Energy

While You Were Regulating, the Market was Busy Saving the Planet

Clean Power Plan fallout coupled with lessons from energy innovation successes ought to inspire policymakers to seek actual fixes to our environmental challenges instead of needlessly expand the regulatory state. Charles Koch recently asserted that innovation can solve climate change. The practical effects of the natural gas revolution suggest he is correct. George Mitchell, the oil and gas entrepreneur who developed hydraulic fracturing technology, has apparently done more to reduce greenhouse gas emissions than the Clean Power Plan ever will.

High-dollar lawyers are the big Clean Power Plan winners. The environment and the taxpayers are the big losers. Exhibit A: The market, driven in part by Mitchell’s innovation of hydraulic fracturing, has seen to it that many states will easily meet their 2030 Clean Power Plan greenhouse gas emissions targets in the ordinary course of business. Yet, lawyers on both sides, not to mention the resources of our strapped judicial system, will spend today arguing over a regulatory expansion that is potentially irrelevant to addressing the problem it aims to solve.

Litigating important constitutional issues about the scope of regulatory authority has value. But so does admitting that America’s environmental policymaking framework is broken, expensive, and in too many cases fails to deliver the promised protection of human health and of the environment. Environmental federalism in its present form, with appurtenant sprawling regulatory mechanisms, will never be able to adapt to rapidly evolving technology in a timely manner. The Clean Power Plan is a stark example of this unfortunate state of affairs. If natural gas prices remain low, this touted climate change rulemaking is on track to realize little-to-no environmental benefit even if it survives legal challenges.

Natural gas fuel switching was occurring en masse in large part due to the advent of cheap, fracked gas well before the United States Environmental Protection Agency (EPA) proposed the Clean Power Plan in 2014. Though the EPA’s separate 2011 Mercury Air Toxics Standards rule provided a regulatory assist to fuel switching, it appears natural gas plants would have comparative advantages of fuel price and ease of operation regardless of MATS.

Meanwhile, major federal environmental rulemakings are costly processes funded by the taxpayer. EPA Administrator Gina McCarthy, for example, last year asked Congress for $52 million to fund lawyers to defend the agency’s climate change rulemaking agenda. Yes, the EPA sought $52 million alone for the lawyers needed to defend a climate change agenda whose crown jewel Clean Power Plan may result in negligible greenhouse gas emissions reductions attributable to the regulations. The Clean Power Plan’s primary benefit increasingly appears to be a demonstration of U.S. global leadership on climate change. Rulemaking and compliance costs, not to mention the overhaul of our electricity sector, seem a high price for what is amounting to a glorified global public relations campaign.

It is time to stop trying to save the planet with an antiquated environmental policymaking regulatory framework that does little protect our environment. It mainly benefits Washington, DC lawyers on the taxpayer dime. Instead, we should create a policy environment where energy innovation entrepreneurship flourishes, unleashed by the power of the market.


In Depth: Energy

It is difficult – and perhaps even impossible – to overstate the relationship between readily available access to safe, affordable and reliable energy and individual prosperity and economic wellbeing. This is because energy is an input to virtually everything we produce, consume and enjoy in society. Think for a minute …

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