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Clear Skies

Frequent Questions

Information provided for informational purposes onlyNote: EPA no longer updates this information, but it may be useful as a reference or resource.
Unless otherwise noted, the data presented throughout this Web site reflect EPA’s 2003 modeling and analysis of the Clear Skies Act of 2003. Clear Skies legislation was intended to create a mandatory program that would dramatically reduce power plant emissions of sulfur dioxide (SO2), nitrogen oxides (NOx), and mercury by setting a national cap on each pollutant. The Clear Skies bill was proposed in response to a growing need for an emission reduction plan that will protect human health and the environment while providing regulatory certainty to the industry. The proposed legislation for air regulation never moved out of the Senate Environment and Public Works committee in 2005 and was therefore never enacted.

What is Clear Skies?

  • The Clear Skies Act sets forth a mandatory program that would dramatically reduce and permanently limit power plant emissions.

What would Clear Skies do?

  • Clear Skies would establish caps on sulfur dioxide (SO2), nitrogen oxides (NOx) and mercury emissions at levels 70% below year 2000 emission levels. The caps on emissions, coupled with rigorous monitoring protocols and automatic enforcement provisions, ensure that these reductions would be achieved and sustained over time. Clear Skies would provide these reductions faster, with more certainty and at less cost to America's consumers than would current law.

How does Clear Skies compare to existing air pollution laws?

  • The Clear Skies Act would move the Clean Air Act forward by providing greater protection over the next decade. EPA's analyses indicate that the cumulative emissions reductions and health and environmental benefits over the next decade from Clear Skies are markedly greater than could be expected under the current Clean Air Act.
  • These benefits would happen at a considerably lower cost, and with greater certainty, than would occur under the current Clean Air Act. This is due in large measure to the major innovation of Clear Skies - a market-based, integrated multi-pollutant emissions reduction strategy for power generation.
  • Clear Skies would require a 70% decrease in power plant emissions of SO2 and NOx, which contribute to ozone and fine particle pollution.
    • Clear Skies would get greater reductions of SO2 and NOx than we expect from the current Clean Air Act power plant regulations that would be replaced or modified by Clear Skies (e.g., new source review (NSR), regional haze (or BART), the Acid Rain program, and the NOx SIP Call).
    • Clear Skies would not change the health-based air quality standards for ozone and fine particles - those standards will still have to be met. In fact, Clear Skies
    • would help bring more areas into attainment with these health-based standards over the next decade than would current law.
  • Clear Skies would require reductions of approximately 70% in power plant emissions of mercury.
    • EPA expects less mercury to be emitted by power plants over the next 5 years if Clear Skies is enacted.
    • EPA cannot predict what mercury emissions would be under the current Clean Air Act after that because EPA is currently engaged in a rulemaking process to set a standard for mercury emissions from power plants which will go into effect no sooner than the end of 2007 (this rule will likely be litigated).
    • Clear Skies would take today's power plant emissions of mercury (48 tons) down to a cap of 15 tons.
  • Clear Skies would not change Clean Air Act requirements for sources not covered by Clear Skies.

Is New Source Review the fundamental provision in the Clean Air Act to reduce power plant emissions?

  • There is a misconception that the New Source Review (NSR) program is designed to require power plants to reduce emissions. This is simply incorrect. NSR applies to existing power plants and major manufacturing facilities only when they make modifications to their plants which result in increased emissions. They may then be required to install new emission control equipment.
  • Clear Skies, on the other hand, is specifically designed to require the power generation industry to reduce their emissions and maintain those reductions by capping emissions at the specified levels. The industry may employ the compliance strategy of its choosing as long as it meets emission reduction requirements.

What emission reductions would Clear Skies deliver compared to the existing Clean Air Act?

