In CPP Debate, Biggest Sparks Fly Over Job Creation

In the fight over the Clean Power Plan, proponents and opponents typically trade the fiercest jabs over how the administration’s emissions rule for power plants would impact employment.

It’s a battle with a lot of cherry picking. Conservative legislators and industry advocates point to the rules’ expected impact on the embattled coal industry, and have gone so far as to say that states should ignore the regulation to protect workers and families. Supporters, on the other hand, are keeping the focus on the potential upswing: creating more new jobs in clean energy technologies than would be lost in the fossil fuel industry.

Most Republicans and a handful of fossil fuel friendly Democrats fall on the staunchly opposed side of the fence. “The agency’s regulations will threaten… countless jobs in the energy, production and manufacturing sectors, and the American economy,” Sen. Joe Manchin (D-W.V.) told reporters in May. “That is simply unacceptable.”

I think it’s pretty clear [the Clean Power Plan] should be a net gain for employment. At the very crude level you’re basically getting people to go out and build a bunch of stuff. – Thomas Lyon, University of Michigan

Supporters counter that the CPP would allow jobs to flourish elsewhere.

“I think it’s pretty clear [the Clean Power Plan] should be a net gain for employment,” said Thomas Lyon, a director of business economics and public policy at the University of Michigan, in an interview. “At the very crude level you’re basically getting people to go out and build a bunch of stuff.”

In May Lyon assessed the credibility of a report done by two economists: Doug Meade of the University of Maryland’s inter-industry forecasting project, and Jason Price of Industrial Economics Inc., a private consulting firm whose clients span the public and private sectors.

The study found “the proposed Clean Power Plan is likely to increase U.S. employment by up to 273,000 jobs.” Lyon called the report “impressive,” and said that it “didn’t seem like there were any slights of hand.”

The report was funded by the Energy Foundation, which promotes energy efficiency and renewable energy.

Environmental advocates have seized on the IEc report to flip a common criticism of the CPP — that it’s a job-killer — on its head.

But opponents have fired back with analyses of their own. One from the Heritage Foundation found that employment could track 300,000 below what it would be without carbon regulations.

However, the study does not measure the CPP in isolation. Instead, it analyzes a comprehensive set of carbon regulations, and models the impact of the CPP using a carbon-tax equivalent. “In order to estimate the impact on the economy of the Clean Power Plan’s regulatory scheme… we have modeled the impact of an equivalent tax of $37 per ton carbon emissions,” the study reads.

The most official analysis of the CPP yet comes from the Energy Information Administration, the statistics arm of the Department of Energy, which released a report on the proposed regulation in May. The government forecasters found that implementing the CPP could more than double the shutdown rate of coal fired power plants.

EIA did not predict any specific or overall employment figures, nor did it consider potential health or environmental benefits. It did measure GDP, finding that the impact on the economy as a whole would likely be negligible: “the level of GDP in the CPP… [case] is almost indistinguishable from that projected in the AEO2015 Reference case that serves as [the] baseline,” the researchers wrote.

That didn’t stop both sides from using EIA’s analysis to support their position.

“In short, EIA confirms EPA’s rule is all pain, no gain — a symbolic, but expensive gesture that continues the administration’s policy path for destroying high wage jobs,” the National Mining Association President Hal Quinn said in a statement.

Rep. Eddie Bernice Johnson (D–Texas), ranking member of the Committee on Science, Space and Technology, had a different take during a June hearing on the EIA report.

“I suspect that some Members and witnesses will be making the same old argument that EPA regulations are killing the economy and jobs,” she said. “We know that this just isn’t true, and it isn’t what EIA’s analysis shows.”

Josh Bivens of the Washington-based Economic Policy Institute, a pro-labor think tank, suggests in a study he authored that the employment impacts of the CPP are stealing the spotlight when they probably shouldn’t.

“Despite the fact that jobs and employment growth are among the smaller outcomes of the proposed rule, they tend to garner outsized attention in debate over the rule,” Bivens wrote in the June study, which found the CPP would increase jobs by 360,000 in 2020.

“While job creation is not a primary goal, it’s still useful to know that the proposed CPP will provide a small boost to overall employment growth in coming years,” Bivens continued. “However, it will also place disproportionate burdens on some economic sectors and communities, and policymakers should address these challenges with complementary policies.”

Workers in electric power generation, transmission and distribution, and coal mining stand the most to lose. EPI estimated job losses in the electric power sector could be as high as 40,000 by 2030. 

“This is an area where it behooves states to get ahead of the game,” said Nicholas Bianco, who oversees the analytical research conducted in support of the non-profit Environmental Defense Fund’s climate and air regulatory team, in an interview.

He said that EPA is giving states “a tremendous amount of flexibility,” to develop their own transition programs to help displaced power sector workers find new jobs, and that states should be “pro-active” in crafting those policies.

That’s not enough assurance for the coal and mining industries.

When asked about the CPP’s effect on employment, Luke Popovich, a vice president at the National Mining Association, cited years of job losses in the coal mining industry — north of 45,000 since 2011, according to data from the U.S. Mine Safety & Health Administration.

“These losses are driven by administration regulations that have destroyed coal-fired generation,” Popovich said in an email. While he conceded that market forces are partly responsible for the downturn, he said that the Clean Power Plan and other EPA regulations would be mostly to blame for future job losses in the energy industry.

Morning Consult