GEOG 432
Energy Policy

Clean Power Plan (2015)

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In 2015, the Obama Administration enacted the Clean Power Plan which was to serve as the nation's first attempt at regulating carbon dioxide emissions from electricity generation sources.  The plan was crafted not just to meet domestic goals for climate action, but also was to be a central component of the United States' nationally determined contributions to meet its reduction obligations under the Paris Agreement.  

Some highlights of the Clean Power Plan (as published by the EPA when it was enacted):

  • reduction of 32% below 2005 levels in carbon dioxide emissions from the electricity sector by 2030 (when the plan was fully implemented)
    • sulfur dioxide 90% below 2005 levels
    • nitrogen oxides 72% below 2005 levels
  • public health benefits totally $14-34 billion by avoiding each of the following every year
    • 3,600 premature deaths
    • 1,700 heart attacks
    • 90,000 asthma attacks
    • 300,000 missed work and school days
  • climate benefits (from avoided expenses of expected impacts) of $20 billion

The Clean Power Plan applies to electricity generation from coal, oil, and natural-gas fired units. What was truly innovative about the architecture of this legislation was its flexibility.  States were given the choice in how best to meet their reduction requirements either individually or in conjunction with nearby states.  This approach recognizes that states have widely variable electricity generation profiles and allows them each to select the pathway forward which is most feasible.   Here is a glimpse at the options states would have had (and that some are still pursuing) under the Clean Power Plan:

  1. rate-based state goal (pounds per megawatt hour)
  2. mass-based state goal (total tons of carbon dioxide)
  3. mass-based state goal with new source complement (also total tons of carbon dioxide)

States could choose to achieve these goals however they saw fit.  They could implement command and control regulations on the generation facilities, they could construct internal cap and trade programs, or any other approach.  States needed to either create an emissions standard plan for all covered entities or a state measures plan that might include things other than just the covered electricity generation entities.

As the graph below illustrates, EIA found that this approach would incentivize electricity generation from cleaner burning natural gas (relative to coal per btu) and renewables.  

bar graph illustrating EIA estimates that the enactment of the Clean Power Plan would increase electricity generation from natural gas and renewable sources over time
The EIA completed an analysis of the then-proposed Clean Power Plan which illustrated that its enactment would increase the penetration of natural gas-fired and renewable electricity generation in the US.

What happened to the Clean Power Plan?

The Trump Administration repealed the Clean Power Plan and replaced it with the much more lenient Affordable Clean Energy rule in the summer of 2019. Repealing the CPP fulfilled a 2016 campaign promise.  The Administration suggests the Clean Power Plan is unnecessarily restrictive and expensive for electricity generators for no real additional benefit given that emissions are already almost to its stated 32% below 2005 goal.  However, proponents of the Clean Power Plan argue that repealing it slows innovation in emissions control technology and hampers the adoption of renewable generation capacity.