Strong pollution standards can ensure decarbonization of the power sector

President Biden made the ambitious pledge in 2021 to eliminate carbon emissions from power plants by 2035. Clean electricity is essential not only to decarbonize the power sector but to slash emissions from transportation and buildings as these sectors electrify. Achieving Biden’s clean power pledge is the linchpin for meeting the U.S. commitment to cut total emissions at least 50 percent by 2030 and prevent the worst impacts of climate change.

The historic investments from the Inflation Reduction Act (IRA) will help the power sector significantly reduce emissions in the next decade. The decade-long tax incentives for clean electricity generation combined with financing to support transitioning out existing fossil fuel assets established by that legislation will help to rapidly expand solar and wind power and make 99 percent of existing coal-fired power plant uneconomic to continue operating according to a recent study by Energy Innovation.

As powerful as these economic incentives are, they do not guarantee success. Many utilities operate as regulated monopolies and could be insulated from competitive clean electricity suppliers. There is also a risk that power companies will replace coal with fossil gas generation, rather than zero-emissions power, as TVA recently proposed. Finally, the IRA’s all “carrots” and no “sticks” approach means that any bottlenecks in siting and permitting clean energy projects slow the transition to clean energy, resulting in higher emissions.

A study by the Princeton Zero Lab and Evolved Energy Research found that as much as 80 percent of emissions reductions expected from the Inflation Reduction Act could be lost if transmission expansion is constrained to 1 percent per year. While that may be an unlikely worse-case scenario, the fact remains that in the absence of a clean electricity standard implementation hurdles could prevent the power sector from decarbonizing at the required pace.

The Environmental Protection Agency (EPA) could greatly ameliorate this risk by establishing strong power plant carbon pollution standards. With mandatory emission reductions in place implementation challenges, such as transmission constraints, may prevent realization of the least-cost solution, but would not undermine necessary emission cuts. A new report from NRDC and Evergreen Action finds that setting strong power emissions standards under the Clean Air Act, combined with the IRA investments, can put the U.S. on track to achieve 100 percent clean electricity by 2035.

The Clean Power Plan, originally created by the Obama administration in 2015, established first-of-its-kind national standards on carbon emissions from power plants. However, in 2019 the Trump administration repealed the plan and last year the Supreme Court ruled in West Virginia v. EPA that EPA overstepped its authority by basing the Clean Power Plan in part on emission reductions that could be achieved by shifting generation from coal-fired power plants to cleaner sources, such as natural gas power plants and renewables.

While the Supreme Court restricted the approach EPA can take to setting power plant carbon pollution standards, it did not eliminate the agency’s obligation to do so. Rather, EPA must now set standards based solely on measures that can be applied to individual fossil fuel power plants, often referred to as the “inside the fence line” approach. While not optimal, this still allows EPA to set strong standards for all new and existing fossil fuel power plants based on emission reductions that can be achieved by the use of Carbon Capture and Storage (CCS) technology. The IRA provides enhanced tax credits for CCS, which strengthens EPA’s ability to set standards based on its application.

But just because EPA needs to base its standards on emission reductions that can be achieved by using CCS does not mean that CCS will be implemented. If any new fossil fuel power plant were required to have CCS the most likely result is that fewer will be built and more wind and solar will be installed instead. For existing power plants, states will be required to develop implementation plans to achieve the overall emissions reductions implied by EPA’s standards, but they are free to allow or require utilities to replace fossil fuel units with renewables rather than retrofit them with CCS. In most, if not all, cases this will be the most cost-effective solution.

As the impacts of climate change persist, disadvantaged communities often bear the brunt of these effects. Setting stricter power standards based on emission reduction levels in line with CCS use will provide stronger regulation on power sector emissions and reduce harm to these communities.

While many environmental justice organizations oppose using CCS, this should not prevent EPA from setting standards based on the emission reductions it could achieve. The alternative would be weaker standards and higher emissions that will continue to harm disadvantaged communities.

The IRA’s clean energy incentives offer the United States a historic opportunity to accelerate decarbonization of the power sector, putting our climate goals within reach and cutting costs for consumers. It’s up to the EPA to protect public health and ensure that the IRA delivers on this promise by establishing strong power plant carbon pollution standards.

Dan Lashof is the director of World Resources Institute, United States. Follow him on Twitter: @DLashof