February 16, 2016 3:58PM

Spin Cycle: Green Tax Credits Supplant Clean Power Plan to Meet Our Paris Commitment

The Spin Cycle is a reoccurring feature based upon just how much the latest weather or climate story, policy pronouncement, or simply poo‐​bah blather spins the truth. Statements are given a rating between 1 – 5 spin cycles, with less cycles meaning less spin. For a more in‐​depth description, visit the inaugural edition.

The Obama Administration is involved in an all‐​out effort to soften the severity of blow that the U.S Supreme Court dealt the EPA’s Clean Power Plan (CPP) last week.*

In the day following the Court’s ruling, White House Deputy Press Secretary Eric Schultz referred to the Supreme Court’s stay as a “temporary procedural determination” and then added that “[i]t is our estimation that the inclusion of [the extensions of the renewable energy tax credits] is going to have more impact over the short term [on greenhouse gas emissions]than the Clean Power Plan.”

We covered Schultz’s first statement in our Spin Cycle from last week, giving it our top award of five Spinnies.

Here we examine the second part of his statement, that the extension of the investment tax credit (ITC) and the production tax credit (PTC) on solar and wind power, approved by Congress last December “is going to have more impact over the short term than the Clean Power Plan.”

On its face, we must admit this is true. Primarily because, under the CPP, the states aren’t required to begin cutting power plant emissions until 2022 — far outside what we would consider “over the short term.” So, by the letter of the (now stayed) law, the CPP wouldn’t have to result in any greenhouse gas reductions prior to 2022. Schultz statement lacks the proper context. Walking (instead of driving) to lunch one time next week would also produce “more impact over the short term [on greenhouse gas emissions]than the Clean Power Plan” (stayed or not).

Granted, the CPP encourages (but doesn’t require) states to begin early. Based on the Regulatory Impact Analysis of the CPP, the EPA estimates that since some states would begin early, the CPP would reduce greenhouse gas emissions by about the equivalent of 75 million metric tons of carbon dioxide (mmtCO2eq) by 2020. Once all states were taking part in the CPP, the annual emissions reduction estimated by the EPA grows to 240 mmtCO2 by 2025 — the year that President Obama promised that the country would achieve a 26 – 28 percent economy‐​wide greenhouse gas reduction beneath 2005 emissions levels (the projected emissions reduction under the CPP grows to 376 mmtCO2eq by 2030).

So how large is the expected impact of the ITC and PTC extensions (which includes a phase‐​out over the next five years)? The White House earlier reported:

This would reduce carbon dioxide emissions by more than 200 million metric tons in 2020 alone, helping to ensure that the United States achieves our 2020 target to reduce emissions in the range of 17 percent below 2005 levels, and providing momentum towards our 2025 target.

In essence, the extension of the renewable tax credits acts as a jump start for the CPP. Then when the CPP fully kicks in, it will subsume the emissions reductions achieved through the tax credit extension. 

But if the CPP is never put into place, the impact of the renewable tax credits alone would still be identifiable — and would stand at about the same level of emission reduction as the CPP has been projected to achieve in 2025.

So, when it comes down to it, it appears that through the year 2025 the ITC/PTC extension is projected by the Obama Administration to generate roughly the same greenhouse gas emission reduction as the CPP. [Note: this is not the case in the period 2025 – 2030 when CPP achieves ever greater emissions reductions.]

If the story ended here, we’d probably be compelled to only award the Administration only perhaps 1 or 2 Spinnies (for espousing “short term” gains over zero).

But this isn’t where it ends. Schultz went on to assure the gathered press that:

“There are driving forces that will allow the United States to meet its [Paris] commitment outside of the Clean Power Plan rule,” Schultz said. “One of those main forces is the inclusion of the tax credits at the end of the 2015 budget agreement.”

This is just wrong. There is no way that the US will meet its Paris target “outside of the Clean Power Plan.” In fact, even with the CPP, there was little chance of meeting the president’s promised target without a whole lot of other actions that have not yet been proposed.

The Administration knows well that this is the case, as it is the conclusion of a large number of independent analyses.

Here is a sampling of a few of them:

Climate Action Tracker: “The US will have to implement additional policies on top of the currently planned policies to reach its 2025 pledge, which requires a faster reduction rate than the rate before 2020.”

Rhodium Group: “Reducing emissions 26 – 28% below 2005 levels by 2025 will not be possible through current and planned policies alone.”

Climate Advisors: “To achieve the U.S. pledge, the next President would need to vigorously implement the Obama administration policies and propose new emission reduction measures”

Niskanen Center: “’Current measures’ [which include CPP] will not get us to the 2025 target.”

If you add in the latest news about a potential (un‐​reported by the EPA) large positive trend in methane emissions (a powerful greenhouse gas) from the United States, the U.S. Paris target is impossible without the Clean Power Plan (lacking a major economic collapse).

For making believe otherwise, and wanting all us all to buy into the charade, we award 4 Spinnies, or Heavy Duty Spin Cycle to the White House and its communications team.

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Heavy Duty


*The sudden death of Justice Antonin Scalia, along with the likelihood that there will be no confirmed replacement until after the inauguration of a new president in 2017 means that the fate of the CPP will be determined at the ballot box on November 8, 2016.