An auto expert and former Energy Department adviser says the policies of a handful of states have pushed the development of electric vehicles. How the U.S. could win the global competition for the car of the future.
In June, the EPA is scheduled to release a proposed rule to reduce carbon dioxide emissions from the country’s power plants. The regulation would be one of the most far reaching to date, targeting the biggest source of CO2 pollution. It comes at a time when scientists are warning, with greater urgency, about the dangers of climate change. The proposal is still being crafted, but the push back is already fierce from industry and from politicians in heavy coal burning states. For this month’s Environmental Outlook, Diane and her guests discuss the debate over the federal government’s effort to reduce carbon dioxide emissions.
- Coral Davenport climate and energy reporter, The New York Times.
- Scott Segal head of The Policy Resolution Group, Bracewell & Giuliani LLP. He specializes in energy, the environment and natural resources. He is the director of the Electric Reliability Coordinating Council.
- David Doniger director, the Climate and Clean Air Program at the Natural Resources Defense Council.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Last June, President Obama laid out his plan for addressing climate change during his second term as president. The centerpiece was directing the EPA to come up with a rule to reduce carbon dioxide emissions from power plants. The draft of that plan is expected in early June. Here to discuss the forthcoming proposal and debate over its impact, Scott Segal of the law firm Bracewell & Giuliani, Coral Davenport of The New York Times, and David Doniger of the Natural Resources Defense Council.
MS. DIANE REHMDo join us, 800-433-8850. Send us an email to firstname.lastname@example.org. Follow us on Facebook or Twitter. Thank you all for being here.
MR. DAVID DONIGERThank you.
MS. CORAL DAVENPORTIt's great to be here, Diane.
MR. SCOTT SEGALThanks.
REHMI'm so glad you got here, Coral.
DAVENPORTSo am I.
REHMYeah. Coral, explain to us what we are actually expecting from the EPA. I realize they're still apparently drafting the rule. But what are we likely to see?
DAVENPORTSo they've pretty much finished the rule. The expectation is that they will roll it out probably the first week of June. The rule will be aimed at cutting carbon pollution from existing coal-fired power plants. That's the largest source of U.S. carbon pollution. So they're really kind of aiming at the heart of U.S. carbon pollution.
REHMCutting how much?
DAVENPORTWell, that will be the question -- how much, over the course of how long? Exactly what the regulation will look like we don't yet know. But we have a really good idea of the contours of the regulation. We expect that the regulation will set some kind of national standard saying, you know, overall the U.S. is going to cut carbon pollution from coal-fired power plants by a certain amount. And then the structure of it is that they expect to have each state come up with some kind of plan.
DAVENPORTEach -- a state -- the individual states will come up with a plan describing how they're going to cut that pollution in the states. And the idea of that is to reflect the fact that states have really different energy make ups. You have states like Ohio or Kentucky or West Virginia that have a lot of coal in their economies, that depend very heavily on coal. Ohio is a state that uses -- 80 to 90 percent of its electricity comes from coal. That contributes to its cheap manufacturing. So that's a really big part of its economy.
DAVENPORTYou have New England states and California that have much different energy mixes, that aren't heavy manufacturing states. It will probably be a lot easier for them to make reductions because they don't have as much of that to begin with. So the expectation is, a national standard and then giving it out to the states to come up with their own implementation plans.
REHMDavid Doniger, just how significant could this rule be, and especially in tackling global warming?
DONIGERWell, we know from a big report that's being announced this morning, the National Climate Assessment, that climate change is not just in the far-off future or in far-off places. It's right here in our own back yards right now. The weather is already changing. People can feel it. People can see it -- weather extremes like heat waves and floods and so on. This is all being driven by carbon pollution. And the biggest source of the carbon pollution are the power plants. More than 2 billion tons of CO2 emissions each year from American power plants.
DONIGERThe Clean Air Act is what's being used here. It calls for EPA to set this national standard and states to implement it, as Coral described. It gives a way to differentiate between the coal-heavy states and the states that are more in to gas and other kinds of electricity. We can make reductions in all of these states. We can cut this pollution. The Natural Resources Defense Council has done studies showing you can cut this pollution by as much as 35 percent by 2020 with minimal impact on electric rates.
