The Clean Power Plan

August 12, 2015

Washington, D.C.

Wayne Pan

Yesterday, for the first time since President Obama announced the Clean Power Plan at a White House press conference last week, EPA Administrator Gina McCarthy stepped out into the public to discuss the new regulations and their potential impacts on the US economy, public health, and global climate change.

After a sober update on the on-going problems in the Animas River in Colorado, McCarthy launched into a spirited and enthusiastic talk about the long road the EPA has taken to arrive at the Clean Power Plan. In particular, she lauded the process, which she described as one of “unprecedented engagement” with stakeholders from across the spectrum. Many years of work went into the drafting of this plan, and it was clear from her remarks that she was confident that the regulations would both be challenged in court, and upheld in court – at one point slyly noting that the lawyers in the room could happily begin to sift through the EPAs responses to the thousands of public comments received during the review period.

The Plan puts in place carbon emission limits on power plants for the first time in US history. The EPA has determined target reduction rates for each state based on their own energy mix, and each state will have the flexibility to determine their own path to achieving those reductions. When all is said and done though, the Plan puts the country on a path to reducing carbon emissions by 32% in 2035, using 2005 as a baseline.

While these reductions fall well short of what many scientists see as necessary, is still clearly a major step forward for the US. Not only does it finally set down a line in the sand that says the country is serious about tackling climate change, it also returns legitimacy to the US’ role in international negotiations. The path forward in Paris is looking increasingly clear and the outlook is positive, although if history serves as any guide, getting an agreement that truly moves the needle on global greenhouse gases will still surely prove to be a mighty struggle.

Ironically, the staunchest environmentalists are only giving the Clean Power Plan a tentative and rather unenthusiastic thumbs-up. Naomi Klein, in an interview on resilience.org says, “there is a huge gap between what Obama is saying about this threat, about it being the greatest threat of our time… but the measures that have been unveiled are simply inadequate.” She goes on to note that limiting global warming to less than two degrees will require America to reduce annual carbon output by 8-10 percent a year, but that this plan maxes out at 6 percent. It is a “carbon gap” and it’s “huge.”

That has not stopped the opposition from coming out in full force against the Clean Power plan. Much of the initial opposition has come, without surprise, from the right and, more understandably, from coal-dependent states. States where coal still plays a large role in the energy mix, or where coal extraction plays a major role in the local economy, like West Virginia, Kentucky, and Indiana, have all announced they will challenge the law in court and not submit plans to meet the new mandates.

For many, the Clean Power Plan is an all-out assault on coal, and while this is not technically true – McCarthy pointed out that many means exist for states to determine how best to cut their emissions, including credit trading or energy efficiency – it is true that any low-carbon energy plan that can address climate change will necessarily be made up of much less coal electricity. This is precisely because coal is an extremely polluting source of energy – one that still accounts for nearly 40% of America’s electricity.

When asked pointedly what people living in coal dependent communities could expect, McCarthy referenced the President’s hopes that coal communities will receive injections of aid in order to transition away from coal. Her answer revealed as much in what she didn’t say as what she did. The truth is that coal is not an industry of the future. Across the world, countries are moving away from coal and towards less polluting sources of energy. BP’s Energy Outlook notes that coal will be the slowest growing source of energy by 2035, growing at under 1% per year. While the coal industry will most certainly not disappear overnight – China’s energy mix is still projected to contain at least 50-60% coal twenty years from now – it is an industry that will inevitably go away.

Contrary to critics, this will not happen because of the Clean Power Plan. Michael Bloomberg points out in a recent op-ed that Big Coal has been steadily declining for over a decade, due largely to a general public aversion to the highly polluting industry and the fact that the transition away from coal has not caused energy prices to spike or a net loss of jobs.  

McCarthy mentioned a number of times that the EPA had developed the Plan in light of ongoing changes in the industry. She said that states and utilities knew the mandates were doable because many of them were already in the process of shifting away from the most polluting forms of power. Indeed, McCarthy and the EPA sees the new regulations as a form of common currency for industry, providing a long term signal for where the country (and industry) is moving in terms of energy. Some may kick and scream, but there are already some who are already successfully embracing change.

Far from what detractors say about government regulation, this type of national clarity is exactly what drives innovation and growth. Opportunities are created when new parameters for an industry are developed and disseminated. Businesses with the greatest foresight have been demanding more clarity on carbon and the economy for years now because they understand that knowing where the goalposts are will allow them to best position themselves for the future.

Changing a complex system with entrenched interests is never easy, but good regulations with sufficient market freedom can jump-start systemic change. There will no doubt need to be modifications to the Plan as feedback loops adjust to the new conditions, but in light of America’s tenacious unwillingness to make any meaningful federal-level changes to our carbon economy, the Clean Power Plan is a welcome step in the right direction.

