June 4, 2014 – The Environmental Protection Agency proposed regulations Monday to cut carbon pollution from power plants 30 percent from 2005 levels by the year 2030. Under the proposal, the EPA expects 30 percent of electricity will come from coal by 2030 compared to 40 percent today. In combination with other regulations, the rule would allow the United States to meet its commitment to the United Nations to cut carbon pollution 17 percent by 2020. University of Houston Law Center Professor Tracy Hester teaches environmental law, environmental enforcement, and emerging technology courses. He researches innovative application of environmental laws to emerging technologies and risks, including climate engineering, nanotechnologies, genetic modification, wind and other renewable power projects, and on novel compliance and liability issues. He also helps direct the Environment, Energy & Natural Resources Speaker Series that brings top speakers on the issues of the day to the Law Center. Hester outlined the implications of the EPA's proposed regulations.
Q.) How would the proposed regulations impact states?
EPA's proposed rules would require states to reduce greenhouse gas emissions from their power plants by up to 30 percent. The rules give the states a great deal of flexibility in crafting their plans to achieve those reductions, but EPA ultimately will still need to confirm that the states' plans meet the requirements of the new rules.
Q.) What are "cap and trade" programs?
A cap-and-trade program sets a total amount of a pollutant that all of the facilities in a single state or regions can emit, and then it lets those facilities buy and sell among themselves how much each one of them can emit. Basically, if one plant reduces its emissions more than the rules require, it can sell those extra reductions to another facility that's having trouble hitting a required emission target. That way, the market helps focus emission reductions to the facilities that can most efficiently cut their emissions. It also adds to the cost of operating inefficient sources that now have to buy extra emission reductions to comply with the new rules. By letting the market decide where and how to reduce emissions, EPA avoids the costs and delays of directly requiring permits and regulatory controls on each facility.
Q.) Why is the Obama administration announcing these regulations now?
In his Climate Action Plan last year, President Obama set out specific deadlines to get rules in place for both new power plants and this week's proposed rules for existing power plants. Given the amount of time needed to develop new rules and see them through notice-and-comment rulemaking procedures, EPA will already have to race hard to have all of the power plant rules finalized and in place before President Obama's term ends in 2016.
Q.) What legal and legislative resistance can we expect the proposed regulation to face?
Once it's finalized, the new rule for existing power plants will spur a host of lawsuits by the power industry, environmental advocates, coal mining companies, and states that rely on coal for a big part of their power needs. Other parties will likely intervene to protect the rules, including natural gas interests and states that benefit from the rules' flexibility and protection of their earlier efforts to increase renewable energy sources, promote energy efficiency and establish greenhouse gas trading networks.
Q.) How do you expect the coal industry will respond?
Aggressively, on both the political and legal fronts. Coal will continue to play a big part in the United States' energy future, and U.S. coal companies will still have foreign markets that demand their product -- but no matter how you view it, these proposed rules will seriously hurt their long-term U.S. markets.
Q.) What impact do you expect the E.P.A.'s new carbon plan to have?
If they survive the legal and legislative gauntlet, these rules could have a big impact. Power generation accounts for a huge share of greenhouse gas emissions in the United States, and this action sets the stage for President Obama to take a credible leading role at the upcoming climate treaty negotiations in Paris next year.