DONIGERActually people's bills will go down if you use energy efficiency -- better appliances, better insulation, better light bulbs -- to meet this standard. And it will create hundreds of thousands of new jobs in the clean-energy industries.
REHMScott Segal, you're shaking your head, no.
SEGALWell, a wise man once said, we never regulate ourselves out of a recession. I don't believe that regulations actually cause economic growth. And in fact, in the case of what might well be proposed, when the current rule-making for existing power plants leaves the Office of Management and Budget, we're looking at a cost range of about $13 to $17 billion each year between the years 2018 and 2033. That is reflected directly in more cost to heat homes, cool homes, light homes, cook meals, run businesses, churches, schools, hospitals, et cetera.
SEGALAnd it has an adverse impact, to a greater extent, on those who live at or near the poverty level, those who live on fixed incomes, because they pay relatively more of their monthly income on power bills. The sad part about all of that cost is that cost is a certainty. What is not certain is that these rules will have any effect on reducing global climate change and here's why. Since the year 2000, the United States has had about stable carbon emissions and even reductions in light of the recession. But also since 2000, China has had a 170 percent increase in carbon emissions.
SEGALIndia has had a 90 percent increase in carbon emissions. And when a molecule of carbon is emitted in China or India, it is literally around the world in seven days. There are no localized carbon impacts. The carbon has the effect, no matter where it is in the world. So my fear is, is that despite the best intentions of these rules, they will succeed in increasing cost, but they will not succeed in changing global climate change.
DAVENPORTSo Scott is absolutely right that while these rules probably will increase costs in heavy coal-fired states, they will also -- the expectation, the whole point of them, is to lower U.S. carbon emissions. And Scott is right in pointing out that the U.S. is no longer the largest contributor to carbon pollution in the world. That honor now goes to China. India is coming up rapidly behind us as number three, expected to surpass us in the coming decades. However, the problem of global climate change is that it's global.
DAVENPORTAbout ten countries contribute 70 percent of the carbon pollution that is attributed to causing global warming. And right now the U.S. and other major economies are engaged in working out some kind of global or international negotiation treaty, a major economies deal -- we don't yet know what it's going to look like -- that will bring all the major polluters to the table and say, Look, we've all got to cut pollution. If any one economy acts on its own, Scott's right, it won't make a difference. But these -- the other economies -- the other countries aren't going to act without action from the U.S.
REHMSo you're saying the U.S. would be leading the way here.
DAVENPORTThe U.S. does not have any leverage to force or push or urge...
DAVENPORT...other countries, other economies to cut their pollution, unless they're showing that they're doing the same thing at home.
REHMExcept by example.
DAVENPORTRight. And so these -- this carbon rule that's coming up is the centerpiece of international negotiations for the U.S. The U.S. is saying, this is what we're doing. And now we have the leverage or the muscle to urge changes from other economies.
REHMNow, help me understand the President's statement today. He's releasing the new National Climate Assessment. What's he saying?
DAVENPORTSo this National Climate Assessment report is really interesting. We've seen a lot of big reports on climate change. The International -- Intergovernmental Panel on Climate Change came out with some reports last month. Those are global. This report is just on the impacts of climate change on the U.S. And it is far and away the most detailed and granular research we've ever had available on exactly what the impacts of climate change are within the U.S., here and now.
DAVENPORTThe report is divided up -- divides up the U.S. into eight regions. It has Northeast, Northwest, Southeast, Southwest, Great Lakes, and looks at the very specific impacts of climate change so. And within those regions, it divides down into towns, into cities. It picks out specific pieces of infrastructure that are threatened or have experienced the impact of climate change. So it's the most detailed, granular, regional research we've ever seen showing what the impact of climate change is in our back yard.
REHMAnd I gather he's talking with meteorologists. He's talking with newscasters who present the weather and the climate.
DONIGERAnd this is a big sign that the President is intending to make good on the promises that he made at the beginning of the second term to tackle climate change. This is the -- one of his biggest priorities that he has the authority to deal with under laws that are already on the books -- the Clean Air Act and the Energy Efficiency Laws. And we can demonstrate leadership by taking responsibility for our own pollution. And at that point, you get leverage.
DONIGERThe Chinese understand that the pollution they have is a terrible threat to their own people and their own stability. And they are motivated to deal with these problems themselves. But they all -- every country wants to see that every other big country is part of the game. And the United States, this is the way we can show that we're part of the game.
