Separating Fact from Fiction in EPA’s CPP Talking Points

As the Trump EPA prepares to unveil its proposed Clean Power Plan replacement, E&E News obtained the agency’s talking points, giving us a window into how Acting EPA Administrator Wheeler plans to spin this Dirty Power Scam.

The talking points read like a work of fiction, using old data and discredited studies to exaggerate the costs of pollution reductions and discount the benefits. But here’s the truth: Trump’s EPA is abandoning any attempt to curb the carbon pollution that’s driving damaging climate change. This proposal violates the law and cooks the books on science and economics, all to prop up coal power plants that can’t compete with cleaner energy. The proposal could result in increased pollution from power plants, putting polluters and their fossil fuel profits ahead of the climate, and all of us whose health, safety, prosperity and future are at risk.

Last week, David Doniger posted a synopsis of where things stand with the Clean Power Plan and Trump’s ongoing efforts to dismantle it. And I’ll write up an overview of the replacement proposal once it’s released. Update: the proposal has been released and that overview is here.

For now, here are our rebuttals to the misleading, deceptive, and outright false talking points Wheeler and Trump will use to justify dismantling the Clean Power Plan:

Fiction: “CPP is an overreach of EPA’s authority under the Clean Air Act” and “Because CPP exceeded the Agency’s authority, the Supreme Court intervened and issued a historic stay.”

Fact: As we’ve repeatedly argued, in court and in comments, the Clean Power Plan is well within EPA’s Clean Air Act authority. And the Supreme Court never opined on the CPP’s legality. It stayed the rule in February 2016 to hold the status quo for the time necessary for the D.C. Circuit to decide the merits, and for any appeals. That was anticipated to take less than a year, but it’s been nearly two years since then with no decision. No court has ever ruled that the CPP was beyond EPA’s authority, and indeed the Trump EPA has asked the D.C. Circuit not to decide the merits of the case.

***

Fiction: “Independent economic analysis by NERA found that CPP’s overreach would have cost up to $292 billion and caused double digit electricity price increases in 40 states.”

Fact: Actually, the costs of meeting the CPP would be near zero over business as usual. In fact, we expect that the reason EPA is citing NERA’s outdated study instead of its own analysis is that EPA’s analysis probably shows that the CPP costs are far lower than NERA projected.

The bogus 2015 NERA study, paid for by a coal industry trade group, grossly exaggerated the CPP’s costs, completely ignored the economic value of the health and environmental benefits of the CPP’s pollution reductions, overstated the costs of clean energy resources, and mis-compared alleged cumulative costs to the CPP’s annualized costs. It is astounding that EPA would reference an outdated and discredited study rather than its own analysis.

The fact is that clean energy costs have only come down over the last 3 years from the levels EPA estimated when issuing the CPP in 2015. And the power industry has been decarbonizing at a much more rapid clip than EPA forecast then. The CPP set a 2030 deadline to reach a 32% carbon pollution reduction below 2005 levels. But power sector emissions had already decreased by 28% in 2017, 13 years ahead of that deadline. These lower costs and industry trends have greatly reduced the CPP’s compliance costs, to near zero over business as usual.

In addition, analyses that account for the renewable energy tax credits showed electricity bills decreasing by 3% to 11% compared with a base case across a range of Clean Power Plan scenarios.

***

Fiction: “CPP would have hurt minorities and senior citizens disproportionally.”

Fact: Here Wheeler cites misleading and discredited statistics. For example, the National Black Chamber of Commerce figures were debunked in the Washington Post by Martin Luther King III—those figures were based on a faulty 2014 report by the U.S. Chamber of Commerce analyzing a version of the CPP proposal far more stringent than the ultimately finalized Plan.

And, of course, since the CPP emission reduction trajectory is now nearly business-as-usual, it would not raise costs for anyone, including low income Americans. Moreover, more recent analysis shows that rolling back the CPP would cost the opportunity to add up to 560,000 new jobs and $52 billion in economic growth by 2030.

***

Fiction: “Through the courts, EPA has a responsibility to regulate carbon dioxide (CO2) emissions from power plants.”

Fact: EPA’s duty to regulate CO₂ is no court-created invention. As laid out clearly in the Supreme Court’s Massachusetts v. EPA decision, the authority and responsibility to regulate CO₂ and other heat-trapping pollutants comes from Congress itself via the Clean Air Act. EPA’s duty to protect Americans from the impacts of carbon pollution stems from the scientific findings made in the 2009 Endangerment Finding that emissions of CO₂ and other greenhouse gases endanger public health and welfare by contributing to climate change.

***

Fiction: “We will not use that authority to pick winners and losers.”

