Guest Column

State leaders should reject EPA’s carbon rule

August 7, 2015
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The federal government is poised to stick Michigan families with higher energy costs and diminished living standards, unless state legislators act now to resist.

The dubiously named “Clean Power Plan,” the Environmental Protection Agency’s proposal to reduce carbon dioxide emissions 30 percent by 2030, will impose steep costs on Michigan residents while generating negligible environmental benefits.

Unless state officials take swift action, Michiganders will be confronted not only with higher energy prices but also job losses and increased poverty.

With the EPA scheduled to finalize the rule in the coming weeks, the agency is pressuring states to submit plans to demonstrate how they will meet the strict reductions. In the interest of state sovereignty and economic opportunity, Michigan’s legislators would be wise to join the fight by refusing to submit a plan.

Michigan wouldn’t be alone. Several states are already pushing back, with 14 having sued the EPA, including each of Michigan’s bordering neighbors.

In addition, several governors — Greg Abbott (Texas), Phil Bryant (Mississippi), Mary Fallin (Oklahoma), Bobby Jindal (Louisiana), Mike Pence (Indiana) and Scott Walker (Wisconsin) — have indicated they don’t intend to submit a state plan.

The EPA is hoping states will do the heavy lifting required to implement and enforce this drastic plan. Michigan shouldn’t do the EPA’s dirty work: While we have little to gain from cooperating with the EPA, we have much to lose.

Once host to the highest state unemployment rate in the nation, Michigan has made great progress in expanding economic opportunity. In the last year alone, Michigan’s unemployment rate dropped from 7.5 percent to 5.4 percent, which is more in line with the national average.

Now, the EPA’s rule threatens to reverse this positive trend.

Although the EPA claims its rule is “flexible,” it essentially forces states to close their affordable coal-fired power plants and replace them with new, expensive plants.

Since Michigan gets about half of its electricity from coal, families could see drastic increases in energy prices if the plan is implemented. A recent study found that EPA’s rule would raise Michigan’s electric rates by 12 percent — or about $140 per year — leaving families with less money to spend on health care, housing and other basic necessities.

For families trying to make ends meet on a tight budget, those are rate hikes we simply can’t afford.

Not only will this plan interrupt economic progress in the state, but those hit hardest will be Michigan’s poor and minorities. For instance, poverty rates for African-Americans would rise 23 percent under the EPA’s rule, while Hispanic poverty would rise by 26 percent, according to new research from the National Black Chamber of Commerce.

Lower-income families, who spend a higher share of their incomes on energy, will be the ones to pay the highest price for EPA’s draconian regulation.

Legal issues add insult to injury. Since the dawn of the electric age, states have been able to regulate their own retail electricity markets, allowing them to pursue the most efficient and affordable electricity that paves the way to economic prosperity. For instance, Michigan voters soundly rejected a 2012 proposal to require 25 percent of the state’s electricity to come from “renewable” energy sources. Now, the EPA is infringing on state sovereignty for a plan that will — by the EPA’s own calculations — have negligible environmental benefits.

These insignificant environmental gains will not be worth the economic pain to be faced by Michigan’s families, particularly the poor. Forcing high costs on families will result in a loss of jobs and an increase in poverty at a time when Michiganders are struggling to regain their economic footing.

We can’t afford to reverse the progress we’ve made. To protect Michigan’s residents from unemployment, poverty and economic stagnation, the state must join others in challenging the EPA’s overreach and refusing to submit a plan.

Christopher Douglas, Ph.D., is associate professor and chair of the economics department at the University of Michigan-Flint and is a member of the Board of Scholars at the Mackinac Center for Public Policy.

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