The Environmental Protection Agency took the largest step toward addressing Climate change in its history Monday when it unveiled a proposed rule to slash power sector carbon emissions 30 percent below 2005 levels by 2030.
The proposed rule, which also sets a nearer-term target to cut emissions 25 percent by 2020, is the centerpiece of President Obama's climate strategy in a policy arena that those close to the effort say is increasingly looked at as his legacy issue. It also builds on a September proposal to impose limits on new power plants.
"Climate change, fueled by carbon pollution, supercharges risks not just to our health, but to our communities, our economy and our way of life," EPA Administrator Gina McCarthy said Monday at the agency's Washington headquarters.
Under the proposed rule, each state would craft its own implementation plan, which would be due by June 2016 must secure EPA approval. The states will have a menu of options to comply with the standard in four ways: Clean energy capacity, dispatch -- meaning the order of precedence for delivering power between coal, natural gas and renewables-- and energy efficiency measures taken at and beyond the power plant.
The EPA is executing the action through the Clean Air Act after climate legislation has stalled on Capitol Hill since a cap-and-trade bill fizzled in the Senate in 2010. The proposed rule will likely face legal challenges, as the section of the Clean Air Act it relies upon has been used just a handful of times and under circumstances more narrow that what EPA proposed Monday.
Democrats cheered the move, saying it addressed an issue that deserved immediate attention, while Republicans slammed it, calling it an overreach by the EPA.
Many groups were still poring over the 645-page proposed rule. Opponents suggested it would raise electricity prices, while supporters said the benefits outweighed costs. Some even suggested it would lower electricity prices -- the EPA said it would lower power prices 8 percent on average in 2030 if states pursue certain policies.
"Critics claim your energy bill will skyrocket. They're wrong," McCarthy said. "Any small, short-term change in electricity prices would be within normal fluctuations the power sector already deals with."
Industry largely opposed the move, though many said they were still reading through the proposal. While many disagreed with the rule to begin with because they suggested it would raise power prices, others were pleased the EPA used a 2005 baseline -- which enables states to pool from a larger list of policies to meet the credit -- and allowed states to pursue their own plans.
The American Chemistry Council, which represents energy-intensive manufacturers, said it was "concerned" about the potential effect on energy prices, but was heartened by the general framework of the proposed rule.
"We welcome the flexibility the Administration gave to states in designing compliance plans, and urge states to carefully assess how specific programs would affect energy costs, diversity and reliability," the group said in a statement.
The National Association of Manufacturers was more strident about the proposed rule's potential effects on its members: "Today's proposal from the EPA could singlehandedly eliminate this competitive advantage by removing reliable and abundant sources of energy from our nation's energy mix," said Jay Timmons, the group's chief executive.
In 2030, the EPA estimates 30 percent of the nation's power will come from coal, compared with 42.5 percent so far this year, according to the U.S. Energy Information Administration. It said coal-fired power plants are retiring regardless of the proposed rule because of age, noting the average plant is 42 years old. Low natural gas prices and other regulations, however, also have played a role.
The electric utility industry was mixed, which reflects the differing levels of cleaner-burning natural gas and renewable energy adoption across those firms.
National Grid, an electric utility in the Northeast that draws a sizable portion of its power from natural gas, said it was "encouraged" by the "sensible and practical" proposed rule. But an official from another utility, who spoke on the condition on anonymity, said the proposed rule assumed to much energy efficiency could be achieved at the plant.
Environmental and public health groups praised the proposal, which would put the U.S. well beyond the 17 percent emissions reduction Obama committed to at the 2009 United Nations climate talks in Copenhagen. They also saw it as a way for the U.S. to lead on climate ahead of key U.N. negotiations next year in Paris, where nations are hoping to agree on a greenhouse gas target that includes commitments from big polluters such as China and India.
"This is the biggest step we've ever taken for the biggest challenge we've ever faced," said League of Conservation Voters President Gene Karpinski.
The EPA estimates the proposed rule, which could change between now and when it's finalized in June 2015, would yield $90 billion in climate- and health-related benefits, helping avert 100,000 asthma and 2,100 heart attacks in its first year.
Public health figures to color the Obama administration's portrayal of the rule -- McCarthy opened with an anecdote about a child with asthma, and Obama will participate in a teleconference hosted by the American Lung Association on Monday afternoon.
"If your kid doesn't use an inhaler, you should consider yourself a very lucky parent," McCarthy said.
The EPA said every dollar spent to fight smog and soot -- a byproduct of sulfur dioxide and other particulate matter released at coal-fired power plants -- would yield $7 in health benefits per family.
But the proposed rule, released during a crucial midterm election season in which control of the Senate hinges on a handful of red-state Democrats retaining or winning seats, will face stiff headwinds from industry groups and their Republican allies who see it as anathema to U.S. competitiveness by taking cheap, coal-fired power offline.
"When will the President care as much for the American worker as he does about his notions of climate change?" said Rep. Bill Cassidy, R-La., who's challenging another opponent of the proposed rule, Senate Energy and Natural Resources Committee Chairwoman Mary Landrieu, D-La., for her seat and will seek to tie her to the Democratic Senate majority and the Obama administration's EPA.
Added Senate Minority Leader Mitch McConnell, R-Ky.: "Today's announcement is a dagger in the heart of the American middle class, and to representative democracy itself."
As such, Obama urged Democrats on Sunday to go on offense to defend the rule. House Democrats plan to launch a social media campaign and to host events in their states around the issue. Senate Democrats, who have been vocal on the topic the past several months, also plan to promote it. The administration will also get help from environmental allies that plan to tout it at events throughout the country and in key Senate and House races.
"By tapping into American ingenuity and innovation, we can protect our children and future generations from the impacts of climate change and lead the world in the 21st century clean energy economy," Rep. Chris Van Hollen, D-Md., said in as statement.
The Obama administration is also painting the effort as an economic winner because of potential jobs created from transitioning to low- and zero-carbon energy sources and damages averted from extreme weather that some scientists have linked to climate change.
"Climate acton doesn't dull America's competitive edge -- it sharpens it. It spurs ingenuity and innovation," McCarthy said, saying the proposed rule would not cause electricity prices to skyrocket as opponents have suggested.
Some businesses agreed. A coalition of 128 firms and 49 investors, including Unilever and Mars Corp., that represent $1 trillion in assets sent letters to Obama and majority and minority leaders in the House and the Senate that supported the proposed rule. The firms, which are members of business sustainability group Ceres' Business for Innovative Climate and Energy Policy, said they want to minimize the risk climate change poses to their assets -- such as through increasing property taxes, insurance premiums and food prices -- and and suggested shifting to clean energy would prove an economic driver.
"Our support is firmly grounded in economic reality. We know that tackling climate change is one of America's greatest economic opportunities of the 21st century," the letter said.