CLIMATE:

Power plant rule will spur industrial growth, keep coal in energy mix -- McCarthy

U.S. EPA Administrator Gina McCarthy sought to rebuff criticism today that her agency's proposed carbon rule for new power plants would damage the economy, saying it would spur investments in clean technology.

"We have proven time after time that setting fair Clean Air Act standards to protect public health does not cause the sky to fall," McCarthy said in a National Press Club speech synchronized with EPA's release this morning of the power plant rule. "The economy does not crumble."

The rule proposal -- the long-awaited first piece of President Obama's climate change plan -- would cap carbon emissions from new power plants, requiring future coal-fired facilities to limit emissions of carbon dioxide to 1,100 pounds per megawatt-hour, while large combined cycle natural gas facilities must meet a standard of 1,000 pounds per MWh (see related story).

The proposal is taking heavy fire from industry groups and congressional Republicans, who say the rule would block the construction of new coal plants and that the technology required to comply will raise power prices and hamstring the economy.

But McCarthy said the proposal is a "reasonable, cost-effective strategy" and would keep coal in the country's future power mix.

"Our standards, rather than doing damage, can actually promote the industry sector to grow," McCarthy said. "We worked strongly with the utilities to understand what technologies are available, and we will continue to work with them over the comment period. ... It's going to get them prepared as time goes on to be competitive in a carbon-constrained world."

McCarthy also emphasized that the proposal reflects comments from states, industry groups and other stakeholders. The final rule due out next year, she said, will continue to incorporate input from all sides.

The fact that the new plan incorporates changes from a proposal last year -- creating different emission limits for different technologies and allowing flexibility for coal plants by permitting them to average emissions over multiple years -- shows the importance of the comment process, she said.

The rule is set to be finalized next fall, McCarthy said, but she noted that EPA over the course of the comment period would "pay attention," saying that there might be "adjustments" to the final rule.

McCarthy also touted the role of carbon capture and sequestration (CCS) systems, which would be required on new coal plants. Despite concerns that the technology is not ready for widespread use, she said CCS is "feasible and available today" and that the standards would "set the stage for continued public and private investment."

"With these investments, technologies will eventually mature and become as common for new power plants as scrubbers have become for well-controlled plants today," McCarthy said.

The coal industry has warned that the CCS mandate would effectively end the construction of new coal-fired plants.

McCarthy also laid a course for future action on climate change, including a rule on existing power plants to be proposed in June 2014.

The proposal today, she said, was "an important step forward in our clean energy journey," but not the final one.

"We know that climate change and protecting our kids from harmful pollution can't be solved overnight," McCarthy said. "It's going to take a broad, concerted effort from all levels of government, as well as the international community.

"The good news is, we can successfully face the challenge of climate change if we work together."