By Michael Krancer, Forbes.
In August, the EPA released its Clean Power Plan, which aims to shape the future of American power generation and consumption by reducing greenhouse gas emissions while also increasing the grid’s efficiency and reliability. This comes more than a year after the EPA issued its first proposal for the CPP. The final version hits upon a fair compromise—a rare occurrence in Washington these days—that not only lowers carbon emissions, but also lays the foundation for an economic growth engine.
Critics say that the plan overreaches, unilaterally imposing compliance and energy policy direction for the states. In crafting the final plan, however, the EPA frees the states to make their own or regional compliance programs. And the final CPP also gives states more time to craft their plans. Initial proposals from states are due to the federal government in 2016, but extensions may grant states time until at least 2018. That’s not a punitive timeline. This final version of the CPP also allows states to delay their time of initial compliance all the way until 2022, pushing that line back two years from the initial proposal.
Detractors of the plan harbor instinctive worries that the plan will result in job losses and economic contraction. But a recent study indicates that the kind of mass-based carbon compliance programs that the CPP will encourage may in fact kindle economic activity and growth rather than stymie it. Mass-based carbon programs aim to put a hard cap on the pollutant emitted, whereas rate-based programs seek to limit emissions based on the total power produced. Mass-based programs also tend to be better suited for free-market trading programs; the successful federal program to limit SO2 emissions to curb acid rain took a mass-based approach.