Gina McCarthy argued Thursday that her home state of Massachusetts is proof you can cut greenhouse gas emissions while fostering economic prosperity, but the Environmental Protection Agency administrator failed to mention the apparent trade-off for consumers: dramatically higher electricity prices.
In a speech promoting President Obama’s climate change agenda, Ms. McCarthy ignored the fact that New England states — which nearly a decade ago formed the nation’s first regional “cap and trade” system — are dealing with electricity rates more than 35 percent higher than the national average.
She also argued that economic growth goes hand in hand with efforts to reduce carbon and other emissions, but data show no clear correlation between the two. In fact, the nation’s largest emitter, Texas, boasted one of the highest rates of economic growth last year.
Critics immediately poked holes in Ms. McCarthy’s claims as the fight between the administration and its opponents on Capitol Hill and in the energy industry heats up.
Mr. Obama this week declared that the U.S. will continue to lead the world in reducing harmful emissions. He pledged to build on the White House’s unprecedented restrictions on power plants and historic auto fuel efficiency standards and to take further steps to slow down climate change.
In trying to sell the public on its plan, the administration is making the case that lowering greenhouse gas emissions will help, not hurt, individual consumers and the larger economy while creating tens of thousands of jobs in the renewable energy sector.
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But that argument is riddled with bad assumptions and is merely an attempt to spin data to better fit the White House narrative, critics say.
“I think President Obama and the EPA must live on a different planet,” said Sen. David Vitter, Louisiana Republican and the ranking member on the Senate Environment and Public Works Committee. “What people want is for them to back off of their attacks on our economy. Their benefits calculations are bogus because the costs for their most recent mandates will be astronomical, and their federal takeover of the electricity grid could kill hundreds of thousands of jobs in Louisiana and across the country.”
For Mr. Obama and Ms. McCarthy, blunting such criticism, which also has come from a number of red state Democrats, is critical, and the EPA chief continued that effort Thursday.
“Climate action is not just a defensive play; it advances the ball. We can turn our challenge into an opportunity to modernize our power sector and build a low-carbon economy that will fuel growth for decades to come,” she said in a speech at Resources for the Future, a nonprofit research organization.
“For years, states in the Northeast have teamed up in a market-based program to curb greenhouse gases. At the same time, they’ve enjoyed some of the nation’s strongest economic growth. My home state of Massachusetts cut emissions by 40 percent, while its economy grew 7 percent. Cities and states acting on climate are not slowing down; they’re speeding up,” she said.
Ms. McCarthy’s claims are true to that point. Massachusetts has cut its greenhouse gas emissions by about 40 percent from 1990 levels, and the state has experienced economic growth.
But there appears to be little direct relation between emissions levels and overall economic performance. Some states with the highest levels of greenhouse gas emissions also have some of the highest rates of growth.
The Texas economy, for example, grew by 3.7 percent last year even as the state remained the highest emitter of greenhouse gases in the country. Last year, the U.S. economy grew by 1.8 percent when measured by total gross domestic product, according to federal government figures. The Massachusetts economy grew at an annual 1.6 percent rate.
North Dakota last year had the highest annual growth rate of any state at 9.7 percent. The state’s energy-related carbon emissions increased by nearly 6 percent from 2000 to 2011, data show.
Data from other states over the past decade seem to disprove a tangible link between carbon emissions and GDP growth.
From 2000 to 2011, Tennessee’s energy-related carbon emissions dropped by 18 percent while its economy grew, seeming to back Ms. McCarthy’s point. But Nebraska’s carbon emissions rose 25 percent during the same time, and the state experienced an even higher rate of growth than that of Tennessee, according to Federal Reserve statistics.
Furthermore, Ms. McCarthy didn’t mention the disproportionate electricity costs in New England since the Regional Greenhouse Gas Initiative was formed in 2005.
Almost a decade later, electricity rates are dramatically higher in New England than other parts of the country.
In July, the price per kilowatt hour in Massachusetts was 14.96 cents, according to federal Energy Information Administration data. The national average was 11.01 cents. In Texas, the nation’s largest emitter of greenhouse gases, it was 9.36 cents, the EIA said.
In New England as a whole, the price per kilowatt hour was 15.08 cents, seeming to bolster critics’ contention that as carbon emissions are restricted and federal regulations force coal out of the energy production mix, electricity prices inevitably will rise.
“The Obama administration’s failure to come clean about the facts, choosing instead to hide behind over-the-top, scare-inducing rhetoric, affirms that we must expose the truth about the proposal’s economic consequences and stop it from moving forward,” said Laura Sheehan, senior vice president for communications at the American Coalition for Clean Coal Electricity.
The EPA countered that one should not draw a direct link between electricity prices and efforts to reduce greenhouse gas emissions.
“There’s much more that goes into electricity bills than environmental policies, including the fixed and variable costs of generating electricity as well as the costs of transmitting and delivering electricity to consumers,” the agency said in a statement to The Washington Times.
“So it is important to note that the costs of environmental compliance are only a part of the eventual price a consumer pays for electricity, much like the price a store pays in rent is only a part of the price a consumer pays when he or she buys a product from that store,” the EPA said.
• Ben Wolfgang can be reached at bwolfgang@washingtontimes.com.
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