Economic consequences of EPA power plant regulations

epa 399 399The Environmental Protection Agency (EPA) is again proposing to limit carbon dioxide emissions from power plants to 1,100 pounds per megawatt hour. Previously, EPA had proposed 1,000 pounds of CO2 per megawatt hour. This will effectively ban new coal-fired plants which on average, emit about 1,800 pounds of carbon dioxide per megawatt hour. These regulations will have no measurable environmental benefit and are based on very questionable scientific speculation. The regulations will make energy much more expensive for homes and businesses.

The Heritage Foundation has a detailed report on this issue (see report here).

Heritage contends that this emissions limit and other EPA regulations will substantially reduce coal production and consumption in the U.S. Currently, 21 states get the majority of their electricity supply from coal-fired plants as shown on the map below.

electricity from coal by state

Heritage provides another map and chart showing the percentage of electricity produced from coal in each state (Arizona produces 39% of its electricity from coal). Heritage also provides a table showing how the regulations would affect employment by 2023. In Arizona, Heritage projects a loss of more than 12,000 jobs.

Nationally, the Heritage Foundation analysis projects that the restrictions on coal will have the following effect for the period 2014 to 2038:

Employment falls by nearly 600,000 jobs.

Manufacturing loses over 270,000 jobs.

Coal-mining jobs drop 30 percent.

A family of four’s annual income drops more than $1,200 per year, and its total income drops by nearly $24,400 over the entire period of analysis.

Aggregate gross domestic product (GDP) decreases by $2.23 trillion over the entire period of the analysis.

They also project that natural gas prices will rise by 28 percent. Heritage says “The most effective approach to halt such harmful, bureaucratic regulatory undertakings would be to permanently prohibit any federal regulators from using GHG emissions as a reason to regulate economic activity.” “Congress should remove the EPA’s and any other agency’s authority to regulate carbon dioxide and other greenhouse gas emissions.” “President Obama’s climate plan would have a chilling effect on the economy, not the climate.”

See also:
Climate change in perspective
Federal energy hypocrisy
Ethanol mandate fails economically and environmentally
EPA targets wrong cause of haze in Grand Canyon
Five reasons Arizona should repeal its renewable energy standards mandate