For years leading up to the release of the federal Environmental Protection Agency’s proposed rule limiting carbon emissions from utilities, environmentalists championed the talking point that states should expand renewable energy mandates and subsidies to “get ahead” of anticipated federal regulation. States such as Wisconsin and Minnesota made major investments in renewable production, energy efficiency and environmental improvements at fossil fuel plants. States such as Kentucky and North Dakota did very little.
A funny thing happened when the EPA announced its carbon regulations in June. Did the EPA reward Wisconsin’s efforts or ask states that had been sitting on the sidelines to step up their environmental game? Not really. Instead, states that had been at the forefront of environmental progress in their energy sectors, such as Wisconsin, were asked to do even more while others were given at least a partial regulatory pass.
This inherent inequity in the EPA’s proposal will make Wisconsin less competitive by requiring ratepayers here to spend billions of dollars on compliance, while businesses and consumers in states such as Kentucky may not. This concern is first and foremost in the minds of Wisconsin employers trying to digest this incredibly complicated new regulation.
When utility bills skyrocket in Wisconsin (and it’s not a question of if but of how much) will a plant manager here be able to justify a capital project to his bosses when electric bills are considerably lower in other states? How favorably will site selectors view Wisconsin when energy costs are significantly lower in parts of the country that aren’t as hard hit by the EPA’s proposal?
The state Public Service Commission has indicated that compliance costs in Wisconsin could be in the tens of billions of dollars. Our regional electricity grid operator, MISO, estimates compliance costs in their territory could reach $90 billion. That’s before taking into consideration the new transmission infrastructure necessary to implement the EPA’s plan.
Transmission is one factor that supporters of the EPA don’t like to mention. By necessity, compliance with the proposal will mean significant new power line projects to connect Wisconsin’s population centers with the wind resources in the west as well as new natural gas pipelines. The groups cheerleading for the EPA today are often the loudest opponents of infrastructure investment. Will they change their tune to allow Wisconsin to comply with the EPA’s mandates?
All of this might be tolerable if we knew our efforts would make a difference for our planet. Under the EPA’s best-case estimates, on Jan. 1, 2030, there will be 1.3% less carbon emitting into our atmosphere than if we were to do nothing. The entirety of that reduction will be offset around noon on Jan. 14 by China’s emissions alone. Another way to look at the problem: Every ton of CO2 we reduce in the U.S. will be met with 16 tons of increases in the rest of the world. The EPA is trying to apply a state-by-state solution to a global problem. It can’t work.
At Wisconsin Manufacturers & Commerce, our thousands of members are proud to invest in our environment. It’s just that in the case of the EPA’s carbon regulations, the only thing we appear to be investing in is our own uncompetitiveness. A recent op-ed by another business group argued for policies that promote jobs and the environment. We share that mind-set, but the EPA’s proposal costs dearly and promotes neither.
See the article here.
- On October 9, 2014