EPA’s Clean Power Plan: Economic Strengths and Weaknesses
Thirteen top economists analyze the Obama Administration’s main climate policy in Science.
An analysis of the Obama Administration’s plan for reducing carbon emissions from power plants suggests that while the plan provides flexibility, allowing emissions to be reduced in cost-effective ways, additional reforms could permit further emissions reduction for the least cost.
The Obama Administration’s Clean Power Plan, released in June 2014 and seeking public comments until December 1, aims to reduce carbon emissions from existing power plants by 30 percent (below 2005 levels) by 2030. Under the rule, states are required to develop plans to meet specific standards devised by the EPA. In the latest edition of Science, economists from the University of Chicago, Stanford, Yale, Harvard, MIT and the University of California-Berkeley and Davis have come together to give their take on the plan. Specifically, they assess whether the plan will achieve its intended emissions reductions, and how it can do so in the most cost-effective manner.
“The Clean Power Plan demonstrates that the United States is serious about confronting climate change. It will provide the U.S. with critical leverage in the international climate negotiations next year in Paris,” says Michael Greenstone, one of the authors of the Science analysis and the director of the University of Chicago’s Energy Policy Institute at Chicago (EPIC).