Is the Clean Air Act tragically flawed? In a new book, "Struggling for Air: Power Plants and the 'War on Coal,'" Richard Revesz, director of the Institute for Policy Integrity, and Jack Lienke, a senior attorney at Policy Integrity, argue that a "tragic flaw" in the regulation has caused a decadeslong effort to undo the impacts of how the rule treats new sources versus existing sources. During today's OnPoint, Revesz and Lienke discuss regulatory efforts to reduce the use of coal and explain why they believe the idea of the "war on coal" is unsound.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Richard Revesz, director of the Institute for Policy Integrity, and Jack Lienke, a senior attorney also at Policy Integrity. Thank you both for joining me today.
Richard Revesz: Thank you.
Monica Trauzzi: So, Ricky, you both are co-authors of a new book, "Struggling for Air: Power Plants and the 'War on Coal'." It's especially timely as the legal action against EPA's Clean Power Plan heats up. "War on coal" is a phrase we've heard repeatedly throughout the Obama administration as new regulations that target the industry have come into play. What are you hoping to clarify through this book?
Richard Revesz: We're trying to clarify the history of the Clean Air Act. What the book does is it shows how, in 1970, 45 years ago, Congress made a serious mistake, even though it passed a law that did a lot of good. And the serious mistake was to grandfather existing sources from the regulatory requirements that apply to new sources, and power plants are an important example of this. So that mistake created enormous incentive for existing power plants to stay in operation a lot longer than would have been the case because now they had a huge incentive to continue operating because they could do it without spending any money on pollution control devices, and new sources had to spend $100 million or so on a scrubber. So plants that were almost obsolete in 1970 and that people thought were about to close down continued operating for decades later. Many of them are still in operation today. So that was the tragic flaw of the Clean Air Act.
The second point of the book is that starting in 1990, administrations of both parties recognized this problem and have been trying to undo the error. Started with 1990 with the Clean Air Act and the acid rain provisions that created a national trading scheme, and then it continued with various regulatory initiatives of administrations of both parties. And so we see the three rules that are deemed to be the war on coal, that the opponents of the Obama administration call the war on coal, to be the continuation of a set of policies of both administrations over a 25-year period to undo an error that was committed 45 years ago.
Monica Trauzzi: OK, so, Jack, in the book you say that the narrative on Obama's war on coal is ahistorical. Throughout the administration, though, steps have been taken to reduce the use of coal and to boost clean energy, things like CSAPR, MATS, the Clean Power Plan most recently. So why, then, is the political rhetoric on coal incorrect if there are, in fact, all these regulations coming into play that are reducing the use of coal?
Jack Lienke: Yeah, we wouldn't contest that these rules are going to reduce coal's market share in the electricity sector because all of the forms of pollution that they aim to reduce, coal emits more sulfur dioxide and nitrogen oxide than a natural gas plant does. You know, coal emits -- a coal plant emits more mercury than a natural gas plant does, and it emits more carbon dioxide than a natural gas plant does, and certainly more than, you know, renewable sources of energy do.
What we're pushing back against is the notion that these rules are the product of kind of a personal vendetta, you know, on the part of the president and that, you know, Obama took office and made, like, a sharp break from the history of environmental enforcement in the U.S., implemented all of these onerous rules on coal plants. I mean, as we show in the book, the transport rule, the Mercury and Air Toxics Standards, the Clean Power Plan, all of these rules were actually set in motion, to some extent, by the actions of previous administrations. So that's really what we're pushing back against is this -- a story that's kind of robbed of historical context.
Monica Trauzzi: How widespread do you think this idea of a personal vendetta against coal is?
Jack Lienke: I think it's very popular in certain media sources. You know, we sort of trace the rise of this narrative in the book, and I think we know that the war on coal reached its most searched point on Google during the Romney-Obama campaign, and at that point, you know, there were signs on lawns across the country saying, you know, stop the war on coal, fire Obama. That was probably the peak, but it's definitely still out there, and basically every time the administration takes a step forward with any of these policies, you know, it's renewed. Oh, this is just another example of the president's war on coal.
