The Barack Obama administration is going to propose tough new emissions rules next week. Alas, I will be on vacation, so you are going to get my thoughts now.
The most interesting part of the standards will likely be the regulations on existing coal plants. Older coal plants emit a disproportionate share of our carbon footprint, but until now, politicians have been leery of touching them. This will change with the new standards:
People familiar with the rule say that it will set a national limit on carbon pollution from coal plants, but that it will allow each state to come up with its own plan to cut emissions based on a menu of options that include adding wind and solar power, energy-efficiency technology and creating or joining state cap-and-trade programs. Cap-and-trade programs are effectively carbon taxes that place a limit on carbon pollution and create markets for buying and selling government-issued pollution permits.
Flexibility is nice, but it's still going to be a bit hard on power consumers in regions where the electricity mix is heavy on coal plants. Apparently, the idea is to force states to start up regional cap-and-trade programs, because a federal program now seems impossible.
Does the president actually expect any of this to happen?
As with any new Environmental Protection Agency rule, a lengthy comment period will ensue. After the comment period, the EPA presumably has discretion about the deadlines they set. With a big election coming in 2016, and some nice, big, coal-consuming swing states on the line, I would wager cash money that those deadlines are set no earlier than Dec. 31, 2016.
Whenever the deadlines do kick in, the new president will be besieged with desperate legislators and governors pleading to keep electricity prices from rising in these hard economic times. I can imagine a steadfast Democratic president standing up for the environment against utility lobbyists, coal-mining districts and electricity users, telling them that we need to do what's best for the planet, not some narrow economic interest. But I can also imagine a beautiful world where everyone rides around in carriages driven by unicorns, angels sing in the trees, and purple raspberry pie grows on bushes outside your backdoor.
That's not to say that we'll never do anything about dirty old coal plants. The longer natural gas stays cheap, the more of those plants that will close simply because they're no longer competitive. Even power plants have a natural lifespan, and the dirtiest plants are also often the oldest. The more we work coal out of the power mix, the easier it will be to pass these sorts of standards.
I'm just skeptical that this is the year, what with our fraught political and economic environment. This seems like another way for Obama to do something without actually doing anything that might make real voters angry. As we head into the final two years of his term, expect to see a lot more of that.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
To contact the author on this story:
Megan McArdle at email@example.com
To contact the editor on this story:
James Gibney at firstname.lastname@example.org