REHMSo the President is sort of shifting his priorities with this statement and with this new assessment, Coral.
DAVENPORTI think the President showed that climate change was a top priority when he came in to the start of his second term. His second inaugural speech heavily stressed climate change. His first State of the Union in his second term, again, heavily stressed climate change. And, you know, we're seeing a big dog and pony show around this report today. But behind the scenes, at EPA and at the State Department, folks have been -- this administration has devoted tremendous resources to working behind the scenes on climate policy.
REHMCoral Davenport of The New York Times. Short break here. We'll be right back.
REHMAnd in this hour we're talking about a proposed rule to reduce carbon dioxide emissions from the country's power plants. The Environmental Protection Agency is expected to release that new rule in June. Here's an email from Michael. "My father-in-law always said, follow the money. Who stands to benefit economically from control of carbon? Who are the stakeholders," Scott Segal?
SEGALWell, the congress years ago reasoned that you have to be very careful when you regulate electric utilities. And the reason is that the price, availability and reliability of electricity is literally the lifeblood of the American economy. One-third of electricity in the United States, a little over that, is generated by coal and it is the most labor intensive form of generation of the conventional base load .
REHMDo you also agree it is the most polluting form of energy we use?
SEGALThere's no question that coal has about twice as much carbon dioxide as natural gas. But another way of viewing where carbon comes from is -- and not trying to be flippant here -- carbon comes from we the people. Twenty-nine -- thirty-nine percent of carbon emissions in the United States come from what's called the building sector, which means residential and commercial buildings. And whereas all industrial sources of carbon put together are only about 29 percent of emissions.
SEGALWe have to make some serious lifestyle changes if we're really going to grapple with carbon change.
REHMDo you agree with that assessment, David Doniger?
DONIGERNo. Scott has done a nice little trick of attributing the power emissions, the electric power plants emissions to the buildings where the power is being used instead of to the power plants where the pollution's coming from. We all use electricity. We all need electricity but it can be made in a dirtier or a cleaner way. And we are in the midst of a transition away from the dirtiest form which is coal and we need to accelerate that transition...
DONIGER...and we can make jobs -- grow jobs and actually bring people's rates down -- I'm sorry, people's bills down...
DONIGER...as you move forward with this.
REHMWhat about our caller's question? Who is likely to benefit economically from control of carbon?
DAVENPORTExxon Mobil. The -- natural -- that's a flippant way of saying natural gas producers. The natural gas industry is going to -- this is going to be a bonanza. This is going to be a huge gift-wrapped present to them. And the reason for that is coal is the cheapest and most heavily carbon-polluting source of electricity today. The second major source of electricity is natural gas.
DAVENPORTNatural gas produces just half the carbon pollution of coal. And so what we're going to see is, when these regulations put a freeze and start shutting down coal-fired power plants, the market -- and this shift is already happening. We've seen this glut of natural gas -- cheap natural gas due to fracking. The market has been turning to natural gas. This will further drive electricity producers from coal to natural gas, again producing just half the carbon pollution poll.
REHMBut what about the polluting process of fracking itself?
DAVENPORTWell, that's -- you know, that is a whole other set of questions.
REHMAnd that's down the line.
REHMIs that what you're saying that right now we're going to deal with coal and coal emissions, move to development of more natural gas which is going to create its own problems?
DAVENPORTWell, and just to follow up though I should say natural gas is going to take probably that biggest base load of producing. But other sources of low carbon electricity are also going to scale up. We're going to see probably nuclear and wind and solar and renewables as well. We'll also see a big market for energy efficiency technology.
DAVENPORTThe whole point of these regulations is to discourage carbon, to make it unprofitable to create electricity with a lot of carbon. And so we'll see technologies that allow companies, electric utilities to squeeze more energy out, more electricity out with less carbon being polluted.
DONIGERYou know, Diane, the last time I was here you were in your old building. This building has -- used less electricity than the old building. My refrigerator that I bought a few years ago uses far less electricity than the one it replaced. You can set this -- and we think eBay is going to do this -- set these rules up in a way that encourages investments in making homes and businesses more efficient to get the same light and cooling and heat our of less electricity…
DONIGER...with less coal and less natural gas. And the other thing that's scaling up big is the wind industry. So -- and solar power. So you have new sources of electricity which don't have any carbon in them at all. And we are going through a transition from the dirty to the clean.
