Cornhusker Economics

SCOTUS Invalidates Obama Clean Power Plan

By J. David Aiken

On June 30, 2022, the Supreme Court of the United States (SCOTUS) ruled in the case of West Virginia v. EPA that the US Environmental Protection Agency (EPA) could not implement the 2016 Obama administration Clean Power Plan (CPP). This newsletter discusses the CPP, the CPP litigation, the Court’s opinion in West Virginia v. EPA, and what the decision means for Biden administration climate policy.

The Clean Power Plan. In 2014 the Obama administration proposed the Clean Power Plan or CPP. Under the CPP proposal, emissions from existing coal-fired power plants would have been reduced by about 30% from 2005 levels. This could be accomplished (1) by converting coal-fired electrical generating units (EGUs) to natural gas-powered; (2) by installing expensive and unproven (then and today) carbon sequestration and storage (CCS) systems to reduce coal-fired EGU greenhouse gas (GHG) emissions; and (3) to replace some coal-fired EGU electricity with wind or solar power and/or utility energy efficiency (EE) electricity consumption savings. Renewable energy and EE would have been the least expensive ways to comply with the proposed CPP. Natural gas EGUs would have been more expensive and would have been challenged to find sufficient supply during cold weather when most available natural gas would be (and still is) used for heating. CCS would have been the most expensive and has not yet proven to be commercially viable in the US. The final 2015 version of the CPP proposed a system where coal-fired EGUs could offset a portion of their GHG emissions through the purchase of renewable energy credits (RECs), which would be supplied by new wind and solar generating facilities.

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