Obama’s Clean Power Plan - An Economically Sound Blueprint to Transition the US Toward a Low-Carbon Future

The new US Clean Power Plan is expected to launch a major White House initiative on curbing global carbon emissions.
Published: Thu 08 Oct 2015

Over the years, coal production has always been put on a pedestal in the US because it fuelled the generation of over half of America’s electricity for a long time.Many called the US the “Saudi Arabia of coal.”

Even current President Barack Obama supported proposals for large federal subsidies to turn coal into motor fuel and reduce the country’s dependence on costly oil imports back in 2004 as state legislator and again as a US senator.

But, now the Obama administration has changed its view of coal production, throwing the fuel off its throne and turning instead to renewable sources.

US government to (finally) curb emissions?

The administration is  toughening rules that force states to cut pollution from coal-burning power plants. The administration is quite literally taking on the coal industry with the final version of rules it has dubbed the Clean Power Plan, a complex scheme designed to reduce, on a state-by-state basis, the amount of greenhouse gases the nation’s electric power sector emits.

The final rules propose a 32% cut in carbon emissions from power plants by 2030 on 2005 levels, up from the initial proposal of 30%. However states will only have to comply by 2022 rather than 2020 as originally proposed, and will be able submit their plans on meeting the targets by 2018 instead of 2017.

Carbon emissions from power plants fell 15% between 2005 and 2013, meaning the country is halfway to the target.

Being the world’s second biggest carbon emitter after China, the plan will help the US formulate a cleaner future.

While hundreds of businesses including eBay, Nestlé and General Mills have issued their support for Barack Obama’s clean power plan, billed as the strongest action ever on climate change by a US president, Republican presidential hopefuls moved quickly to voice their opposition, saying they would be economically damaging.

The reason for the administration’s focus on coal is because it is still the biggest cause of greenhouse gases in the US at a time when President Obama is striving for an agreement at the December climate summit in Paris.

US makes plans to combat climate change on the homefront

Mr Obama has been relying on world leaders, from China, India, Brazil and others, to commit to reducing emissions. But, he hasn’t been very successful back home since Republicans in the Senate have accused him of waging a “war on coal” – and especially the jobs that go with it.

Coal’s share of electricity generation is already decreasing, with natural gas and renewable energy taking its place.

Today, more people are employed installing solar panels than in the coal industry. A new study from Duke University has shown that during the four years following the 2008 recession, the US coal industry lost more than 49,000 jobs, while at the same time the natural gas, solar, and wind industries across the country created nearly four times as many jobs as coal lost.

The Obama administration has trumpeted “carbon capture”, where carbon dioxide emissions are injected into old oil fields to enhance recovery and store the carbon dioxide there permanently. But carbon capture and storage is costly. Moreover, because  natural gas is suddenly so cheap, utilities are turning to it instead especially since oil and gas companies have started using fracking techniques to tap vast natural gas resources buried  in shale rock.

The US has always been wary of curbing coal production as there were concerns this would disadvantage the US economically and competitively in world markets. This is why the Environmental Protection Agency’s plan to rein in coal-burning is “the biggest, most important step we’ve ever taken to combat climate change”.

The new rules is good news for the renewables sector. These will give a give a head start to wind and solar deployment. As a result, there will now be a more aggressive investment in clean energy technologies, resulting in more renewable energy generation and lower renewable energy costs.

Further reading

United States Environmental Protection Agency-Clean Power Plan for Existing Power Plants