Posted by: Matthew Hoffmann | June 3, 2014

The Big Picture of Obama’s Proposed Climate Policy

The biggest (positive) news on climate policy coming out of the US in years was announced on June 2 and will set the tone for a raucous political debate that will last for years. The broad outlines of President Obama’s proposal to limit greenhouse gas emissions from existing power plants through EPA regulations are now clear. States will be required to reduce emissions from power plants 30% below 2005 levels by 2030. The reductions will take place on a state-by-state basis (instead of regulating individual power plants) and a number of flexibility mechanisms can be employed to reach the target. These include joining regional cap and trade systems, moving to renewable energy, investing in energy efficiency, and utilizing fuel-switching policies to move to lower polluting natural gas. The proposed rules will now enter a comment period where any stakeholders can register their opinions on what should be done and the final rules are due to be put in place in 2015.

The details of the plan will be scrutinized in great detail in the coming months and those on both sides of the debate will mobilize their strategies for the comment period in an effort to shape the final contours of the EPA regulations (and even to kill them). At the outset of this wrangling, however, it is important to also consider the wider possibilities of this move by the President. Certainly these will emerge over time and will depend on the ultimate character of the regulations, but at the outset we should consider the potential for these regulations to facilitate big, positive changes in the US and global responses to climate change.

A big question is whether, in the long-term, these kinds of regulations can create pathways out of the current reliance on (read addiction to) fossil fuels. The power sector only accounts for 38% of US greenhouse gas emissions (EPA) so the immediate reaction might be one of skepticism. Yet, the move to regulate existing coal-fired power plants has the potential to create the conditions for a tipping point that disrupts carbon lock-in and catalyzes decarbonization domestically within the US. It has this potential because these regulations can alter the political and economic calculus around acting on climate change in ways that will be felt beyond the reach of the regulations themselves.

There will be winners (and losers) when we move aggressively to address climate change, but the problem has historically been that the winners do not always know who they are and further that they are not coherently organized. This proposed set of regulations crystallizes the policy debate and provides an opportunity for those on the side of moving aggressively on climate change to coalesce and exert influence. The renewable energy industry, energy efficiency proponents, public health proponents, environmentalists, and more will see opportunities for action and advantage in these proposed regulations. These regulations may produce new coalitions that work for increasingly aggressive action on climate change.

Even more broadly, these regulations can contribute to changing the commonsense around climate change in the US. A big contrast between the US and Europe is that in Europe for the last decade, the political debate has been waged on the question of how to act on climate change where in the US the debate has been about whether to act on climate change. If the EPA regulation survives legal and legislative challenges, the debate in the US will have significantly shifted to a question of how fast and in what ways the US should pursue climate action. This is a very different baseline for discussing climate/energy policy and action.

If the regulations go through as written, it will be clear that opponents of climate action are fighting a rearguard action and that the right side of history lies with aggressive climate action. This will contribute to the normalizing of climate policy within the US —giving it a sense of being taken for granted. Normalization of action on climate change can have far-reaching effects. By providing a long-term signal for where the US is going on climate change, it could change how major players think about where to move capital and investments—towards renewables and energy efficiency. Once cities, states, and corporations begin to work towards the emissions targets in the proposed regulations, their orientation towards energy and climate may significantly change and they may take up different practices in multiple areas (transportation, buildings, urban deveopment). The combination of aggressive targets in a particular sector and flexibility mechanisms that encourage a diverse range of action in multiple sectors, could produce ripple effects that put the US on a different trajectory, away from fossil fuels.

The rosy interpretation is thus that these regulations have the potential unleash economic and political forces that lead to larger changes in the US than just the closing of a number of power plants. Those catalytic effects could also extend to the moribund international negotiations. In taking relatively bold action (let’s be honest though, the bar for bold action on climate in North America is relatively low these days), President Obama injects a shot of hope for breaking the deadlock in the UN negotiations. A significant part of the global debates for the last 20 years have revolved around complaints from the Global South that the US (and non-Europe Global North more generally) have done too little to address a problem that they are historically responsible for causing. These proposed regulations will nudge the US closer to the ‘leader’ category in the global response to climate change (or at least further from the laggard label that has dogged the US for years) perhaps making a global deal more palatable and realizable.

Of course as evidenced by the many caveat-laden phrases here (perhaps, potential, possibility, may, if), these proposed regulations are a good distance from being realized and put into practice. The political fight over them will be fierce and the outcome is far from certain. At least for now, however, savor good news coming out of the US on climate change and consider positive pathways moving forward.

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