Obama’s ‘biggest move’ on US climate policies Experts react

The Environmental Protection Agency will manage the Clean Power Plan and will reduce greenhouse gas emissions from US power plants by 32% compared to 2005 levels by 2030.

has praised the policy as a vital step in reducing US emissions of greenhouse gases, which are around a third from electricity production. This policy sends an important signal to other countries ahead of the United Nations climate talks that will take place in Paris, France in December.

Costs and Benefits

John Quiggin Professor, School of Economics at the University of Queensland

Obama’s plan to combat climate change is notable for its calculation, which shows that the benefits to local health and the environment of using less coal in electricity generation will outweigh any direct economic costs. This is even before considering the effect on CO2 emissions. The economic research that has been done on this subject is in line with the conclusion of This 2011 Review. It concluded that coal’s overall impact is several times greater than its benefits.

The Chinese government made a similar assessment when it decided to shut down all coal-fired electricity stations near Beijing and other major cities.

It means that we are still at the “no-regrets” stage of climate change policies, where measures to reduce CO2 emissions are beneficial without considering climate change. It is due in large part to the fact that there are so many “low-hanging fruits” available in terms of energy efficiency, but even more so to the dramatic reductions in renewable energy costs, especially solar photovoltaics. The cost of renewable energy has dropped so dramatically that, depending on electricity prices, new solar photovoltaic power plants are now cheaper than coal-fired ones.

It’s also sobering to note that no government has been willing to spend a significant amount of money (say more than 1%) to stabilize the climate. The world would be in a dire situation if there were no “no regrets policies.””

Malte Meinshausen Australian-German Climate & Energy College School of Earth Sciences University of Melbourne

The coin has two sides. The EPA Clean Power Plan, on the other hand, is a signpost that signals coal to the exit and begins rolling out a red carpet for renewables at a greater scale. According to the EPA, this plan will prevent health and climate damage of between US$25 billion and US$45 billion by 2030. CPP sends a geopolitical message to other coal-dependent economies and large emitters that now is the time to act. Obama’s administration has not only announced nationwide targets for 2025 but also put in place even longer-term policies that are effective. So far, so positive.

The other side is that the 32% reduction rate is completely inadequate. In recent years, the US power sector reduced its emissions significantly (and had already fallen 20% below 2005 levels in 2012). To achieve the economy’s emissions reduction target of 26-28 percent by 2025 and continue on the trajectory to an 80% reduction by 2050, the other sectors must pick up the slack. It could be not easy, as the power sector does not have to do a lot more. Only reducing by 32% would result in a reduction of only 15% from 2012 levels. This leaves sectors such as transport, industry, and waste, along with agriculture, facing a 36-38% drop below current levels until 2030.

And so, to achieve the long-term emissions targets, other sectors would have to contribute more than twice the amount of the energy sector. This cannot be the way to go. The CPP is only a limit if the power sector does not exceed its EPA targets. Once the new state regulations are fully implemented, the power industry will be able to deliver even more reductions.

The Regulations

Katherine Lake, Research Assistant, Centre for Resources, Energy and Environmental Law, University of Melbourne

It is a plan that uses innovative methods to reduce emissions from US power plants. The program is based on EPA’s successful partnerships with states and the federal government to reduce other air pollutants like mercury and sulfur. The program strikes a balance in setting strict emission limits for each state while still allowing flexibility to achieve those limits. It explicitly encourages market mechanisms, such as trading emissions between and within states.

The plan’s legal basis is section 111 of the Clean Air Act. This piece of environmental legislation, under which state and local governments collaborate with the EPA in order to combat air pollution, has been a cornerstone of environmental regulations for decades.

How the new plan works under the US Clean Air Act.

The Supreme Court ruling in 2007 that CO2 was an air pollutant under the Act is key to the EPA’s authority to regulate climate gases. The EPA’s new plan will undoubtedly face legal challenges, but it is in a good legal position.

The plan is in support of the United States’ official pledge, which aims to reduce emissions by 26-28 percent by 2025. This ambitious commitment embodies the “bottom-up” approach to reducing CO2, which has been emerging internationally, as well as in other countries, including Australia.

Legal hurdles

Lynette M. Molyneaux is a researcher at the Energy Economics and Management Group of the University of Queensland.

Obama and the EPA will likely have to go through years of litigation in order to implement this. Legal challenges to the environmental policy litter the history of US power stations. After 70 pieces of legislation failed to install scrubbers in order to reduce acid rainfall, the regulation of sulphur oxide emissions was finally achieved in 1990.