REHMSo how about that, Scott?
SEGALWell, there's a lot in what was just said that is very much agreeable to me. I do think we've had an improvement in appliance efficiency and the like. And I do agree with Coral that coal-fired capacity is among the most affordable and most reliable. She termed it the cheapest. I don't think it will come as a surprise to any of your listeners though that if coal is the cheapest and it is the most reliable and we move away from it, that electricity prices will go up.
SEGALIn fact, it is nonsense to suggest that a major regulatory program out of the federal government is somehow going to be a boon for consumers. If these forms of electricity were less expensive, they would not need the force of regulation to bring them on. So instead what we're going to have -- and this is not my opinion but the opinion of nine AFL-CIO trade unions who wrote the administrator of EPA and in very clear and unmistakable terms analyzing the proposal advanced by the Natural Resources Defense Council, stating 539,000 job losses at risk by 2020 as a worst case scenario in the midrange, 404,000 jobs at risk if this proposal, the proposal being advanced by David, were to become law.
DAVENPORTScott is right to bring up the fact that we probably will see job losses as a result of this proposal. Most specifically, in the long run this proposal is about changing the electricity market, reducing demand for coal, creating demand for low carbon energy sources, changing the electricity and energy market so that you get more electricity out of less energy sources. And most of that is a good thing.
DAVENPORTIf you reduce demand for coal, at the end of the day you reduce the demand for a specific job and that's jobs in the coal industry. Coal miners are probably going to be, in the long run, on the losing end of these policies. And that's a true fact.
REHMIt could turn out to be healthier, couldn't they, for not going into the coal mines?
DAVENPORTWell, they could. One of the problems is that the parts of the country that -- in which coal mining is a really big part of the economy, there's not much else there. And in areas of West Virginia and in areas of Kentucky...
REHMSo what about that?
DONIGERWell, so in Ohio for example, this is one of the areas where the wind energy industry, the clean energy sources of employment, the manufacturing in those sectors is growing fast. Now the economy changes all the time and people move from one job to another. We should be looking at whether we're creating a big new source of jobs. And we would be if we have a standard that really mobilizes energy efficiency and clean energy.
DONIGERAt the same time it's important to take care of the people who lost a job and they need transition, they need help and they need skills, training and they need support. And each state will have the opportunity and the responsibility as it designs its plan to figure out how to address these issues and help the people here.
REHMDo you think those plans will be in place by the time these jobs start going away?
DONIGERWell, the way the -- yes, because it's the state plan that implements the standards. Now if the state won't play ball then the federal government is required under the Clean Air Act to set a standard in that state. But the first opportunity to craft a plan that fits the needs of that state is with the state itself.
SEGALWell, with respect to public health, the EPA is very good at counting what they believe the public health benefits of their rules. So in fact they enjoy it so much they sometimes count the same public health benefits twice and three times attributing them to different rules. That said, they are very bad at counting the adverse health impacts that flow from an increase in the cost of electricity and from unemployment.
SEGALEleven medical doctors back in March who also serve in the House of Representatives wrote the administrator of EPA and said, please consider the adverse health effects associated with the rule. Increases in the likelihood of hospital visits, illnesses and premature deaths in communities that are adversely affected either by reduced affordability of power or by unemployment. And to date the EPA has not done that. In fact, they've refused to estimate adverse health consequences related to the rules.
REHMWhat about that, Coral?
DAVENPORTWell, it's interesting. A very -- a big source of controversy around these regulations is what's the cost. And what's the cost and what's the benefit? EPA is required by law when it puts out one of these major regulations, that it cannot have more economic costs than benefit. It has to do a major cost benefit analysis. And so EPA will take into account higher electricity prices, potential job losses, all of the potential economic hardships that could come as a result of regulations.
DAVENPORTAnd then it also -- it attaches monetary value to things like -- for the carbon rule the EPA actually has a metric that it calls the social cost of carbon. It attaches a price to the economic harm that each ton of carbon pollution will contribute. And that cost can change sort of depending on various scenarios. But it's looking at the economic harm caused by climate change as a result of things like rising sea levels, increased flooding, increased drought, loss of farmland. All of those come with economic costs as well.
