This spring, the US Environmental Protection Agency (EPA) has announced three regulations that affect the US power sector. All three would fulfill directives in the Clean Air Act. Of the three, EPA first released the so-called “Good Neighbor Plan,” which aims to address emissions of nitrogen oxide that the wind blows across state lines. The second proposal includes a review of and amendments to an existing EPA rule, the Mercury and Air Toxics Standards. The third proposal (yet to receive a moniker) would limit the amount of greenhouse gases that power plants are allowed to emit.
In a recent event, Resources for the Future (RFF) hosted a trio of experts to examine the contents, context, and implications of these proposed regulations—along with the next steps in the regulatory development process.
Good Neighbor Plan Aims to Reduce Traveling Emissions
The Clean Air Act requires EPA to set air-quality standards for pollutants that are detrimental to public health and the environment. One of the regulated pollutants, ground-level ozone, forms when nitrogen oxide combines with other pollutants. Power plants and certain industrial processes can emit nitrogen oxide, which is part of the reason that EPA has targeted those emitters with the Good Neighbor Rule.
Some states effectively limit their own emissions of nitrogen dioxide and fulfill EPA’s air-quality standards within their own boundaries. However, if wind carries nitrogen dioxide over state lines, then these traveling emissions can push other well-behaving states over the established air-quality limits.
“That failure is not supposed to happen,” said Chris Hoagland during the RFF Live event. Hoagland is the director of air and radiation at the Maryland Department of the Environment. “The Good Neighbor Plan is a measure to address the problem of traveling emissions and require all states to reduce the pollution that they are causing downwind.”
The Good Neighbor Plan is the only one of these three rules that EPA has finalized. The rule took effect in May this year.
Revised Mercury Rule Pinpoints Lingering Sources of Pollution
While EPA regulates a range of pollutants through the Mercury and Air Toxics Standards, mercury has been the agency’s focus due to the severe negative impacts of the chemical on human health. Overall, the federal regulation of mercury pollution has been a success: between 2008 and 2020, mercury emissions from US power plants have decreased by 90 percent. But disparities in mercury levels among communities remain, particularly in regions of North Dakota and Texas, where a large amount of lignite coal (known as “brown coal”) is mined and burned and serves as a stubborn source of mercury pollution.
“EPA has had weaker standards for lignite coal in earlier iterations of the Mercury and Air Toxics Standards,” said Elsie Sunderland, a professor at Harvard University, during the event. “The proposal would strengthen those rules.”
The benefits of mercury regulation may be higher than EPA has estimated, noted Sunderland. More comprehensive estimates of these benefits could help this proposal withstand legal challenges. EPA will accept public comments on the proposal until June 23, 2023.
Greenhouse Gas Regulation Balances Legal Challenges and Technological Feasibility
The Clean Air Act requires EPA to regulate greenhouse gas emissions, but the agency’s previous attempts to regulate emissions from power plants have encountered legal challenges. The new proposal would replace a rule that a US circuit court annulled in 2021. “EPA also had to consider the 2022 Supreme Court decision in West Virginia v. EPA,” said Carrie Jenks during the event. Jenks is executive director of the Environmental and Energy Law Program at Harvard Law School. “The ruling constrained how EPA could regulate greenhouse gas emissions.”
Rather than setting emissions standards that focus on the outcomes of a transition to a greater reliance on sources of renewable energy, EPA’s proposal has focused on strategies for reducing emissions that are achievable, cost-effective, and tailored to existing power plants according to the type of fuel that the plants use, how frequently the plants generate electricity, and the expected retirement dates of the facilities.
The proposed rule would require coal-fired power plants that are going to operate beyond 2040 to capture 90 percent of their carbon dioxide emissions by 2030. Large natural gas plants that are going to operate at full capacity beyond 2040 can fulfill the emissions standards in either of two ways: capture 90 percent of carbon dioxide emissions by 2035, or blend natural gas with hydrogen in increasing proportions. “These natural gas-fired plants probably need to decide by 2031 which path they’re going to take,” said Jenks.
EPA’s approach with the new proposal—focusing on actions that individual power plants can take—is more consistent with how the agency has interpreted the Clean Air Act in the past. “I think that gives people comfort that EPA is staying within their lane,” said Jenks. EPA is accepting public comment on the proposal until August 8, 2023.
Contextualizing the Proposed Rules
The proposed amendments to the Mercury and Air Toxics Standards align with the Biden administration’s focus on fusing environmental justice and climate policy, said Sunderland. “When we think about mercury, we want to think about the people who are most vulnerable to local pollution from utilities,” she said.
The Inflation Reduction Act, a law that uses tax credits and other subsidies to promote a major shift in how the United States produces and consumes electricity, also provides context for the Good Neighbor Plan and the proposed rule for greenhouse gas emissions from power plants. “The government is coming at the problem of climate change from different directions—through direct incentives and tax policies, and also through regulation,” said Hoagland. “Climate change is an enormous problem. It makes sense that the government is deploying all available tools to address it.”
The timing of the rule announcements may simplify the deployment of these tools. “It’s helpful for state regulators and power plant operators to know the different programs across different [pollutants] that they have to plan for,” said Hoagland. “EPA deliberately has been trying to do these things together, so that everybody can plan them all at once.”
