Policy Memo: Clean Power Plan Put on Hold – Ohio Reacts
TO: OHIO GOVERNOR, JOHN KASICH
FROM: MATTHEW LANDINI, OHIO RESIDENT, UNDERGRADUATE ENVIRONMENTAL ANALYST, DAVIDSON COLLEGE
SUBJECT: CLEAN POWER PLAN PUT ON HOLD: OHIO REACTS
DATE: MARCH 20, 2016
On February 9th, 2016, the U.S. Supreme Court put a stay on the Clean Power Plan – preventing state planning and freezing development. The halt allows the D.C. Circuit Court of Appeals to debate the legality of President Obama’s proposal before it is implemented. Despite the temporary restriction, Ohio should take preemptive steps and create a timetable to reduce carbon emissions by 32% in 2030.
Reducing carbon emissions is an environmental necessity and a political “hot take.” The challenge to the Clean Power Plan (CPP) is regulatory. That is to say, Republicans object to how the CPP imposes federal authority over state authority. Historically, the EPA has been given sweeping authority to regulate state resources. While the courts debate this precedent, Ohio has the unique opportunity to reaffirm the importance of state involvement in overcoming environmental challenges. Gov. Kasich can prove the importance of state regulatory authority by rendering the CPP unnecessary with his own environmental plan.
Carbon emissions hurt Ohioans.
- In 2013, Ohio ranked 5th in total carbon dioxide emissions with 229 million metric tons. West Virginia, by comparison, ranks 22nd despite being a comparable energy producer. As Gov. Kasich says, “we can do better.”
- In 2012, Ohio set 583 new high temperature records.
- Rising temperatures contaminate drinking water and hurt the fishing industry by increasing the algae blooms and number of invasive species in Lake Erie.
Diversifying energy sources helps consumers. In the past, Gov. Kasich has testified on the importance of diversifying energy sectors. Supporting renewable energy creates new sources of power, revenue, and jobs.
- Private growth creates opportunities for workers. It also encourages existing energy corporations to explore new enterprises to stay competitive.
- AEP, Duke, and FirstEnergy monopolize Ohio’s energy market. Promoting new energy sources (and businesses) gives consumers greater independence and more buying power.
- Polls show the majority of Ohioans want new energy sources.
State subsidies promote energy independence. Subsidizing new energy startups helps them grow.
- Raising taxes on carbon producers (per metric ton) also better incentivizes business to change processes and maximize efficiency.
Each of the following solutions uses a weighted scale (from 12.5% to 25%) to illustrate the impact on different social, political, and economic variables. The final weighted score – ranging from 1-3 – shows the total impact that decision will have on different stakeholders. “1” means that the costs of the solution outweigh its benefits. “2” is neutral, i.e. costs match benefits. “3” is ideal, as benefits exceed costs.
- No change, wait for the courts to make a ruling. Do not preempt any environmental plan.
- Feasible, but purposefully ignores the negative impact carbon emissions have on Ohioans.
- Expends little political capital. Has no negative economic effect, but prevents any future gains.
- Check existing industries by regulating carbon emissions.
- Levy a tax on carbon emissions to discourage polluters. Taxes are effective in eliminating behavior that negatively impacts Ohioans.
- Encourage research and development (R&D) as a way to reduce those taxes.
- Regulatory proposals require significant political capital. In this instance, benefits match costs. Offset any carbon tax with cuts to payroll and/or income taxes, i.e. pro-growth taxes.
- Encourages bipartisan cooperation.
- Public program to subsidize new start-ups.
- Build on public sentiment to diversify energy sources. Effectively break the monopoly imposed by AEP, Duke, and FirstEnergy and encourage competition.
- Gives consumers and buyers much more political/economic power.
- Encourages local innovation and entrepreneurship. Requires hefty amounts of political capital, while not guaranteeing a reduction in carbon emissions.
- Match some CPP regulations. Preempt the courts.
- Meet President Obama’s recommendation and propose a 32% reduction in Ohio carbon emissions by 2030.
- Enforce a tax (per metric ton) on carbon emitters. Announce subsidies for existing energy companies looking to diversify with new technology. Encourage start-ups to do the same.
- Will expend significant political capital – follows cues from the Obama Administration.
- Lead the bipartisan charge for environmental change..
- Affords maximum environmental, social, and economic rewards. Frame Ohio as the “Silicon Valley” of energy.
It is in Gov. Kasich’s best interest, based on our scoring system, to match some of the CPP regulations before the courts make a final decision. He can frame his environmental plan as a response to unfair federal regulations, while dictating how and when taxes and state subsidies are appropriate.
|Effectiveness||Political Capital||Social Benefits||Environmental Benefits||Economic Benefits||Weighted Score|
|Do Nothing (Status Quo)||1||1||1||1||2||1.25|
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