DAVENPORTAnd that will be baked into the overall analysis that the EPA does. But it's tough. I mean, you're going to have coal miners who lose jobs and you weigh that against saying, well, you know, do we not want to regulate this pollutant that's going to make it difficult to grow crops in California, that's going to hurt water supply in the Midwest? What's the economic cost of that? So all that's baked into the rule.
REHMAnd that gets me around to the Supreme Court ruling last week. David, how is that going to play into this ruling?
DONIGERWell, last week the Supreme Court issued a very important ruling on a standard also for the coal-fired plants, but directed to other pollutants, the pollutants that lead to soot and smog that kills tens of thousands of people each year. In fact, EPA estimates that the reductions that their previous regulations on soot and smog would save tens of thousands of people's lives each year.
DONIGERA lower court had blocked that. The Supreme Court said, no this is EPA's job. It's EPA's prerogative to work out a solution to a problem like this. They worked with the states. They gave the states a chance. That standard should go forward. We think this is a good sign of the way things should be approached on carbon.
REHMDavid Doniger. He's director of the Climate and Clean Air Program at the Natural Resources Defense Council. And you're listening to "The Diane Rehm Show." Scott Segal, EPA says it has the authority to do all of this under the Clean Air Act. Do you agree?
SEGALWell, I do agree that after the Supreme Court decided the Commonwealth of Massachusetts' decision some years ago that EPA had the ability to regulate carbon, particularly emissions from automobiles. When we get to the question of what we call stationary sources, so power plants as an example, the legislative -- or the authority is much more circumscribed. The EPA's proposals that we believe are under consideration in our judgment are illegal, not because they don't have the authority to regulate carbon at all but because of the particular way they're going about it.
SEGALFor example, the regulation of new power plants requires the installation -- or is based upon the installation of carbon capture and sequestration technology, which has not been adequately demonstrated as that term is used under the law. The rules that we believe are under consideration for the existing power plants, boy, violate 40 years of precedent under the Clean Air Act. Look, if I seek to regulate a power plant, my regulation's supposed to be about power plants. But these regulations that we believe the EPA is considering will blow through the gate of defense line to the power plant and regulate literally any part of the system that is touched by technology.
SEGALNow the state -- I'm sorry, that is touched by electricity. So any use of electricity could be regulated pursuant to these rules by the states, not by the EPA. But as we've already established, if the states don't dance to the EPA's tune, then the EPA would be more than happy to put the political will of the federal government on top of the states, blasting through 40 years of cooperative federalism that underscores the Clean Air Act.
DAVENPORTI'm not a lawyer. I'm the only one of this group who's not and I'm not -- I can't even begin to start touching the legal arguments that Scott addressed, but I will say that he has just laid out for us beautifully the legal landscape that we're going to see going forward as a result of these rules.
REHMSo are you saying, as soon as the rules are issued...
DAVENPORTThe lawsuits. Boom, we're going to see huge lawsuits from talented industry lawyers like Scott. We're also going to see -- and this will be really interesting -- big lawsuits from states. As I described before, the structure of the rule is national standard, states have to implement a plan. For some states this will be really easy. I think California and the northeast states already have climate plans in place. I think it will be pretty easy for them to just continue to do what they're doing.
DAVENPORTStates that have governors that are ideologically opposed to the rule or states that are heavily polluting and just think it will be economically difficult for them to comply. I'm thinking again of states like Texas, of states like Wyoming, certainly possibly states like Kentucky or Ohio, very likely to fight back, to sue the federal government. I think that we might see -- so I think we're going to see several states suing, refusing.
DAVENPORTAnd I think that we might see a dynamic similar to the implementation of the health care law in which there was a national law and states were supposed to create or implement their own exchanges. And over 25 states said, no we're not going to do this. And there was this protracted back and forth. The federal government went in. I think this is going to play out over the coming years and it's very likely that it will go to the Supreme Court.
REHMSo in the meantime before it gets to the Supreme Court, what happens, David?
DONIGERWell, first of all, it's no surprise that the polluting industries that are subject to these standards bring lawsuits and that some of the states closely allied with them bring lawsuits. But the point of last week's decision and the point of a string of decisions over the last few years is that they lose those lawsuits. The EPA has this authority. It's really been to the Supreme Court three times already. And each time the Supreme Court has upheld this authority on carbon itself. So...
REHMBut what I'm asking is...
