Climate and energy experts at US-based Natural Resouces Defense Council (NRDC) have put forward an innovative proposal that could help the new Obama Administration to create jobs, grow the economy, and curb climate change.

NRDC proposes setting state-specific carbon emission rates under the Clean Air Act. The use of EPA’s existing regulatory powers to effect emissins reductions has been referred to as ‘Plan B’ in the wake of failed efforts to pass nation wide cap a trade provisions under Congressional authority.

NRDC’s proposal calls for the U.S. Environmental Protection Agency to use its authority under the Clean Air Act to set standards for existing power plants-America’s largest source of carbon emissions that fuel climate change-that will cut millions of tons of carbon pollution, save thousands of lives and create thousands of clean energy jobs.

The proposal enables states and electricity plant owners to use a wide range of existing technologies, including energy efficiency and renewable energy sources, to meet carbon pollution standards in the most cost-effective way. States would also have broad flexibility to design their own plans to meet the standards.

“The President put climate change on the national agenda, and NRDC’s plan shows how the United States can make big reductions in carbon pollution that drive climate change, with a flexible approach that promotes clean energy investments and delivers big benefits for Americans’ health,” said Peter Lehner, NRDC’s Executive Director.

“This year’s ravaging heat waves, drought, wildfires and Superstorm Sandy underscore why the nation must tackle head-on the biggest source of dangerous carbon pollution now.”

NRDC’s proposal shows how the United States can dramatically reduce pollution from power plants that are responsible for 40 percent of the nation’s carbon pollution.

“We are overturning the conventional wisdom that reducing carbon pollution through the Clean Air Act would be ineffective and expensive,” said Dan Lashof, NRDC’s Director of Climate and Clean Air programs, and a principal author of the plan.

“We show that the EPA can work with states and power companies to make large pollution reductions, by setting system-wide standards, rather than smokestack-by-smokestack ones, and by giving power companies and states the freedom to choose the most cost-saving means of compliance.

“The impact is huge: our proposal would eliminate hundreds of millions of tons of carbon pollution, save thousands of lives and stimulate a surge in clean energy and energy efficiency investments,” Lashof said, “all at a lower cost than many would expect.”

NRDC outlined its proposal at the National Press Club in Washington. Joining Lehner and Lashof to discuss the power plant plan was Dallas Burtraw, who is Darius Gaskins Senior Fellow at Resources for the Future.

Also participating in the event was Franz Litz, Executive Director of the Energy & Climate Center at Pace Law School. Litz advises states on climate change and energy policy matters, and was instrumental in creating the northeast states’ Regional Greenhouse Gas Initiative.

Using the same sophisticated analytical tools relied on by both industry and the EPA, NRDC analysis shows the plan would:

•Cut carbon pollution from the nation’s existing power plants 26 percent by 2020 and 34 percent by 2025.
•Make large reductions in other dangerous pollutants, such as sulfur dioxide and nitrogen oxides, from existing power plants.
•At a cost of about $4 billion in 2020, save Americans between $25 billion and $60 billion in lives saved, avoided illnesses and reduced climate change.
•Save 3,600 lives, prevent more than 23,000 asthma attacks, avoid more than 2,300 emergency room visits and prevent nearly 1.2 million restricted activity and lost work days.
•Stimulate investments of more than $90 billion in energy efficiency and renewable energy sources in the next eight years.
•Create thousands of jobs, boost local and state economies, and move America toward a clean energy, clean air future.

NRDC commissioned ICF International to analyze the proposal using the company’s proprietary Integrated Planning Model (IPM(r)).

The utility industry and the EPA often use the IPM(r) model to determine cost-effective ways of meeting the nation’s electricity needs, and to assess the effects of new standards. NRDC provided the depiction of the plan and other assumptions required for the analysis.

Under NRDC’s proposal, the EPA would use Section 111(d) of the Clean Air Act to set state-specific carbon emission rates that reflect the diversity of the nation’s electricity sector and fuel mix. Broad compliance flexibility would enable power plant owners and states to reduce emissions through cost-effective means that could be accomplished by:

•Reducing an individual plant’s carbon emissions by improving combustion efficiency, burning cleaner fuels or installing carbon capture and storage.
•Shifting generation from high-emitting to lower- or zero-emitting plants. Lower emitting sources such as gas, wind and solar would earn credits that other plants could use, to reduce average emissions rates.
•Expanding energy efficiency. State energy-efficiency programs could earn credits for avoiding power generation and its pollution. Generators could purchase those credits to use toward their emissions targets.
•States would have additional freedom to adopt alternative approaches-such as those already adopted by California, the Northeast states, and Colorado-as long as they are equally effective in cutting emissions.

NRDC developed its proposal on the heels of two U.S. Supreme Court rulings, in 2007 and 2011, that determined it is EPA’s job under the Clean Air Act to curb dangerous carbon pollution from the nation’s vehicles and power plants.

In the United States, electric power plants emit about 2.4 billion tons of carbon dioxide (CO2) each year, or roughly 40 percent of the nation’s total emissions.

The EPA has taken important first steps by setting standards that will cut the carbon pollution from automobiles and trucks nearly in half by 2025 and by proposing standards to limit the carbon pollution from new power plants.

But the EPA has yet to tackle the CO2 pollution from hundreds of existing fossil-fueled power plants in the United States.

The EPA has both the authority and responsibility to reduce pollution from these plants under the Clean Air Act, the nation’s bedrock air pollution law adopted in 1970. NRDC has crafted an effective and flexible approach to cut carbon pollution from existing power plants that:

•uses the legal authority under the Clean Air Act.
•recognizes differences in the starting points among states.
•charts a path to affordable and effective emissions reductions by tapping into the ingenuity of the states.
•provides multiple compliance options, including cleaning up existing power plants, shifting power generation to plants with lower emissions or none at all, and improving the efficiency of electricity use.

Using the same sophisticated integrated planning model used by the industry and the EPA, NRDC calculated the pollution reductions that would result from the proposed approach – and the costs and benefits of achieving those reductions.

The plan would cut CO2 pollution from America’s power plants by 26 percent from 2005 levels by 2020 and 34 percent by 2025. The price tag: about $4 billion in 2020. But the benefits – in saved lives, reduced illnesses, and climate change avoided – would be $26 to 60 billion, 6 to 15 times greater than the costs.