EPA Administrator Scott Pruitt will make official on Tuesday what we knew all along – the Administration is officially withdrawing the controversial Clean Power Plan rule on power plant emissions.
California Attorney General Xavier Becerra has railed against the repeal of the Clean Power Plan (CPP) claiming that the EPA’s responsibility “can only be fulfilled through a strong, effective, and science-based policy”.
I completely agree with California’s AG: The EPA must implement an effective and science-based policy. But that’s what Director Pruitt’s action today will bring us.
In advocating for the CPP back in 2014 (and yes, the EPA became an activist interest group arguing for the policy), the EPA claimed that implementing the CPP would reduce electricity bills by roughly 8 percent.
Think about that assumption for a moment. The EPA was claiming that unless the federal government dictated what power sources every utility across the country should use, energy expenditures would be unnecessarily high. On its face, such a bizarre assumption should raise red flags.
The EPA came to this bizarre conclusion because the agency simply assumed that no energy efficiency programs will be adopted in any year without the CPP, and that 100 percent of the identified energy efficiency programs would be adopted if the CPP was implemented.
The historical evidence starkly contradicts the EPA’s assumption. In fact, without any impact from the CPP, the U.S. economy’s CO2 emissions fell 12.2 percent since 2007. Not only have CO2 emissions fallen, the U.S. economy continues to become more energy efficient – every year the U.S. economy can produce more goods and services using less energy.
The EPA’s bizarre assumptions were important, however, because they drove the conclusion that the CPP would have a positive economic impact. But, as I noted in this 2016 PRI study, the CPP was having a negative economic impact that was particularly burdensome on lower-income and middle-income families.
This error alone invalidates the economic analyses used to justify the EPA’s regulatory actions. Without a valid economic cost-benefit study, it is simply unscientific to impose unprecedented regulations on the entire energy sector.
Wayne Winegarden, Ph.D. is a Senior Fellow in Business and Economics at the Pacific Research Institute and Managing Editor for EconoSTATS.