The federal government projects that a major regulatory repeal will benefit Americans. New independent modeling instead finds that the costs of repeal could outweigh benefits by about $1.5 trillion, even before considering air-quality damages.
Losing the Endangerment Finding: What Are the Costs and Benefits of Deregulation?
In February 2026, the US Environmental Protection Agency repealed the endangerment finding—the federal government’s formal scientific determination that greenhouse gases cause climate change that endangers public health and welfare. This blog series uses best-practice benefit-cost analysis to show how endangerment finding–related rollbacks will affect the health and well-being of everyday Americans.
The rescission of the endangerment finding in February of this year by the US Environmental Protection Agency (EPA) started a cascade of deregulatory actions that have dramatically changed the landscape of climate and air-pollution regulations. In September 2026, EPA repealed the 2024 standards limiting greenhouse gas emissions from power plants under Section 111(d) of the Clean Air Act and proposed the repeal of all remaining greenhouse gas emission requirements for power plants.
EPA argues that the increase in greenhouse gas emissions due to this rollback will have a minimal impact on public health and welfare; as a result, EPA contends, these emissions do not warrant regulation by the agency, and the forgone climate benefits of the repeal can be ignored in EPA’s accompanying regulatory impact analyses. The impact analyses performed by EPA also do not account for the public health impacts of criteria air pollutants such as sulfur dioxide and particulate matter, contradicting guidelines from the Office of Management and Budget and EPA itself.
Ignoring emissions of greenhouse gases and criteria air pollutants goes against decades of scientific peer review and best practice for benefit-cost analysis. Because EPA does not account for the economic costs and benefits of carbon emissions or local air pollution, the agency’s reported cost savings do not reflect the true impact of the regulatory rollback.
This dramatic departure from best practices became especially problematic when EPA updated other parts of its regulatory impact analysis for the final rule. The agency assumed significant growth in electricity demand from data centers, the phaseout of the Inflation Reduction Act’s clean energy tax credits, and a changing electricity generation mix with notably more coal capacity. As a result of these assumption changes made in the final rule, EPA estimates that repealing the regulation on power plants will save approximately $280 billion in compliance costs (minus transfers such as tax payments and credits) between now and 2047, versus estimated savings of $53 billion in the proposed rule.
It follows that emissions of greenhouse gases and air pollutants increase under the final rule’s updated analysis, as higher electricity demand translates to greater capacity and generation needs which are met in part by coal and other fossil fuels. EPA’s decision to ignore the damages from these emissions means that its new analysis tells a story of increasing cost savings without acknowledging the increasing health and climate damages caused by the repeal. We estimate these damages to be many times larger than these cost savings.
In this blog post, we offer a fresh perspective and evaluate the economic and environmental outcomes of repealing the 2024 standards regulating power plant greenhouse gas emissions established under Section 111(d) of the Clean Air Act. We find that the forgone benefits from the repeal outweigh the cost savings by almost $1.5 trillion between 2032 and 2050, even before accounting for the effects of air pollution–related health damages.
Model and Scenarios
We use the power sector model E4ST to estimate how repealing the power plant standards affects the electricity generation mix, decisions over power plant investment and retirement, power-sector emissions, and system-level grid costs. We will quantify the health damages from increased air-pollutant emissions in a future blog post and in our final report.
In this analysis, we evaluate the impacts of rolling back these standards under two scenarios:
- A baseline scenario that incorporates all federal and state regulations and policies on the books as of February 2026, including the repeal of the greenhouse gas rules for light-duty vehicles, the One Big Beautiful Bill Act amendments to the clean energy tax credits of the Inflation Reduction Act, and the repeal of the Good Neighbor Plan (which is currently stayed).
- A rollback scenario built directly on the baseline scenario that also includes the repeal of the power plant greenhouse gas standards.
In both scenarios, we use demand growth projections that reflect a rapidly changing power sector with significant increases in electricity demand driven by data center growth.
Our upcoming report will provide additional details about how the repeal of vehicle greenhouse gas standards will affect the power sector. While in our baseline and rollback scenario we account for these effects (namely reduced electricity demand from electric vehicles, which causes some changes in grid mix and slightly reduced US power-sector emissions), we do not discuss them in detail here; instead, we focus on the more significant grid effects of the rolled-back power plant standards.
