Public Comments

Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources

May 9, 2014 • Public Comments

By Patrick J. Michaels and Paul C. “Chip” Knappenberger

This passage from the EPA’s “Regulatory Impact Analysis for the Proposed Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units” sums up the intent and justification of the proposed standards.

“While sector‐wide modeling does not project any new coal‐fired EGUs [electric generating units] without CCS [carbon capture and storage] to be built in the absence of this proposal, we recognize that a few companies may choose to construct coal or other solid fossil fuel‐fired units. In Chapter 5 of his RIA we present an analysis of the project‐level costs of a new coal‐fired unit with and without CCS, and estimate the social benefits of requiring CCS on a new uncontrolled unit. We also present a sensitivity analysis indicating that even in the unlikely event that market conditions change sufficiently to make the widespread construction of new conventional coal‐fired units economical from the perspective of private investors, this rule would result in net benefits from avoided negative health and environmental effects.”

As we will show, this justification fails in virtually all of its aspects:

1) the social cost of carbon (SCC) estimates used by the EPA to compare project‐level costs of new coal‐fired power plants with and without CCS technology are overinflated and thus wrongly favor the adaptation of CCS;

2) the Rule would not result in net benefits from avoided negative health effects as human health is improving — partially as a result of climate change; and

3) the Rule would not result in net benefits from avoided negative environmental effects as the environmental impacts of the Rule are negligible and scientifically undetectable.

As a consequence, this proposed standard should be withdrawn and not revisited.