Clean Power Plan Costs Soar, Hit (Almost) Everyone

Published August 18, 2015

Climate Change Weekly #183

In the previous issue of Climate Change Weekly, I examined the impact of President Barack Obama’s Clean Power Plan (CPP) on the coal industry. This week I’m broadening the examination. A number of analysts have examined the harmful impact of CPP on the economy; the numbers are eye-opening.

The Wall Street Journal calls CPP a “Climate-Change Putsch,” noting EPA is attempting to commandeer states’ long-held right to manage the electric power system within their borders. The Journal states,

Rarely do American Presidents display the raw willfulness that President Obama did Monday in rolling out his plan to reorganize the economy in the name of climate change. Without a vote in Congress or even much public debate, Mr. Obama is using his last 18 months to dictate U.S. energy choices for the next 20 or 30 years.

States have regulated their power systems since the early days of electrification, but the EPA is now usurping this role to nationalize power generation and consumption. To meet the EPA’s targets, states must pass new laws or regulations to shift their energy mix from fossil fuels, subsidize alternative energy, improve efficiency, impose a cap-and-trade program, or all of the above.

EPA’s original plan allowed states to make up for the loss of some of their coal-powered electricity by expanding the use of cleaner burning, relatively inexpensive, natural gas. In a shock to almost everyone, the finalized plan locks in natural gas’s share of electricity production at near-present levels – 27 percent (2014) – while renewable energy sources are given a huge boost through mandates and “pollution” credits, from just 7 percent of today’s electricity (not counting hydropower) to 28 percent by 2030. As a result, since renewables are far and away the least reliable, most expensive sources of electric power, every American’s energy bill will increase dramatically.

The Institute for Energy Research mocks the president’s claim CPP’s annual compliance cost will be “only” $8.4 billion by 2030 and will save consumers $155 billion from 2020 to 2030.

As IER notes, “It is difficult to believe that any plan that requires new construction of utility plants, and prematurely retiring existing plants … could actually save consumers money. In a recent study, IER found that even a new natural gas combined cycle unit on an annual cost of operation basis would be almost twice as expensive as an existing coal-fired unit to operate and that a new wind unit would be two to three times as expensive.”

IER points out the Energy Information Administration has projected CPP will result in $1.23 trillion in lost GDP (in 2014 dollars) between 2020 and 2030, with an average annual GDP loss of $112 billion. According to EIA modeling, CPP will cost an average of $199 in lost economic growth for each ton of carbon dioxide reduced between 2020 and 2030, an amount more than 10 times greater than EPA’s low estimate for the social costs of carbon dioxide, and nearly $50.00 more per ton than EPA’s high estimate.

Alan Carlin has projected the possible costs of CPP on American ratepayers and the economy by examining the impact of dramatically increasing renewable energy sources’ share of the energy mix, as has already been done in Europe. According to Carlin’s estimates, if CPP is fully implemented, U.S. electricity prices will almost quadruple by 2030. His estimates include the costs of rebuilding the electric grid to handle renewable power’s inherent variability and the costs of keeping traditional power plants on standby. Carlin writes, “So if your electric bill is now $100 per month, the new CPP requirement would increase your monthly costs to over $350 by 2030 in current dollars.” He also notes businesses facing higher energy costs will move overseas to countries without mandated carbon dioxide emission reductions; that has happened already in Europe.

And all of this pain to prevent a temperature rise of less than a hundredth of a degree in 2100.

— H. Sterling Burnett

SOURCES: Wall Street Journal; The Daily Caller;; Institute for Energy Research; and EPA


Efficiency mandates are costliest climate programVoters skeptical of president’s Clean Power PlanU.K. opens shale gas bonanzaGlobal warming not harming HimalayasCorals adapt to climate change generationally


In a significant change from the original Clean Power Plan (CPP) draft, the final rule drops the fourth “building block” states could use to comply with the rule: energy conservation/efficiency measures. When CPP was initially proposed EPA argued, “Energy efficiency investments are a critical part of the U.S. government’s proposed Clean Power Plan (ICF, 2014), U.S. electric utilities are rapidly expanding their energy efficiency programs, and federal and state regulators routinely tighten energy efficiency building codes, appliance standards, and fuel economy standards for automobiles and trucks.” Steve Hayward says the feds dropped the energy efficiency provision because, despite environmentalist claims to the contrary, efficiency measures don’t pay for themselves and are among the most costly ways to reduce greenhouse gas emissions. A July National Bureau of Economic Research report concludes energy efficiency investments on average had a negative 9.5 percent rate of return; the actual reduction in energy use was less than half what the government asserts.

