Media Matters takes a close look at a 2014 study from National Economic Research Associates (NERA)—which criticized the (draft) Clean Power Plan—and lays out the study's four big flaws.
First and foremost, the study is out of date. It looks at the draft plan when the final plan includes significant changes. For example, it allows more time for implementation, changes targets and ups the emphasis on renewables and energy efficiency.
Secondly, the NERA report makes assumptions about energy efficiency, using cost estimates that are 63% higher than those used by the EPA and 150% higher than those of the DOE.
Third, the study's assumptions about renewable energy are out of date and far too conservative. As we all know, renewable energy costs are falling rapidly, something NERA failed to properly take into account.
Finally, and perhaps most egregiously, NERA's report doesn't look at any of the economic benefits that arise from a switch to clean energy. The inclusion of the economic benefit figures alone would tip NERA's analysis from negative to positive, meaning that even if the other three errors were to remain uncorrected, properly accounting for the plan's benefits would make its benefits twice as great as the costs. If the remaining errors were corrected, benefits could exceed costs by as much as 23 times.
In sum, the NERA report is a "sort of" cost-benefit analysis that inflates costs by using old info, and shrinks benefits by ignoring them entirely. So it's really more of a cost-exaggeration analysis.
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