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Patrick Knight

Yes, it does. Unfortunately, some confusion persists about how energy efficiency measures can be applied to mass-based compliance within the Clean Power Plan. Fortunately, the answer can be summarized in two sentences: (1) In any situation, energy efficiency is a cost-effective way to reduce demand for electricity, both reducing emissions and helping to avoid or defer other mass-based compliance actions. (2) States can take action to develop customized plans to further encourage energy efficiency as a means for meeting mass-based compliance.

Emissions trading programs are a long-established mechanism used by environmental regulators to reduce air pollution from the electric sector. In this series of posts, we explore how EPA has designed the Clean Power Plan to facilitate the buying and selling of credits representing emissions reductions at fossil-fuel fired power plants. Part 1 focused on rate-based trading. Part 2 explores how states can trade allowances representing tons of CO2 emissions.

EPA’s Clean Power Plan, released this past Monday, offers many more options for compliance than were available in the proposed rule. More on these pathways plus a link to detailed slide deck after the jump.

On August 3, EPA released the final version of its Clean Power Plan. This rule establishes emission reduction guidelines for existing power plants aimed at reducing carbon dioxide (CO2) emissions 32 percent below 2005 levels. The final rule includes some important difference from the version proposed last year. As public agencies, interest groups, and electric-sector experts scramble in the next days and weeks to first absorb and then analyze the rule, we offer our early assessment of the top eight things planners and advocates should know about the final Clean Power Plan, and compare each point to the proposed rule.

In 2014, the U.S. electric system looked remarkably different from how it looked ten—or even five—years ago. In the past year alone, the system nearly doubled the amount of incremental installed capacity from renewables as compared to 2013, saw a 13 percent increase in renewable generation, and reached the lowest level of CO2 emissions since 1996.

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