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Green energy investment set to ‘explode’ after Obama unveils carbon cuts

Administration seeks to cut carbon emissions from power plants by up to 30 percent by 2030

Federal plans for new carbon emission cuts — reportedly by up to 30 percent from 2005 levels — could spark a rapid expansion in the renewables sector, environmental groups predicted Sunday ahead of the unveiling of a new government blueprint on clean energy.

 “If you’re working in the solar or wind industry, you should feel very happy right now. Those are the industries growing faster than the rest of economy,” Mike Brune, executive director of the Sierra Club, said. “It’s clear that those are going to be the industries to work in, invest in and watch. They’re about to explode in terms of growth.”

The comments came on the eve of an announcement Monday in which Environmental Protection Agency chief Gina McCarthy is expected to outline new limits on existing power plants. In anticipation of the new guidelines, President Barack Obama said Saturday that it was time for “higher standards to cut pollution” and that the new rules would “cut down on the carbon pollution, smog and soot that threatens the health of the most vulnerable Americans, including children and the elderly.”

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The new rules could bolster an industry that has already benefited from a flow of new cash and new demand.

Warren Buffett, the billionaire owner of Iowa utility MidAmerican, announced a $1.9 billion investment in wind farms earlier this month. MidAmerican plans to generate almost half its electricity from wind by 2017.

In January a Minnesota judge, tasked by the state’s public utilities commission to look into the pricing of electricity for consumers, held that the utility Xcel Energy should invest in the solar energy developer Geronimo Energy rather than in natural gas generators because that choice would be the better economical and environmental deal for the state.

Every four minutes, an American home or business goes solar, Obama said earlier this month in a speech on the U.S. transition to clean energy. Solar panels were installed on the White House the same day.

The standards that Obama is set to unveil on Monday, including details of the new carbon pollution standards for power plants as part of a new set of EPA guidelines to address climate change, will push renewables’ progress even further — replacing dirty fuels, experts believe.

About a third of coal plants online in 2009 have been retired or will be soon, Brune said.

Obama’s announcement of new emission cuts follows the release of a series of scientific reports filled with dire warnings from hundreds of climate scientists saying carbon emissions must be cut now in order to avoid some of the worst effects of global warming.

Power plants are responsible for almost half of America’s carbon pollution and collectively are the single largest source of such emissions in the country. Currently there are no limits on the amount of carbon those plants may emit. “It’s not smart, it’s not safe, and it doesn’t make sense,” said Obama.

Though details of the cuts will not be unveiled until Monday, The Wall Street Journal reported Sunday that the executive order could include forcing carbon emission cuts of 30 percent on existing power plants by 2030, based their 2005 emission levels.

Citing two people briefed on the proposed rule, the newspaper said individual states will have to implement the cuts, with compliance plans due to be submitted to the EPA by June 2016.

Though the extent of the emission cuts hasn’t been confirmed yet, environmentalists had hoped to see a larger percentage when Obama releases the figures Monday.

“What we’re looking for are cuts of 35 to 40 percent by 2020 from 2012 levels,” Brune said. “This is what we need to see in order to get the carbon reduction from the U.S. that will both compel international negotiations and meet what climate scientists are saying has to be done.”

Cuts based on the 2012 emission levels would be much more significant than using 2005 levels as the baseline, he added.

Climate scientists have warned that the world’s temperature increase has to be capped at 1.5 degrees Celsius. According to Brune, that would require carbon emission cuts of about 50 from 2012 levels percent by 2030.

The EPA guidelines will also include plans to prepare the U.S. for the effects of climate change — including strengthening roads, bridges and shorelines — after scientists warned of an increase in extreme weather events like 2012's Hurricane Sandy. The government will also strive to lead international efforts to combat climate change through global negotiations.

“Last year alone, there were 11 different weather and climate disaster events with estimated losses exceeding $1 billion in estimated damages, which would make it the second-costliest year on record,” according to the president’s climate action plan released last June.

Reports of the new EPA guidelines have prompted a Republican backlash in anticipation of the plan.

Wyoming Republican Sen. Mike Enzi said Saturday that the plan would make electricity more expensive, “if we can get it.” He added that the rules would make little or no difference in combating pollution and climate change but would hit the pockets of average Americans.

“Let’s face it, that’s what they always say,” Obama said in his weekly address Saturday from Washington. “They warned that doing something about the smog choking our cities and acid rain poisoning our lakes would kill business. It didn’t. Our air got cleaner, acid rain was cut dramatically, and our economy kept growing.”

He added that nearly a dozen states have already implemented their own market-based programs to reduce carbon pollution. Over 1,000 mayors have signed agreements to cut their cities’ emissions.

“The idea of setting higher standards to cut pollution at our power plants is not new,” the president said. “Its just time for Washington to catch up with the rest of the country.”

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