EPA’s Greenhouse Gas Regulations

Via Matthew Yglesias, Dave Roberts has a detailed and interesting discussion of EPA’s recent announcement of its plan for addressing greenhouse gas emissions under its Clean Air Act authority.  The bottom line is that there’s not a whole lot of potential for major progress here, but it’s better than nothing.  I haven’t looked closely into the EPA documents myself, but judging from Roberts’s description it sounds like EPA is likely to steer a pretty conservative course here, focusing on efficiency improvements at existing plants rather than more effective but extremely expensive options like carbon sequestration.  The underlying problem here is that the CAA system is based on the concept of Best Available Control Technology.  This works fine for the traditional pollutants that have been covered by the Act up until recently, but for carbon dioxide the technology isn’t as well developed and the technologies that provide the best control of emissions are so expensive that requiring them would effectively mean forcing coal plants out of operation.  Which would not really be a problem from an environmental standpoint, of course, but politically the result of such stringent regulations would almost certainly be concerted action by the coal lobby and its friends in Congress to strip EPA of its authority.  So EPA is instead looking more at efficiency-enhancing technologies which would make some marginal improvements in reducing emissions but wouldn’t have anything like the effects of a carbon-pricing policy in reducing overall emissions.  It’s better than nothing, but it’s definitely not enough to handle the problem alone.

By the way, I definitely don’t buy Roberts’s argument, which is pretty popular in environmentalist circles, that cogeneration is an important part of the solution.  He does note that increased use of cogen would involve more small plants located near population centers, which is true, but he sees this as a good thing whereas I don’t see how it does anything but add needless additional expense in a context where any serious solution is already going to be very expensive.  Energy is an industry in which economies of scale are enormous.  Building big power plants and transmitting the power long distances is in most contexts going to be much cheaper than building a bunch of small plants closer to the demand.  Transmission losses are tiny compared to conversion losses in the generation process for traditional steam turbines, and while cogen does boost conversion efficiency a lot, the heat it generates can’t be moved nearly as far as the electricity.  Building cogen plants at the scale of the big coal plants that currently serve a huge portion of baseload generation need would be prohibitively expensive, and building enough smaller ones to replace that load would also be prohibitively expensive.