Wednesday, June 26, 2013

President Obama's Climate Action Plan

The President made a speech on climate change yesterday. I did not watch it because I've seen enough of his speeches, and have been waiting for him to take action on climate change. The "Climate Action Plan" on which his speech was based can be read here. As noted in an earlier post (here), the centerpiece involves regulation of existing power plants under the Clean Air Act, a very good idea which could, if designed and implemented properly, provide greater carbon dioxide mitigation than any other country has yet achieved, including the European Union via its Emissions Trading Scheme combined with member state-level "policies and measures." The big question, of course, is whether EPA's regulations of carbon from existing power plants will be properly designed and implemented.

So, I will avoid further comment on the president's ostensibly bold new initiative until I see the actual regulations that EPA promulgates, which are bound to involve some compromises with the power industry, and could prove almost as toothless as its regulations of carbon emissions from new power plants, which hardly deviate from business-as-usual given the current low price of natural gas (as against coal).

I will, however, make one point in reference to complaints by politicians from coal states that the president's new initiative amounts to an "attack on coal" (see here). That claim is nonsense. Any coal not burned in the US pursuant to this initiative will be sold (that is, exported) to other countries, particularly in Asia. Indeed, coal exports already are at record levels because more and more power plants are using cheaper natural gas (see here).

From a climate perspective, this is hardly good news. By regulating coal-burning by US power plants, the US will mainly be exporting carbon emissions that would otherwise come from the US. This problem is known as "leakage." And there is no way around it, except to the extent that the long-awaited resumption of US leadership on climate change mitigation spurs other countries to similarly restrict emissions of greenhouse gases. I suspect that if EPA issues regulations that have read bite, other recalcitrant major-emitting countries, including Canada, will follow suit. And more bilateral agreements with the Chinese on climate change will be facilitated. But those are empirically testable hypotheses, which assume actually-enforced hard caps on American power-plant emissions of carbon dioxide. Time will tell, first, whether that assumption is warranted, and then whether other countries follow suit.

No comments:

Post a Comment

I actively moderate comments for spam, advertisements, and abusive or offensive language.