Clean Power Plan Primer Published: August 5, 2015 National Journal Presentation Credits Producer: Katharine Conlon Director: Afzal Bari

Power Plants are the Largest Single Source of Greenhouse Gas Emissions Source: U.S. Environmental Protection Agency, “Sources of Greenhouse Gas Emissions,” July 21, Primary Sources of U.S. Greenhouse Gas Emissions in 2013 Analysis The largest source of U.S. greenhouse gas emissions from human activities is from burning fossil fuels for electricity and transportation. The new Clean Power Plan seeks to reduce the emissions from electricity production and sets limits for existing power plants. Electricity Production Production of Goods Transportation Commercial and Residential Agriculture 1

Clean Power Plan Sets Individual State Goals for Reducing Emissions from Power Plants Source: U.S. Environmental Protection Agency, “Clean Power Plan State-Specific Fact Sheets,” August 3, 2015; National Journal Research, Emission Goals by State, Percentage Reduction from 2012 Historic Emission Values Analysis Idaho and Connecticut only have to reduce their emissions by less than 10% from 2012 levels. Eight states have to reduce emissions by more than 40% by The Environmental Protection Agency used a formula to decide the emission reduction goals for each state (see appendix for details). Recommendations and detected threats OH WV VA PA NY ME NC SC GA TN KY IN MI WI MN IL LA TX OK ID NV OR WA CA AZ NM CO WY MT ND SD IA UT FL AR MO MS AL NE KS VT NH MA RI CT NJ DE MD 0-10% 11%-20% 21%-30% 31-40% 41-50% HI AK No data* *Vermont has no fossil-fuel electric power plants. Alaska and Hawaii have unique grid situations, and the EPA is still working on establishing their goals. 2

States Can Decide How to Reach Goals for Reducing Emissions Source: Brad Plumer, “How Obama’s Clean Power Plan Actually Works – Step by Step,” Vox, August 4, Methods for Reducing Carbon Dioxide Emissions Analysis States have the flexibility to decide how they will meet their emission goals before submitting their plans. If a state refuses to decide on a method, the EPA would create a federal plan based on a cap-and-trade system. A final federal program will be decided in 2016 for those states not willing to comply. Shift from coal power plants to natural gas power plants Increase in renewable energies such as solar, wind, and nuclear energy Establish programs to promote energy efficiency in homes Utilize a cap-and-trade program or carbon pricing 3

States Have Seven Years to Meet Initial Emission Reduction Goals Source: Alex Guillen, “Obama Issues Landmark Climate Change Rule,” August 3, Timeline for President Obama’s Clean Power Plan Analysis States have until 2018 to submit plans on how they plan to meet their emission reduction goals, which they will then start implementing by 2022 to meet initial reduction goals. The EPA predicts the rule will lower carbon dioxide emissions from the power sector by 32% from emission levels in States that do not submit plans for reducing emissions will have an imposed plan produced by the Environmental Protection Agency States with extensions must submit plans to the Environmental Protection Agency States must start cutting their carbon dioxide emissions States continue to follow the goal that was set States may begin submitting plans to the Environmental Protection Agency 4

Carbon Dioxide Emissions are Down 15% Since 2005 Levels Source: U.S. Energy Information Administration, “July 2015 Monthly Energy Review,” July 28, 2015; Perry Lindstrom, “Lower Electricity-Related CO2 Emissions Reflect Lower Carbon Intensity and Electricity Use,” U.S. Energy Information Administration, October 23, Carbon Dioxide Emissions from Electric Power Sector, (Million Metric Tons of Carbon Dioxide) Analysis Electric power carbon emissions in the U.S. declined in five of the past nine years, and total emissions from the electric power sector in 2014 was 15% below its 2005 level. The substitution of natural gas and the increase in renewable energy has led to an aggregate decrease in carbon dioxide emissions from power plants in recent years. The EPA expects 20% further cuts in power-plant emissions by 2030 with the new plan MMmt 2051 MMmt MMmt: 30% Emission Reduction Goal for 2030

Clean Power Plan Creates Political Tension Source: Clare Foran and Jason Plautz, “Winners and Losers in President Obama’s Global Warming Rule,” National Journal, August 2, Winners and Losers with the Clean Power Plan Rule Note The Environmental Protection Agency’s Clean Power Plan has the power to change the American energy landscape. Renewables will benefit from the rule, while the coal industry will suffer. Winners President Obama The rule would be an achievement for President Obama’s climate change agenda Renewable Energy States will bring in more renewable energy sources, like solar power and wind energy Nuclear Power The rule will offer up incentives for building or upgrading nuclear power plants Cap-and-Trade The rule encourages states to use a cap-and-trade program, and includes an option of interstate cap-and-trade Lawyers A legal battle over the rule will drag on for years and require participation from lawyers of both sides Losers Purple State Senators Facing Tough Elections Candidates facing tough elections will have to make decisions that could potentially alienate one side of the battle Natural Gas The rule projects that power from natural gas will be identical to business-as-usual scenario, due to incentives from zero-emission sources Coal The rule is likely to trigger even more coal-plant shutdowns, reducing demand for coal Carbon Capture and Storage The new rule will not rely on carbon capture as much as what was expected in the previous draft of the rule 6

Questions Still Surround the Clean Power Plan Source: Brad Plumer, “How Obama’s Clean Power Plan actually works – a Step-by-Step Guide.” August 4, 2015; David Roberts, “What Impact Will Obama’s Clean Power Plan Have? It Depends,” August 3, Unanswered Questions on the Clean Power Plan Note The rule has the potential to change the U.S. electric industry, but questions must be answered to better predict the impact of the plan. Unanswered QuestionsWhy It’s Important How will the Clean Power Plan hold up in court? Legal challenges could decide if the plan is successful or not. The rule will probably end up in the appellate courts or the Supreme Court How will the EPA decide on the emission reduction goals for Alaska and Hawaii? Since Hawaii and Alaska are not on the major grid systems, their emission reduction goals have yet to calculated. What will the EPA’s federal plan look like for states that refuse to submit a plan? The EPA has to decide between two versions of the federal cap-and-trade program that will states that refuse to submit plans. How will the next President handle the Clean Power Plan? The next president will oversee the approval process of the state plans. What will the U.S. energy mix look like in 2030?Because the plan focuses on emissions rather than the energy mix, this question will be answered once states submit plans. 7

Reduction Emission Goals are Calculated Using a Formula Source: U.S. Department of Energy, “Learn More About Interconnections,” 2015; Brad Plumer, “How Obama’s Clean Power Plan Actually Works – a Step-by-Step Guide,” Vox, August 4, Alternating Current Power Grids or “Interconnections” in the U.S. Analysis The Environmental Protection Agency’s Clean Power Plan uses a formula to calculate the emission reduction goals for each state. The constants in the formula differ based on the state’s grid region: Eastern Interconnection, Western Interconnection, or Texas Interconnection. + State’s Emission Reduction Goal ( ) % of Coal Power Plants in the state EPA Constant for one of the grid regions ( ) % of Natural Gas Power Plants in the state EPA Constant for one of the grid regions ( ) = Recommendations and detected threats OH WV VA PA NY ME NC SC GA TN KY IN MI WI MN IL LA TX OK ID NV OR WA CA AZ NM CO WY MT ND SD IA UT FL AR MO MS AL NE KS VT NH MA RI CT NJ DE MD AK TX Eastern Interconnection Western Interconnection Texas Interconnection 8 Appendix