Hidden Costs of Repealing EPA’s Carbon Pollution Standards: Consequences for the Environment, Households, and Society

Nicholas Roy and Karen Palmer
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Nicholas Roy: Resources for the Future
Karen Palmer: Resources for the Future

No 25-10, RFF Issue Briefs from Resources for the Future

Abstract: On June 11, 2025, the US Environmental Protection Agency (EPA) proposed a repeal of the existing Greenhouse Gas Standards and Guidelines for Fossil-Fired Power Plants, hereafter referred to as the Carbon Pollution Standards (CPS). EPA’s repeal is part of the new administration’s deregulatory agenda for the US power sector, whose stated goals are to lower costs and to meet rising electricity demand. The proposed repeal would lead to measurable changes in outcomes for the nation’s electric power sector, especially when assessed in conjunction with the One Big Beautiful Bill Act (OBBBA) and updated electricity demand forecasts.Policymakers and the public alike are paying attention to the action’s likely result of slowing US greenhouse gas emission reductions. In this issue brief, we consider the economic costs of the greenhouse gas emissions unabated due to this repeal and evaluate other costs and benefits for the US population from the proposed repeal using updated data.Indeed, according to our analysis: if the EPA conducted a cost-benefit analysis using updated electricity demand projections and including the electricity tax credit changes from the OBBBA, then the repeal of the CPS would fail a traditional cost-benefit test—even without factoring in the increase in greenhouse gas emissions.With the repeal of the CPS, US residents will likely see:Increases in coal generation of 169–456 TWh by 2040, or 4.8–8.7 times as much coal generation as was expected with the regulations in place.An increase in cumulative CO2 emissions from the power sector by 1.2–5.8 gigatons by 2050.A net increase of 2.1–3.3 percent annually in national average electricity prices from now to 2050. This combines the 1–1.4 percent decrease from CPS repeal with the OBBBA increases of 3.3–4.7 percent over the same period.Net increases in average net household electricity costs of $67–$97 per year in the 2030s, driven by the CPS’s decreases of $19–$24 annually and the OBBBA’s increases of $87–$121 annually over the same time period. However, CPS repeal savings for households increase in the 2040s to $34–$44 annually on average per household over the decade due to coal plants remaining online.Increases in health damages that exceed the savings from lower compliance costs. The climate and health damages from this regulatory repeal will be 4–8 times the savings from reduced compliance costs across the modeled sensitivities. Considering solely the health effects along with the power sector’s financial outcomes, there is a total net cost of $128.9 billion (2024 US dollars) through 2050 to US society in our central case.

Date: 2025-08-06
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