The Trump administration on Wednesday finalized its replacement for a cornerstone Obama climate rule, the Clean Power Plan, which placed heavier regulations on coal plants.
The replacement, known as the Affordable Clean Energy (ACE) rule, does not require states to reduce overall emissions. Instead, it gives states flexibility to set performance standards and implement efficiency improvements at individual facilities. States will have three years to prepare their plans, which the administration will approve.
Environmental Protection Agency administrator Andrew Wheeler, a former coal lobbyist, said the new rule will “ensure coal plants can be part of a cleaner future.” But the ultimate impact of the rule remains to be seen. Coal faces significant economic headwinds in the U.S. aside from any regulations, and analysts say the new rule is unlikely to change broad trends in the power sector.
Like its Obama-era predecessor, which was never implemented due to court challenge, the Trump administration's rule is almost certain to face significant legal blowback.
Coal-fired power plants accounted for 47 percent of large-scale generation facilities closed between 2008 and 2017, according to the Energy Information Administration (EIA), and coal consumption in 2018 was expected to be at its lowest level in nearly four decades.
Since the administration presented its proposed rule in August, several states including New Mexico, Nevada and Washington have ratified 100 percent carbon-free or clean energy requirements.
“Coal plants are retiring at a rapid rate. That suggests this rule won’t change that,” said Julie McNamara, an energy analyst at the Union of Concerned Scientists. “At the same time the evidence could not be clearer of the imperative to act on climate … We need federal leadership. This is not that. This is just a craven capitulation to a select number of polluters.”
Power production has significant climate implications. According to the EPA’s greenhouse gas calculations for 2017, the last year for which data is available from the agency, electricity accounted for 28 percent of U.S. emissions, having fallen slightly behind transportation, at 29 percent of emissions.
Experts say the new rule would likely lead to increases in U.S. emissions, though the EPA said the rule when implemented would cut carbon dioxide emissions “as much as” 35 percent below 2005 levels.
The power sector accounts for over 90 percent of U.S. coal consumption, according to the EIA.
Even as the U.S. is on track to beat targets set out in the Obama-era Clean Power Plan — which was never implemented but would have cut power sector carbon emissions 32 percent from 2005 levels by 2030 — environmentalists say an energy transition spearheaded by private companies isn’t an adequate substitute for federal policy.
“We’ve seen an unbelievable transition towards clean energy underway in the power sector,” said McNamara. “This isn’t just in some leading states. We’re starting to see this all across the country.”
But, she added, “we need federal guidance. Not just to ensure that all signals are pointing in the same direction, but especially for those laggard states where a continued reliance on coal … means that ratepayers are paying more for energy than they need to be and they are living around higher levels of pollution than they need to be.”
Advocates of the Clean Power Plan argue private sector decisions are unlikely to meet the level of action required by the severity of climate change. A recent analysis of corporate business plans showed that only 15 percent of companies are set to meet goals set out in the Paris agreement.
“Time is not what we have a lot of in responding to the climate situation,” said Janet McCabe, who served as assistant administrator at EPA’s office of air and radiation at the time the Clean Power Plan was drafted. “While I would expect the industry to continue on … this trajectory because it makes financial sense to them, it would not be as fast as if there was a regulatory driver.”
Without guidance from the federal government, companies are afforded wide latitude to pursue climate action if it makes economic sense. In announcing the rule, Wheeler said “the genius of the private sector and free markets” had brought about emissions reductions between 2005 and 2017 (emissions increased last year, according to Rhodium Group).
Joseph Goffman, who also worked at the EPA during the drafting of the Obama-era rule, said that utilities cannot be expected to make decisions with the public interest as their top priority, as the government should.
Many states are expected to argue similarly. In October, 27 Democratic state attorneys general published lengthy comments contending that the administration’s rule is “unlawful.” Lawsuits from states, as well as environmental groups, are likely to follow the administration’s announcement.
Ahead of the rule’s release, Goffman presented concerns that the administration may use its rule to establish legal precedent that limits the agency’s authority under the Clean Air Act, which is the law the Obama administration built on to argue for the necessity of the Clean Power Plan.
The revamp of the ACE rule is one of the most high-profile among a laundry list of environmental rollbacks undertaken by the Trump administration. The New York Times has recorded 83 in total, either started or completed.
A rework of federal fuel efficiency standards could be next up, with the administration unveiling a proposal of that plan in August.
McCabe argued that shifting tailpipe emissions standards is likely to hurt automakers in the long run, just as reshuffling the rules will for power genators. With the 2020 election approaching and pressure for environmental action from customers and abroad, companies are being pulled in several directions.
“They are both industries that like to have certainty long-term into the future,” said McCabe. “Both of these rules — and the inevitable legal challenges that are going to come — are just disruptive and cause uncertainty.”