Obama Could Unveil Climate Strategy with Clean Air Act Tie Soon

The Nicholas Institute for Environmental Policy Solutions at Duke University
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Obama administration could soon make an announcement detailing plans to address climate change, even in the face of continuing political barriers to progress on the issue. Unnamed administration officials pointed to July for the rollout, while an Administration aide was more vague.

“In the coming weeks and months, you can expect to hear more from the president on this issue,” White House environment and energy adviser Heather Zichal said at an environmental forum June 11. Though timing and details are still in flux, Zichal said the plan will expand on the administration’s efforts to permit more renewable energy on public land and to promote energy efficiency. A central part of the administration’s approach to deal with climate change, Zichal noted, would be to use the authority given to the U.S. Environmental Protection Agency (EPA) to address greenhouse gases from power plants under the Clean Air Act.

The EPA missed an April deadline to release final rules to limit greenhouse gas emissions from new power plants under the act and has shared no details about its plan for the rules since. Speculation about the public release of a climate strategy did delay the filing of a lawsuit against the EPA for that missed deadline; filers pledged to “wait to see” if Obama releases a plan in the coming weeks.

If the plan includes final rules for new fossil fuel-fired power plants, known as the new source performance standard, those rules will prompt a Clean Air Act provision—section 111 (d)—requiring the EPA and state governments to regulate greenhouse gases from existing fossil fuel-fired power plants. The White House has signaled that new rules securing reductions from existing power plants are likely to be part of its strategy. A new report by the Nicholas Institute for Environmental Policy Solutions and the American Council for an Energy-Efficient Economy outlines some of the key considerations that are likely to arise if energy efficiency is included as an option for states needing to secure reductions from existing sources. It explores how incorporation of energy efficiency into past state air quality programs can inform federal and state environmental regulators as they evaluate these section 111(d) issues.

A second analysis by the Nicholas Institute identifies how potential regulatory tools under the Clean Air Act—beyond the greenhouse gas rules—could accelerate development and deployment of potentially game-changing clean air and energy technologies to reduce emissions in the nation’s key industrial sectors.

Holding Pattern Continues for McCarthy

The timing of Obama’s climate plan could complicate the nomination of Gina McCarthy, Obama’s pick to replace former administrator Lisa Jackson as head of the EPA. Senate Majority Leader Harry Reid (D-Nev.) announced last month that McCarthy’s nomination would be delayed until July.

The Senate Environment and Public Works panel backed McCarthy a month ago in a party line vote. The nomination remains in a holding pattern as a result of continued opposition by Republicans and urgings to release data the EPA uses to design air pollution regulations.

U.S. Tax Code Has Minimal Effect on Carbon Dioxide, Other GHG Emissions

Current federal tax provisions have minimal net effect on greenhouse gas emissions, according to a new report from the National Academies of Science. The report, which evaluates how key elements of the current tax code affect the nation’s greenhouse gas emissions, finds that several existing tax subsidies have unexpected effects, and others yield little reduction in greenhouse gas emissions per dollar of revenue loss (subscription).

Climate Commitment Renewed at G8 Summit

While the crisis in Syria and the economic downturn pushed climate change out of the spotlight at the G8 Summit, it was highlighted in a communiqué released following the close of the talks. G8 leaders dedicated a page to climate change—noting that it is “one of the foremost challenges for our future economic growth and well-being.”

The statement acknowledges “grave concern” the leaders have regarding failure to make deep emissions cuts and includes support for UNFCCC’s efforts to deliver a new global treaty to curb greenhouse gases in 2015 with a more ambitious framework than is currently in place.

“We remain strongly committed to addressing the urgent need to reduce greenhouse gas emissions significantly by 2020 and to pursue our low-carbon path afterwards, with a view to doing our part to limit effectively the increase in global temperature below 2°C above pre-industrial levels, consistent with science,” the statement reads. “We also note with grave concern the gap between current country pledges and what is needed, and will work towards increasing mitigation ambition in the period to 2020.”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

OPEC Discord May Be “the Beginning of the End” of the Oil Cartel

The Nicholas Institute for Environmental Policy Solutions at Duke University

With oil prices high, the International Energy Agency (IEA) last month made a rare plea for the world to produce more oil. So the latest meeting of the Organization of Petroleum Exporting Countries (OPEC), where they set their production quotas, was closely watched. After a rancorous meeting, most member countries refused to raise quotas.

