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Study: US EPA's Affordable Clean Energy rule to hike emissions in several states

Although it may drive a slight decline in the nation's overall carbon dioxide emissions in the next decade, the U.S. Environmental Protection Agency's proposed Affordable Clean Energy, or ACE, rule will raise the output of carbon and/or criteria pollutants in roughly 20 states, a new study found.

Further out, the rule even could cause U.S. power-sector CO2 emissions to exceed levels that otherwise would occur with no policy in place, according to a new analysis published by Environmental Research Letters.

The ACE rule seeks to improve the efficiency of existing U.S. coal-fired power plants, but the heat rate improvements upon which it is based could prompt more coal units to operate or some plants to run more frequently, the analysis said. That could cause a "rebound effect" that ultimately could increase carbon output in many states compared with no rule, said the report, which was put together by researchers with Resources for the Future, the Harvard T.H. Chan School of Public Health, and other universities and organizations.

Despite achieving a modest reduction in nationwide power-sector CO2 emissions, the ACE rule could increase carbon output in 2030 by up to 8.7% in 18 states plus the District of Columbia compared to no policy, the study found. States that could see increases include California, Texas, New York and many southeastern coastal states, including Florida. The study also found that the ACE rule could increase SO2 emissions in 18 states and raise NOx output in 20 states plus D.C. in 2030 compared with no rule.

The analysis suggested that by 2050, national CO2 emissions under the ACE rule would exceed emissions that would occur without any policy under two out of three heat-rate improvement scenarios as a result of plants potentially delaying retirement because their operations costs will be lower. Under the third scenario, which assumes existing coal plants achieve a uniform 4.5% heat rate improvement at a cost of $100/kW, emissions under the ACE rule could be lower than without any policy in place, but achieving that efficiency target would be difficult, the report said.

To reach their conclusions, report authors used results from the EPA's own power-sector model for the ACE rule. They also compared their findings to additional EPA ACE scenarios and modeling results for similar policies.

"Our findings demonstrate the importance of considering the emissions rebound effect and sub-national emissions impacts in evaluating the ACE and similar policies targeting heat rate improvements," the study said.

The ACE rule is intended to replace the Obama administration's Clean Power Plan, which established state-specific carbon emissions rate limits for all existing fossil fuel-fired plants. The Trump administration has proposed to repeal the Clean Power Plan, which the U.S. Supreme Court placed on hold in February 2016 pending the outcome of lawsuits against the regulation.

The study published in Environmental Research Letters said carbon emissions under the Clean Power Plan would have been lower through 2050 than with the ACE rule. But the EPA defended its proposed new rule, which it said would reduce U.S. greenhouse gas emissions 34% from 2005 levels when fully implemented.

"[The Clean Power Plan] did not result in any reduction in CO2 because it was legally problematic and stayed by the U.S. Supreme Court," agency spokesman John Konkus said. "ACE, on the other hand, would continue to reduce emissions across the nation."

The ACE rule would allow states to make their own plans for lowering greenhouse gas emissions from existing coal-fired plants. The EPA's proposed "best system of emission reduction" for those sources would be heat-rate improvements that can be achieved through a range of "candidate technologies," including steam turbine upgrades and computer modeling to optimize emissions control technologies. Once the ACE rule is finalized, states would have three years to form their implementation plans.

By contrast, the Clean Power Plan would allow states to hit their specific emissions rate targets through several "building blocks," including shifting generation to lower-emitting plants such as those running on natural gas or renewable energy.