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What to Look for in the President’s Climate Address

Obama will propose a climate plan, but his options are limited without congressional support.
June 20, 2013

President Obama is expected to announce a series of measures to reduce carbon emissions, help the United States prepare for the impact of climate change, and facilitate international coöperation on dealing with the problem. The recommendations will mark the administration’s most significant policy moves since the comprehensive energy legislation passed by the House in 2009 failed in the Senate.

The president is expected to propose a series of regulatory changes but avoid the type of legislative fight over climate policy that marred his first term. Without new legislation, his options are limited—there will be no overarching policy such as a carbon tax or a cap-and-trade program limiting emissions. And there will be no significant increases in spending on development and demonstration of new technologies.

Promoting international agreements will be key—the United States accounts for only 20 percent of worldwide carbon emissions, a number that’s shrinking as emissions in grown in places such as China and India. Yet the country’s international leverage will be limited without action from Congress on long-term emissions reductions. Meanwhile, measures such as decreasing carbon dioxide emissions at federal agencies and establishing more stringent appliance efficiency standards address only a fraction of the economy. Perhaps his most powerful strategy will be to reduce carbon dioxide emissions from power plants through the U.S. Environmental Protection Agency, but tough legal challenges will limit the scope of such regulations.

Whatever Obama comes up with, the results are likely to fall far short of the 80 percent reductions in carbon dioxide emissions that many researchers say are necessary to avoid catastrophic climate change. Taken together, the actions Obama can take might reduce emissions by only 20 percent says David Victor, co-director of the Laboratory on International Law and Regulation at the University of California at San Diego, who notes that the EPA’s ability to restrict carbon dioxide emissions under the Clean Air Act will be limited by considerations such as cost and by precedents that will make it much more difficult to regulate existing power plants than new ones. “It will be very difficult to establish a rule that is meaningful but that will also survive legal challenges,” he says. “We’re approaching the limit of what the United States government can do without new legislation.”

What’s ultimately needed is legislation that can provide more funding to demonstrate new technologies and establish across-the-board emissions limits that extend beyond power plants. Victor says regulations will probably favor technologies that offer incremental improvements over existing ones, not technologies that make a major break with the status quo. For one thing, new technologies need to be proved before they can be adopted. One important approach to keeping down the cost of emissions reductions, for example, is carbon capture and storage. But this has yet to be demonstrated in power plants at a large scale.

Efforts at improving efficiency also deserve scrutiny, says Michael Greenstone, a professor of environmental economics at MIT. While large reductions in energy consumption are possible in theory, much of that potential may not be realized in practice because people often don’t take advantage of such measures, he says, and it’s not clear why that is. Greenstone says the president should build in a system of evaluation to determine which efficiency measures actually make a difference.

Greenstone also says that regulations have the potential to make coal and natural-gas power plants more expensive, which would allow renewables to compete on a “more level playing field” by taking into account the climate-change-related costs associated with greenhouse-gas emissions. The cost of complying with such regulations will depend on how much flexibility is built into them; the more options utilities have for complying, the lower the cost. A broad regulation that stipulates maximum average emissions from all of a utility’s power plants—including, say, both coal and solar plants—would keep cost increases down, he says, but that approach is likely to face legal challenges. He also says that the impact of regulations on new plants will be minimal because the ones planned by utilities don’t rely on coal, but on natural gas, which is cleaner than coal. The biggest impact would come from regulating existing power plants.

Greenstone says a key question will be the extent to which any proposals will be useful in getting other countries to sign on to emissions reduction plans. For example, if the president can make a case that the U.S. can meet a goal of reducing its emissions 17 percent by 2020—something it’s committed to in negotiations, although the Senate didn’t ratify the agreement—that might produce some leverage in future negotiations.

Victor says that one of the key things the Obama administration’s measures might do is create more of a push for comprehensive climate legislation. “We’re going to see increasingly fragmented policy that differs by sectors of the economy and by state,” he says; part of what the government is trying to do is establish that “if we do not have nationwide legislation, the alternative fragmented regulatory approaches are going to be really expensive.” He adds, “This is a big part of the story. What you’re trying to do is make the alternative to legislation look more and more unattractive.”

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