using nuclear energy and renewables like wind and solar, and boosting energy efficiency for businesses and consumers.

Pennsylvania will need to reduce its power plant carbon pollution intensity—the amount of carbon dioxide its plants produce per unit of electricity—by 31 percent. West Virginia will need to reduce its pollution per unit of energy by 20 percent. States can form regional carbon trading units to meet their goals. 

Q. Is the EPA allowed to regulate greenhouse gases?

A. Yes. In 2007, the Supreme Court, by a 5-4 decision, ruled that greenhouse gases(GHGs) are “air pollutants” which may endanger public health, and thus subject to regulation by the Clean Air Act. The majority held “harms associated with climate change are serious and well recognized.”

EPA finalized rules for newly constructed power plants in 2013. These rules would require drastic reductions from coal-fired power plants, which may be attainable through carbon capture and sequestration. 

In June, the EPA set forth a much-anticipated follow-up: rules for existing power plants.

Q: Will these new rules impact the economy and the coal industry?

A: The coal industry will be affected by the new rule.

The EPA estimates between 11,500 and 18,000 coal jobs will be lost by 2025 as a result of the plan and that Appalachian coal production will decline by up to 37 percent by the year 2020 under the rules. But the federal agency also predicts natural gas production could increase by 12 to 14 percent. 

Coal producers and electric utilities that rely on coal say this will result in serious hardship in coal-dependent regions and states, and increase electricity costs for manufacturers and consumers.

Overall, the EPA says the new rule will have a positive impact on the economy, because of climate and health benefits, as well as increased activity in the alternative energy and efficiency industries. 

EPA estimates electricity costs will rise by 6 to 7 percent by 2020, and that average electricity bills will rise by 3 percent in 2020, but decline by 9 percent by 2030, as efficiency measures reduce demand.

Q: How did the EPA come up with state goals?

A: The EPA calculated each state’s goals by determining what reductions the states’ power generation plants could achieve “at reasonable cost.”

Q: Will these regulations solve climate change?

A: Even if the U.S. stopped producing GHGs, other countries continue to burn coal. EPA Administrator Gina McCarthy says these new rules will help the U.S. negotiate international agreements on climate change action.