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Shedding Light on Obama’s Clean Power Plan

Last Monday, President Obama released the much-anticipated Clean Power Plan.

The plan sets standards and goals for reducing carbon dioxide emissions by 32% from 2005 levels by 2030.

The Obama Administration emphasized a sense of urgency in its rollout of the plan.

“I am convinced that no challenge poses a greater threat to our future and future generations than a changing climate,” said Obama during a press conference for the Clean Power Plan.

“We are the first generation to feel the effects of climate change and the last generation that can do something about it,” he continued.

Here is the promotional video that was released via social media last week.

The Nitty-Gritty

So what are the specifics of the plan?

First and foremost, the plan addresses the largest producer of harmful emissions – power plants.

The plan states that fossil fuel-burning power plants will continue to be a large part of America’s energy infrastructure in the coming years, but its goal is to reduce the environmental impact of these plants while making room for zero-carbon energy sources.

In tandem with the Clean Power Plan, the U.S. Environmental Protection Agency (EPA) issued Carbon Pollution Standards for new, modified, and reconstructed power plants. The EPA also proposed a federal plan and model rule to assist states with implementing these new standards.

Under the Clean Air Act, a partnership exists between the EPA, states, tribes, and U.S. territories. Through this partnership, the EPA sets the standards and the local governments choose how to meet them. The Clean Power Plan is also following this approach.

The EPA is establishing interim and final carbon dioxide emission performance rates for both fired electric steam generating units and natural gas-fired combined cycle generating units – two of the most common fossil fuel processes.

The interim and final goals can take one of three forms, depending on what the state chooses:

  1. A rate-based state goal measured in pounds per megawatt hour.
  2. A mass-based state goal measured in total short tons of carbon dioxide.
  3. A mass-based state goal with a new source complement measured in total short tons of carbon dioxide.

After the state chooses, the onus is then on them to come up with a plan to reach those goals in a way that’s beneficial to their communities.

Making Room for Clean Energy

Increasing renewable energy sources and infrastructure is another big part of the plan – the goal is to have 30% more renewable energy generation by 2030.

The administration will continue to help fund clean energy technology development with $6.8 billion of the 2015 budget going toward the cause.

The federal government is also leading by example. Federal agencies are working toward reaching 100 megawatts of installed renewable capacity in federally subsidized housing by 2020.

And the U.S. Department of Defense (the largest energy consumer in the United States) committed to using three gigawatts of renewable energy at military facilities by 2025.

The plan also address vehicle fuel standards, cutting energy waste, reducing harmful emissions from other sources, and keeping future leadership invested in the plan.

Next week, I’ll delve into the reaction of the fossil fuel industry and how the plan could affect those markets.

Good investing,

Samantha Solomon

Samantha Solomon

, Special Correspondent

View More By Samantha Solomon