Obama’s Clean Power Plan: Problem or Potential?

Obama's Clean Power Plan Problem or PotentialPresident Obama hasn’t made many friends with the announcement of his Clean Power Plan—power producers, Republican opposition leaders, and even typically supportive Democrats have spoken out against the proposed changes.

The plan seems simple enough: Reduction of air pollution from currently operating plants, significant limitations on any new plant emissions and state-by-state reduction goals designed to slash carbon dioxide emissions by 32 percent by 2030. But with all the conflict over Obama’s new plan it’s time to clear the air: Are power plants staring down the barrel of more problems or does this represent big potential?

Tough Road

As noted by Jurist, states have a difficult task ahead to meet new regulation standards. For example, all states must draft a plan to meet new emission requirements, and submit this plan no later than September 2016. This no easy task in an industry already feeling pressure from alternative energy sources and increased operating costs. What’s more, many of these alternate fuel sources—from solar to wind power—are promised incentives under the new plan, making it even more difficult for traditional plants to compete.

Not surprisingly the plan has already been challenged in court. Opponents of the Obama legislation have high hopes after the recent verdict against the EPA which requires the agency to consider the cost of any regulations put on power plants—if the EPA acts recklessly, courts have the power to nullify their efforts.

Capped Out

According to the Washington Times, there are some big problems with Obama’s Clean Power Plan. One issue stems from the use of “cap-and-trade” mechanics which force energy producers to buy credits based on the amount of carbon dioxide their plants emit. The result is a kind of artificial marketplace with significantly increased costs of doing business, costs which are often passed on consumers. Previous efforts by Democratic governments to implement this kind of system have been unsuccessful, and with many states still relying on coal to keep the costs of energy manageable, it’s no wonder there’s significant pushback to a cap-and-trade plan.

Looking Up?

But it’s not all bad news for the Clean Power Plan. As noted by HPPR, some states stand to benefit from the introduction of lowered emission targets and incentives for wind and solar generating plants. Consider Oklahoma: When the plan was initially announced, Oklahoma residents and lawmakers were enraged, but cooler heads now prevail. Why? Because the state ranks fourth when it comes to both wind power capacity and natural gas production, making it the site of a potential boom.

So what’s the bottom line for Obama and his Clean Power Plan? This is a long-term project, something that comes with significant challenges for the power industry. And while some gains are possible with improved maintenance and regular cleaning routines, the real potential here lies with green power adoption—time will tell, however, if this legislation can withstand both court challenges and industry fallout.

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