Climate change – heat waves, water shortages, and reduced flexibility – poses huge risks for electric utility infrastructure.
A Multi-Pollutant Strategy
An integrated approach could prove more effective for controlling emissions.
have established caps on CO 2 emissions in 2009 at 2006 emissions levels and in 2013 at 2001 emissions levels. Of the legislation analyzed by EPA in the 2005 Multi-Pollutant Analysis, CAPA was predicted to have the second highest annual benefits and costs with full implementation benefits of $197 billion and costs of $11.6 billion. 11
The only effort assessed that resulted in greater benefits and costs was Senator Jeffords’ CPA, introduced in January 2005. CPA would have reduced power-sector emissions from all four pollutants by implementing caps on each five years out, in 2010 only. The caps would have lowered SO 2 emissions by 76 percent from Title IV levels, NOx by 11 percent beyond Clear Skies, and mercury by 67 percent beyond Clear Skies (with no mercury trading). Additionally, CPA would have implemented a CO 2 cap, reducing CO 2 emissions by 16 percent from 2000 levels. These steep emissions reductions resulted in estimated annual benefits of $258 billion and an estimated annual cost of $62 billion in 2020. 11
EPA Moves on Regulations
Starting in 2003, EPA began working to develop three regulations that worked in concert as a multi-pollutant program. EPA’s CAIR/CAMR/CAVR endeavor had many similarities to the Administration’s Clear Skies legislative efforts. The primary differences among CAIR/CAMR/CAVR and Clear Skies were that: CAIR/CAMR/CAVR was regulatory as opposed to legislative; the regulations did not alter the Clean Air Act in any way; and CAIR adopted an eastern domain (28 eastern states and D.C.) to cap emissions of SO 2 and NO x from the power sector, whereas Clear Skies would have implemented a national program. CAIR and CAMR were announced in March 2005 with CAVR following in June. At full implementation, CAIR was predicted to reduce power sector SO 2 and NOx emissions in the east by 73 percent and 61 percent, respectively, from 2003 levels, thereby helping states achieve the PM2.5 and ground-level ozone NAAQS. Meanwhile, CAMR was predicted to reduce power-sector emissions of mercury by nearly 70 percent and CAVR would ensure SO 2 and NOx emission reductions from facilities affecting visibility in Class 1 National Parks. CAMR was notable as the world's first rule to begin to reduce the emissions of mercury from existing coal-fired power plants. As such, it could have influenced other countries to enact controls, providing further benefits to the United States because of the global transport of mercury emissions.
EPA’s assessment of CAIR/ CAMR/CAVR in 2020 predicted annual human health and welfare benefits of $171 billion at an annual cost of $7.5 billion. 11 The marginal cost per ton of SO 2 and NOx reductions, respectively, were projected to be at $860 and $1,600 in 2010 and $1,700 and $2,000 in 2020. 12
Most of these benefits in the near term currently are left on the table as only CAVR remains in effect. With the failure of Clear Skies, various multi-pollutant bills in Congress, and the court’s recent vacatur of CAIR and CAMR, the void of a U.S. multi-pollutant emission reduction program for the power sector remains unfilled.