The Clean Power Plan will provide a host of opportunities for business and benefits for the economy. The plan can be expected to accelerate clean energy innovation and improve energy efficiency, it will also cost a tiny fraction of the estimated costs of inaction. The EPA estimates that the Clean Power Plan will result in economic benefits of $27 to $50 billion each year in 2020, and $49 to $84 billion in 2030. These savings are attributable to the combination of reducing climate impacts from greenhouse gases along with health savings from cutting particulate emissions in the air.
According to estimates from the Obama administration the cost of the Clean Power Plan will be about $8.4 billion annually by 2030. The annual price tag of climate inaction is more than 17 times the price of the energy emissions reduction plan. A White House report titled, “The Cost of Delaying Action to Stem Climate Change.”
indicates that failing to act on climate change will cost $150 billion annually.
This assessment is corroborated by Lux Research which states, “Negawatts will prove to be the cheapest compliance.” A negawatt is a negative megawatt or a megawatt of power saved by increasing efficiency or reducing consumption. Lux cites the American Council for an Energy Efficient Economy (ACEEE), which says saving electricity is considerably cheaper for a utility than producing it. The cost can be as little as $0.028 per kWh, or two times as cheap as coal.
In addition to driving efficiency, the Clean Power Plan will drive creative new approaches to energy production. “These standards will also spark the innovation we need to build the next generation of power plants, helping grow a more sustainable clean energy economy,” EPA Administrator Gina McCarthy said.
According to Lux some of the other technologies that will benefit from the Clean Power Plan are combined cycle gas turbines (CCGTs), commercial and utility scale solar and clean coal. The new rules are also expected to accelerate the development of second and third generation technologies for carbon capture and sequestration.
The LUX report suggests that measures including the Clean Power Plan could drastically reduce the economic cost of climate change later on. For every decade of inaction, the costs to control global warming rise an average of 40 percent.
A 2014 report from the Analysis Group indicates that States are well positioned to implement the EPA’s Clean Power Plan. The report titled, EPA’s Clean Power Plan: States’ Tools for Reducing Costs & Increasing Benefits to Consumers, shows that states that are already regulating carbon pollution have seen net increases in economic output and jobs.
“The bottom line: the economy can handle — and actually benefit from — these rules,” said Analysis Group senior advisor Susan Tierney.
The report also suggests that states that work together to form carbon markets or other collaborative initiatives can glean even greater benefits.
A number of studies show that the longer we wait to reduce our use of fossil fuels the more it will cost. A cost benefit analysis makes a powerful case for acting on climate change and a detailed review of the Clean Power Plan shows that the savings far outweigh the costs.
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