Comment to the Environmental Protection Agency Proposed Rule: Performance Standards and Emission Guidelines for Greenhouse Gas Emissions From New, Modified, Reconstructed, and Existing Fossil Fuel-Fired Electric Generating Units

By Benjamin Zycher of AEI.

"The asserted climate “benefits” of the proposed rule are an illusion; under the explicit EPA assumptions and estimates as published, the temperature effect of the proposed rule would be 0.001°C to 0.0016°C by 2050, and less than 0.003°C to 0.023°C by 2100. Because the standard deviation of the surface temperature record is 0.11°C, those effects would not be detectable. Accordingly, the present value of the monetized climate benefits of the proposed rule, asserted by EPA at $30 billion, also is an illusion.

 

EPA attempts to circumvent this obvious problem by substituting in place of any such analysis an application of the “social cost of carbon” to the asserted reductions in GHG emissions attendant upon implementation of the proposed rule, as estimated on an interim basis by the Biden Administration Interagency Working Group. The interim IWG estimates are deeply flawed, in that they (1) distort the actual economic growth predictions produced by the integrated assessment models, (2) base predictions of future climate phenomena on climate models that cannot predict the past or the present, (3) incorporate “co-benefits” in the form of a reduction in the emissions of other criteria and hazardous air pollutants already regulated under different provisions of the Clean Air Act, (4) incorporate the asserted benefits of GHG reductions on a global basis, and (5) employ discount rates that are inconsistent and inappropriate.

 

The EPA application of discount rates is incorrect because the regulatory reallocation of resources in pursuit of increased economic efficiency is an investment, the opportunity cost of which is the marginal social return to investment. The common argument that a low discount rate is needed to further the goal of intergenerational equity is not correct. Future generations prefer to receive a bequest of an aggregate capital stock both natural and manmade more- rather than less valuable, an objective that requires efficient resource allocation by the current generation, and therefore the application of the correct discount rate. 

 

The proposed rule establishes a carbon capture and sequestration requirement of 90 percent by 2035, but none of the notional CCS projects cited in the proposed rule has achieved that standard. That there is no such commercial CCS plant in the U.S., and only one internationally, demonstrates that CCS technology has not been adequately demonstrated.

 

EPA asserts that “The increasing concentrations of GHGs in the atmosphere are, and have been, warming the planet, resulting in serious and life-threatening environmental and human health impacts. The increased concentrations of GHGs in the atmosphere and the resulting warming have led to more frequent and more intense heat waves and extreme weather events, rising sea levels, and retreating snow and ice, all of which are occurring at a pace and scale that threatens human welfare.”

 

Those assertions are not supported by the evidence. There is no evidence of a climate “threat” or “crisis” in terms of temperature trends, polar sea ice, tornadoes, tropical cyclones, wildfires, drought, flooding, or ocean alkalinity. The Intergovernmental Panel on Climate Change is deeply dubious about the various severe effects often asserted as prospective impacts of increasing atmospheric concentrations of GHG. Moreover, NASA reports significant planetary greening as a result of increasing atmospheric concentrations of carbon dioxide, and data from the United Nations Food and Agriculture Organization show that global per capita food production increased 46 percent between 1961 and 2020, and 20 percent for 2000-2020.

 

The “crisis” narrative is derived wholly from climate models that cannot predict the actual temperature record. In particular, the suite of climate models underlying the IPCC 5^th and 6^th Assessment Reports overstate the mid-troposphere temperature record by factors of about 2.5. Moreover, the models are fine-tuned in such a way as to deny the importance of natural influences on climate phenomena, but that is inconsistent with a large body of evidence, in particular the substantial warming observed from 1910 to 1945, and the close correlation between the satellite temperature record and the El Niño/Southern Oscillation.

 

The “environmental justice” concept is too narrow. Environmental quality is one component of “health” broadly defined, and it is clear from the scholarly literature that “health” is a “normal” good, that is, one the consumption of which rises with income or wealth. This is true for individuals and for economies as a whole. Lower-income individuals and households, precisely because their incomes are lower, consume less environmental quality, lower-quality diets, ad infinitum. Therefore, it is unsurprising that lower-income individuals and households tend to be located in areas with lower environmental quality; that is what they can afford. This is a reality regardless of the impacts of differences in environmental quality on “health,” that is, mortality and morbidity.  More broadly, EPA fails to define the “environmental justice” concept, undoubtedly because it is wholly subjective, and thus not measurable in any “objective” sense, leaving the definitions to the imaginations of the regulatory agencies. Nor does EPA explain why we should expect regulatory policies to advance such goals however defined, and the same is true for the longstanding problem traditionally described as the equity/efficiency tradeoff. 

 

The proposed rule is fatally flawed, and should not be finalized."