New report shows importance of Clean Power Plan

Power plant emissions of carbon dioxide have been falling for a decade, even without national regulations. However, further progress could cease in the absence of the Clean Power Plan, whose fate awaits hearings by the Supreme Court and U.S. Court of Appeals.

{mosads}That’s the conclusion of scenarios modeled by the Energy Information Administration (EIA) in the “early release” issued last week of its “Annual Energy Outlook 2016.” The scenarios predict that power plant carbon dioxide emissions would be 20 percent lower with the Clean Power Plan than without it.

In an earlier piece in The Hill, I noted that U.S. power plant emissions are already declining at a faster pace than needed to attain the Clean Power Plan’s 2030 target. Emissions dropped 21 percent from 2005 to 2015, more than half of the 32 percent cut needed by 2030. Coal use is down sharply again so far this year.

However, the EIA projects that shifting market conditions could halt further progress unless emissions are regulated. Much of the decline in emissions to date has reflected a shift from coal to natural gas, driven by sharp declines in natural gas prices. The EIA forecasts natural gas prices will rise in coming years, improving the competitiveness of coal. New coal power plants would remain prohibitively costly to build, but the utilization of existing coal plants could rebound, driving up emissions.

The EIA takes major strides in its new outlook to better represent the costs of renewable technologies like wind and solar. Past “Annual Energy Outlooks” have overestimated the costs of renewables and underestimated their rates of deployment. The new outlook reduces those cost estimates, and accounts for the extension of tax credits for renewables passed by Congress in December 2015.

Even with the more favorable representation of renewables, the EIA predicts that they will be deployed too slowly to offset emissions growth as natural gas prices rise. Deployment of new wind turbines is expected to plummet after the production tax credit for wind is phased out. Solar power will continue to grow as its costs decline, but with growth rates slowed by the tapering of its tax credit. Meanwhile, emissions would be pushed up by a forecast 0.9 percent annual growth in electricity demand, which is nearly double the rate of the past 15 years.

The EIA will be releasing more detailed analyses and additional scenarios when it issues its full “Annual Energy Outlook 2016” in July. The Environmental Protection Agency (EPA) provided states substantial flexibility in how to attain the Clean Power Plan, so the scenario analyses could provide insights into those options.

For now, though, the early release heightens the importance of the upcoming court decisions on the Clean Power Plan. Despite trend lines pointing toward attainment of the plan’s goals, the EIA’s outlook provides a stark indication of how quickly those trends can be halted if the Clean Power Plan is overturned.

The early release also provides a sobering reminder of how much more progress is needed to meet greenhouse gas emissions targets across the energy economy. President Obama pledged to reduce overall U.S. emissions 26 to 28 percent from 2005 levels by 2025. Even with the Clean Power Plan, the EIA forecasts just a 15 percent reduction in overall carbon dioxide emissions over that span. Proposed rules to reduce fuel use by heavy-duty trucks will narrow the gap, but far more reductions are needed.

Globally, the need for more emissions reductions is even more daunting. The Intergovernmental Panel on Climate Change estimates that a 40 to 70 percent reduction in greenhouse gas emissions is needed by 2050 to limit warming to 2 degrees Celsius. Even faster reductions will be needed to meet the Paris climate agreement’s aim to keep the rise “well below” 2 degrees Celsius. However, the EIA’s “International Energy Outlook 2016,” released earlier this month, projects that global emissions will continue rising through 2040 in the absence of new policies.

Such a sharp bending of emissions curves from projections down to goals will require ambitious efforts worldwide. The EIA’s latest release shows the Clean Power Plan to be a necessary but not sufficient step toward bending the curve in the U.S.

Cohan is associate professor of civil and environmental engineering at Rice University.