The US will work to rein in carbon emissions from power plants and boost its capacity to produce renewable energy, President Barack Obama said in aspeech in Washington on Tuesday. The much-anticipated announcement came following his promise in February to make tackling climate change a top priority during his second term.
The Obama Administration’s newly-released climate action plan outlines a series of measures - some new, others that involve existing programmes - that touch upon an array of other issues as well, such as the possible liberalisation of environmental goods and services at the WTO.
The policies are primarily executive actions - in other words, those that the President can implement without requiring the approval of Congress. Passing climate change laws through the highly-polarised legislative branch has been notoriously difficult, with earlier attempts at pushing through legislation on market-based climate strategies ultimately failing. Given that context, the Obama plan notably does not include any mention of a carbon tax, or a cap-and-trade scheme.
In his State of the Union address earlier this year, the US President had pledged that he would take executive action if necessary to address the growing threat of climate change, if it appeared that Congress was not moving quickly enough on developing a bi-partisan, market-based solution. (See Bridges Weekly, 13 February 2013)
“I still want to see that happen,” Obama said. “I’m willing to work with anyone to make that happen. But this is a challenge that does not pause for partisan gridlock. It demands our attention now.”
Reducing emissions, increasing renewable energy
One of the most high-profile measures outlined in the Obama plan - and likely to be the most controversial domestically - is the planned imposition of federal carbon limits on new and existing power plants, which are the largest concentrated source of emissions in the US. While limits are already in place for arsenic, mercury, and lead, none have been imposed on carbon until now.
Such carbon pollution standards would be developed by the US Environmental Protection Agency (EPA). However, some political analysts have been quick to point out that the planned regulations could face legal challenges, which many expect considering the opposition of some Republicans to such a move.
Another pledge in Obama’s plan is the goal to double renewable electricity generation by 2020, from wind, solar, and geothermal sources. Energy sourced from renewables has already doubled since the president first took office in 2009.
“Countries like China and Germany are going all in in the race for clean energy,” he said. “I believe Americans build things better than anybody else. I want America to win that race, but we can’t win it if we’re not in it.”
To achieve this goal, Obama has outlined measures aimed at accelerating the pace of issuing permits for renewable energy projects on public lands. Other steps would involve upgrading the US electric grid and increasing funding for clean energy technology across all government agencies by 30 percent.
The plan also includes a series of measures aimed at increasing energy efficiency, reducing other greenhouse gas emissions - such as hydrofluorocarbons (HFCs) and methane - and preparing for the impacts of climate change.
Trade
The plan also announces the US’ intention to - together with its trading partners - kick off WTO talks focused on liberalising trade in environmental goods. Such discussions would aim to build upon the agreement announced by the 21 Asia-Pacific Economic Cooperation (APEC) countries last year to lower tariffs on over 50 environmental goods - including climate-friendly products, such as solar panels and wind turbines - to five percent or less by 2015. (See Bridges Weekly, 12 September 2012)
The current APEC agreement is non-binding, given the nature of the regional grouping; in addition, critics have noted that tariffs on many of these goods are already low. The APEC announcement, however, has prompted many pundits to suggest that the move could reinvigorate existing WTO talks in this area, which have repeatedly stalled since the launch of the overall Doha negotiations.
However, early discussions at the WTO on the APEC agreement have already shown a divide between members, as some opposed having the Asia-Pacific agreement influence current WTO discussions or be multilateralised at the global trade body. (See Bridges Weekly, 14 November 2012)
Current participants of the APEC agreement would aim to expand the deal’s scope by adding products of interest, the Obama Administration said on Tuesday. They would also work to bring in new participants, with the goal of “securing participation of countries which account for 90 percent of global trade in environmental goods.”
Given that the US is also one of a subset of WTO members currently preparing to negotiate a plurilateral agreement on trade in services, the Obama plan also pledges to include environmental services in these talks.
Keystone pipeline
In his speech on Tuesday, the US President stressed that the Keystone XL pipeline - which would carry 830,000 barrels of crude oil a day from Alberta, Canada and the US state of Montana to Texas, through Nebraska - will not be built unless it is clear that the project does not increase net carbon emissions.
The Keystone project has been controversial since the idea was originally tabled years ago, with environmental groups arguing that the oil extraction and refining process would generate high carbon emissions and that a pipeline breach in environmentally sensitive areas could have catastrophic results.
While Obama had blocked the project last year, many political analysts predict he will approve TransCanada’s new application, following a recent generally positive preliminary environmental assessment by the State Department, which has jurisdiction given that the pipeline crosses an international boundary. An announcement is expected in the coming months, following the State Department’s final review. (See Bridges Weekly, 13 March 2013)
Canadian Natural Resources Minister Joe Oliver, a long-time proponent of the pipeline, told reporters in Toronto on Tuesday that - on a net basis - his country does not “see any increase in emissions as a result of the construction of the pipeline.” This is particularly the case, he said, because at least one-fifth of the oil will not actually be from the controversial oil sands and would therefore be less carbon intensive.
Response
Tuesday’s speech was welcomed by many environmental groups and international policymakers, though several were quick to say that such efforts should only be a first step in a much larger climate change agenda.
“It appears that the President will finally begin to make good on his climate promises, but to truly meet his obligation to future generations, this must be the foundation - not the final act - of his climate legacy,” Greenpeace USA Executive Director Phil Radford said.
EU Commissioner for Climate Action Connie Hedegaard similarly called the plan a “most welcomed step forward.”
Manufacturers, however, have been among those to criticise the plan, on the grounds that provisions such as power plant carbon limits and the phase-out of fossil fuel subsidies could damage efforts to create US jobs - another one of Obama’s policy priorities.
“Ultimately, this plan will make the United States less energy secure, less affordable and unable to meet our future energy needs,” National Association of Manufacturers (NAM) President and CEO Jay Timmons said, while agreeing that climate change is an international issue.
Obama, however, has stressed that US industry is adaptable, and that a low-carbon, clean energy economy can actually be a source of growth.
“The point is, if you look at our history, don’t bet against American industry. Don’t bet against American workers,” he said on Tuesday. “Don’t tell folks that we have to choose between the health of our children or the health of our economy.”
ICTSD reporting; “Obama’s greenhouse gas plans face court challenges,” THE FINANCIAL TIMES, 24 June 2013; “Canada says no net increase in emissions from Keystone,” REUTERS, 25 June 2013; “Obama unveils climate change plan that goes around Congress,” THE HILL, 25 June 2013.