President Obama, EPA takes green gamble

<WC1>With a metallic gasp, the chute opens its metal jaws and deposits precisely 230,000 pounds of coal into the railway car. The pour is carefully calibrated to create an aerodynamically efficient heap. Sealant is sprayed evenly across the coal's surface to limit dust release. Fully loaded, the car moves along to be replaced by another. It takes two-and-a-half hours to load the two-mile-long train.

Four trains, each carrying 15,000 tons of coal, leave the Spring Creek mine in Decker, Mont., every day, often destined for midwestern power plants, where the fuel is burned to light the homes and heat the kettles of Minnesotans and Michiganders.

Some goes elsewhere, including to a Canadian port, bound for China or South Korea.

Coal mining in the Powder River Basin, which straddles Montana and Wyoming, has been economical only since the Environmental Protection Agency began regulating sulfur dioxide in 1990. Coal from eastern states is far more sulfurous. A new rule from the EPA may be less well received here, however: On June 2 it unveiled a proposal to cut emissions of carbon dioxide from power plants, which account for 39 percent of overall emissions, by 30 percent from their 2005 level by 2030.

To reach that goal, each state — except Vermont, which has no fossil-fuel plants and therefore is exempt — has been handed its own target. These vary widely: Washington must cut the carbon intensity of its energy production by 72 percent, North Dakota by only 11 percent. Comments will be solicited before the rule is finalized next year. Lawsuits are inevitable.

A national carbon price would have been the cheapest way for America to meet its goals. That would require action from Congress, however, which has looked impossible since a Democratic-backed cap-and-trade bill died in the Senate in 2010. The EPA's approach, although it involves dictating terms to states, probably provides the next-best level of flexibility.

Acting under an obscure provision of the Clean Air Act, signed by President Richard Nixon in 1970, long before politicians recognized a threat from carbon dioxide, the EPA has told the 49 states to produce plans to meet their respective targets.

The agency proposes four "building blocks" that the states may — but are not obliged to — choose to reduce emissions: make fossil-fuel plants more efficient, shift to power sources that emit less, such as natural gas, boost zero-emission sources such as renewables and nuclear, and reduce electricity demand by, for example, insulating buildings.

States are encouraged to team up to find efficiencies and economies of scale. The rule may thus goose sleepy regional carbon markets in California and the northeast, or spur the creation of others. Plans must be submitted by 2016, though those involving more than one state have two more years. Some Republican-ruled states already have pledged not to cooperate, and the EPA will create its own plans for them.

Advocates and industry groups attached wildly varying price tags to the rule, some before it had been issued. The EPA admits that electricity bills will rise, but projects net benefits worth between $48 billion and $82 billion by 2030, thanks to better health and slightly less global warming. In calculating the benefits of curbing climate change, the EPA applied a novel methodology: It included the benefits to foreigners. That is unusual, and dramatically changes the results, unless other big emitters follow America's example.

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