Loopholes worth worrying about? Exempting old coal plants
Last week, the New York Times ran an editorial bemoaning loopholes in the Waxman-Markey bill. I don’t think anyone would seriously contend that the final bill out of the House is perfect, but I think there is plenty of room for debate as to what actually counts as a significant weakness as opposed to a provision that just looks funny on first glance.
The Times editorial pointed out two problems: (1) the bill’s grandfathering of existing and already-permitted coal plants, and (2) offsets. I’ll leave the complex issue of offsets for some hypothetical day in the future and for now, just look at Waxman-Markey’s treatment of existing coal plants.
The Times notes that Waxman-Markey
sets tough performance standards on new power plants permitted after 2009, requiring emissions reductions of 50 percent or more. …
The bill does not, however, impose any performance standards on existing power plants. And it explicitly removes these plants from the reach of the Clean Air Act. This is a mistake. The overall cap on industrial emissions will not be fully effective for a long time, and, meanwhile, the government should be able to impose lower-emissions requirements on the older, dirtiest plants.
You may have heard in the news or from politicians similar statements about how the climate bill removes the EPA’s authority to regulate coal plants, or that it strips the agency of its power under the Clean Air Act to deal with carbon dioxide. Of course, a little context here is useful. After all, the EPA was powerless to regulate CO2 until this past April, when it issued its finding that greenhouse gases endanger public or welfare. Only after making this finding was EPA allowed to regulate greenhouse gases as pollutants under the Clean Air Act – a law that was enacted long before the science of climate change was well-understood. Thus, it’s not surprising that in many ways, the Clean Air Act is not really well-suited for regulating greenhouse gases. Over on Climate Progress, Joe Romm has done a great job explaining why the EPA cannot single-handedly stop dangerous global warming.
However, I do think it’s disingenuous of the Times to assert that the bill “explicitly removes these plants from the reach of the Clean Air Act.” In fact, most of the bill entails amendments to the Act, thus bulking it up into perhaps one of the broadest pieces of environmental legislation in our country’s history. It certainly does not remove old coal plants from the current reach of the Act. It does, however, limit the Act such that carbon dioxide and other greenhouse gases cannot be regulated under the Clean Air Act in the same manner as other air pollutants like SO2 and NOx.
Bruce Nilles, director of the Sierra Club’s Beyond Coal Campaign, describes the performance standard problem in more detail:
…the way the bill works right now, instead of encouraging investment in new industries and new plants that are subject to stringent standards, it leaves the door open to expand the old plants with no added safeguards.
By “grandfathering” existing coal-fired capacity, which accounts for 44 percent of U.S. electricity generation, the bill repeats the mistakes of the 1977 Clean Air Act — mistakes that we have been paying for in the form deadly air pollution ever since.
Setting emissions-reducing performance standards for coal-fired power plants is indisputedly the right policy goal and a valuable – if not critical – part of the climate bill. But this is a cap and trade bill, dealing with permits to pollute – so where do the performance standards come in?
As far as I can tell, the only emissions performance standards applying to coal power plants are found under the subtitle devoted to Carbon Capture and Sequestration. For example, Section 116, Performance Standards for Coal-Fueled Power Plants amends the Clean Air Act by requiring new and already-permitted power plants to achieve CO2 emissions limits of 50-65% (depending on the year of initial permitting) “reduction in emissions of the carbon dioxide produced by the unit.” This section specifies how coal power plants will receive emissions allowances for effectively capturing/sequestrating carbon to reduce emissions. The section also requires the EPA to reduce emissions allowances for plants initially permitted beginning in January 1, 2009.
What’s important to note here is that while these provisions indeed exempt older coal plants, it only applies to the CCS provisions of the bill – as far as I can tell. I haven’t yet had time to carefully read through Title VII of the bill yet – the title that deals with the greenhouse gas inventory, offsets, allowances, and the other messy details of the cap and trade system – but I didn’t see anything in there that created a loophole for regulating old coal-fired power plants. As far as I can tell, Title VII treats all coal-powered plants alike in terms of coverage under the cap and trade system: the Definitions provision in Section 312 defines a “covered entity” as “any electricity source.”
So even if older coal plants are not subject to the same CCS requirements as newer plants, they will still be subject to market mechanisms, including the system-wide cap which decreases allowances over time. Considering that CCS technology is still highly speculative, it doesn’t seem like this “free pass” to older plants is that horrible of a loophole. In fact, if the cap and trade system works as it is meant to, and CCS does in fact eventually become commercially viable, it would seem that operators of older coal plants could be incentivized to implement CCS technology or other emissions-reducing technology.
What do you think? Is my interpretation totally wrong?
