On November 7, 2013 EconoSTATS Contributing Editor, Wayne Winegarden PhD, submitted comments to the members of the EPA Listening Panel. In his comments, Dr. Winegarden expressed his concerns that the carbon regulations under consideration by the EPA could have a negative impact on the U.S. economy. Notably he argued that:
- Coal is an important energy source: Coal is a major energy source for the U.S. economy (20% of total energy consumed in the U.S. is from coal according to the EIA). Additionally, those states that rely on coal as their primary generator of electricity tend to have lower energy prices. America’s Power.org estimates that coal generated electricity contributes over $1 trillion in gross economic output to the U.S. economy. The U.S. economy is heavily dependent on coal. Policies that unnecessarily raise the price of coal hurt consumers, businesses and the overall economy.
- Restrictive regulations will cause an energy supply shock: In order for the proposed regulations to have a meaningful impact on greenhouse gas (GHG) emissions, it must (by definition) reduce the amount of output from coal fired power plants. If mandated via regulations, the reduction of energy output will raise energy prices and create a self-inflicted energy supply shock. As the energy supply shocks of the 1970s vividly illustrated, energy supply shocks cause recessions.
- Evolving Technology is addressing the Problem: The purpose of stricter regulations on existing power plants is to reduce GHG emissions. But, this is already happening. For instance, the growth of natural gas, which is now a larger share of the U.S. energy market than coal according to the EIA, is already lowering the economy’s GHG emissions without the need for further regulations.