On Monday, the EPA released the final Clean Power Plan, which will achieve a 32 percent reduction in carbon pollution from the nation’s power plants from 2005 levels by 2030. To achieve that national reduction, the EPA established state-specific carbon pollution reduction goals that take into account each state’s electricity mix.
From the outset, the hallmark of the Clean Power Plan has been flexibility for states in determining how to meet those carbon reduction targets. In many ways, the final rule offers states even more options for complying with the plan. In the words of EPA Administrator Gina McCarthy, the final Clean Power Plan is “flexible, customizable, and puts states in the driver’s seat.”
Despite this new flexibility, some opponents of the Clean Power Plan continued to argue that the rule imposes rigid requirements on states. West Virginia Attorney General Patrick Morrisey, for example, accused President Obama of trying to “transform the EPA from an environmental regulator to a central planning authority for electricity generation.” The Wall Street Journal editorial page also referred to the Clean Power Plan as “central planning” and said the EPA is usurping the states’ role to “nationalize power generation and consumption.”
These and similar comments dramatically exaggerate the role of the EPA in implementing the Clean Power Plan. Here are five ways the final Clean Power Plan makes it easier for states to meet their carbon pollution reduction targets:
- The final plan gives states more time to submit implementation plans.
- Initially, the EPA proposed requiring all states to submit implementation plans by June 2016 with an option for a two-year extension in limited circumstances. As finalized, the Clean Power Plan requires states to submit a final plan or an initial submission by September 2016 but gives all states the opportunity to request an extension until 2018.
- States have more time and leeway to shape their pollution reduction pathways.
- The final Clean Power Plan extends the compliance start date from 2020 to 2022, giving states more time to plan and implement their pollution reduction programs. In fact, the extra two years may make it easier for states to invest in new renewable energy infrastructure rather than make a quick switch to natural gas. The EPA is also allowing states to set their own “glide paths” to reduce their carbon pollution over the 2022‐2029 interim compliance period — as long as they achieve the necessary pollution reduction goals. The EPA made this change in response stakeholder concerns that the proposed rule would require states to jump off a so-called emissions reduction “cliff” in 2020.
- States have another option for multi-state collaboration.
- The proposed rule opened up the possibility for states to form multistate markets to comply with the Clean Power Plan. The final rule provides another option for collaboration: states can craft implementation plans that allow power plants to trade allowances or credits with out-of-state power plants, without a formal interstate agreement. The EPA offers to provide states with support in tracking allowance and credit trading.
- The final plan incentivizes early action on clean energy and energy efficiency.
- The final Clean Power Plan includes a new Clean Energy Incentives Program, a voluntary “matching fund” to incentivize renewable energy and energy efficiency deployment before the 2022 compliance start date. Essentially, the EPA will offer allowances or emissions rate credits to states that build eligible renewable energy projects or implement energy efficiency programs in low-income communities. States can then use these allowances or credits to help meet their carbon pollution reduction goals.
- The final plan provides states another tool to guarantee grid reliability.
- Some stakeholders raised concerns that the draft Clean Power Plan would affect the reliability of the electricity grid. Even though experts released studies showing minimal risk, EPA’s final plan responds in good faith to these concerns to ensure a smooth transition to cleaner generation. In addition to giving states more time to craft implementation plans and comply with the rule, the EPA clarified that states can amend these plans if unexpected reliability challenges arise. The final rule also contains a “reliability safety valve” that a state can use — in extraordinary circumstances — for 90 days to provide reliability-critical generation that may conflict with the state’s pollution reduction plan.
The EPA finalized a rule that provides states with ample flexibility to comply without undermining the stringency of the rule itself. States now have the opportunity — and responsibility — to use that flexibility to develop implementation plans that chart a cleaner energy path.
Alison Cassady is the Director of Domestic Energy Policy at the Center for American Progress. You can follow her on Twitter at @ALCassady. Myriam Alexander-Kearns is a Research Associate with the Center for American Progress.