Sampling more than 30,000 households, the study found the upfront investment costs are about twice the actual energy savings, and model-projected savings are roughly 2.5 times the actual savings. Calculating the average cost per ton of avoided carbon dioxide, the study found the most plausible estimates are approximately $329/ton carbon dioxide avoided.

SOURCE: Powerline


Likely voters don’t believe the Clean Power Plan (CPP) will do much to fight global warming, but they do think it will increase energy costs. A national telephone survey of 1,000 likely voters by Rasmussen Reports found just 33 percent believe CPP “will do a lot to fight global warming,” while 26 percent think it “will have no impact.” By contrast, 56 percent of those polled believe CPP will increase energy costs, while just 17 percent believe it will decrease costs. Interestingly, 54 percent of those polled do not believe EPA should be allowed to implement major regulations like CPP without congressional approval, while just 32 percent believe EPA should be able to act without congressional authorization.

SOURCE: Rasmussen Reports


Over the objections of climate alarmists, the government of the United Kingdom, which recently reduced its support for renewable power schemes, is opening up vast areas of the country to shale gas production. Communities Minister Greg Clark is writing new guidance stressing “there is an urgent need to explore and develop our shale gas and oil resources in order to unlock their potential benefits and to help meet our objectives for secure energy supplies, economic growth and lower carbon emissions.” The new guidance will give Clark the authority to override local councils’ decisions to reject gas development.

Energy and Climate Change Secretary Amber Rudd said expanded domestic gas production is necessary to help bolster the U.K.’s energy security. Writing in the Sunday Times Rudd noted, “Natural gas meets a third of our energy demand and we will need it for many years to come. … Britain is currently on course to be importing about 75 per cent of its oil and gas resources by 2030 – we need more home-grown energy supplies and shale gas must play a part in that. The choice is not gas or no gas. The choice is how much we rely on gas from abroad or whether we extract more in the UK.”

Benny Peiser, Ph.D., director of the Global Warming Policy Forum, said: “Shale exploration is clearly in the national interest and nimbyism should not stand in the way of Britain’s energy security.”

In advance of the new rules, ministers are preparing to award dozens of gas exploration licenses within weeks. Ninety-five companies submitted bids for nearly 300 drilling licenses, spanning more than 40 percent of the U.K.’s land area. The licensees will be announced in late August.

SOURCES: Business Green and Canada Free Press


Despite significantly improved monitoring of extreme weather events in the Himalayas, India’s Environment, Forests and Climate Change Minister Prakash Javadekar reported to parliament there is no evidence global warming is causing extreme weather events in India’s Himalayan region. Responding to written questions Javadekar stated, “There is no study reported so far, which supports … natural calamities are occurring in the Himalayan region due to global warming.”

SOURCE: Indo-Asian News Service


A new study in the Journal of Experimental Biology from scientists at the University of Hawai’i – Manoa’s (UHM) Hawai’i Institute of Marine Biology (HIMB) shows adult corals exposed to increased temperature and ocean acidification produced offspring better able to handle such environmental stressors.

The researchers exposed two groups of parental corals to either present ocean conditions or warmer and more acidic water similar to the ocean conditions predicted by the United Nations’ Intergovernmental Panel on Climate Change due to climate change. While the warmer, more acidic conditions lowered photosynthesis and production-to-consumption ratios in parental corals, the offspring of parents exposed to such conditions were healthier when re-exposed to the harsher environment. Hollie Putnam, lead author of the study, said, “Our work suggests … corals have resources to respond to climate change that we have not yet considered fully.

“This may be good news for corals of the future” Putnam said.

SOURCE: Science Daily

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