EPA Administrator Lee Zeldin said his efforts this week to repeal climate and mercury rules would prevent fossil fuel industries from vanishing.
“Regulate them out of existence,” is how he described the intent of the Biden- and Obama-era rules on power plants.
But EPA’s own analysis that accompanied Zeldin’s proposal, released Wednesday, showed that the rules he is targeting for repeal would have changed the U.S. energy sector very little. For that reason, the agency’s so-called regulatory impact analysis — or RIA, which breaks down the costs and benefits of its actions — projected that the climate rules by the previous presidents would impose modest costs on the electricity sector. In one case, it was nonexistent.
The environmental benefits of the rules, though limited, substantially outstripped their costs to either the power sector or the economy, EPA’s analysis showed. That’s despite the fact that the agency didn’t analyze the likely financial benefits of cutting carbon pollution from power plants under the 2024 rule finalized under former President Joe Biden — or, by extension, the costs of carbon increasing under Zeldin’s plan.
EPA states in its RIA for the draft repeal that it did no new modeling or analysis on the effects of repealing the carbon rule. Nor did it analyze the impacts of erasing it. Instead, the regulatory analysis draws virtually all of its figures and projections from the analysis for the 2024 Biden rule it’s designed to kill.
“[W]e rely on the 2024 [Carbon Pollution Standard] RIA policy case analysis as the baseline for this action. Similarly, there may be other regulatory changes before the promulgation of this proposed action, and these too are not accounted for in the baseline for this action,” said the RIA released by the agency Wednesday.
Alan Krupnick, a senior fellow with Resources for the Future, noted that Zeldin’s regulatory analysis “merely takes the original RIA for [the Biden climate rule] — which was very thoroughly done — and multiplies those numbers by minus one.”
EPA did not respond to requests for comment.
Krupnick notes that the career staffers who compiled the analysis for the repeal probably didn’t have time to run models. EPA sent the proposed repeals to the White House for review in May, just over three months after the start of President Donald Trump’s second term.
Under Biden, EPA analyzed how the 2024 rule requiring existing coal plants and new gas plants to reduce their climate pollution would work with other regulations and incentives to shape the grid.
The analysis showed that the Inflation Reduction Act’s tax credits for wind, solar and other technologies would drive the green energy build-out and deliver the carbon cuts that would nudge the power sector closer to Biden’s climate goals. The climate and mercury rules would play a meaningful but supporting role, the Biden analysis showed, by ushering out aging coal-fired units and spurring a few fossil power plants to invest in carbon capture and storage systems.
And because Zeldin’s repeal uses the Biden climate rule’s numbers and projections, its results are the mirror image of last year’s IRA.
For example, the repeal proposal touts $19 billion in saved regulatory costs over two decades from jettisoning the standards, or about $1.2 billion per year. A number taken from the 2024 document that reflects a relatively small percentage of the overall investments that utilities put toward their coal and gas fleets, not the kind of seismic shift to the economy that Zeldin described.
The draft repeal acknowledges that the Obama-era standards for new coal, which it called “largely non-binding,” has had no impact on costs because no new coal units have been built.
“The relative economics of coal-fired generation have remained challenging, as evidenced by continued retirement,” it states.
It acknowledges that between market forces and IRA tax credits the same kinds of new power plants would likely have been built between now and the start of 2032, when the Biden rule’s tougher standards would have phased in, whether that rule was repealed or not.
The Biden rule would have cut power sector carbon emissions by 123 million metrics tons by 2035 — roughly the annual emissions of the Netherlands. And without the rule, the expectation now is that those tons will go into the atmosphere.
Ben King, associate director of the energy and climate program at Rhodium Group, said his analysis showed that the Biden climate rule would have had a slightly larger impact on investment decisions and emissions than EPA’s modeling projected.
“But it was in the same ballpark,” he said. “Not transformative to the power system, but a step in the right direction.”
But King noted “the EPA rule and the IRA tax credits reinforce each other.”
The Biden EPA’s analysis showed few costs because most of the utility sector investments that would be required for compliance were already projected to happen because of the 2022 law, which invested $369 billion in those technologies. Now, Republicans in Congress are working to deliver a budget package that would greatly reduce those incentives. So EPA’s analysis for its final carbon rule repeal — which is expected later this year — will likely show more savings on compliance, but also vastly more emissions tied to the loss of the Biden rule.
Brendan Pierpont, director of electricity modeling at Energy Innovation, said the repeal of EPA’s carbon and mercury standards and a loss of the IRA tax credits would result in higher electricity prices and more health-harming pollution from aging coal plants.
“Health damages from repealing the rule are going to be substantially more than what’s represented in this because they’re, again, drawing on the last year’s analysis that incorporated the IRA tax credits,” he said.
Right now, EPA projects that by 2035 the loss of the Biden rule would result in up to $17 billion in public health costs and premature deaths compared to what would have happened if the rule had remained in place. Those impacts are all tied to particulate pollution and smog. EPA opted not to monetize the impacts from changes in carbon or mercury pollution with or without the rule, even though those are accounted for in the IRA.
Excess death estimates are reached by surveying people about their willingness to pay for policies that reduce their chances of dying. The metric is called “value of statistical life.”
But while EPA listed those figures in lower sections of the RIA for the draft repeal, the numbers were included as net benefits in the document’s executive summary. Those benefits are limited to “regulated pollutants” and savings to industry — a departure from EPA’s historic practice of counting benefits when the rule helps reduce other pollutants.
Krupnick called it a “catch-22″ because he said EPA is choosing not to monetize carbon pollution in the analysis. The agency also did not count other pollution increases toward the net costs of the repeal because they aren’t the pollutants the repeal is targeting, he said.
“EPA, their job is to protect and improve public health by reducing pollution,” Krupnick said. “And you don’t get to not count these [fine particulate pollution] and ozone benefits that are associated with reducing reliance on coal, you don’t get to ignore that. It’s completely antithetical to EPA’s mission.”