DONIGER...so what happens is...
REHM...can they be put -- can the rules move forward even though there are...
DONIGERThe challengers challenge on their own time. They have to comply along the way.
REHMAll right. And we'll take a short break here. When we come back, time to open the phones. I look forward to speaking with you.
REHMAnd let's go to the phones, as we talk about a new rule from EPA, expected in the next month, in June, to talk about carbon emissions. Let's go to Scott, in Richmond, Va. Hi, you're on the air.
SCOTTHi, Diane. How are you?
REHMI'm fine, thanks.
SCOTTGreat. I've been calling for a long time. I wanted to make one really important point. I'm an environmental scientist. And the most important point that seems to be left out of most of these discussions is you can look about 800,000 years into paleoclimate data to see what the climate was like.
SCOTTHowever, these fossils resources that we're consuming were in the ground 1.5 billion years ago. So there's this whole time frame, you know, pre-800,000 years ago that we have no idea what the Earth's climate was like. And, you know, we are undergoing the largest experiment in mankind's history.
SCOTTBut, more to the point of the discussion, Scott, I believe, made a point about, you know, if CO2 is burned in one country, you know, it doesn't matter because it's in the atmosphere. And then he was talking a lot about coal. And we also, in the U.S., we export the exact tonnage of coal every year that we import. Because we export our dirty, you know, SOX and NOX polluting coal and we import cleaner coal. And so I'd just like to hear his comments about that.
SEGALSure. And I thank the caller for the question. First of all, it all get -- he's really touched on the heart of the matter when it comes to addressing climate change, which is how do we achieve international solutions. How do we do that in light of imports and exports, and in light of where manufactured goods are made?
SEGALIf we set a unilateral carbon standard in the United States, and it makes it appreciably more expensive to manufacture goods because the price of electricity goes up, one of the things that occurs is that we import more manufactured goods from overseas, that may be made in less energy efficient economies and we bear the carbon burden associated with transporting those goods back to the United States.
SEGALSo the irony is a unilateral standard, which is not flexible, not very carefully designed -- and David's put a lot of time into careful design here. Don't get me wrong.
SEGALBut if it ends up not being carefully designed in the way it's implemented, then we could actually increase carbon emissions by importing more goods from overseas from less carbon -- less energy efficient nations.
REHMHere's a tweet. And this is for you, Scott. "How would you go about starting to lower the cost of power and develop a cleaner source of power for U.S. residents?"
SEGALRight. There are lots of ways to address both energy efficiency and carbon emissions. I'd like to dwell on one that we've been after the EPA to consider for some years. You know, what the EPA legal authority is, is to actually regulate directly the technology which generates electric power. So that's the power plant. The only way to decrease carbon emissions from a coal-fired power plant, frankly, is to improve the energy efficiency of that plant.
SEGALBut there's an unfortunate double bind in the way the EPA interprets its own law. If I try and improve the energy efficiency of my coal-fired power plant, the EPA then will launch an enforcement action against me, even if I've invested millions and millions of dollars, or billions of dollars, in fact, in environmental compliance costs over the years and could quite possibly shut down my coal-fired power plant.
SEGALIf the EPA would say, "No. Energy-efficiency improvements are not triggers for litigation, but instead are something we'd like to encourage," well, that would go a long way to incenting the power industry to do even more energy efficiency improvements. But the agency doesn't want to hear that right now.
DONIGERWell, Scott is trundling out an old coal industry concern about the way the Clean Air Act requires permits and best technology when power plants want to modify themselves and increase their pollution. If the pollution actually goes down they don't even need the permit. This is just an old side show.
REHMAll right. To Ryan, in Houston, Texas. You're on the air.
RYANHi, Diane. Thanks for taking my call.
RYANMy comment's just a really brief one that has to do with the money involved in the politics of climate change. And that is the fact that as far as money is concerned, when it comes to the politics of climate change, energy companies completely dominate it. And as long as energy companies dominate the money, dominate the media and continue to have this kind of almost total control over the discussion, then we're not going to see any meaningful progress in climate change whatsoever.
RYANBecause the oil companies and the coal companies and the other polluting companies and the natural gas companies -- which everybody kind of touts as better than coal, but it's still a fossil fuel -- you know, as long as all this money is involved and swirling around politics, we're not going to see any meaningful change.