Coal Plants Remain Online
Figure 1 shows the change in US capacity and generation mix from the rollback of the power plant greenhouse gas standards. Before the rollback, these standards required coal power plants to retire or retrofit with carbon capture and storage (CCS) or natural gas cofiring with deadlines in 2032 and 2039. Without the standards, significant unretrofitted coal capacity remains online and continues to generate power through 2050, displacing capacity and generation that would otherwise come from a mix of coal retrofits; lower-emitting natural gas plants; and renewable resources, including wind, solar, and battery storage.
Figure 1. Change in Generating Capacity and Generation Mix Caused by the Repeal of the Power Plant Greenhouse Gas Standards
The difference in unretrofitted coal capacity and other non-CCS fossil generation between the scenarios varies regionally. Figure 2 maps this change for the year 2040. Many US states see increases in fossil generation when the regulations are removed. We project the greatest increases in the South and Midwest, where coal still maintains a significant share of the resource mix. Texas sees the largest increase in non-CCS fossil generation, at 57 terawatt-hours in 2040—an amount roughly equivalent to 9 percent of total coal generation in the United States in 2024. In states and regions with cleaner grid mixes and strong energy and climate policies (e.g., California and New England), the impacts are not as large.
Figure 2. Change in Non–Carbon Capture and Storage Fossil Generation by State in 2040
Prolonging the lifetime of coal units in place of CCS, natural gas, and renewable resources increases power-sector emissions in each of the modeled years. Figure 3 shows annual carbon dioxide emissions in the US power sector across the baseline and rollback scenarios. Generally, the emissions impacts are more modest in 2050 than in 2032, as clean energy deployment accelerates in both the baseline and rollback scenarios.
Figure 3. National Power Sector Carbon Emissions by Scenario over Time
The effects of the rollback on grid resources and the generation mix are accompanied by shifts in both capital expenditures and operating costs. The national average wholesale electricity price is $0.84–$2.00 per megawatt-hour lower in the power plant rollback scenario than in the baseline scenario, which is roughly a 3 to 7 percent reduction. Electricity prices are lower under the rollback scenario primarily for two reasons: First, the power plant rules limit how often new natural gas units can run, making them a more expensive resource. Second, coal units with CCS cost more to run than unretrofitted units.
Our modeling projects that the rollback would reduce total system costs incurred by electric power producers, which are ultimately passed on to consumers through electricity bills. We estimate the change in total system costs as the difference in compliance cost minus transfers, or the sum of capital expenditures, operating costs, and fuel costs between the two scenarios. Using a 3 percent discount rate, the rollback yields a net present value of $221 billion in system savings (in 2024 dollars) between 2032 and 2050, discounted to 2026.
These savings stem primarily from lower capital expenditures by power producers, as retaining paid-off coal capacity under the rollback scenario reduces the need for investment in new grid resources. Operational costs also fall, because retrofitted coal units (required by the power plant rules) have higher variable and fixed costs than unretrofitted coal units.
Greenhouse Gas Damages Are Substantial
However, the system cost savings from the rollback are dramatically offset by the greenhouse gas damages that the rollback causes—we estimate these greenhouse gas damages to amount to nearly $1.7 trillion. We arrive at this figure using the modeled change in carbon dioxide emissions from the rollback, the social cost of carbon, and a 2 percent discount rate consistent with the Office of Management and Budget’s 2023 guidelines. On net, repealing the standards harms society by almost $1.5 trillion, even before accounting for health damages from the widespread deterioration of air quality, which especially affect areas with higher unretrofitted coal-fired generation. We will provide estimates of these public health damages in an upcoming blog post and in our final report.
Electricity demand is rapidly rising in the United States due to electrification trends and data center growth. This increasing demand, and the mix of resources that energy producers use to meet that demand, will meaningfully influence the cost savings and forgone climate and air-quality benefits of the rollback of power plant greenhouse gas standards. If these trends continue, failing to account for the effects of regulatory rollbacks on air pollution and climate change will increasingly misrepresent the net benefits of regulations and downplay their role in protecting Americans and the rest of the world from detrimental health and climate damages.
