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News Analysis

Experts debate whether Bush's Clear Skies plan on power plant emissions clears the way for better emissions technologies.
Fortnightly Magazine - April 1 2002

News Analysis


Experts debate whether Bush's Clear Skies plan on power plant emissions clears the way for better emissions technologies.

"Weak." "Bold departure from past policies." "Rollback of power plant pollution rules." "An ambitious program." Yes, it's another environmental proposal aimed at power plant emissions, this time with the moniker of "Clear Skies." The only thing that's clear about it, though, is that the energy industry likes it, and environmentalists don't.

The Bush administration has yet to deliver a detailed plan of its Clear Skies program-no legislation has been introduced. Instead, broad outlines of the plan, released Feb. 14, call for cuts on power plant emissions of 73 percent for sulfur dioxide (SO 2), 67 percent for nitrogen oxides (NO x), and 69 percent for mercury, all by 2018. The plan also calls for interim targets in 2010 for SO 2 and mercury, and in 2008 for NO x. The key feature of the Clear Skies plan is a radical shift to a cap-and-trade regime, and away from the much-hated (by industry) new source review (NSR) and best available control technology (BACT) aspects of the Clean Air Act. Even without many details, there's plenty to argue about. At the top of the list is whether a cap-and-trade program will truly reduce emissions more than the current command-and-control regime.

The Acid Rain Paradigm

The administration argues that not only will the Clear Skies proposal reduce emissions, it will do so at a lower cost to consumers and to the power industry. In touting Clear Skies, the administration relies heavily on the success of the acid rain cap-and-trade program to demonstrate the effectiveness of such programs generally. Under the acid rain program, instituted under the 1990 Clean Air Act (CAA) amendments, SO2 emissions dropped between 43 and 49 percent by 1999, depending upon geographic area.

While acknowledging that the allowances program itself worked well, Patricio Silva, Midwest activities coordinator, Natural Resources Defense Council, says that the administration's reliance on the acid rain program is somewhat misplaced. He notes that the Clear Skies' executive summary comparison of actual emissions with the acid rain cap stops in 1999. Yet, according to Silva, if the emissions comparison were carried out to 2000, it would have shown actual emissions exceeding the 2000 cap by 2 million tons per year. What happened, Silva says, is that many utilities were able to bank a large number of allowances early on in the acid rain program by exceeding targets. Now, generators are drawing down that bank, and generating more SO 2. The result is, he says, no net benefit. "We're not meeting the cap that was originally envisioned in the acid rain program. So for us, the lesson is pretty clear for the acid rain program. There was too little reduction, the reduction targets were too high, and that's why there was so little cost, and why it's so attractive to participants."

There's no doubt a cap-and-trade strategy is attractive to many. Denny Ellerman, executive director of the Center for Energy and Environmental Studies at the