This could be big:
President Obama will use his executive authority to cut carbon emissions from the nation’s coal-fired power plants by up to 20 percent, according to people familiar with his plans, which will spur the creation of a state cap-and-trade program forcing industry to pay for the carbon pollution it creates.
Plumer previews the plan, which will be released Monday:
The EPA has a fair bit of leeway in designing this rule, and the precise details will matter a lot. A strict rule that cuts power-plant pollution sharply could help the Obama administration achieve its goal of cutting overall US greenhouse-gas emissions 17 percent below 2005 levels by 2020. Officials hope that meeting this goal will help persuade other countries like China to do more to address climate change.
But there are risks, too. A rule that’s too stringent or badly designed could impose high costs on power plants and hike consumers’ electric bills. That, in turn, could trigger a backlash from Congress — which has the power to take away the EPA’s authority. What’s more, the EPA is entering uncertain legal territory with this rule, and there’s always a chance that the courts decide the agency has exceeded its legal mandate and strike down the regulation.
Ben Adler expects Big Coal to put up one hell of a fight:
Whatever the specifics of the EPA’s plan, there is no question that it will create winners and losers among different industries. And since coal is the most carbon-intensive fossil fuel, there is no question that the coal mining industry will be among the latter. That’s why it plans to come out swinging at the new regulations.
The US Chamber of Commerce released a report Wednesday predicting that the new rules could cost the economy $1 billion a year in lost jobs and economic activity. The National Mining Association is running radio spots claiming they will lead to an 80 percent jump in electricity bills. The pro-coal group ACCCE conducted its own study, and concluded that the rules could run up $151 billion in additional energy costs for consumers by 2033.
The trouble with such predictions, counters the Environmental Defense Fund’s Ceronsky, is that the economic impact of the rules will depend entirely on how states chooses to implement the standards, “They have the flexibility to make this as cost-effective as they can,” she says. British Columbia’s carbon-tax system, for example, has netted more than $5 billion in revenue since 2008, while carbon emissions plunged seven times more than they would have otherwise. And although the NRDC predicts that full implementation of the most rigorous version of the rules could cost up to $14.6 billion nationwide, it predicts savings of up to $53 billion in avoided health and climate impacts, and $121 billion in energy efficiency and renewable energy investments pumped into local economies.
Cohn predicts a Republican freak-out about the return of cap-and-trade:
Of course, this is another case in which the right’s anger will be at odds with policy positions mainstream conservatives once professed to hold. Cap-and-trade is a market-based alternative to a more straightforward carbon tax, which is the solution that many liberals would prefer. It was actually part of John McCain’s 2000 presidential campaign and Mitt Romney, as governor of Massachusetts, played a key role in setting up the market now operating in the Northeast. If states have the flexibility most experts expect, the conservative anger will be doubly ironic, because this is precisely the way that most conservatives think federalism should work—by giving states freedom to solve problems in ways that best suit their resources and preferences.
And Chait gleefully gives Mitt Romney credit for laying the groundwork:
As governor of Massachusetts, Mr. Romney was a key architect of a cap-and-trade program in nine northeastern states, the Regional Greenhouse Gas Initiative. … Officials with the northeastern regional cap-and-trade program that Mr. Romney initially endorsed have played a significant role in shaping the new rule. In frequent trips to Washington over the last several months they have consulted with [EPA administrator Gina] McCarthy [who designed Romney’s cap-and-trade program in Massachusetts] and other top E.P.A. officials.
It’s Cap-and-Mitt!
The Dish 