DAVENPORTThe caller is absolutely right that the fossil fuel industry has been fantastically effective at contributing to the campaign funds and the campaigns of lawmakers who then go into Congress and continue to protect its interests. We are starting to see some really interesting shifts and changes in the money and politics of energy and climate and fossil fuels. One, you know, that's sort of the obvious one is this injection of big new money from the environmentalist community.
DAVENPORTWe've got billionaire Tom Steyer pledging to spend 100 million dollars in this midterm election to support lawmakers and candidates who will back climate action. He's looking for what he calls climate candidates. We saw that last year when Tom Steyer's group and the League of Conservation voters spent heavily to insure that Ken Cuccinelli, candidate for Virginia governor, major denier of climate science, didn't get elected.
DAVENPORTThe green groups outspent coal and fossil fuel in that race, significantly. And they won. I mean, I think the caller is right, in that money talks. It's just interesting. We've got some new money in this space. And what's also interesting is that a lot of the traditional fossil fuel companies that have fought against climate policy are also, internally, changing their views. I mentioned Exxon Mobile before.
DAVENPORTAll five of the major oil companies, Exxon, Shell, Chevron, Phillips, BP, are open about their problem that climate change is real, it's caused by carbon pollution, it's hurting their bottom lines. Those companies are looking at a future in which there's a possible price or tax on carbon. They've acknowledged that climate change contributes -- causes threats to their infrastructure.
DAVENPORTSo, you know, where a lot of the big oil companies are on climate change -- it doesn't mean that they're out, you know, campaigning for these climate candidates, but they're not -- a lot of these big companies are not -- not only not major climate deniers, we've got companies like Coca-Cola saying, you know, climate change is a threat to water supply. We need water to make our product.
DAVENPORTAnd Coca-Cola is a major Republican donor. So we're seeing some interesting shifts in what's happening with the political money.
DONIGERThe money is a problem and it's overwhelming on one side. Even though we have had some help in a couple of elections on the green side. The Koch brothers are a powerful force. They fund the Americans For Prosperity, the American Legislative Exchange Council, the power companies fund Scotts Group. They want to have a cleaner looking reputation when they're operating under their own name, but they fund front groups who are funneling money and influence to squash cleaner power…
DONIGER…and squash clean air standards.
SEGALQuick answer. The major flaw in the caller's question is that the energy industry is not monolithic on these issues. In fact, the major power companies that I represent are also the largest investors in renewable energy for communitywide solar and communitywide wind power, as well. It's just they take President Obama at his word, we ought to have an all-of-the-above energy strategy.
SEGALAnd that means stuff for base load, as well as renewables.
REHMHere's a tweet, "We've heard a lot about job losses from your panel, how many job gains can we expect from the movement to clean energy?" David?
DONIGERSo we did a study last year and the answer is more 200,000 additional, net additional jobs from this transition, if the standards allow the power companies to comply by not just cleaning themselves up, but doing the cheaper thing, which is to invest in energy efficiency and cleaner power. This is a net gain in jobs of a couple of hundred thousand. And at the same time electricity bills will go down by on average, not much, but about a dollar on average, across the country.
REHMAnd, Scott, is saying the price for energy is going up.
DONIGERWell, I don't know what -- I mean Scott had some multibillion dollar range that he came up with for a proposal we haven't seen. It's our proposal, which we put out a year and a half ago, it has a much lower price tag and a huge surplus of benefits over costs. We don't know what EPA's exactly going to propose yet. I do know that the voters in red and blue states, support EPA doing its job to curb carbon pollution by 60, 70 percent. This is in red and blue states, in northern and southern states. And this is a consistent result.
SEGALWell, a couple of things. First of all, the data that I rely upon are analysis actually of the NRDC or David's proposal. And one was conducted by nine of the labor unions, the other one by the very respected National Economic Research Associates. And this material is widely available on the internet. People take a look at it. The other thing…
REHMSo what our listeners cannot see here is that David Doniger is laughing as you put out your numbers and your assessments of how much it will cost. And David saying that costs are going to go down, not -- who are we to believe, Coral?
DAVENPORTThe answer is the transformation of our electricity system is going to happen over many years.
