For its first trick, the E.P.A.’s new leadership more than tripled the plan’s projected price tag merely by changing how the agency accounts for energy savings.
Pre-Pruitt, the E.P.A. had projected that states and utilities would meet the rule’s emission targets in part by investing in energy-efficiency programs that help consumers reduce energy waste. These programs offer highly cost-effective emissions cuts because the upfront expense of, say, better insulating a building is often more than offset by the resulting reductions in electric bills. Because these savings also reduce utilities’ generating expenditures, they were reflected in the E.P.A.’s original estimate of the electric sector’s compliance costs.
In most of its new analyses, the Pruitt-led E.P.A. ignores these savings when calculating the costs of the plan. As a result, the E.P.A.’s cost projections now include almost $20 billion of generating expenses for electricity that the agency’s own analysis shows would not be produced with the plan in place.
The agency plays down its creative arithmetic as the application of a different “accounting framework,” in which energy savings are treated as a benefit of the rule rather than a cost saving. In other words, the new numbers don’t reflect a changed view of the Clean Power Plan’s net economic impacts. But if the change is so meaningless, why make it at all?
Probably because a rule that supposedly costs up to $33 billion a year sounds worse than one that costs up to $8 billion a year. And the Trump administration very much wants the Clean Power Plan to sound like a bad idea so that getting rid of it will sound like a good one.
Having ginned up sufficiently intimidating cost estimates, the E.P.A. next set about making the plan’s environmental benefits look meager. Pre-Pruitt, the agency estimated that the rule would yield up to $20 billion per year in avoided harms from climate change. In the agency’s new analyses, that number drops to a maximum of $3 billion. The E.P.A.’s explanation is that, whereas its original estimate focused on global climate impacts, its new calculation is limited to harms that the plan would avoid within the United States.
But it is impossible to calculate a domestic “share” of climate damages with any accuracy. In our globally interconnected economy, major climatic (and economic) disruption in other countries will inevitably affect American pocketbooks.
And even if it were possible to isolate climate damages in the United States, it would be strategically foolish (not to mention morally indefensible) to ignore foreign harms when evaluating pollution standards. Just as carbon dioxide emitted in the United States harms other countries, emissions from other countries harm America. And under any plausible theory of international relations, it’s clear that other governments are more likely to take America’s interests into account when setting their pollution limits if the United States does the same.
Remarkably, even with most of the Clean Power Plan’s climate benefits excluded, its overall benefits would still outweigh its costs by as much as $28 billion in 2030. This is because, in addition to cutting carbon dioxide emissions, the shift to cleaner sources of electricity encouraged by the plan would also reduce deadly particulate matter and other harmful air pollution. The E.P.A.’s original analysis found that these reductions would result in big public health benefits — most notably, preventing up to 3,600 premature deaths each year.
And so the E.P.A. invented flimsy excuses for ignoring some — and, in the most extreme version of its analysis, all — of the rule’s health benefits, too. With this final disappearing act, the Trump administration at last succeeded in making the Clean Power Plan look like a bad deal for the American people, with projected costs that outweigh projected benefits.
In the end, all of these methodological contortions are meant to obscure a very basic truth: that any “savings” achieved by rescinding the Clean Power Plan will come at an incredibly high cost to public health and welfare. If the Trump administration is willing to make that trade, it should at least have the courage to admit it.