Assessing the Final Clean Power Plan

January 7, 2016

The U.S. Environmental Protection Agency’s (EPA) Clean Power Plan (CPP) is the most significant greenhouse gas policy ever undertaken in the United States and is expected to achieve significant emission reductions by the time it is fully implemented in 2030. However, calculating the ultimate emissions-abatement potential is more difficult than simply adding up the state reduction targets. While the EPA has set a floor on cumulative emissions from existing fossil-fuel-fired power plants, it has not set a ceiling, and projecting the actual emissions outcome on a national level is not straightforward due to the flexibility states have in implementation.

In this note, the authors seek to deepen understanding of the potential emissions outcomes of the CPP and what factors could influence that outcome. They start by explaining the primary factor that has the potential to undermine EPA’s emissions floor—leakage—and how EPA is attempting to address that issue. They then turn to a quantitative analysis of two potential pathways for state implementation plans under optimal implementation conditions. Bearing in mind that optimal implementation is unlikely, they also explore key drivers and decisions that could result in emissions that are higher or lower than initial projections.