  • There are great uncertainties (regulatory development, litigation, implementation time, etc.) as to how quickly and effectively current regulations would be implemented over the next decade under existing law.
  • In contrast, the mandatory emissions caps at the heart of Clear Skies are a sure thing and guarantee that reductions will be maintained over time. And, because cap-and-trade programs include economic incentives for early action, Clear Skies would begin improving public health immediately.
  • Quantifiable health benefits under Clear Skies grow to $110 billion annually by 2020, and include prevention each year of: 14,000 premature deaths; 30,000 costly hospitalizations and ER visits; and 12.5 million days with respiratory illnesses and symptoms. An alternative methodology for calculating health-related benefits projects over 8,400 premature deaths prevented and $21 billion in health benefits - still far greater than the costs.

Would Clear Skies go far enough or fast enough?

  • If enacted, Clear Skies would deliver early human health and environmental benefits right away because its cap and trade program gives power plants incentives to begin reducing emissions immediately.
  • Clear Skies is designed to ensure that electricity generators are able to obtain financing and perform installation of the necessary pollution control equipment cost effectively. It would also ensure that the large-scale installation of emissions control technologies to achieve the necessary reductions can be accomplished, while allowing the power industry to continue to provide reliable service to American consumers at reasonable prices.

Would Clear Skies allow power plants to increase emissions beyond safe levels?

  • Clear Skies would maintain the protections provided by the health-based national air quality standards, the major provision of the Clean Air Act to protect local air quality.
  • In fact, together with other Clean Air Act provisions, Clear Skies would bring most of the country into attainment so that they meet the clean air standards.
  • Clear Skies also requires tough, technology-based new source standards on all new power generation projects and maintains special protections for national parks and wilderness areas when sources locate within 50 km of "Class I" national parks and wilderness areas.
  • Clear Skies is designed to reduce emissions by significant amounts over large geographic areas, and would improve air quality in every part of the country where power plants contribute significantly to air pollution.

Would the emission reductions under Clear Skies be voluntary?

  • No. The emissions reductions under Clear Skies would be mandatory. Like the successful Acid Rain Program, power plants not meeting the requirements would be subject to non-negotiable penalties.
  • The legislation would set aggregate emission limits, or caps, and let industry find the most cost-effective way to achieve required reductions.
  • Companies would have flexibility to choose how to comply, not whether they comply. This system rewards innovation, reduces costs and guarantees results.
  • Required continuous emissions monitoring and reporting would allow EPA and the states to know with certainty that emissions reductions occur.

Would Clear Skies prevent states from requiring additional controls on their own power plants?

  • Clear Skies would do nothing to change the fundamental provision contained in the Clean Air Act that permits each state to adopt more stringent regulations on power plants (and other sources) under its jurisdiction.

Will Clear Skies cause fuel switching?

  • As the President said in the State of the Union, one of our goals "is to promote energy independence for our country, while dramatically improving the environment." Clear Skies would help accomplish this goal by providing important environmental protection while maintaining energy diversity and security.
  • The emissions reductions under Clear Skies would be achieved primarily through the installation of control technologies, not through fuel switching, according to extensive economic modeling of the utility industry using EPA's Integrated Planning Model.
  • Under Clear Skies by 2010, 69% of U.S. coal-fired generation is projected to come from units with advanced pollution control equipment (such as scrubbers and SCR, which also substantially reduce mercury emissions). In 2020, the percentage is projected to rise to 81%.
  • Growth in electricity demand over the next 20 years is forecast to be met through an increase in gas-fired generation and some increases in coal-fired generation. Clear Skies does not significantly alter this forecast.

Will Clear Skies cause electricity prices to rise?

  • Retail electricity prices are expected to gradually decline from today's levels but then rise over time with or without Clear Skies. (Prices are expected to drop initially due to the increase of excess generation capacity; in 2010 prices would begin to increase due to new capacity requirements, which lead to higher capital costs and greater natural gas use, and higher retail prices passed on to consumers.)
    • Clear Skies would do so because it phases in large reductions over time and gives industry flexibility as to how it makes those reductions.

Projected retail electricity prices under Clear Skies and the Base Case

* Note: Retail prices from 2000 are from AEO2003. Prices for the period 2005 and after were calculated using the Retail Electricity Price Model (see section G for a description of the Model).

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