OREANDA-NEWS. Proposed federal CO2 regulations for the power sector will drive long-term renewable energy investments, US Environmental Protection Agency (EPA) administrator Gina McCarthy said yesterday.

The proposed Clean Power Plan will provide long-term market signals to the power sector and states covered by the regulations, McCarthy said.

"What the [Clean Power Plan] is telling utilities and states is to think about investments between now and 2030, and rely on your current programs, and we will underpin those with the final rule," McCarthy said yesterday at the GreenGov Symposium in Washington, DC.

The rule will also reinforce what many companies are already doing by accounting for potential climate costs for their operations, she said.

"It is the business community that is saying, we have been pricing carbon into our products and services for a long time," McCarthy said. "Businesses are embracing this in a way that [the government] has been slow getting to the table."

The clean Power Plan would set CO2 emissions rate targets for each state to meet by 2030, along with an interim target for 2020-29. EPA says states will be able to use a broad range of measures to meet the targets, including emissions trading, renewable energy and energy efficiency. EPA plans to finalize the rules by August.

While the public and private sector have already begun to incorporate carbon-cost signals into their operations by adopting less-carbon intensive practices, certain global stakeholders appear to be lagging in their efforts to manage risks posed by climate change, including the world's largest source of greenhouse gas (GHG) emissions, China.

"China realizes they made a big mistake by growing their economy without thinking about how to protect public health in their country at the same time," McCarthy said.

The federal government has undertaken its own effort to reduce GHG emissions at the behest of President Barack Obama. The steps to date have cut emissions by 17.4pc since 2008, the White House Council on Environmental Quality (CEQ) said yesterday. Obama has ordered agencies to cut emissions by 40pc from 2008 levels by 2025. Agencies are also required to procure 30pc of their energy from renewable sources over the same period.

To date, the initiatives to procure renewable capacity at the federal level have resulted in 72MW of capacity across Defense Department installations, the CEQ said.