The Clean Power Plan and Environmental Justice: Part One

Though directed at greenhouse gases, the Clean Power Plan, by controlling existing fossil-fuel power plants, will have important implications for associated co-pollutants, many of which continue to be emitted at unhealthy levels notwithstanding decades of control.  The degree to which the Clean Power Plan will lead to reductions in traditional pollutants – the extent  of its “co-pollutant benefits” – is an especially important issue for communities experiencing the highest pollution levels, communities that are disproportionately of-color and low-income.  Hence, the Clean Power Plan presents an opportunity for the federal government and the states to further environmental justice.  So, how does the Plan measure up? And how should the states maximize the opportunity to achieve environmental justice?

In The Clean Power Plan: Issues to Watch,  I wrote a short essay identifying and explaining a number of environmental justice issues raised by the proposal. The final Clean Power Plan’s preamble recognizes the importance of this issue, devoting a major section to “Community and Environmental Justice Considerations.”  EPA has also created a Clean Power Plan Community Page devoted to addressing the impacts of the rule on overburdened communities. 

A first key issue is the degree to which the plan achieves large aggregate reductions in co-pollutants, a function of the plan’s stringency.  A second key issue concerns classic environmental justice: the degree to which the plan distributes reductions where they are most needed and provides vulnerable communities with meaningful participatory opportunities.  A third key issue is the degree to which low-income and disadvantaged communities avoid the costs and reap the benefits from a clean energy transition. In this post, I’ll take a look at the first of these issues, and tackle the other two and draw some conclusions in subsequent posts tomorrow and Monday.

As discussed in my essay anticipating the final rule, the more stringent the state carbon targets, the more likely they are to lead to substantial reductions in co-pollutants like sulfur dioxide, nitrogen oxides and particulates, as well as hazardous air pollutants like mercury.  Coal-fired power is particularly “co-pollutant intensive” — that is, it has high co-pollutant levels per unit of energy generated.   So, the more stringent the targets, the more likely states are to shift generation away from coal and toward lower-polluting and no-polluting alternatives, like natural gas, renewable energy, and demand-side energy efficiency. So while high aggregate reductions will not necessarily benefit the most polluted communities any more than anybody else, stringent targets are nonetheless likely to generate more benefits for overburdened communities than weak targets.

Stringent targets also enhance the incentives for the states to transition to a clean energy system, not just a better energy system. In other words, the weaker the target, the greater the temptation to rely on natural gas, rather than investing in no-emissions sources like renewable energy and energy efficiency.  Natural gas has lower carbon and co-pollutant rates than coal-fired power, but it is nonetheless polluting to produce and combust. (My CPR colleague, Joseph Tomain, discusses the risk of reliance on natural gas in one of his essays in The Clean Power Plan: Issues to Watch.  Steering investments toward renewables and energy efficiency facilitate a longer-term transition to genuinely clean energy.

The 2030 targets established by EPA’s final plan, when aggregated across the states, add up to 32 percent below 2005 levels, slightly more stringent than the 30 percent required by EPA’s earlier proposal.  Overall, that is good news.  It rests on the Administration’s retention of a “portfolio” approach that recognizes that measures beyond power plants’ fencelines can significantly impact affected source emissions.  EPA’s retention of the portfolio approach, including shifts to lower- and no-carbon sources, is critical to its having not only retained, but strengthened, the state targets and associated co-pollutant benefits.

Nonetheless, the targets could have been stronger if the Administration had not removed the demand-side energy efficiency building block. EPA removed that building block to reduce legal risk and reduce uncertainties in calculating reductions, but energy efficiency is nevertheless a viable mechanism for reducing emissions from existing sources, and the new targets do not reflect its use.  Utilities and states can still use energy efficiency to meet their targets, but if they do, then they can forego other feasible actions – the actions that were used to calculate the target.  If states merely seek to meet their targets and don’t do more, then using energy efficiency to comply will replace, rather than complement, some of the available and reasonable mechanisms that were used to calculate that state’s target.  Instead of demand-side energy efficiency being done in addition to other mechanisms, it will replace efficiency upgrades to existing plants, or replace shifts from coal to natural gas, or replace generation of renewable energy. Simply put, retaining the energy efficiency building block would have led to stricter targets with accompanying co-pollutant benefits.  Elimination of that block may have been politically or legally necessary, but it’s a decision with consequences.

The final Clean Power Plan also includes incentives for states to adopt the cleanest energy alternatives, renewable energy and demand-side energy efficiency, rather than relying exclusively on natural gas. It establishes a new federal “Clean Energy Incentive Program” that provide utilities with free allowances or credits to help support the generation of renewable energy (wherever located) and investment in demand-side energy efficiency in low-income neighborhoods. While the total number of allowances is limited and it is unclear how much states will take advantage of the incentives, EPA is attempting to encourage states to take the cleanest path forward. 

In addition, EPA explains that one reason for its decision to delay the interim target date from 2020 to 2022 was to facilitate clean energy investments that might require a longer timeframe.  According to EPA, states or affected industries might make farther-reaching and more substantial investments in renewable energy and energy efficiency if given more time, so what is lost by delay is made up for by cleaner energy investments.

I focused today’s post on the plan’s stringency and incentive effects because I think they’re indirectly critical to achieving significant and long-term results for overburdened communities.  Tomorrow and the next day, I'll discuss Clean Power Plan provisions that directly address traditional environmental justice considerations, including distributional effects and participatory opportunities (tomorrow), and economic costs and benefits for overburdened communities (Monday).