Josh Smith | State Budget Solutions
President Obama’s push for “clean” energy reaches its peak in the form of the Administration’s newly-unveiled Clean Power Plan, with its goal of encouraging the use of renewable energy and cutting greenhouse gas emissions. The proposal features even more stringent emissions standards that would apply to states, as well as other measures meant to protect the environment.
Ideally, the plan would allow states to find methods of lowering pollution that make sense for them. As the laboratories of democracy, states need freedom to innovate because they each face unique circumstances and have varying resources on which to draw. Environmental Protection Agency (EPA) administrator Gina McCarthy has touted the Clean Power Plan’s adaptability, saying it puts states in the driver’s seat and permits them to make changes as needed. In reality, however, the plan is far too rigid and defined.
In some ways, the Clean Power Plan is a bottom-up approach. The federal government sets standards and then states meet them in a manner best fitting their situation. Skepticism is warranted however, because the plan is still federally-imposed, with no provision to opt out. States that fail to submit their own plans by 2016 will have one imposed upon them. Some states already have taken a hard line, announcing their refusal to comply with the EPA’s new rules.
The Administration’s plan will force greater reliance on renewables, which may drive up the price of energy. For example, one study by Strata, a free-market environmental group, found cost estimates of wind power are, on average, underestimated by 48 percent. The National Rural Electric Cooperative Association, a group that largely speaks for co-ops providing energy to poorer areas, estimates the Clean Power Plan will increase electricity prices by 10 percent or more. Most of those higher prices would be concentrated on “the country’s most vulnerable populations.” Although the White House anticipates consumers will spend less money on energy because of the plan in the long-term, if those forecasts are based on faulty cost estimates, or come at the cost of those who are the least-well off, those rewards become dubious.
Several groups recoiled from the plan because they viewed the EPA’s rules as too restrictive, denying states the liberty to innovate effectively. For example, the Brookings Institution submitted a public comment arguing the EPA had inappropriately restricted the options available to states. Brookings recommended the EPA allow states to comply by taxing pollution and encouraged the implementation of flexible rules because of the varying conditions in the states.
Placing the same environmental requirements on Florida and Alaska is patently absurd. Similarly, the success of President Obama’s Clean Power Plan depends on how well it accounts for the differences between the states and allows experimentation. Overriding the experimentation happening among the states with heavy-handed decrees from federal agencies will only lead to higher energy prices for the country.
The success of the Clean Air Act is evidence of the promise of cooperative federalism between the EPA and state governments. As the EPA explains, the lower aggregate national emissions of six common pollutants is progress achieved through the cooperation of the states, local governments, the EPA, and other groups.
States should not be afraid to represent their interests and argue for measures they believe will improve the welfare of their citizens. Federalism is worth fighting for, and as strategist Michael McKenna has put it, “[W]hen you push back against bullies, you end up with a better result.”
Josh Smith, a policy intern for State Budget Solutions, studies economics and political science at Utah State University.