Before the OPEC meeting, the chief economist of the IEA, Fatih Birol, told the New York Times: “Oil prices are hurting the economy.” He added, “I hope to see more oil in the markets soon.”

Saudi Arabian Oil Minister Ali al-Naimi declared it “one of the worst meetings we ever had,” with opposing views from the “haves” and “have-nots”—in terms of spare production capacity.

Saudi Arabia had been pushing to boost production by more than 1.5 million barrels per day, above current levels. Already OPEC members have gone beyond their quotas, producing an estimated 28.8 million barrels per day, compared to the current overall quota of 24.8 million barrels per day. “Everybody in OPEC is cheating and everyone knows that,” an oil analyst told the New York Times.

The Saudi oil minister suggested his country would decide on its own production levels, telling Platts, “let the buyers come and we will supply them with what they want, whatever they need.” The Wall Street Journal quoted one Gulf-state delegate as saying it’s “the end of the quota system,” and the Guardian reports some analysts say the split could mark the beginning of the end for the cartel.

Some analysts argued OPEC doesn’t matter, and Russia is the big winner, since they have added more to exports in the past few years than Saudi Arabia, and have the ability to boost their production further.

Is Increasing the Gas Tax the Answer?

The head of General Motors’ North American unit predicted gasoline prices will continue to climb in coming years. While, General Motors’ CEO, Dan Akerson, called for higher gas taxes to push people to buy more efficient cars. “We ought to just slap a 50-cent or a dollar tax on a gallon of gas,” Akerson said.

Meanwhile, the Liveable Communities Taskforce in the U.S. House of Representatives issued a report titled “Freedom From Oil.” “Providing a range of transportation choices can help break auto dependence,” the report said, and it encouraged a range of measures from more efficient cars, to better city planning, to “pay-as-you-drive” auto insurance.

Clean Energy Trade Wars

Subsidies for clean energy and emissions trading schemes were also a source of discord, within countries and internationally. China agreed to end subsidies that favored wind power firms using domestic parts, after the U.S. complained it was protectionism that broke World Trade Organization rules.

Starting next year, the European Union plans to include flights in and out of Europe in its greenhouse gas emissions trading system. But China may threaten a trade war over this issue, following on U.S. carriers, who have already started a legal battle to fight European Union levies on flights.

In several countries, feed-in tariffs that subsidize renewable energy are on the chopping block. The United Kingdom is considering slashing its subsidy by 40 to 70 percent for installations producing more than 50 kilowatts, but the solar industry pleaded for a re-think, saying the move would “decapitate” the industry. The chief policy director of the Confederation of British Industry said “business confidence has clearly been bruised by sudden and unexpected policy shifts,” including the reversal of these tariffs.

Climate Talks Stumble, Coal Rises

A few countries are starting to oppose an extension of the Kyoto Protocol. The climate treaty expires in 2012, and countries have been trying to negotiate a successor, but with limited success. At the latest round of talks in Bonn, Germany, one of Canada’s delegates said their country would not take on any emissions targets under an extension of the treaty. Russia and Japan also took a similar stance. The European Union’s lead negotiator said it may take until 2014 or 2015 to create a full successor treaty.

To help cut emissions and cope with a decline of nuclear power, the world could create a “golden age of gas,” according to a new IEA report. However, renewable energy such as wind and solar is often competing with natural gas—so the rise of natural gas could “muscle out” renewables, delaying their deployment.

Only six months ago, the IEA was warning about a gas glut, but that is already beginning to dissipate as gas demand has surged. In part this is due to increased imports by Japan of liquefied natural gas, after shutting another of its nuclear power plants.

The world may be moving increasingly toward coal, according to numbers published in the latest BP Statistical Review. Coal consumption  rose to 29.6 percent of the world’s energy—its highest share of the energy mix since 1970—with China’s use growing 10 percent in 2010, but richer countries also consuming 5 percent more in 2010. To reflect the rise of renewables, BP added them to their report for the first time, reporting that in 2010, solar grew 73 percent and wind close to 25 percent.

A New Kind of Crude

Instead of relying one kind of black goop—crude oil—to power cars, researchers at MIT developed another liquid they call “Cambridge crude.” The conductive liquid can store electrical charge, so that the battery could be slowly charged by plugging it in, or could be quickly “refueled” by draining the liquid and pumping in a new, pre-charged batch—giving electric cars the flexibility of fuel cars.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.