Members of the UN General Assembly – world leaders including President Obama – will gather this week in New York City to continue the long-running debate regarding the future of global emissions reduction. On Tuesday, President Obama will tout the steps he has taken to reduce emissions in the United States, highlighted by ambitious fuel efficiency standards for automobiles and a two-part plan to redefine the manner in which electricity is generated and consumed in the United States.
The second pillar of the campaign – EPA’s greenhouse gas standards for new and existing power plants – threatens to undermine our national competitiveness and derail our economy in one fell swoop by drastically increasing the price of energy within our borders. Few factors matter more to a robust and growing economy than ready access to affordable energy. Low-cost and reliable energy has helped our manufacturing sector to surge. It’s encouraged enterprises to locate within our borders. And it’s helped to drive an economic recovery that, while encouraging, remains tenuous today.
EPA’s pending actions – actions that President Obama and his surrogates will tout this week at the UN and nationwide – will throw the advantages we’ve gained through affordable and reliable energy out the window, ushering in a new reality of higher costs and decreased reliability.
Under the plan, new coal power plants could not be built absent application of costly and, to date, unavailable carbon capture and sequestration (CCS) technology – a requirement so onerous and difficult to attain that many view the new source rule as a de facto ban on construction of new power plants. Existing power plants – the engines upon which our economy relies today – would be forced to drastically cut emissions through application of similarly costly controls. The net result will be shrinking energy supply and significantly higher prices.
From a microeconomic perspective, these changes mean higher energy bills and tighter household budgets. From a macroeconomic perspective, the resulting conditions would send jobs and opportunities overseas – to regulatory environments that have simply not placed the same priority on emissions cuts.
This dynamic is one that President Obama and the EPA must consider carefully this week as they address global leaders, and on an ongoing basis as they continue to hear the concerns of a vast array of stakeholders – on both sides of the aisle – who fear that this regulation will upset our economy without meaningfully addressing the issue at hand.
The EPA’s plan is, in effect, a unilateral approach to a global question. Emissions from China and India continue to grow, and are contributing more to global emissions by orders of magnitude. Each of these nations, though, has declined to send their top executives to New York City to discuss the issue with the rest of the UN General Assembly.
As these policy questions are deliberated, one vital condition must be front of mind: The United States cannot act alone. Unilateral moves to reduce domestic emissions will cripple our economy, and the resulting reductions will be rapidly offset by increases in GHG emissions elsewhere – in China and India, for example.
Global emissions require a global solution, and American leadership is vital to arriving at that solution. But the current U.S. proposal to reduce emissions from power plants would not meaningfully reduce global emissions levels while also increasing costs and jeopardizing continuous electricity here at home. The EPA’s work is in need of revision and requires urgent action by the administration.