Greenhouse gas emissions from electricity production represent almost one-third of the total emissions from the United States.  Today the Obama Administration finally used its authority under the Clean Air Act (required by a 2007 Supreme Court decision) to regulate this pollution.  The Environmental Protection Agency set a proposed goal of reducing greenhouse gas emissions from the electricity sector by 30% from 2005 levels by 2030.  States will have significant leeway to meet these goals, including setting up cap-and-trade programs and using energy efficiency and natural gas to switch from coal.

I’m glad the president finally decided to take this step after Congress failed to pass a comprehensive federal approach and “cap-and-trade” and “climate change” suddenly became dirty words.  Business groups and conservatives are already panning the proposed rules, but in fact they’ve already extracted significant concessions.

The biggest concession is that the baseline year is 2005.  As a result, ta-da!  We’re already halfway to the 2030 goal, because emissions fell 15% from 2005 to 2012.  So we’re really talking about a 17% reduction.  It’s not nothing but it’s unlikely to create the kind of reductions we need to avert the worst impacts of climate change, according to what scientists tell us.  In addition, the rules will benefit from the retirement of many coal-fired power plants in the coming decades that were reaching the end of their useful lives anyway. They will likely be replaced by natural gas plants, due to falling natural gas prices and separate, stringent Clean Air Act regulations on new coal-fired plants. This process would have happened even without EPA action on carbon.

The economic impact is also negligible.  The Chamber of Commerce predicted a doom-and-gloom scenario of $50B lost to the economy from these regulations by 2030.  Of course, the Chamber is always wrong with these predictions. And as economist Paul Krugman pointed out, even if the Chamber is right, that’s only 0.2% of GDP in a $21.5T economy.

I wish Obama had used his Clean Air Act Authority more aggressively and much sooner, but better late and weak than never and nothing. It’s also important to lay the groundwork for future improvements to the system. For example, once state cap-and-trade programs are up and running under these rules, state leaders may incorporate additional greenhouse gas sources under the caps, possibly leading to a national program based on state-by-state groundwork and experimentation. And if it looks like we’re well on our way to meeting the 2030 targets sooner than expected, perhaps there will be political momentum to tighten the screws a bit more on the targets. Finally, the rules give the United States a tiny bit more credibility with other countries on climate change action when we sit down at the UN climate change conference in Paris late next year.

So overall, the new rules are a positive and long overdue step. Let’s hope they portend future action, both at the state and federal levels. Because by themselves, they’re not enough to get the job done.