Last March, I noted that Gina McCarthy’s belief that, in the near term, the biggest impact on GHG emissions would come from EPA’s traditional regulatory programs, rather than through GHG regulation. A report recently released by Credit Suisse indicates that she might be right. Looking at EPA’s upcoming promulgation of the Clean Air Transport Rule and the mercury MACT rule, Credit Suisse predicts that between 50 and 69 gigawatts of old coal plants will be retired between 2013 and 2017 as a result of implementation of the two rules. Credit Suisse also predicts that approximately 100 gigawatts of capacity will require significant additional investment to comply with the rules.

For those with money to invest, Credit Suisse recommends clean plants in dirty markets – a not surprising conclusion.

For those more interested in the regulatory side of things, it is worth noting that the Credit Suisse analysis is admittedly fairly simplistic. They pretty much just looked at small plants lacking scrubbers as candidates for closure. As the report puts it:

"environmental control costs are non-linear (they’re more expensive on a unit of capacity basis at a small coal plant) and because these plants are generally older and less efficient in energy conversion.

Without details about individual plants, the Credit Suisse approach is certainly reasonable. I note only that, where plants are not closed, installation of scrubbers for SO2 or SCRs for NOx actually increases GHG emissions, because scrubbers and SCR require additional station service, making the plants less efficient to operate than previously. Overall, I don’t doubt that the closure of coal plants will outweigh the decrease in efficiency in the coal plants that remain operational, but both effects should be included in any analysis of the impact of the Transport Rule and the MACT rule on GHG emissions.