Finally, Arkansas is starting to talk about thinking about how to address climate change.
Earlier this month, the EPA announced a proposed rule that will require a 30 percent reduction in carbon emissions produced by power plants, phased in over the coming decades. The feds are setting goals (which will be tailored to individual states), but it’s up to the states themselves to come up with plans that address those targets. On Wednesday morning, the Arkansas Department of Environmental Quality (ADEQ) and the state’s Public Service Commission (PSC) held a public meeting to solicit preliminary input from stakeholders including utility companies, environmental groups and consumer advocates. Information about the rule and the public comment process is available on the ADEQ website.
The details are esoteric, but make no mistake, this is a huge deal. It’s the most decisive action ever taken by the federal government to combat climate change, and it may well be among the most significant pieces of domestic policy to emerge from the White House in Obama’s second term.
Fairly or not, ADEQ has gained a reputation among some Arkansas environmentalists as being far too industry-friendly. But when it implements this rule, the state environmental agency is going to find itself in the business of regulating and limiting carbon emissions head-on, which will mean forcing Arkansas electric companies to make some hard choices.
The EPA provides four “building blocks” as suggestions for states to design their carbon-cutting plan, said Stuart Spencer, a legal policy adviser for ADEQ. The state can do all, some, or none of these things, just as long as it meets EPA’s requirements. (If Arkansas fails to come up with a feasible plan at all, the federal authorities will step in and give us one.)
1) Make existing coal plants more efficient
2) Increase the use of existing natural gas plants
3) Increase power supplied by renewables and nuclear
4) Increase end-use efficiency (for example, by making homes and buildings more efficient)
Note that one option is conspicuously absent from the above list: retiring coal-fired plants altogether. Glen Hooks, director of the Arkansas Sierra Club, said that should be on the table as well. “About 85 percent of CO2 emissions in the state come from five coal power plants,” he said. “That really is the meat of this discussion.”
Arkansas is in an unusual position, in terms of coal. The state’s carbon emissions aren’t the highest in the nation, nor are its per-capita emissions. What makes it unusual, according to a PSC presentation later in the morning, is that its rate of emissions per megawatt hour has increased significantly in recent years. In other words, the amount of CO2 that it takes to generate an average unit of power has gone up, not down. That’s largely the product of the state’s continued investment in coal-fired plants at a time when most of the rest of the nation, including other Southern states, has moved in the opposite direction. The carbon intensity of Arkansas’ power sector emissions increased dramatically from 2005 to 2013 – a 37 percent increase, the fourth highest rise in the nation for this period.
(The increase is not driven by Arkansans using more electricity, by the way. During the same period, our power consumption rose by only 1 percent. The rest was exported to other states.)
It’s exactly this measure that the EPA rule targets: The rate of carbon released per megawatt hour (MWh). So, Arkansas has some major changes to make. To comply with the rule, our rate of CO2 produced per MWh must decline 44 percent by 2030.
Unsurprisingly, power companies and most business interests aren’t thrilled. They say implementing the EPA rule will raise rates for consumers. There is truth to this. Coal power is cheap, and both households and businesses will probably see costs rise if the state does indeed prod utilities into using less and less of it. A representative from the Arkansas Chamber of Commerce said that it was “just an economic fact” that the state’s remaining manufacturing jobs would be threatened by higher rates. (Ernie Dumas’ column last week focused on the politics swirling around the new rule.)
It is also fair to note that there really are at least two distinct public interests at play here, as represented by the two state agency heads who hosted the meeting. ADEQ Director Teresa Marks is charged with enforcing environmental law. The chair of PSC, Colette Honorable, is supposed to ensure that utilities keep consumer rates affordable and the power grid reliable and safe. After the meeting, Honorable acknowledged that those two mandates aren’t always identical, but said the agencies were committed to working more closely than ever before.
“At the end of the day, Teresa’s focus may be apart from ours but this is a great opportunity to collaborate and cooperate,” she said.
Also, talk of hurting business through costlier energy doesn’t take into account the economic activity that would result from weaning the state away from coal. A representative from the Arkansas Advanced Energy Association (a business group) enumerated the benefits: increased job opportunities in energy efficiency, investment in new renewable plants, a better market for the state’s rich reserves of natural gas and the possibility of creating a market for carbon credits in a multi-state partnership. Dr. William Mason of the Arkansas Department of Health said there was “unequivocal scientific evidence” that the particulate matter released by coal-fired plants causes an increase in asthma and other respiratory disorders among children and the elderly.
There’s an even greater economic and public health benefit as well: mitigating the potential devastation of climate change. As a report co-authored by former (Bush) Treasury Secretary Henry Paulson has recently highlighted, a destabilizing climate – fueled by carbon emissions – poses a multibillion dollar economic threat.
Wednesday’s meeting was only the first step in a long process. EPA won’t issue its final guidelines until next June at the earliest, and states have at least another year after that to submit their compliance plans. And that’s all assuming the rule even survives; legal challenges are inevitable, said Chuck Barlow*, Entergy’s vice president for environmental policy. One of many disadvantages to taking major action on climate (or anything else) via an executive agency rather than legislation is that it creates a readymade argument for legal challenge – that the EPA, and the Obama administration, has overstepped its bounds.
“Our questions about the rule — our uncertainties — run to pages and pages,” he said. “We’re very concerned about legal defensibility of the rule.”
When asked later if Entergy itself might challenge EPA over the rule’s legality, Barlow replied “I don’t know that there’s going to be a legal challenge from us…but there will be from somebody.” However, he also said that the electric giant will be taking steps to shape the new regulation and comply with its mandates even as it contemplates fighting it in court.
“You can’t bank on winning a legal challenge,” he explained. Which is further evidence for what proponents of regulating carbon have said all along: if tough emissions standards cut into the bottom line, power companies will adapt. Business is smart enough to learn to live with the rules the public gives it.
*Correction: The original post incorrectly identified the Energy representative at this meeting as Bill Mohl, President of Entergy Wholesale Commodities