On June 25, 2013, President Obama made a long-awaited announcement for his administration’s Climate Action Plan. The plan outlines a range of actions the Obama administration will take using existing authorities to reduce carbon pollution, increase energy efficiency, expand renewable and other low-carbon energy sources, and strengthen resilience to extreme weather and other climate impacts. As part of the plan, the Environmental Protection Agency (EPA) has been directed to set standards by June 2015 to reduce carbon pollution from existing power plants.
President Obama’s Climate Action Plan focuses on the following key areas:
· Regulating Greenhouse Gas Emissions – In lieu of any action by US Congress on setting an economy-wide price on carbon, President Obama is using his powers under the Clean Air Act to curb emissions from power plants, by far the largest unregulated source of US carbon emissions. Companies are seeking regulatory certainty so many of them are prepared to work with the Obama administration on pragmatic approaches to cut GHG emissions and mitigate climate risks. The Supreme Court ruled in 2007 that EPA has authority under the Clean Air Act to regulate greenhouse gases. Carbon pollution standards for new power plants proposed by EPA in March 2012 have not yet been finalized. In his June 25 speech, President Obama announced a Presidential Memorandum directing the EPA “to work expeditiously to complete carbon pollution standards for both new and existing power plants.”
· Energy Efficiency – The Department of Energy has been directed to build on efficiency standards for dishwashers, refrigerators, and other products that were set during President Obama’s first term. President Obama set a goal of cumulatively reducing carbon dioxide emissions by 3 billion metric tons by 2030 through efficiency measures adopted in his first and second terms. The president also committed to build on heavy-duty vehicle fuel efficiency standards set during his first term with new standards past the 2018 model year.
· Renewable Energy – In 2012, renewable energy was responsible for 12.7% of net U.S. electricity generation with hydroelectric generation contributing 7.9% and wind generation 2.9%. As the fastest growing energy source in the US, President Obama reiterated his support to make renewable energy production on federal lands a top priority. In particular, the President announced a series of executive decisions (i) directing the Department of the Interior to permit enough renewable projects on public lands by 2020 to power more than 6 million homes; (ii) to designate the first-ever hydropower project for priority permitting; and (iii) to set a new goal to install 100 megawatts of renewables on federally assisted housing by 2020. The President will also maintain a commitment to deploy renewables on military installations and will make up to $8 billion in loan guarantees available for a wide array of advanced fossil energy and efficiency projects to support investments in innovative technologies.
· Natural Gas – New drilling technologies such as hydraulic fracturing have significantly increased the amount of recoverable natural gas in the US. These advances are expected to keep the price of natural gas near historically low levels, thus altering energy economics and trends, and opening new opportunities to reduce greenhouse gas (GHG) emissions. To better leverage natural gas to reduce GHG emissions, the administration will develop an inter-agency methane strategy to further reduce emissions of this potent GHG.
· Leading by Example – In his first term, President Obama set a goal to reduce federal GHG emissions by 24% by 2020. He also required agencies to enter into at least US $2 billion in performance-based contracts by the end of 2013 to finance energy projects with no upfront costs. In his climate plan, the President established a new goal for the federal government to consume 20% of its electricity from renewable energy sources by 2020 which is more than double its current goal of 7.5%.
· Climate Resilience – The President wants federal agencies to support local investments in climate resilience and convene a task force of state, local, and tribal officials to advise on key actions the federal government can take to help strengthen communities. President Obama also wants to use recovery strategies from Hurricane Sandy to strengthen communities against future extreme weather and other climate impacts and update flood-risk reduction standards for all federally funded projects.
· International Climate Change Leadership – President Obama promised to expand new and existing international initiatives with China, India and other major emitting countries. He also called for an end to US government support for public financing of new coal-fired powers plants overseas, except for the most efficient coal technology available in the world’s poorest countries, or facilities deploying carbon capture and sequestration technologies. A noteworthy initiative introduced by the President was a direction given to his administration to launch negotiations toward global free trade in environmental goods and services, including clean energy technology “to help more countries skip past the dirty phase of development and join a global low-carbon economy”.
Eileen Claussen, President of the Center for Climate and Energy Solutions, commented that President Obama is laying out a credible and comprehensive strategy to strengthen the US response to climate change. In particular, President Obama’s plan recognizes that the costs of climate change are real and rising; to minimize them, the US must both cut its carbon output and strengthen its climate resilience. These policy initiatives are an important first step, but it will require continued leadership to translate the plan’s good intentions into concrete policy.