Why you should care about Keystone XL

Our energy policy is a mess. This stems largely from our consumption patterns and from fear-mongering by entrenched corporate interests and the politicians they feed. The on-going debate about the Keystone XL pipeline project in America, which will bring oil extracted from tar sands in pristine northern Canadian lands (and have already extracted giant environmental tolls on the affected areas) is actually a small bit in a much larger debate.

That debate is where our energy future lies.

As many environmentalists have said for years now, we must invest in truly renewable energies. As many industry experts have said for years now, it will be decades before renewable energies can provide the amount of energy that we need. The truth of course, is somewhere in-between. It does not take a genius to see that we cannot ramp up alternative energies at a pace sufficient to eliminate fossil fuel usage in the near-term 5 year range. Duh. Yet, the alternative narrative, that we just don't have the resources to plow into making alternative energies more cost-effective or attractive is false also. We may not be able to generate enough energy in the near term, but it's better to get started on that road now rather than in the future, right?

Instead, there is much money being plowed into alternative fossil fuels. As this article from the BBC on shale gas shows, we should be very wary of our love affair with these sources of energy. These sources do nothing to wean our planet off highly polluting and unsustainable use of fossil fuels, and they are extremely damaging to the environment at the point of extraction as well as through their entire life-cycle too.

The truth is, our solutions lie in reducing fossil fuel usage, ramping up and investing some of those billions of dollars of oil profits into wind and solar technologies (er, tax oil company profits anyone? as opposed to giving tax breaks to them? uh, duh?), and - here is the great big huge grey elephant in the room - change the way we consume energy. The fact is, we have exported a societal paradigm to the rest of the world built upon inexhaustible supplies of cheap fossil fuels, which admittedly contain more energy per unit of measure than just about any other fuel source.

How else do we explain the ridiculous proliferation of automobiles carrying single passengers around glorified moving parking lots (aka roads) around the world? Or the incessant building of concrete boxes with no thought to air flows or self-cooling and require around the clock air conditioning or heating? Or the addiction to plastics and other disposable items made for our "convenience" but that are instead just burying our planet under incredible heaps of wasted resources?

We must address energy consumption. Beyond just cutting personal electricity usage or even mandating better fuel standards, we must acknowledge that the era of cheap energy has passed and realign our societies to accommodate a new reality where we make choices to maximize the efficiency of our energy usage. This is why Keystone XL matters. Instead of acknowledging and putting our money into achieving a standard of living given this vision of the future, the Keystone pipeline is the last gasp of a system clinging desperately to a disappearing reality. Can we access ever more strange sources of fossil fuels and continue our addiction to them for another few decades, damned be the environmental impacts and the viability of the society we leave future generations? Yes, we probably can. But should we?

The Costs of Nuclear

There has been a long-running debate over nuclear power for many years - many years before the current crisis in Japan introduced a whole new generation of people to the dangers of nuclear power generation, and many years before the myopic focus on carbon emission levels made nuclear trendy again. Here, in this article in Solutions magazine, authors push for the merits of nuclear to be analyzed objectively, through a complete cost analysis and by eliminating subsidies that make the energy seem cheaper than it is.

"How would nuclear power fare if the subsidies were removed and the full costs internalized? It is hard to predict, but the answer to whether nuclear power can be part of the energy solution lies in how the full costs of nuclear compare with the full costs of fossil fuel, hydro, and renewable energy. For example, most people believe that nuclear energy is either completely free of greenhouse gases or contributes negligible amounts. However, this is not true when one considers the entire life cycle of the nuclear power complex. A 2008 study showed that if the price of nuclear energy included the cost of greenhouse gases, nuclear power would cost more than not only fossil fuel technologies but also wind energy.7 Including the cost of the risk of accidents and waste disposal, as discussed above, would raise the price significantly further."

Amen to that!

Yet, for as much sense as this makes, the truth is that full cost analysis and internalizing real costs require a complete re-thinking of how business is done. The real difficulty here is not how much work it would take to actually re-think business, but how much resistance to the very idea exists. There is an entrenched and influential group of people who are very much opposed to changing how the system works, the same group of people who benefit from the system.

Don't get me started on how all of this ties back together with our on-going national debt issues and financial woes. Because, like it or not, the increasing inequality in wealth, grossly distorted wage gaps, and wild generation of false wealth - these things are all tied together in what is becoming increasingly apparent as an economic system and society gone wrong.

Ooops, sorry, a little Paul Ryan-inspired rant there. :)

The case for the future of energy

Thomas Friedman writes in the New York Times recently that our inability to get a revolutionary energy and climate change policy through Congress is essentially "pathetic." He is right. Facing what are incredible challenges for the future of our country and our WORLD, we are at an impasse, with a law-making body that is impotent and too self-centered to do what is needed and what is right. Friedman proposes that we could, and we should, "pass an energy bill that begins to end our oil addiction." By doing so, we would "shrink the piles of money we send to the worst regimes in the world, strengthen our dollar by keeping more at home, clean up our air, take away money from the people who finance the mosques and madrassas that keep many Muslim youths backward, angry and anti-American and stimulate a whole new industry — one China is already leapfrogging us on — clean-tech."