DAVENPORTIt's -- no matter what this regulation says, no matter what legislation comes down the pike, I think that there are a lot of big unknowns. We don't yet know how much it's going to cost to comply. We don't yet know if there are going to be technology breakthroughs. You know, one thing that happens when we've seen these regulations come out before is that the industry has said that, you know, based on the terms on the ground, it's very expensive to comply.
DAVENPORTWhat ends up happening is it creates a market for new research for technologies that allow the companies to comply with the regulations more cheaply. There's so much that we don't know. I would say that we should be careful about attaching this rule too closely to the idea of job loss and job creation. The number of jobs in the U.S. -- coalminers will lose their jobs. There's about 80,000 coal jobs in the U.S. That's a problem and attention should be paid to it. That is a tiny, tiny fraction of the whole U.S. jobs picture.
REHMAnd will they be given assistance in finding other jobs? That's the question.
DAVENPORTAll of that remains to play out. The other question is, we shouldn't treat the development of the renewable energy sector as a major job creator. It's a sector that's necessary. It's new technology that's necessary. But in the big jobs picture, you know, this is not going to be one of these major, major job creators.
REHMAnd you're listening to "The Diane Rehm Show." You wanted to add something, Scott?
SEGALWell, only this, whether you believe my studies, David's studies, any studies any find on the internet, looking at some empirical evidence might be helpful. Look at Germany, look at Spain right now, that have made major commitments for high-cost energy over low-cost energy. And look at the exodus of manufacturing jobs to the United States, in some cases, from those nations. And no one in your listening audience could possibly believe and an expensive, governmental regulatory program is a job creator. That makes -- to my -- it just doesn't make any sense to my way of thinking.
DONIGERI would just say look at the history of the last 40 years where every time a power plant regulation or a car regulation has come forward, the industry has preached gloom and doom and…
REHMI was thinking of seatbelts and air bags.
SEGAL…and the economy is three times the size it was in 1970, when the Clean Air Act was passed. And pollution is down 70 to 90 percent. We are able to do this and grow the economy and grow our welfare and protect our health at the same time. On climate change we're running out of time, but we are not running out of solutions.
REHMCoral, I wonder how you see this playing out.
DAVENPORTThe regulations specifically? The regulation will come out. There will be huge political pushback. Republicans and the coal industry will attack it as a war on coal. They won't be wrong. I think that this regulation really is about dramatically reducing and ultimately ending coal pollution in the U.S. You know, I think that there will be some economic losers. Again, I talked about coalminers.
DAVENPORTI also think that in the long run, if this regulation is decently written, it probably will, you know, it will send a market signal to electric utilities, you can't make money by building more coal plants. It will drive new research. We'll see a big change, a big transformation in our electricity system over the coming decades. I don't think it will happen in, you know, three or four or five years.
REHMWell, that's what I was going to ask. I mean, President Obama has made this really an important part of his second term. How likely is this rule to be implemented before he leaves office, David?
DONIGERThe president set a schedule. It starts with a June proposal that gets this process through to the states developing their plans and sending them to EPA for approval in 2016. It can get done in this term. If the Congress -- there will be, you know, there'll be a lot of…
DONIGERBut it won't amount to anything because they don't have the power to repeal the Clean Air Act. And even if they could pass something the president will veto it. The president is serious about this. It's a national challenge. It's key to our leadership in the world. It's something that he's dedicated to and we are going to back him. There will be a front lash, if you will, of support for what he's doing.
REHMHow much are voters going to think about this when they go to the polls in November?
DAVENPORTI think that this will matter a lot for voters in coal states. This is going to be part of the debate in Kentucky and West Virginia, in Wyoming.
REHMBut not across the country?
DAVENPORTNot across the country. I mean, again, it's depicted as a war on coal and I think that's right. It's just that coal producing is such a small part of the economy.
DAVENPORTAnd I think that…
DONIGERThe Republican attack on the war on coal did not work in Virginia. It did not work in Ohio in the last election.
REHMAll right. Last word, Scott.
SEGALThe only way the president can get this proposal done, on the time frame he has articulated, is by essentially ignoring interagency review of it and ignoring the input of key stakeholders. And the result will be threats to electric reliability and affordability of power. Just like we saw during the cold snap of the polar vortex.
REHMScott Segal, Coral Davenport, David Doniger, thank you so much for being here, presenting all sides of a very important issue. Thanks for listening all. I'm Diane Rehm.
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