The U.S. Chamber of Commerce has published an analysis critical of the Environmental Protection Agency's (EPA) proposal for new carbon-emission standards for coal- and natural gas-fired power plants. The analysis by the Chamber's Global Energy Institute (GEI) determined the EPA used a flawed methodology in its cost-benefits calculations.

Dan Byers, vice president of Climate and Technology at the GEI, said in a June 28 press release that the Chamber "strongly supports" lowering carbon emissions and the organization is "among the biggest supporters of investments in research, development and deployment of advanced nuclear, renewables, carbon capture and sequestration, and a host of other technologies."

"However, effective and durable emissions policies must be based on transparent and realistic analysis of potential regulatory impacts," Byers said in the release. "EPA should work to prepare such an analysis by addressing the shortcomings we’ve identified before moving forward with any rulemaking.”

In the analysis, co-authors Byers and Heath Knakmuhs, GEI vice president and policy counsel, state their review of "highly technical" EPA documents uncovered the work has "significant shortcomings that deserve closer attention.

"These omissions and discoveries reside primarily within the 359-page Regulatory Impact Analysis, or RIA for short, that sets forth an excruciatingly detailed – yet incomplete – analysis of the multitude of costs and benefits that are supposed to underpin EPA’s claims of huge societal gain at minimal economic pain." the authors write in the analysis. "The serious shortcomings in this analysis undercut the rule and reveal that the cost-benefit calculations are deeply flawed."

The EPA states in its proposal, released May 11, that it "would avoid up to 617 million metric tons of total carbon dioxide (CO2) through 2042, which is equivalent to reducing the annual emissions of 137 million passenger vehicles, roughly half the cars in the United States. Through 2042, EPA estimates the net climate and health benefits of the standards on new gas and existing coal-fired power plants are up to $85 billion."

The Chamber's analysis alleges that the EPA proposal's cost-benefit analysis underestimates future electricity demand. The authors state the investments needed to comply with any new regulations that might come from the proposal would exceed EPA projections. The authors write that it is the EPA's responsibility to provide a credible estimation of the proposal's effects and should report on any consequences of an overlooked surge in electricity demand.

The Chamber's study reports that the EPA is proposing to use a single facility's top performance as a benchmark that should be sustained consistently across the nation’s generation fleet. The authors claim their analysis found that this mandate is unrealistic and comparable to demanding all runners in a marathon maintain through the entire race a pace set by the fastest sprinter in the world. 

“Given the essential role that affordable and reliable electricity plays in every aspect of our lives, this rule has the potential to be among the most impactful proposals from the Biden Administration,” Knakmuhs said in the Chamber's news release. “Our analysis demonstrates that EPA’s assumptions are unrealistic and fail to take into account our broken permitting process and the Administration’s own push for electrification, which will have a material impact on electricity supply and demand.”