What do the new EPA rules on greenhouse gas emissions mean for consumers?

New federal limits on greenhouse gas emissions published this week by the Environmental Protection Agency are designed to reduce the U. S. greenhouse gas emissions level by “30% from their 2005 level,” according to a Wall Street Journal report. This reduction will bring U. S. emissions well under the non-bonding Copenhagen Agreement of 2009, when the U. S. pledged to reduce emissions by 17% of the 2005 level.

According to the Wall Street Journal:

A big factor in the EPA’s cost forecast: successful energy-efficiency programs. These can include steps consumers take, such as more energy-efficient refrigerators, and programs utilities pay for, such as giving companies credits for shifting power use to periods of low demand.

Emphasizing home energy efficiency can be effective in controlling greenhouse gas emissions because reduced demand on utilities to generate electricity should lead to reduced emissions that are a product of electricity generation.

The new EPA rules on greenhouse gas emissions place the burden of compliance on each state, which must develop its own emissions target plan for EPA approval. This will put the states that have invested in renewable and clean energy ahead of others – in particular the states that rely on coal, such as Ohio, Pennsylvania, and West Virginia. Iowa, for example, has invested $10 billion to generate 28% of its electricity from wind.

What do the new EPA rules mean for consumers?

  • Higher home energy costs. Utilities will need to invest in equipment and employees o comply with the new federal rules. These costs will be passed along to consumers in the form of surcharges, taxes, and rate hikes.
  • Higher prices on manufactured goods. Labor intensive durable goods from home appliances to cars and trucks will rise in price as manufacturers invest in their factories to comply with new federal rules.
  • More jobs for hard hit industries like construction, industrial manufacturing, home performance, HVAC, and energy. Complying with new federal rules will require businesses to invest in tools, equipment, and training for their current and future workers.
  • Lower home energy costs – eventually. Utilities will raise prices in the short term to cover the expenses of complying with new federal rules. But home energy efficiency will lower energy costs for homeowners, renters, and landlords in the long run. By consuming less electricity, households will reduce their energy costs.

Energy costs the average American household more than $2,000 each year. Those costs are anticipated to rise over the next few years as the new federal rules come into effect. But home energy efficiency can reduce those costs for everyone, whether you own or rent your home.