DETAILS OF THE future US climate policy are still hard to come by, but industry and regulatorsare preparing for a dramatic change in direction, which will have implications for NorthAmerican and global carbon markets. For the first time in years, environmentalists have reasonto hope: While George Bush refused to sign the Kyoto Protocol, his successor Barack Obama isfar more climate-friendly.
Thus, in December, 2009 at the ClimateConference in Copenhagen – where Kyoto Protocol participants meet to decide upon how to extendthe original agreement beyond 2012 – Obamacould ratify US participation. He could of coursesign on beforehand, but that’s consideredunlikely, given the current US financial crisis andsubsequent world economic fallout.
Obama’s environmental advisor
“I can tell you I am absolutely firm in thecommitment to tell you nothing firm,” quippedJason Grumet, one of Obama’s environmental advisors at a recent conference on US carbonmarkets. Yet, he said the new administration iscommitted to hitting the ground running on 21January, adding that the Obama team is anxiousto reverse the present US federal policy, whichhas worked counter to environmental interests.“He [Obama] comes with a tremendous depth of information to draw from. He will move quickly onclimate change,” Grumet said.While the advisor would not commit to beingmore substantive, others could and were moreforthcoming.For example, Senator Jeff Bingaman, whochairs the Senate Energy and Natural ResourcesCommittee, said: “We need to make every effortto enact major energy change and climatechange. [We will] begin with energy legislation…a renewable portfolio standard.” He went on todiscuss increased efficiency. “I believe we’vedemonstrated in Congress that we can gettogether [on this cause].”When
asked Bingaman to commenton the upcoming administration’s nuclearpolicies – a hot button topic with many of theenvironmentalists who elected Obama – Bingamanpointed to the Energy Policy Act of 2005, whichhe co-authored and which includes a stipulationto expand nuclear capacity. The Energy PolicyAct of 2005
authorises loan guarantees forrevolutionary technologies, such as advanced
www.tcetoday.comdec 2008/ jan 2009
nuclear reactor designs, clean coal and renewableenergy.“President Elect Obama is not opposed toexpansion. Whether he’d embrace additional expansion, I just don’t know,” said Bingaman.Meeting moderator Eileen Claussen, presidentof the global climate change organisation PEWCenter, was even more specific. She said that61% of US voters, according to PEW statistics,are concerned about capping carbon emissions.Claussen is a member of the Council on ForeignRelations and is former director of the USEnvironmental Protection Agency’s (EPA’s)atmospheric programme.“Building a new green economy must be atop three priority for the new administration, ”Claussen said. Then she highlighted five reasonsto believe that change is imminent: “Americanssupport action on climate [change] – there is agrowing public understanding that the climate isin crisis, that it’s reached a tipping point.”Secondly, there is growing pressure oncorporations and states to mandate morestringent carbon emissions controls. 44companies, she said, approve mandatoryrequirements for the US, and there is a growingmovement for strong national legislation to putthis forward. 24 states involved in regulatorycap-and-trade schemes are presently onboard,Claussen cited, pointing to the Regional Greenhouse Gas Initiative (RGGI, called“Reggie” colloquially) as an example. RGGI isthe first initiative in the US that would makethe reduction of greenhouse gas emissionsmandatory. Ten Northeastern and Mid-Atlanticstates are on target to cap and then reduce CO
emissions from the power sector 10% by 2018.Thirdly, there are very high expectationsaround the world for the US to step it up. “Theglobal community has been very frustrated. If Obama wants to start off on [the right] foot, itis imperative to craft environmental policy.”Fourthly, the Supreme Court decisionMassachusetts
EPA, which proved that “inactionis no option,” demonstrated that reducinggreenhouse gas emissions fell under the scope of the
Clean Air Act
.And finally, the Obama advisors and Congressunderstand the connection between economic,climate and energy policy, Claussen said.
putting policy into action
While the carbon market is a profitable one forcompanies cashing in on others’ complianceneeds – and could possibly account for why thisparticular conference was so heavily attended,as banks and other businesses struggle tomeet regulatory standards for a new, more pro-environment administration – how it will all playout is unclear. If Grumet keeps mum at this stage,it’s to be expected; but if Obama does not meetthe world’s, let alone most Americans’ expectationsfor curbing CO
emissions, it’s hard to imagine hispopularity continuing its ascent.In no industry are policies of the newadministration being more carefully monitoredthan in the energy and chemical sectors, whilecompanies such as Dow Chemical and Pacific Gas& Electric (PG&E), are already adapting businessstrategies to meet environmental demands andfuture mandates. Melissa Lavinson, directorof federal environmental affairs and corporateresponsibility at PG&E, said that the utilityis pursuing new infrastructure and innovativetechnology investment. She added that electricityand energy companies should play a role beyondthe power plant and take a more ‘holistic’ approachthat encompasses delivery, consumption andinfrastructure support.
what’s at stake?
According to the 2007 report issued by theIntergovernmental Panel on Climate Change (IPCC)global atmospheric concentrations of carbondioxide, nitrous oxide and methane emissions haveincreased dramatically since 1750.One state leading the way in reversing climatechange is California, as famously representedby its headline-grabbing governor, ArnoldSchwarzenegger. Speaking at a session on evolvingregional and world markets, Margret Kim of theAir Resources Defense Board in Sacramento talkedabout how the governor’s Global Warming SolutionsAct paved the way for other states to follow.The legislation established the first statewidegreenhouse gas regulation in the US, mandatingemission cuts to the 1990 level by 2020, with aclear view that that is not the end point.Kim told
after the event that California will continue to implement the Act “and we are startingour rule making.” As for unconditional supportof the new administration, she said California issupportive but it would be premature to offer moredetails before Obama even takes office.Perhaps, but the new president might wantto heed an example set by the Golden State: arecent National Resources Defense Council studypoints out that if the US were to follow California’sexample, this alone would ensure that Kyotoguidelines are met.
Laurie Wiegler is a US-based science writer
States and industry plan for carbon caps
US mulls climate policy