With New EPA Rules, McCarthy Sees Economic Upside In Health Savings

For more on the new pollution regulations, Robert Siegel speaks with Environmental Protection Agency Administrator Gina McCarthy about her agency's carbon emission plan.

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ROBERT SIEGEL, HOST:

Joining us is EPA administrator Gina McCarthy. Welcome to the program.

GINA MCCARTHY: It's great to be here.

SIEGEL: The U.S. Chamber of Commerce in a kind of a preemptive report it issued last week said that once old coal-fired plants are retired to comply with new standards, coal's share of total electricity generation will decrease from 40 percent in 2013 to 14 percent in 2030. Is that right? Is coal on the way to being a small share of U.S. power generation?

MCCARTHY: Well, the chamber really didn't have the opportunity to look at our proposal. If they had, they'd see that coal right now represents about 37 percent of the energy mix. At the end of 2030, even with these significant carbon pollution reductions, you're going to see coal remain somewhere at 30 - 31 percent.

SIEGEL: But you don't think that over a 15-year-period that old coal-fired plants would be more likely replaced with natural gas-fired plants than with new coal-fired plants?

MCCARTHY: Oh, I think that what you see in the future is going to be natural gas plants that are very efficient. And you're going to see some renewables. But a lot of that is because of the market. But that doesn't mean that the share of electricity for coal is going to be significantly diminished.

What that means is you have a lot of aging coal facilities that aren't competitive now and that won't be invested in. A lot of that will happen just because of market conditions - not necessarily because this rule. But it is an advantage for the coal industry and the utilities to think about where they want to invest.

SIEGEL: What do you tell people in West Virginia who say whatever happens elsewhere in the country - for us this is a job killer? We're a coal state.

MCCARTHY: Well, we're more than happy to sit down with every state. And what we're hoping is that we made this flexible enough that states will find a path forward for themselves. If they need help they can have it. And we also know that we are offering an opportunity for multistate plans to be done. So this is what we're hoping to accomplish state-by-state. And in the end we're hoping to make a significant dent so that we can protect public health and the U.S. can provide some global leadership on this issue.

SIEGEL: Put this in some perspective for us globally. Asian markets now account for about a quarter of U.S. coal exports. If say China continues to build coal-fired plants at its current rate, would they in fact be adding to the atmosphere as much CO2 as the new EPA regulations would remove from the atmosphere?

MCCARTHY: Well, I don't know what that calculation would be, Robert. But it's a concern if China continues to build coal facilities just as it's a concern if we don't control the carbon pollution from ours. I think one of the reasons why the president is moving out in his climate action plan is that we can provide some international leverage here. We can work with China as the two largest emitters of greenhouse gases. And we can work to find a global solution. But if the U.S. does nothing - if we don't show leadership here - then we do not believe that a global solution will be able to happen.

SIEGEL: Let's say we fall well short of a global solution for a few years here. What are the local benefits of having emissions controls in the U.S. even if Asia continues to increase emissions?

MCCARTHY: We're not only getting carbon pollution reductions, we're also getting direct public health benefits. Because with the carbon that's emitted by our power plants, we also are capturing carbon monoxide, SO2, NOx, particulate matter. So when you take a look at the cost-benefit analysis here, we are talking by 2030 of having $90 billion in benefits.

SIEGEL: This is about as wide a gap between the EPA and the U.S. Chamber of Commerce of an economic forecasts as I've ever heard. You're talking about $90 billion in benefits. They're talking about $51 billion a year in lost production because of increased energy costs and lower demand for energy.

MCCARTHY: Well, they put that study out last week and it was filled with assumptions that simply didn't come true for them. We'll get a lot of comment in on this, but I think that EPA has never produced a rule that's going to be as significant here domestically for our communities and for our kids.

SIEGEL: Gina McCarthy, thanks a lot for talking with us.

MCCARTHY: Great to talk to you as well.

SIEGEL: We've been talking with Gina McCarthy, who is administrator of the Environmental Protection Agency.

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