On August 3, 2015 President Obama and the EPA unveiled the final Clean Power Plan. The Plan is designed to reduce carbon dioxide (CO2) emissions from power plants. It limits emissions of CO2 from all existing fossil-fuel burning power plants as well as natural gas-fired electric generators.

Power plants account for a third of the U.S.’s greenhouse gas emissions. In a video address announcing the launch of the Plan, President Obama remarked, “power plants are the single biggest source of the harmful carbon pollution that contributes to climate change. But until now there have been no federal limits on the amount of that pollution those plants can dump into the air. Think about that.”

The goal of the Plan is to achieve an overall 32% CO2 emissions reduction (based on 2005 levels) by 2030.  This is a change from an earlier draft of the Plan, which called for only a 30% reduction goal. The change is part of a general shift in the Plan from more modest reductions over a shorter span of time to greater reductions over a somewhat longer time horizon.

Here are the main points of information you should know about the Plan:

·      The Plan assigns to each state an individualized goal for reducing CO2 emissions from their electric power plants.

·      The different limits for each state reflect the reality that some states are much more heavily reliant on coal-burning power and will therefore need more time to transition away from coal based power.

·      Each state can decide for itself how to achieve their goals. There are many options for states to choose from, including switch from coal to natural gas, boost renewables, set up programs to boost energy efficiency in homes, or develop individual statewide or regional cap-and-trade systems.

·      States are required to submit plans by 2018, begin reducing emissions by 2022 at the latest, and then continue through 2030.  

·      If the states fail to submit plans — as several states have threatened — the EPA can write a plan for them.

The 32% overall reduction target may appear to be a large, significant drop, but the U.S. is already well on its way to meeting the target. Powerful forces are already starting to transform our energy structure. Coal fired plants have started to close, and more energy is being generated by renewable sources. As a result, power plant emissions have already dropped 15 percent between 2005 and 2013! With such momentum, moving into larger reductions will likely begin to quickly transform the U.S. power sector.

The Plan is almost certainly going to be subjected to legal and political challenges that could possibly delay deadlines.  We will continue to monitor and cover developments in the coming months.