Fact: Picking winners and losers is exactly what this proposal does. Currently, coal plants can’t compete with inexpensive energy efficiency, solar and wind energy, and natural gas. The proposal seeks to throw the old coal plants a lifeline by setting do-nothing carbon pollution limits and opening a loophole in other Clean Air Act requirements—the New Source Review permitting program—that would constrain pollution increases.

Together, these moves will enable coal plants that make minimal heat rate improvements, which could have the effect of encouraging those plants to run more and increase overall emissions of carbon dioxide, SO₂, NO_X, and other pollutants.

Power company executives, analysts and other experts would all agree that coal generation is likely in a permanent decline brought about by steeply declining renewable technology costs, competitive gas fuel prices, strengthened policy. The clear purpose of the proposal is to reverse this trend.

***

Fiction: “The rule will not interfere with states as they construct diverse, reliable energy portfolios . . . essential to the President’s goal of energy dominance.”

Fact: Energy security, wealth creation and reliable electricity are the hallmarks of growing renewable energy in the generation mix. Instead of encouraging and building on the trends toward cleaner, safer energy sources, this proposal props up costly, dirty coal generation.

***

Fiction: “From 2010 to 2018, total U.S. energy-related carbon dioxide emissions will fall by nearly 7 percent, according to the Energy Information Administration. In contrast, global emissions are increasing by 10 percent. The U.S. is doing its part to address this problem without the Paris agreement or the failed and overreaching regulations of the prior administration.”

Fact: Emissions are falling because of market trends in the power sector stemming from lower-cost cleaner energy resources that are out-competing coal in the marketplace. Trump and Wheeler’s response is to pick winners—to try to prop up coal plants and slow this trend.

But the U.S. is not on track to meet its commitments under the Paris Agreement, and getting on track would require a greater level of effort in the high-polluting sectors of the economy, including electricity and transportation.  

EPA should be strengthening the Clean Power Plan, not proposing to dismantle it. We face an existential threat from the carbon pollution that’s driving runaway climate change, and it will only get worse for our children and grandchildren. The whole point of the Clean Air Act is to do more than the marketplace does by itself to curb dangerous pollution.

***

Fiction: “The proposal will reduce CO2 emissions from their current level” and “When states have fully implemented the proposal, U.S. power sector CO2 emissions could be 33% to 34% below 2005 levels.”

Fact: The power industry is steadily reducing emissions due to plentiful lower-cost and cleaner alternatives to running coal plants. As explained above, the CPP target of 32% reduction in carbon pollution from 2005 levels by 2030 is now likely to be nearly realized under a business-as-usual trajectory. The proposal will result in more pollution than if the CPP were implemented, so Wheeler cannot argue that it reduces pollution compared to current law. And in fact, this proposal could actually increase emissions compared to business-as-usual without the CPP.

The assertion that heat-rate improvements could reduce coal plants’ overall emissions another 0.7-1.5 percentage points could be true only if all coal plants make those improvements, and only if their operating rates do not increase. But as Wheeler’s talking points acknowledge, the proposal’s analytical projections are illustrative and uncertain because under this proposal the states would be free to require coal plants to do nothing.

This is a perversion of the Clean Air Act, which requires EPA to set performance targets and requires state plans to meet those targets. And as explained above, the New Source Review loophole would allow plants that do improve their heat rates to run more hours and increase their total emissions. This means that overall emissions of carbon and other pollutants very likely will not decrease as EPA asserts and instead could increase.

***

Fiction: “EPA projects that replacing the CPP with the proposal could provide 400 million in annual net benefits. Complying with the proposal could cost 500 million less than the CPP’s compliance costs.”

Fact: It is patently dishonest to compare the Trump EPA’s current cost estimate to EPA’s 2015 estimates to project hundreds of millions in savings from this proposal.

In 2015 EPA estimated that the CPP would require emissions reductions far greater than business-as-usual industry trends, and based cost estimates on gas prices and renewables costs that proved to be much too high. Because those costs have declined significantly, updated calculations show that the cost to achieve the CPP target level of 32% reduction by 2030 are extremely low. So the “savings” Wheeler touts are a complete fiction.

Moreover, the proposal cooks the books to minimize the benefits of reducing pollution. The proposal grossly reduces the estimate of the benefits of reducing carbon pollution—known as the social cost of carbon—by ignoring climate impacts abroad and discounting away impacts on future generations. Moreover, study after study has shown that the economic damages of climate change will be severe, and that the costs of inaction far outweigh the costs of curbing the carbon pollution that’s driving those damages. These accounting gimmicks are particularly galling as we’re seeing what climate change looks like in real time this summer, with deadly heat waves occurring all over the world, wildfires rampaging through the west, and hurricane season on the way.

***

Wheeler and Trump can try to spin their replacement proposal with these misleading talking points, but the truth is that this “Dirty Power Scam” could result in increased pollution from power plants at a greater cost. Trump and Wheeler are picking winners and losers: polluters win, and the rest of us lose.