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Getting on Track: Why We Need Greenhouse Gas Standards for Existing U.S. Power Plants

This week, the Natural Resources Defense Council (NRDC) released a new proposal detailing how they would like the U.S. Environmental Protection Agency (EPA) to reduce greenhouse gas (GHG) emissions from existing power plants. Their analysis predicts that their proposal would reduce power sector GHG emissions 26 percent below 2005 levels in 2020, or 17 percent below 2011 levels.

Standards for existing plants are essential if the United States is to make meaningful strides toward a low-carbon economy. NRDC’s proposal provides a valuable contribution to the ongoing discussion about how best to design these standards.

U.S. Emissions Are on an Unsustainable Path

Even though the United States has made progress on reducing emissions – most notably through the Obama administration’s new standards for passenger vehicles – we need more action if the country is to prevent climate change’s worst impacts. While U.S. energy emissions have fallen nearly 9 percent below 2005 levels, these trends are not expected to continue without ambitious new climate and energy policies. This is the clear takeaway from both the U.S. Energy Information Administration’s Annual Energy Outlook 2012 and a recent analysis by Dallas Burtraw and Matthew Woerman at Resources for the Future. It is also important to note, however, that energy-related carbon dioxide emissions only account for about 80 percent of the U.S. GHG emissions inventory. While these emissions have fallen slightly in recent years, the 20 percent of GHG emissions from remaining sources (such as natural gas systems, refrigerants, and landfills) are predicted to rise over the next several decades.

This is where standards for power plants come in.

Why We Need Standards for Existing Power Plants

Power plants account for about one-third of total U.S. GHG emissions. Importantly, they also present some of the lowest-cost opportunities for reducing emissions. The power plant fleet must be modernized if the United States is going to make a meaningful dent in its emissions. EPA took the first step when it proposed standards for new power plants in March 2012, and it is important that the agency finalizes those standards.

However, in order to make more progress on reducing emissions, we need standards for existing plants. Such standards can help mobilize much-needed investments in a more efficient, modern electric power sector, including: investments in new, low-emitting generation; efficiency improvements at existing power plants; more sustainable dispatch of the existing fleet; and consumer efficiency programs. Such standards must offer flexibility in order for power companies to meet them. The NRDC proposal does this.

It is important that concrete proposals, such as NRDC’s, be placed on the table. Soon, EPA must do the same.

Where Does this Get Us?

Standards for existing power plants are critical, but we also need to keep an eye on where overall U.S. emissions are heading. WRI is completing work now on a new report that will take stock of the actions the United States has taken to date. It also examines the impact of a wide range of possible new standards at the federal and state levels. The report’s goal is to shed light on what new policies the United States will need in order to meet its commitment of reducing emissions 17 percent below 2005 levels and continue emissions reductions beyond 2020. These continued reductions are necessary in order to get on the low-carbon trajectory required to avoid climate change’s worst impacts. Look for that report in January 2013.

WRI's forthcoming report on potential GHG emissions reductions under federal authorities and state action is being researched and written by Nicholas Bianco, Kristin Meek, Rebecca Gasper, and Franz Litz.

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