The myth that ‘business’ hated Obama’s clean power plan.

Alana Semuels
Wed, 11 Oct 2017 06:44:19 +0000
Climateeconomics, Gamingscience, Climatepolitics, Climate-change, Electricity, Domestic, Activism, Economics, Fossil-fuel, Greenhouse-gases, Atmosphere-climate, Coal, Climateenergy, Rollbacks, Regulatory, Law, Coalfight, Renewable

The Trump administration has long portrayed the Clean Power Plan, a signature Obama-era initiative to reduce greenhouse-gas emissions, as a policy overreach that was bound to cost the economy jobs and constrain economic growth. That’s why, in announcing Monday he would repeal the Clean Power Plan, EPA administrator Scott Pruitt said that the reversal was a way of listening to the needs of businesses. Regulations “ought to work with folks all over the country and say, how do we achieve better incomes by working with industry, not against industry,” Pruitt said Monday, in Hazard, Kentucky.

He was partially correct. Some business groups did indeed laud the reversal Tuesday. The president of the U.S. Chamber of Commerce’s Global Energy Institute said that the group had “always believed that there is a better way to approach greenhouse gas regulations than the [Clean Power Plan].” Peabody, the nation’s biggest private-sector coal company, said it supported the repeal, adding that the plan would have raised power costs and damaged reliability.

But the Clean Power Plan, which which would have required states to meet certain individualized targets to limit emissions from existing power plants, was also supported by a wide array of businesses. Many big companies that have publicly pledged to reduce their environmental footprint would have been happy to see a shift toward more renewable energy, and even stood to benefit from it if it brought their energy costs down. The divide highlights something that is becoming increasingly obvious as the Trump administration rolls back various Obama-era policies: The business world isn’t a monolith, and some benefit from regulations that others detest.

In the legal battle over the Clean Power Plan that eventually made its way to the Supreme Court, which put the plan on hold last year, many of America’s biggest companies filed briefs in support of the plan. Amazon, Apple, Google, and Microsoft were in that camp, writing that while they are big consumers of electricity, they have all tried to limit their environmental impact because of concerns about climate change. Thus far, they have had to develop their own renewable energy facilities in order to meet their own goals, but the Clean Power Plan would provide them with more—cheaper—options, they argued. They also suggested that they want to take steps to protect the environment to forestall future natural disasters and global public health crises—events that would be both humanitarian and business disasters. “Delaying action on climate change will be costly in economic and human terms,” they argued.

When asked for comment Tuesday, Google referred The Atlantic to a joint statement from Amazon, Apple, Google, and Microsoft in March, when President Trump issued an executive order calling for a review of the Clean Power Plan. “We believe that strong clean energy and climate policies, like the Clean Power Plan, can make renewable energy supplies more robust and address the serious threat of climate change while also supporting American competitiveness, innovation, and job growth,” the statement read.

Consumer brands such as Adobe, Mars, Ikea, and Blue Cross Blue Shield of Massachusetts supported the plan too, writing that, as businesses that buy a large amount of power, they are sometimes challenged to find enough renewable-energy sources. The Clean Power Plan would have made it easier for them to meet renewable energy goals that they have already issued; revoking it will make that more difficult. Furthermore, they argued, the Clean Power Plan helped create a timeline for how the mix of energy sources would be changing in the future, which meant they could make plans taking those changes into account; repeal of it will create further uncertainty.

Dominion Resources, an energy company that operates Dominion Virginia Power, a utility that serves 2.4 million customers in Virginia and 100,000 in North Carolina, also filed a brief supporting the Clean Power Plan, in part because the way the state of Virginia was implementing the plan would allow the company to build more natural gas plants—something that would have meant that in the long run Dominion could have been ahead of other utilities in power-generation capacity. Wind and solar energy companies supported the plan, too.

“It was really just a small minority of businesses that were against it,” John Quigley, the former Secretary of the Pennsylvania Department of Environmental Protection, told me. Quigley held hearings around the state about the Clean Power Plan, and told me that while coal companies and manufacturing associations were against it, utilities said they just wanted some sort of regulatory certainty, and gas companies stayed out of the debate. Overall, he said, about 80 percent of the comments received by the state of Pennsylvania were positive, though that also included comments from private citizens and advocacy groups.

Indeed, the list of companies supporting the Clean Power Plan raises the question of who Pruitt was referring to when he said the Trump administration wanted to work with, rather than against, industry. The companies supporting the Clean Power Plan are among the biggest employers in the country, and also contribute the most to economic growth—the four combined tech companies have a market value of $1.7 trillion.

There may have been some reason for small manufacturers to be worried about the Clean Power Plan, according to Stephen Munro, a policy specialist at Bloomberg New Energy Finance, a research firm. A credit system set up through the Clean Power Plan to incentivize low-carbon energy could have raised the cost of electric power. Opposition was really concentrated among small and mid-sized manufacturers that were big consumers of power, including the metals industry and textile companies, he said.

Businesses opposing the rule in court include the railway Norfolk Southern, the Municipal Electric Authority of Georgia, and the coal company Peabody. The U.S. Chamber of Commerce, which has already lost the membership of dozens of U.S. companies over its stance on environmental protection, and various state and local Chambers of Commerce also opposed the Clean Power Plan, arguing that it would make it more difficult for local businesses to operate because it would increase energy costs. They argued the plan would increase unemployment for people who work at coal plants and those businesses that support coal workers. The rule, they argued in a brief, would affect rural communities whose utilities would shut down because they won’t be able to afford to make the shift away from coal. “The result will be economic disaster,” the brief from 166 state and local business associations argued.

But many energy-industry analysts say predictions of economic disaster are overblown. In fact, said John Larsen, an analyst with The Rhodium Group, current market trends mean that many businesses are shifting away from coal anyway. Natural gas costs continue to stay low, and the price of renewables like solar and wind keep falling, motivating more companies and utilities to make the shift. According to a recent analysis by the Rhodium Group, at most 21 states would have had to do something to comply with the Clean Power Plan, while the rest would have met requirements of the rule through their existing efforts. “I think there’s a small group of very vocal critics of the Clean Power Plan that are happy today,” Larsen told me. Other businesses may have to become more vocal if they want to achieve similar results.