Monica Trauzzi: Ricky, coal is the reason for much of the development that has been achieved in the United States throughout the years. So is all of that viewed through a negative lens as the United States moves towards a cleaner energy future?
Richard Revesz: Our economic growth over these decades has been a very good thing for the country, but now we understand the consequences better, the additional pollution that coal brings, and the very adverse consequences on human health and the environment. Just take one rule, the Cross-State Air Pollution Rule. It will reduce the number of premature deaths by more than 10,000 a year. So now that we understand this better, we have to take those things seriously, and we have to value the consequences, the positive and negative consequences of coal. I mean, the problem is that the supporters of using coal now want to focus on the positives but don't want to focus on the negatives, and our book's perspective is that we should be focusing on both.
Monica Trauzzi: So now, obviously, the Clean Power Plan is receiving all eyes and a huge amount of attention in terms of its impacts on the coal industry and, Jack, ClimateWire reported last week that government officials in West Virginia and major coal-producing states are having discussions about carbon trading for their Clean Power Plan compliance. What does that indicate to you about the long-term economic planning that's happening in a state like West Virginia that's so dependent economically on coal?
Jack Lienke: I think, you know, they're recognizing that they need to operate on the assumption that this rule will take effect on schedule and that, given that that's taking place, they should try to comply with the rule in the most cost-effective manner, and the cheapest way to meet, you know, the standards under the Clean Power Plan is going to be engaging in emission trading, you know, some sort of cap-and-trade scheme, essentially. And so we see a lot of states converging around that solution. Certainly they have the option to do other things. The rule gives them flexibility. They don't have to do that, but if it's the cheapest way to hit the targets, it's probably what they're going to do, and we think the country would be better off if pretty much every state adopted a kind of mass-based trading model for complying with the rule.
Monica Trauzzi: Ricky, could trading, in a sense, save the industry, save the coal industry in some states?
Richard Revesz: It could. It could. And that's the beauty of trading is it is not a governed regulator saying you deserve to, like, go away and you should stay. It basically says, well, if you can -- if once we take into account the negative consequences, which are taken into account by setting the cap, you can make a go of this, we applaud that.
Jack Lienke: And I think it's important to point out that, while the Clean Power Plan is projected to cause, you know, a large quantity of coal plants to retire, there's still -- the majority of them are still going to be around. It's not shutting coal out as an energy source in this country, you know, even in 2030 when the rule's fully implemented. There's still going to be quite a bit of coal capacity, at least under EPA's projections.
Monica Trauzzi: Right, just about a third. What do you see as the long-term role for coal in the U.S.'s energy mix?
Jack Lienke: You know, I think it's very difficult to make predictions about energy markets, but I do think that long term, to be a viable energy source, we would need to be capturing the carbon that coal generates. I think we're going to see steps toward natural gas that we're already seeing and steps towards renewables which emit nothing because it's cleaner and it's, you know, contributing less climate change, and that's a good thing for society, so I think if coal is to have a really long-term future as a power source, something like carbon capture would have to be implemented on a wide scale.
Monica Trauzzi: Ricky, this administration has had several legal wins in the past week. No stay on the power plan in the D.C. Circuit, and many are contending that the panel that has been chosen to hear the suit against EPA on the power plan is potentially a plus to EPA. We also saw the Supreme Court siding with the government in the FERC demand-response case as well in the past week. Are the legal tides shifting with respect to how the courts view the government's influence over energy markets?
Richard Revesz: It's hard to say. This case is going to be litigated to the hilt. Obviously there is a lot at stake. There's lots of parties and there'll be lots of briefs. I mean, I think at the end of the day, the administration is on strong legal footing, and many of the criticisms make it sound like this is something unprecedented and never has there been a regulatory approach that sets up broad trading markets, but those have been done under the transport rule and its predecessors, so I think that once all of this rhetoric is peeled away, the courts will understand that what EPA's doing here is part and parcel of policies that it's implemented in the past under other programs with much success.
Monica Trauzzi: All right. Well, it's a great read regardless of what side of the argument you're on. Very accessibly written. Thank you both for coming on the show. Nice to see you both.
Richard Revesz: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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