New EPA Carbon Rules Tackle CO2 from the ‘Bottom up’

The Washington policy machine will in the coming days fully analyze the Obama administration’s proposed rule to cut carbon dioxide emissions from the nation’s power plants. 

And for good reason: Today’s announcement is a genuinely big deal with its launch of proposed first-time regulations that would require the nation’s power plants to reduce their emissions by as much as 30 percent below 2005 levels by 2030. There is much to parse.

But one thing that’s worth noting right off is how fully the proposed rulemaking reflects the ongoing devolution of U.S. climate and energy policy discussions five years after the collapse of the “Waxman-Markey” cap-and-trade emissions scheme of 2009.

As I have observed here and here, the clear trend in climate and energy problem-solving these days is toward decentralized solutions at the state level. Whether it be pollution regulation, clean energy finance initiatives, or projects on the energy efficiency front, states and cities across America have been actively pursuing their own “bottom up” self-help efforts even as federal climate efforts stagnated.

So now the Environmental Protection Agency (EPA) has embraced the bottom up ethos. Far more than Waxman-Markey, the new power plant rules accept the reality of states’ varied energy systems and the virtue of local creativity in reforming them. Accordingly, the EPA will set different emissions targets for different states. As Brad Plumer explains over at Vox, that will aim to cut carbon emissions from the power sector by the targeted 30 percent below 2005 levels. Once those targets have been set, electric utilities and other actors in each state will have a lot of room to decide how to meet the reductions targets, whether by deploying more renewable energy, scaling up energy efficiency, or even joining one of the regional cap-and-trade systems like California’s Global Warming Solutions program or the Northeast’s Regional Greenhouse Gas Initiative (RGGI). Perhaps a group of states will want to create their own emissions scheme.

In any event, the direction is clear: The EPA and the White House have gone all-in with bottom-up.  They have proposed a carbon scheme that recognizes the states have been innovating, places states at the center of the emissions push, and gives them the maximum amount of flexibility to limit carbon pollution.

In short, the proposed scheme gets some big things right by moving the pollution effort from federal to “federalist.”