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Power Producers Overestimate Emissions Control Costs

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Is Emissions Reduction Too Expensive?
Is Emissions Reduction Too Expensive?

Carbon dioxide emissions are the latest focus of the EPA, including transportation and power production sectors. Power producers say it’s too heavy of a burden.

We have the technology to address emissions, whether by reduction or elimination of fossil fuel burning, or by the addition of emissions-reduction technology. Mention this to most companies, however, and the main complaint will be, “It’s too expensive to reduce emissions.” Of course, they’re right, because non-emissions-reduction technology, basically everything in existence, is easier and cheaper to produce, easier to sell, and therefore, better for the bottom line.

Power producers, in particular, have been one of the biggest opposers to emissions-reduction technology for exactly this reason. Again, it’s understandable that power producers would be interested in cutting costs to improve their bottom line, but are the expenses as severe as they say they are? Interestingly, according to a recent study by the Center for American Progress (CAP), not nearly as much as the power producers say.

The scenario is as follows: If the EPA (Environmental Protection Agency) institutes a new part of the Clean Air Act, then power producers will need to cut emissions to meet the new standards. The cost to add this emissions-reduction technology will have to be passed on to the consumer, resulting in increasing electricity prices. In September, the EPA did just such a thing, and the power producers immediately put up the same fight as always, that it’s “too expensive” to implement and that electricity prices would spike.

In 1990, the EPA passed legislation under the Clean Air Act, reducing sulfur dioxide and nitrogen oxide emissions to combat acid rain. The Edison Electric Institute (EEI) estimated that electricity prices would increase 13.1%, when adjusted for inflation, by 2009. The “rate shock” would occur in 46 of 48 states in the EEI study. When CAP compared electricity rates in these very same states in 2009, 36 of those states’ electricity rates had fallen, when adjusted for inflation, even though ten of them were heavy coal power states!

Now that the EPA is working to reduce carbon dioxide emissions, look out for more fuzzy math to prove that it can’t be done, economically speaking.

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