But one thing we do know: we can no longer blame the president for failing to fulfill all his election year promises. True, he said we’d be out of the Middle East by now as we creep back in. He said you can keep your current medical insurance — except you can’t, as many have discovered. He promised to end politics as usual, when opinion polls suggest many prefer yesterday’s backroom politics to today’s.
But he did promise the following on the campaign trail back in 2008: “Under my [greenhouse gas reduction plan] … electricity rates would necessarily skyrocket.” Power companies could build new coal-fired plants, he explained to The San Francisco Chronicle, but under his leadership the cost of doing so would bankrupt them.
He’s delivered. Maybe not with legislation; Congress, after all, declined his invitation to bankrupt coal producers. But with the Environmental Protecion Agency’s (EPA) Clean Power Plan (CPP), he has achieved much the same result and possibly bankrupt some low-income families in the bargain.
Two recent studies of the economic impact of the EPA’s CPP show how the president is making good on his pledge. Despite using slightly different assumptions, their conclusions are the same: the CPP will cost way more than it’s worth.
The study by Energy Ventures Analysis Inc. for NMA underscores why the plan isn’t just bad for coal but bad for the entire economy. States will struggle to meet the emissions caps the EPA assigned them, concluded Energy Ventures, because of fundamental flaws in the EPA’s assumptions about what heat rates and energy efficiency improvements are possible, what renewable fuel grow is likely and how costly the “carbon penalty” will be on households and businesses forced to replace coal capacity with costlier fuels and new power plants.
In sum, the president’s plan will deliver higher wholesale power costs totaling $274 billion, $80 billion in higher natural gas prices for residential and commercial consumers and a $53 billion tab to replace an estimated 14.2 GW of coal capacity just to keep the lights on. In most cases, said the EVA consultants, the EPA’s 10-year compliance schedule will be impossible for states to meet.
In a second study released last month, NERA Economic Consulting found the CPP will impose double-digit electricity price hikes on 43 states, sending peak power prices up has high as 20% in 14 states. No problem, unless you use electricity.
What’s the environmental benefit for this pricey payoff for environmental activists that will cost consumers $500 billion to cut their electricity use? Average global temperatures will fall by less than 2/100th of a degree and, after adding in CO2 emissions from replacement natural gas generation, the president’s plan will slow the rise in sea levels by 1/100th of an inch, a little thicker than this page. Great news for Bangladesh.
But, says the president, this isn’t the point. The point of all this economic pain is to prompt big coal users in the developing world to cut their emissions. Well, leaders of developing countries seem to have read these impact studies because they appear to want no part of his plan.
Last month, China said further emissions reductions will be “dependent on the adequate finance and technology support provided by developed country parties.” That’s us. India’s energy minister said, “Twenty percent of our population doesn’t have access to electricity. The eradication of poverty is our first task.” The president’s pals at the Sierra Club urge India to get its priorities straight.
Poland’s prime minister said his government “will not agree to documents that would mean additional costs for our economy and higher energy prices for the consumers.” Sounds like “no” in any language.
So the president is delivering on at least one pledge. I hope you showed your sense of appreciation in the voting booth.
Luke Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.