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Mark Cuban says he has the solution to growing income inequality, and it's to reward every employee—from CEO to janitor—with company stock

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New Energy

In Obama’s climate change rule, coal states catch a break

Claire Zillman
By
Claire Zillman
Claire Zillman
Editor, Leadership
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Claire Zillman
By
Claire Zillman
Claire Zillman
Editor, Leadership
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June 3, 2014, 3:04 PM ET
Ohio's Struggling Economy
CHESHIRE, OH - FEBRUARY 4: The stacks from the Gavin coal burning power plant dwarf a small nearby home on February 4, 2012 in Cheshire, Ohio. (Photograph by Benjamin Lowy/Getty Images)Benjamin Lowy—Getty Images
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When Environmental Protection Agency administrator Gina McCarthy announced what’s been touted as the most dramatic update to climate change regulation in a generation on Monday, she set the country on course to cut emissions from coal-fired power plants by 30% nationwide by 2030.

It’s no shock that environmental groups praised the regulation. The Sierra Club, for example, applauded the measure and President Barack Obama for “mak[ing] good on his promise to American families that his administration would tackle the climate crisis, and clean up and modernize the way we power our country.”

Lawmakers from states that are economically dependent on coal are — of course — none too pleased.

Senator Rand Paul, a Republican from Kentucky, said the rule was an “assault” on the economy and that he’d “force a vote to repeal it.” Senate minority leader Mitch McConnell, also from Kentucky, called the regulation “a dagger in the heart of the American middle class” that would likely result in increased power costs and less reliable energy. Representative Nick Rahall, a Democrat from West Virginia, said that the regulation threatens his state’s economy and “does so with an apparent disregard for the livelihoods of our coal miners and thousands of families throughout West Virginia.”

But these states and their leaders need to take a moment and cool their fossil fuel-powered jets.

With a nationwide goal of 30% fewer emissions by 2030, the EPA established state-specific emission reduction goals that are based on each “state’s mix of energy sources and opportunities to achieve reductions.” The required pollution cuts fluctuate wildly from state to state and the bottom line is that those that depend on coal are catching a bit of a break.

Kentucky, which gets 93% of its electricity from coal, must reduce its power plant emissions rate by 19%, according to analysis by the Georgetown Climate Center. West Virginia, a state that gets nearly 96% of its electricity from coal, must cut its emissions by 21%. Other states that get more than half of their electricity from coal must cut emissions by similar amounts: Indiana and Missouri must both decrease emissions by 23%, while emissions in Ohio and Utah must go down by 29%.

No doubt, these requirements will disrupt energy production in coal-burning states. In fact, that’s the point of the rule. But compare those emissions standards to those expected from states that already use non-coal energy sources, and those requirements don’t look nearly as onerous.

Washington state, for instance, which depends on coal for just 3.2% of its electricity, must further reduce emissions by 84%. Idaho, where 0.5% of electricity is coal-generated, must cut its emissions by 73%. In Oregon, 4.3% of electricity comes from coal and the state must lower its emission by 66%.

In some instances, the higher reduction goals reflect those states’ potential for renewable energy production, according to Vicki Arroyo, executive director of the Georgetown Climate Center. “Some states have more capacity for hydro[power] than others,” she says “Some are rich in wind or solar; those are all factors.” Some of these states have already committed to renewable standards and the EPA seems to be holding them to those promises. (The agency did not return a request for comment.)

But the bottom line, Arroyo says, is that “states with clean energy are also going to have to make significant investments in future renewables, while states with a lot of coal have more modest goals.” So, regulation isn’t necessarily the job-killing, coal-bashing initiative that some coal-dependent states are making it out to be.

About the Author
Claire Zillman
By Claire ZillmanEditor, Leadership
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Claire Zillman is a senior editor at Fortune, overseeing leadership stories. 

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