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The following, written by William Bowen, appeared January 10, 2014 on the Crain’s Cleveland Business website. Read the full article at

Ohio’s energy laws might look different if the EPA’s carbon-regulating authority is upheld

This year’s anticipated U.S. Supreme Court ruling on the question of whether the federal Environmental Protection Agency can tighten standards for stationary sources of carbon dioxide (CO2) emissions could have a huge impact on electricity generation in Ohio.

If the high court finds that the EPA does not have the necessary authority to tighten the standards, the status quo will reign, at least for a while. But if the court finds that the EPA has this authority, the effect will be to pit federal regulators against huge vested interests in states such as Ohio, where the vast majority of electricity is generated by coal.

Let’s briefly consider the scenario in which this second outcome occurs.

First of all, utilities that operate coal-fired electric power plants will be subject to regulations formed under the newly increased federal “social cost of carbon.” The social cost of carbon monetizes the damages from carbon emissions in terms of the impact on agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem services. It enables federal agencies to consider the social benefits of reducing CO2 emissions when doing their cost-benefit analyses of regulatory actions that impact carbon emissions. It has recently been raised from $21 to $38 per metric ton.