One way to reduce power plant carbon emissions is to reduce the demand for electricity. Encouraging customer energy efficiency is one of the building blocks underpinning the Environmental Protection Agency’s (EPA) Clean Power Plan. But the plan does not distinguish among uses of electricity. That means, without further options, the Clean Power Plan could inadvertently discourage states from deploying electric vehicles (EVs), electric mass transit, and other technologies that use electricity instead of a dirtier fuel.

In all but very coal-heavy regions, using electricity as a transportation fuel, especially in mass transit applications, results in the emission of far less carbon dioxide than burning gasoline. In industry, carbon emissions can be cut by using electric conveyance systems instead of diesel- or propane-fueled forklifts and electric arc furnaces instead of coal boilers.

Under the proposed power plant rules, new uses of electricity would be discouraged regardless of whether a state pursues a rate-based target (pounds of emissions per unit of electricity produced) or a mass-based target (tons of emissions per year).

EPA has a few options to make sure regulations for power plants would not discourage uses of electricity that result in less carbon emissions overall.

One solution would be for EPA to allow states to credit providers of carbon-cutting electricity to ensure some uses of electricity are not discouraged. Emissions caused by EV fueling, for example, would still count against a state’s Clean Power Plan carbon budget, but a state could offset this by issuing credits for the avoided gasoline emissions. However, the mechanism for this is difficult to envision since state implementation of the Clean Power Plan legally must focus on the power sector, while much of the carbon-cutting potential of electricity fuel switching comes from other sectors, like transportation.

A much simpler solution would be for EPA to let states remove the power plant emissions associated with EVs from the calculation of their total emissions for Clean Power Plan compliance purposes. This could be justified by classifying electricity used to charge EVs as being part of the transportation sector rather than the power sector. As such, the emissions associated with this electricity would fall outside of what a state is responsible for under the Clean Power Plan. A similar approach could be used for new electricity demand that reduces emissions in the industrial sector, meaning the Clean Power Plan would not stand in the way of a state encouraging carbon-cutting uses of electricity throughout the economy.

Power plants are responsible for more than a third of U.S. carbon dioxide emissions, making it the No. 1 source, but transportation comes in a close No. 2, and industry is No. 3.

EPA has been receptive to ideas to improve its power plant proposal, and the public comment period remains open until October 16. There should be ample opportunity for C2ES and other stakeholders to work with EPA to address this issue and ensure EVs and other climate-friendly uses of electricity are not discouraged.