The long-running argument about the scientific “consensus” regarding global warming has drowned out a sharper point of contention: the economics of dramatically reducing our emissions of carbon dioxide.
That’s about to change, thanks to the Obama administration’s proposed new rule to reduce power-plant emissions.
By the Environmental Protection Agency's own estimates, compliance will cost at least $60 billion between 2020 and 2030. The U.S. Chamber of Commerce is less sanguine: A study it commissioned before the plan's unveiling put the average annual cost of a similar plan at more than $50 billion starting this year, or some $859 billion in all.
Despite that wide discrepancy on costs, there should be little question the rule would deliver few benefits to the planet.
The EPA says its rule would reduce carbon emissions from power plants by about 30 percent by 2030, compared to emissions in 2005. That sounds like a lot, until you consider:
a) Carbon emissions from power plants in 2012 were already 16 percent lower than in 2005; and
b) Emissions from power plants account for only about two-fifths of all U.S. carbon emissions.
Given all that, the rule by itself would mean total U.S. carbon emissions in 2030 were a mere 6 percent lower than in 2012. Globally, the decrease would be less than 1 percent.
It might be one thing if spending billions would make a dent in the problem the EPA identifies. Yet, this decrease in emissions reportedly would lower temperatures by just 0.05 degrees Fahrenheit by century’s end. That’s about one-hundredth of the projected increase.
But wait; it gets worse.
Most of the actions in response to the new rule will represent the low-hanging fruit: for example, finishing nuclear reactors already under construction, such as two new reactors at Georgia Power’s Plant Vogtle.
That means further emission reductions, which we are already told will be necessary, may be even costlier. Perhaps technological breakthroughs will make future reductions cheaper, but it’s unclear this power plant rule is needed to spur them on. Money, both public and private, is already pouring into low- or zero-carbon research.
Meanwhile, the rule would create a perverse incentive to burn more coal elsewhere. Why? Because, absent a ban on exports, American coal will still be mined. It’ll just be shipped overseas in larger quantities, and probably sold at cheaper prices, to countries whose power plants likely are less efficient than ours.
If the goal is reducing emissions, a number of actions would be preferable. First, governments could ease restrictions on extracting natural gas from the ground through methods such as fracking. That would keep natural gas cheap and help continue our downward, market-driven emissions trend.
Second, governments could continue to support basic research into alternative energies — just not the crony capitalism that sent millions of dollars to future busts like Solyndra.
Third, governments and utilities could beef up energy-efficiency incentives. Last year, my wife and I used a Georgia Power rebate to make our house more efficient, and our energy use is down by about 25 percent. But the work still cost us more than many homeowners could afford. Regulations in Georgia and other states also make it overly expensive for homeowners to install solar panels for their own use.
The EPA rule is essentially a scheme to mimic market incentives, even though the real market is working fine. The agency’s approach is bound to outweigh any benefits it delivers.
