Opinion

When Crafting a Clean Electricity Standard, Please Don’t Forget the Standard

In April, President Joe Biden delivered the most ambitious climate pledge of any U.S. administration in history. He promised to put in place policies that by 2030 will reduce the nation’s greenhouse gas emission levels to half of what they were in 2005, and that by mid-century will achieve a net-zero emission economy. Right now, there’s a narrow window of opportunity to make progress on those goals with a bold, climate-focused infrastructure package.

As many analyses have shown, the linchpin to reaching the president’s climate targets is to reduce emissions from the power sector by at least 80 percent below 2005 levels by 2030. These reductions are both readily available and highly cost-effective – and they are the key to unlocking necessary reductions in other sectors, such as transportation, buildings and industry, by providing them with the clean electricity they need to replace fossil fuels. This clean shift across the economy can generate massive rewards beyond the climate – cleaner, healthier air and new jobs in rapidly growing low-carbon industries.

Recognizing the magnitude of this moment, the Biden administration and many Democrats in Congress have rallied behind a potential suite of powerful climate solutions, including a federal clean electricity standard.

Over a dozen major power providers, as well as power-consuming businesses including Apple, Google and General Motors, are also on record in support of a CES that calls for an 80 percent reduction in electricity-based emissions, with power providers aptly noting in a letter to the administration that “such a national policy can provide the certainty that the emission reductions needed from the power sector will be achieved.”

Other proposals by the president and Congress to ramp up incentives for renewable power and storage are also critically important: The tax provisions contained in Sen. Ron Wyden’s (D-Ore.) Clean Energy for America Act, for example, would provide a meaningful boost to deployment of zero-emission electricity. Yet given the pace of change needed in the coming decade, the power sector is likely to fall short of the necessary reductions with incentive-based policies alone.

This is where a clean electricity standard that establishes a strong standard of performance comes in: Electric power companies need to have a clear compliance obligation that ensures clean electricity will be deployed, and climate and local air pollution will be slashed. It’s the requirement itself that sets this type of policy apart from strategies that purely incentivize companies with payments – it’s what makes the CES a “standard.” In other words, a requirement means that regulators will have the tools to keep companies on track.

This is critical because, as explained by the Environmental Protection Agency’s former compliance chief, Cynthia Giles, companies’ compliance rates are much lower than assumed by policymakers. As noted in her analysis, “enforcement serves an essential role… [and] a compliance program can’t succeed without it.”

But Giles’ analysis also underscores the importance of having a well-designed policy. Policies that are transparent, have uniform and straightforward requirements and leverage advanced monitoring and reporting systems make compliance — rather than rule-breaking — the more attractive choice for companies. With costly climate impacts mounting across the country, this is the moment for proven policy design that doesn’t let climate-warming pollution slip through the cracks.

While the most important feature of a CES is the binding regulatory requirement, it also matters what that requirement is crafted to accomplish. A CES should be designed to curb what’s driving this crisis: climate pollution.

A CES crafted solely to achieve a percentage of carbon-free energy sources, without incorporating a hard constraint on emissions into the design, will not guarantee that climate pollution goals are hit. In addition, the regulators implementing such a policy should ensure they have the tools available to tailor policy design to help accelerate reductions where they are most needed. This includes communities of color and low-income communities that have long suffered disproportionate exposure to and the negative health impacts from local air pollution.

Oregon just showed federal lawmakers how it’s done, setting a standard with science-based pollution reduction goals in the form of a statewide CES requiring retail electricity providers to reduce their greenhouse gas emissions 80 percent by 2030 and 100 percent by 2040. It ensured that the Department of Environmental Quality will be tracking emission reductions and gave regulators the directive to ensure power providers stay in compliance.

Replicating bold and well-designed policy on the federal level, including overcoming the procedural and political obstacles on Capitol Hill, will surely not be easy.

But the Biden administration and federal lawmakers need to do everything they can to ensure pollution in the power sector falls by at least that 80 percent benchmark, a critical component of their all-of-government mission to match the urgency of the climate crisis with the type of concrete policy that actually guarantees results.

 

Fred Krupp is the president of Environmental Defense Fund.

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