New Carbon Dioxide Emissions Limits Cost Nothing and Offer No Benefits, Says EPA
Today the Environmental Protection Agency issued proposed new regulations limiting the emissions of carbondioxide from new electric power generation plants. The EPA press release states:
Under today's proposal, new large natural gas-fired turbines would need to meet a limit of 1,000 pounds of CO2 per megawatt-hour, while new small natural gas-fired turbines would need to meet a limit of 1,100 pounds of CO2 per megawatt-hour. New coal-fired units would need to meet a limit of 1,100 pounds of CO2 per megawatt-hour, and would have the option to meet a somewhat tighter limit if they choose to average emissions over multiple years, giving those units additional operational flexibility.
Since current coal-fired electric generation plants emit about 1,800 pounds of CO2 per megawatt-hour, the new regulations would essentially outlaw the construction of new conventional coal-fired plants. Not to worry, says the agency in its regulatory impact statement:
Under a wide range of electricity market conditions – including EPA's baseline scenario as well as multiple sensitivity analyses – EPA projects that the industry will choose to construct new units that already meet these standards, regardless of this proposal. As a result, EPA anticipates that the proposed EGU New Source GHG Standards will result in negligible CO2 emission changes, energy impacts, benefits or costs for new units constructed by 2020. Likewise, the Agency does not anticipate any notable impacts on the price of electricity or energy supplies…
These proposed EGU New Source GHG Standards is not anticipated to change GHG emissions for newly constructed electric generating units, and is anticipated to impose negligible costs or monetized benefits. EPA typically presents the economic impacts to secondary markets (e.g., changes in industrial markets resulting from changes in electricity prices) and impacts to employment or labor markets associated with proposed rules based on the estimated compliance costs and other energy impacts, which serve as an input to such analyses. However, since the EPA does not forecast a change in behavior relative to the baseline in response to this proposed rule, there are no notable macroeconomic or employment impacts expected as a result of this proposed rule.
Surely if there are no costs, then there must be some benefits accruing to the public from the new rules, right? Well, no. As the agency impact statement notes:
…the proposed rule is anticipated to yield no monetized benefits and impose negligible costs over the analysis period.
That's right—no costs and no benefits. Just new regulations.