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Washington, D.C. New analysis from NERA Economic Consulting projects significant negative economic impacts resulting from the Environmental Protection Agency’s proposed “Clean Power Plan” to regulate CO2 emissions from existing fossil-fuel power plants under section 111(d) of the Clean Air Act.

 

NERA projects that the costs to comply with EPA’s proposed plan could total $366 billion, or more, in today’s dollars. The analysis also finds that 43 states will have double-digit electricity price increases, with 14 states potentially facing peak year electricity price increases that exceed 20 percent. Despite these significant costs, EPA’s proposal would have a meaningless effect on global climate change: atmospheric CO2 concentrations would be reduced by less than one-half of a percent, equating to reductions in global average temperature of less than 2/100th of a degree, and sea level rise would be reduced by 1/100th of an inch—equal to the thickness of three sheets of paper.

 

NERA also projected that EPA’s Clean Power Plan could cost consumers and businesses a staggering $41 billion or more per year, far outpacing the costs of all Clean Air Act rules for power plants in 2010 ($7 billion) and the annual cost of the Mercury and Air Toxics Standards rule ($10 billion). Much of NERA’s cost projection is based on consumers having to spend more than $500 billion to reduce their use of electricity. The NERA analysis also finds that the proposal could shutter 45,000 megawatts or more of coal-based electricity, which is more than the entire electricity supply of New England.

 

EPA’s proposal sets state CO2 emission rate targets for 49 states based on four EPA “building blocks.” The new analysis is...

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