Technology Leads, Regulation Follows

EPA Clean Power Plan Locks in Existing Energy Trends

This week marks the release of the Obama Administration’s Clean Power Plan, an EPA Clean Air Act regulatory platform designed to reduce carbon emissions from American power plants. The #CleanPowerPlan has been called “the biggest action ever taken by the US to combat global warming.” It has also been called “really kind of eh.”

So at the very least, we’ve added another Rorschach test to the climate policy debate.

What explains the range in perception? The Clean Power Plan is the first federal regulation to cover carbon emissions across an entire sector of the economy – in this case, electric power, which happens to be a rather important sector. Fans of the plan emphasize this point, noting, as MIT’s Jesse Jenkins did, that “states now finally all have to think seriously about carbon dioxide.” In a statement, the Sierra Club’s Michael Brune described the plan as “the most significant single action any President has ever taken to tackle the most serious threat to the health of our families: the climate crisis.”

But the regulations have also drawn criticism for lack of ambition. Politico’s Michael Grunwald observed that “the rate of decarbonization is expected to slow over the next 15 years.” Slate’s Eric Holthaus offered similar lamentations.

The unimpressed have reason for their disappointment. As the EPA rules note on pp. 636-637:

We expect that the main impact of this rule on the nation’s mix of generation will be to reduce coal-fired generation, but in an amount and by a rate that is consistent with recent historical declines in coal-fired generation…the trends for all other types of generation, including natural gas-fired generation, nuclear generation, and renewable generation, will remain generally consistent with what their trends would be in the absence of this rule.

“Generally consistent” is of course vague and, like the rule itself, flexible. David Roberts and Michael Levi both helpfully explain that the flexibility of the plan is a political necessity of sweeping environmental regulation and thus, in its own way, a feature, not a bug.

But looking at the EPA’s projections, it’s hard not to conclude that this long-awaited gamechanger doesn’t really change the game all that much.

That’s not surprising to students of history. If we look back at the 1990s and early 2000s, federal regulation akin to the #CleanPowerPlan was the end-all-be-all of environmental activism and organizing. Thence came Michael Shellenberger and Ted Nordhaus who in 2004, pre-Breakthrough Institute, wrote an essay titled “The Death of Environmentalism,” in which they argued that environmentalism must embrace economic growth, organized labor, and an explicit policy program promoting technologies like solar, wind, biofuels, and energy efficiency to broaden their appeal and achieve real political gains. The upshot was that technological innovation, not regulation, would drive emissions reduction and energy transformations.

Despite some immediate consternation, the environmental community basically shifted to adopt Shellenberger and Nordhaus’ recommendations over the next decade. Today, organizations like the Sierra Club and regularly applaud the progress made in technologies like solar and wind, insisting that climate action will be cheap and easy with the recent cost declines in renewable energy.

And, while not as widely embraced by environmentalists, it is also the case that cheap natural gas has played the biggest role in reducing coal-fired generation – and that this trend has driven environmental regulation, not the other way around. (See Michael Levi’s terrific piece in Democracy Journal for more on this.)

The upshot is simple: technology leads, and regulation follows. This was true of the Montreal Protocol; it was true of the Cleain Air Act; and it is true of the Clean Power Plan.

At Breakthrough, a lot has changed since 2004. We’ve realized that energy transitions tend to take longer than we might like, and that even next-generation solar and wind are ill-suited to drive climate action on their own.

So if we’re going to achieve and dramatically improve on the EPA’s carbon targets, we’ll need big improvements in technologies including nuclear power, carbon capture, electric vehicles, and renewables. So at the end of the day, we should support incremental regulatory action like the Clean Power Plan. But let’s not let big-ticket demonstrations of climate commitment distract us from the real action that will deliver climate benefits: technology.