Robert J. Samuelson: Obama’s climate plan: exaggeration and rhetoric vs. real impacts

Published: Monday, June 9 2014 8:21 p.m. MDT

Both Barack Obama and his harshest critics — business groups and Republicans — have a shared interest in exaggerating impacts of the president's recent EPA proposal. The truth is the president's plan would only modestly cut greenhouse emissions, mostly carbon dioxide (CO2), from current levels.

Martin Meissner, AP

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WASHINGTON — On climate change, both Barack Obama and his harshest critics — business groups and Republicans — have a shared interest in exaggerating the impact of the president's proposal. By 2030, it would reduce the electricity sector's greenhouse gas emissions by 30 percent from a 2005 base. For Obama, it's all about legacy. He wants to be the president who took bold action on the century's great environmental challenge. For critics, it's about demonstrating that costly mandates would hurt family incomes and job growth.

There's much hype here. The truth is that, love it or hate it, the president's plan would only modestly cut greenhouse emissions, mostly carbon dioxide (CO2), from current levels. Assuming no major glitches — a big assumption — the economic effect would be muted. It wouldn't be a major net job creator or destroyer. It wouldn't catapult "renewables" (solar, wind) into major electricity sources. The proposal's real significance is that, if blessed by the courts, it would create a complex and costly regulatory apparatus that in the future might govern much of the U.S. economy.

True, the headline claim of a 30 percent cut in CO2 emissions sounds impressive. The electricity sector is undeniably crucial to reducing emissions. In 2013, power plants caused nearly 40 percent of energy-related U.S. CO2 emissions. Coal-fired plants represented about three-quarters of this; natural gas was most of the rest. Unless many coal-fired plants are shut or retrofitted to capture CO2, meaningful cuts are impossible.

Still, Obama's 30 percent target by 2030 is misleading. It overstates the size of the proposed cut, because the reduction is compared to 2005 emissions. Since 2005, there has already been a big shift away from coal; this shrinks the need for added cuts by about half.

Let's do the math. In 2005, power plants produced 2,402 million metric tons of CO2. A 30 percent reduction is 721 million metric tons. This is the target. But by 2012, CO2 emissions had already dropped to 2,023 million metric tons, a decline of 379 million metric tons. That's 53 percent of the 2030 target. All of this has occurred without regulation of greenhouse gases.

The average coal-fired plant is 43 years old, says the Edison Electric Institute (EEI), the trade group for utilities. Many older plants have been retired, it says, for reasons "including plant age, fuel prices (i.e., low natural gas prices), decreased demand, and the projected cost of complying with pending EPA [non-greenhouse gas] regulations." By EEI's count, utilities have announced the closure of coal units equal to 20 percent of the coal total. Some have already shut; others will between now and 2022.

Obama would continue these trends. Coal's share of electricity generated (including nuclear, hydro power and renewables) has dropped from 50 percent in 2005 to 39 percent in 2013; in the same period, natural gas' share rose from 19 percent to 27 percent. By 2030, the EPA projects coal to fall to 31 percent and natural gas to increase to 32 percent. Renewables' share, led by wind and solar, goes from 5 percent to 9 percent.

This is not aggressive. Some environmental groups had hoped for deeper emission cuts. The Natural Resources Defense Council did a study assuming a 39 percent cut by 2025. However, the modest goals weaken business objections that the costs will be steep. (Of course, unexpected surges in electricity demand or losses of generating supply could change that. Both risk power shortages.)

None of this will matter much without technological breakthroughs. Emission increases from China and other developing countries will swamp cuts the United States might make. Poor countries will not abstain from using more fossil fuels that are needed to produce electricity and reduce poverty. Unless technologies can reconcile more energy with fewer (or no) greenhouse emissions, the crusade against climate change will continue to fail.

The best approach is to tax carbon emissions. If you want less of something, tax it. Stimulate competition to find ways to conserve energy or produce it without greenhouse gases. An energy tax would also help close U.S. budget deficits. But there's little public taste for this. Indeed, support for any anti-global warming legislation is weak. In 2009, when Democrats controlled the House and Senate, they could not pass a bill.

So, Obama resorted to regulatory fiat: The EPA sets emission limits under the Clean Air Act. The proposal is hugely complex. Each state receives a target that can be met in many ways, subject to agency approval. This will be challenged in court and, if upheld, will strain EPA's administrative capacity. Winners and losers would be determined as much by political pressures as by market forces. It would be a bonanza for lawyers, lobbyists, economic consultants and public relations advisers. Whether it would affect the world's climate is more questionable.

Robert J. Samuelson is a columnist at the Washington Post.

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