While I don't agree with everything Friedman writes or proposes, I do think he is correct that a new approach to energy in this country is an imperative, plain and simple. Similarly, while Republicans are definitely the obstacle today, I think it is fair to say all politicians are pretty reluctant to bite the hand that feeds them. What can we do to get past the gridlock, break our current system of special interests, and actually pass an energy bill that could end up being a win win win win win win??

Climate targets

Both the US and China have announced their own climate change carbon reduction targets this past week, in preparation for the upcoming global climate conference in Copenhagen. The US has committed to hard reduction targets finally (although, because of how our system is set up here, this may actually amount to nothing - just like the Kyoto Protocol was never in effect due to Congress' disapproval.) Likewise, China has committed to a reduction of sorts, although it is a reduction in "energy intensity" as opposed to the more traditional absolute figures used by developed nations.

You can find more details on these developments both at the BBC and at the New York Times.

I'll try to provide some more opinion on this in the run-up to Copenhagen, but for now, I'll leave it at this and say Happy Thanksgiving to anyone reading!

Move over CFLs?

Elisabeth Rosenthal and Felicity Barringer write about the coming of LED lighting in the New York Times. I first heard about commercial applications of LED lighting when doing research for my thesis project on green hotels - some of the hotels I talked to were experimenting with LED lighting. While I've know about LED flashlights and camp lights for a long time, their super bright white light seemed ill-suited to room lighting to me. So it's interesting to know that people are really pushing this technology now.

http://www.nytimes.com/2009/05/30/science/earth/30degrees.html?em

Of course, for good reason though. LED lights are much more energy efficient and material efficient than CFL lights - our current standard for greenness. (Scary fact though - normal CFLs are only about 20% efficient.. meaning, only 1W out of 5W that goes to powering your bulb is actually turned into light. The other 4W become waste heat. This of course is also the reason that CFLs are considered green - relative to traditional incandescents, they're amazing since traditional bulbs typically convert no more than THREE percent to light.)

This will be a trend that will be very interesting to follow as time goes on. Especially, as pointed out in the article) money comes on-line from the government to support new technologies like LEDs. Anyone out there come into contact with LED lightbulbs on a regular basis in a commercial setting?

Hybrids everywhere

IHT recently had an article about Honda's big push into the hybrid market with their Prius-beating new Insight model. As the article mentions, the Insight is quite a bit cheaper than the Prius and hopes to steal market share from the Prius through this advantage. Lower cost does come at a price though, as the environmental performance isn't as good as Prius (which in turn, isn't as good as say, all electric vehicles.) Honda however is counting on the idea that people now WANT to be identified with a Hybrid car, and are proud to drive them around.

"Instead of the more complicated hybrid system used in the Prius, the Insight’s main source of power is a lightweight gasoline engine that is assisted by smaller batteries. That greatly reduces manufacturing costs but gives the Insight a highway fuel efficiency of 5.5 liters per 100 kilometers, or 43 miles per gallon — about 4 percent worse than that of the Prius. The Insight also shares parts with other Honda models, which helps the carmaker keep costs to a minimum." (full article here)

Inherent in this business strategy is the idea that people actually don't care as much about the real environmental benefits of their hybrid cars, but instead care more about showing that they care. As paradoxical as that statement is. Indeed, this is probably what's behind some of the more ridiculous "green machines" that I've seen recently, including the Hybrid Cadillac Escalade, an uber-luxury SUV that gets something like a whopping 21mpg. I mean, who are we kidding here?

I'm just as happy as the next tree-hugger to see more cars being produced that will finally drive our fuel economy figures up - but aren't we running a really dangerous line between going in the right direction and intentionally misleading ourselves? Sure, you can feel good that you're driving a HYBRID SUV, but you're still polluting the environment 2-3x as much with every mile you drive as some guy driving a Smart or a Prius.

Saving energy

In the process of doing my research for my thesis on green hotels, I ran across a link to California's "Flex Your Power" website. Although the name of the program is not new to me, the resources on this website are. I've not looked at it in years, and I must say, the information available really is helpful. Everyone should check this site out. (It's only for California though - there may be similar websites in your state or country, but you'll have to do some research. California has long been known as one of the pioneers in energy conservation programs.)

Of particular interest here is the tool to help customers locate local rebates, free energy saving upgrades (like showerheads and lightbulbs), and my personal favorite - free energy audits! I was really surprised to find that I could get someone from Southern California Edison to come to my house, do an energy audit, and help me figure out how to better save energy (and money.) For FREE. I think everyone should start taking advantage of this service.

If you've had an energy audit done on your house before, give us your experience!