June 3, 2014 at 1:00 am


Editorial: Obama's carbon rules will choke economy

Energy prices will rise as large, coal-fired power plants are taken off line without a credible plan to replace them

Eliminating one-third of America's coal plants is a choice for Congress to make, not the EPA. (Daniel Mears / The Detroit News)

President Barack Obama, in presenting his strident new plan to reduce carbon emissions, is touting the health benefits of cleaner air. And thereís little doubt shutting down one-third of the nationís coal plants will make Americaís air cleaner and some people healthier.

But it will also risk making them hungrier, less prosperous and more likely to be unemployed as the nationís economy slows and jobs disappear. The tough, new restrictions on smokestack emissions are the latest in a series of battles in the administrationís war on coal.

And while the power industry has achieved substantial reductions in carbon emissions over the past decade, the new standards would greatly accelerate the pace. The Environmental Protection Agency, which drafted the mandates, is targeting a 30 percent cut in greenhouse gases by 2030 based on the peak emissions year of 2005.

The power industry estimates that up to one-third of its 1,000 coal-fired facilities will have to close. Those plants produce 40 percent of the nationís energy.

While everyone wants cleaner air, the fundamental problem with the administrationís agenda is that it has no credible plan for replacing the lost power.

While conservation and green energy sources such as windmills and solar will fill some of the void, they arenít yet capable of producing anywhere near the power of 300 or so base-line coal plants. Natural gas will also play a big role ó but it, too, is a fossil fuel, and one subject to disruptive price swings.

Thereís still little appetite for expanded use of nuclear power. And many of the same environmental groups who are fighting coal and oil also push back against the infrastructure needed for wind, solar and hydro power and object to fracking for natural gas.

As usual, Obama tossed out a lot of very hopeful numbers on how much the United States will save in reduced health care costs, how many new green energy jobs will emerge and how much economic growth will result.

Such promises are always attached to green energy initiatives, but rarely materialize.

The White House cites as myth the projections by the U.S. Chamber of Commerce that the regulations will reduce employment by 224,000 jobs annually, hike electricity bills by $289 billion and trim $500 billion from household incomes.

Europeís experience with such hardline carbon rule-making would suggest the chamberís claims are more credible than the administrationís. Clean energy investment among European Union members dropped 14 percent in the third quarter of last year, as governments reconsidered policies similar to the ones Obama is putting in place.

The reason: Electricity costs in Europe are the highest in the world, and are helping to drive away manufacturing jobs. Instead of shutting down coal plants, Europe is actually building them again as a way of dropping those crushing electricity costs.

Higher utility bills will hurt poorer Americans the hardest, and ultimately will necessitate even more wealth transfer schemes.

In addition, the resurgent U.S. manufacturing industry will be slowed. Energy is a crucial component of building things, obviously, and today American manufacturers enjoy a distinct advantage because of relatively low electricity costs. Raising those costs will hit industrial states, like Michigan, particularly hard.

This is a major piece of policy that will impact the economic course of the nation for decades. And yet it is being done through the agency rule-making process, and not by Congress.

Such a monumental shift should come with the approval of the representatives of the American people, who, according to opinion polls, arenít nearly as worried about the impact of carbon emissions as they are the stagnant economy and scarcity of good jobs. Obamaís carbon mandates will only exacerbate those concerns.

Four times, Congress has killed carbon cap measures.

It should act to block this one, too.