Obama will let states decide how to cut greenhouse gas emissions

WASHINGTON — President Barack Obama is about to unveil the centerpiece of his agenda to fight climate change, a much anticipated rule to slash the emissions of planet-warming gases from power plants.

The president will call for major reductions, according to sources familiar with the planning, with each state given its own greenhouse gas emissions reduction target and the power to decide how to meet it. The Environmental Protection Agency is putting the plan together, and Obama will announce it Monday.

The plan could push states to require more renewable energy use and to lower demand by investing in efficiency programs for homes and businesses. States also could use so-called “cap-and-trade” systems, in which emissions are limited and polluters buy and sell rights to release greenhouse gases, according to indications the Obama administration has given to environmental groups and others.

California already has such a cap-and-trade system, as does a coalition of Northeastern and mid-Atlantic states including New York, Massachusetts and Maryland.

The new rule could prompt other states to join in similar regional cap-and-trade ventures, or to take other measures to cut down on coal burning.

“This is going to make a big difference for people’s health and our kids’ future,” said David Doniger, climate director for the Natural Resources Defense Council.

The NRDC’s proposals helped shape the Obama administration’s plan, which is scheduled to go out for public comment before becoming final next year.

Doniger said he expects the president’s plan to make “meaningful reductions,” but he said it is not clear exactly what percentage of carbon emissions reductions the president will demand. There’s been discussion of a 25 percent cut, but Doniger is skeptical that will end up as the real number. And he said it makes a huge difference whether it’s calculated as a cut from 2005 levels — which the administration has used as a baseline in other carbon goals — or from current levels.

“The EPA and the White House are holding that quite close,” Doniger said.

Power plants are responsible for some 40 percent of the nation’s carbon dioxide emissions, and coal burning accounts for three-quarters of that total, according to figures from the federal Energy Information Administration.

Major coal states such as Kentucky, West Virginia and Wyoming are likely to be impacted by the new greenhouse gas emissions rule more than other states. Coal has historically shaped the economy of Eastern Kentucky, which already has been hit hard by mine closures in which thousands have lost their jobs. Lawsuits are expected over the president’s plan, as well as a fierce political battle.

“What the president is doing is going to severely harm the domestic coal market, which is going to create more hardship across Kentucky and especially in areas like Eastern Kentucky already at ground zero for what’s happening to our industry,” said Bill Bissett, president of the Kentucky Coal Association.

Kentucky relied on coal for about 93 percent of its electrical generation last year. Bissett said the new rule is “going to have to have a tremendous economic impact on Kentucky.”

The rule is expected to demand bigger power plant emission rate cuts in states such as Kentucky and Indiana than in places like California, where the plants on average already produce far less carbon dioxide.

But the Natural Resources Defense Council’s Doniger argued it doesn’t have to be expensive for states such as Kentucky to cut emissions.

“If you’re looking at this from a point of economic efficiency, Kentucky has a cheap source of reductions that California doesn’t. Kentucky could switch to natural gas or to renewable resources, which California can’t do in the same measure because they already have,” he said.

“And Kentucky or Indiana, they haven’t focused that much on energy efficiency, while California really has. … The states that have the highest emissions and the most to do also have a lot of opportunities and cheaper opportunities than the states which have already done a lot. So this is in some way fair,” he said.

Electrical utilities are watching closely and emphasize they’ve already been moving away from coal.

Charlotte, N.C.-based Duke Energy, the largest electric power holding company in the United States, said its carbon emissions are down 20 percent from 2005 by increasing the use of natural gas and replacing old coal plants.

“Cheap natural gas has helped significantly reduce our carbon emissions and we’ve accelerated the retirements of coal units,” said Duke spokesman Tom Williams.

Other nations are watching closely as well to see how serious the Obama administration is about climate change. The president said last summer that the United States would be a leader on the issue, which would be a turnaround for a country that effectively torpedoed the 1997 Kyoto agreement to cut global emissions.

The Kentucky Coal Association’s Bissett argued that Obama is now moving the United States in a direction away from the rest of the world, as Europe and Japan as well as emerging economies such as India turn to coal. He said Obama’s action against U.S. coal plants isn’t going to have much of a climate impact when considered alongside what’s happening in the rest of the world with carbon emissions.

National Mining Association President Hal Quinn said inefficient U.S. coal plants already have been weeded out. Little more can be done to cut emissions at the remaining plants short of closing them, which he said would mean less affordable and less reliable power.

“We’re going to need a lot of flexibility from the EPA, because I can tell you that there’s not much left in the coal fleet to squeeze out in terms of carbon emissions,” Quinn said at a conference this month in Washington sponsored by the consulting firm Deloitte Energy.

But Daniel J. Weiss, the director of climate strategy at the Center for American Progress, said the states are going to have a lot of options for meeting the new emissions standards in a cost-effective way. Greater energy efficiency saves consumers money on their utility bills, said Weiss, whose Washington think tank was founded by influential Obama adviser John Podesta.

“Climate change isn’t a future threat, it is a current threat. That is the No. 1 conclusion from the National Climate Assessment,” Weiss said.