Bypassing Congress, president outlines ambitious climate agenda

Perhaps, like the rest of us, President Obama does most of his reading – and thinking – when he is away from the office on travel. Speaking in Berlin in June following the G8 summit – which may be characterized as a futile annual shindig in search of a purpose – he reiterated his view that climate change represents “the global threat of our time,” promising, “We will do more.”

With the news that global concentration of CO2 in the atmosphere have topped 400 parts per million (ppm), a symbolic threshold that the majority of scientists believe is a milestone into potentially irreversible climatic consequences, Obama must have come to the conclusion that the time to act is now and the US, the second largest global greenhouse gas emitter, must lead by example, especially now that America is enjoying the bounty of shale gas revolution.

In a seminal speech delivered to an enthusiastic crowd at Georgetown University on 25 June 2013, Obama declared a sweeping war on carbon, the tone and ferocity of which stunned both his supporters and foes (see box).

During his first term, the president tried, and famously failed, to get legislation through Congress on a comprehensive energy and climate bill. It is hard to imagine, but the political gridlock in Washington has worsened. This reality prompted the president to bypass the Congress by resorting to executive orders and/or direct intervention by government agencies to address climate change. It won’t be as elegant, widespread, effective or efficient as a comprehensive legislation with the backing of the Congress, but Obama must have come to the conclusion that, with the clock ticking, this may be his only option.

Mindful of the uphill battles in the Congress during his second term, yet determined to leave a lasting environmental legacy, Obama asked the President’s Council of Advisors on Science and Technology (PCAST), consisting of a group of distinguished scientists and business leaders, led by his chief science adviser, former Harvard Professor John Holdren, to come up with suitable options. PCAST, whose members include a number of luminaries such as MIT Professor Ernest Moniz – now head of US Dept. of Energy (DOE) – and Google’s executive chairman, Eric Schmidt, submitted a 9-page letter with 6 broad recommendations in March 2013. One can only assume the president has been consumed by other, more pressing, priorities until now to follow up on these recommendations.

The policies that Obama has proposed can be implemented with relative ease. They include efforts to tighten appliance energy efficiency standards, continue to support clean energy technologies and reduce greenhouse gas (GHG) emissions from both existing and future coal-fired plants by enforcing new regulations by the Environmental Protection Agency (EPA) as mandated under the Clean Air Act.

Obama surprised the coal lobby by calling for additional restrictions on existing coal-fired plants – the dirty, inefficient and old clunkers that are responsible for most of the damage. According to Edison Electric Institute, there are 1,142 coal and 3,967 natural-gas-fired plants in America. Under Obama’s plans, all would face new carbon emission limits for the first time in US history. These fossil fuel plants produce 67% of the nation’s electricity and 40% of the carbon emissions.

In its March 2013 letter to the president, PCAST was careful not to kill the goose that is laying America’s golden eggs – the shale oil and gas production (see following article). PCAST acknowledged the obvious, e.g., substituting cheap natural gas is preferred to burning more coal, and more domestic oil production reduces oil imports and enhances national security goals. Who could disagree?

Yet natural gas emits significant amounts of GHGs and can only play a transitional role in the short to medium term until a longer-term low carbon solution is in place. If the aim is to curb GHG emissions, switching from coal to natural gas only goes so far. If a heavy smoker is advised to quit smoking before he has a fatal heart attack – to use an analogy – it doesn’t help much if decides to cut smoking in half. Proponents of natural gas seem to miss the point that their favorite fuel, while far cleaner than coal, won’t ultimately address the carbon issue.

Mindful of the deep political schisms in Washington, PCAST went to great length to explain that, “the focus on decarbonizing electricity generation has been misconstrued by some as an attack on coal.” The shift away from coal, PCAST points out, is largely driven by economic factors. In other words, cheap natural gas is killing coal; the EPA is a mere accessory to the crime.

That did not appease the powerful coal lobby. Surprisingly, the immediate reaction from US utilities was mostly muted. They must have already decided that the time to build more coal-fired plants and spew unlimited amounts of carbon into the atmosphere were numbered.

PCAST takes a sober yet realistic stand on nuclear energy. First, it notes that, “nuclear power requires special attention as the Federal Government’s role is different than for all other technologies.” Second, it makes another obvious point, namely, “Achieving low-carbon goal without a substantial contribution from nuclear power is possible, but extremely difficult” (emphasis added).

That is the message that has eluded Chancellor Angela Merkel as Germany hastily moves towards shutting down its remaining perfectly safe, perfectly functional, nuclear fleet by 2022. Meeting Germany’s carbon emission targets will be so much more difficult – and expensive – without the nuclear option. How the US, the UK, Japan and other large democracies around the world ultimately handle the nuclear option – or non-option – will have a large impact on future global GHG emissions, everything else being equal.

America’s current good fortune, low demand growth, plentiful supplies of natural gas substituting for coal, and energy efficiency gains, mean that the US emissions will not reach their historical peaks, certainly not by 2040. That is in sharp contrast to rapidly growing economies of China and India, for example, who continue to rely on coal for large proportion of their power generation.

China alone consumes roughly half of global coal production making it the biggest greenhouse gas emitter. Likewise, India’s growing economy is expected to rely on coal for roughly 70% of its generation through 2035. Rapidly developing economies of the world are resorting to coal of sheer necessity, not because their policymakers favor coal per se. Americans, the Europeans, Australians and other developed economies, can increasingly decide what type of fuel mix they want and take steps to achieve it – as is happening with renewable portfolio standards and low carbon targets that are now prevalent within OECD economies.

To those who say why bother, the obvious answer is that GHG emissions have to be curbed by significant amounts and it does not matter who does the cutting first. Those who are in a position to set an example should lead, encouraging others to follow. In this context, Obama should be given credit for what he said. How much he can deliver, and when, remain to be seen.