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What Obama’s Proposed EPA Regulations Mean for Indiana

More than 80 percent of Indiana’s electric power comes from coal, so the EPA regulation could have harmful effects on the state's economy.

By Lacy Scarmana

During his first term in office, President Obama tried, without success, to move a climate change bill through Congress. Now, the president is sidestepping the legislative process and taking a different approach by proposing EPA regulations that would require the nation’s power plants to cut carbon dioxide emissions by 30 percent by 2030, as compared with 2005 levels.

This is one of the most aggressive actions the U.S. government has taken to fight climate change. But in Indiana, where coal is used to generate 80 percent of the state’s electric power, some businesses are saying the regulations will have devastating effects on the economy.

Environmentalists, on the other hand, are hailing the proposal as a major step toward alleviating the effects of climate change.

“It’s long overdue for the United States to take a leadership role in mitigating the impacts of climate change by reducing emissions from the biggest culprit, which are fossil fuel power plants,” Kerwin Olson, Executive Director of the Citizens Action Coalition, says.

Olson also emphasizes that the 30 percent reduction is a nationwide goal.

“Indiana only has to achieve about a 20 percent reduction by 2030, which is modest and more than achievable in a cost-effective manner,” he says.

Cam Carter, Vice President of Federal Relations of the Indiana Chamber of Commerce, agrees that Indiana should diversify its energy portfolio, but it must carefully plan how to do that.

“You certainly won’t get an argument from Indiana Chamber of Commerce that we ought to diversify our energy mix – wind, solar, nuclear and indeed fossil fuels for the foreseeable future. Even if these regulations go into effect, coal is still going to be significant in the country, let alone in the overseas developing countries,” Carter says.

He says the Chamber takes issue with the manner in which Obama has gone about initiating these changes, and he fears the rest of the world won’t follow the U.S.’s lead. He adds that the regulations have the potential to eliminate not only jobs in the coal industry, but in the manufacturing sector as well.

“It takes a lot of electricity to build a Subaru in Lafayette. It takes a lot of electricity to roll steal up in northeast Indiana. It takes a lot of electricity to run laboratories,” he says. “So it’s not just jobs in a single industry in the state that we’re concerned about. It’s jobs across the state that we’re concerned about here.”

But Phil Stevens, a professor in Indiana University’s School of Public and Environmental Affairs, says energy companies have been innovative when finding ways to be more efficient.

“Indiana and the rest of the U.S. have been reducing emissions from power plants for a long time through a variety of programs,” he says, noting that the 1990 Clean Air Act amendment has been successful at reducing emissions from power plants without increasing the cost of electricity.

In the 1980s, Stevens says, many people were worried about how regulations controlling sulfur dioxide emissions would hurt manufacturing and increase electricity prices. However, after the Clean Air Act’s amendment, emissions dropped, electricity production increased and the cost of electricity went down for most of the time.

“We want to give the industry a little bit of credit that they’re able to adapt in having some incentives,” he says. “They are able to come up with ways of meeting these regulations without causing a lot of economic harm.”

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