America’s plan of inaction

The endgame was smoothly done on August 2, 2015,  a Sunday. Reporters gathered at the White House to receive details of the Clean Power Plan (CPP), a regulation that aims to reduce carbon dioxide emissions from US power plants by 32 percent below their 2005 levels by 2030.  The plan, quietly informed Gina McCarthy, administrator of the US Environmental Protection Agency (EPA) and chief plan overseer, was under the Clean Air Act; legally, it is solid. White House adviser Brian Deese was triumphant.

According to him, the new EPA rules were nothing less than the “biggest step that any  President has made to curb the carbon pollution that is fuelling climate change”.

The plan was formally unveiled the next day. The White House released fact sheets and a statement, which linked CPP to the global climate treaty. “Taken together, these measures put the United States on track to achieve the president’s near-term target to reduce emissions in the range of 17 per cent below 2005 levels by 2020, and lay a strong foundation to deliver against our long-term target to reduce emissions 26 to 28 per cent below 2005 levels by 2025,” read the statement.

A two-and-a-half-minute video appeared on Facebook. Called “A Memo to America...”, the video uses stereotypical climate change tropes. A solemn, Solomon-like voice-over explains the imperative of tackling global climate change: it is that of the President himself, justifying his plan.

CPP was first announced in June last year. It faced the usual opposition from free marketeers and climate sceptics in the US. Over a year, it was revised. The EPA released final rules in June 2015. That generated a positive buzz. As The Guardian reported, Al Gore said the new rules were “the most important step taken to combat the climate crisis in our country’s history”.

Michael Brune, executive director of Sierra Club, the oldest environmental group in the US, said the President had “made good on his promise to American families that his administration would tackle the climate crisis, and clean up and modernise the way we power our country”.

On the eve of the unveiling, think tank Ceres—that directs a network of institutional investors with collective assets totalling more than US $13 trillion—organised an initiative in which 365 companies and investors sent letters to two dozen state governors, stating their support for CPP.

After the August unveiling, the world took up the refrain. “The Plan,” said Stéphane Dujarric, spokesperson for UN Secretary-General Ban Ki-moon, “is an example of the visionary leadership necessary to reduce emissions and to tackle climate change.” Speaking to reporters in New York the day the plan was formally unveiled, he also said, “We believe that this plan shows the United States’ determination to address global warming while also saving money and growing economy.” The Associated Press reported that CPP had tougher than expected emissions targets.

It was referring to the fact that whereas a draft CPP had mentioned a 30 percent reduction, that figure was now being raised to 32 percent. BBC’s Tom Bateman wrote that Obama was hoping “Monday’s announcement secures his legacy on climate”. The twitterati was thrilled to 140 bits. Some, such as Greenpeace and 350.org, were sceptical. But, largely, the world accepted CPP was the best the US could do. Is that so?

It is worth noting, to begin with, that the so-called reduction of power sector emissions by 32 percent from the 2005 emissions levels is not a target. It is a projection - of what would happen to total emissions from the US’ power sector if CPP were implemented in an assumed growth, energy price and energy mix scenario. What CPP has done is just lay out a way for power plants and different states to comply with its projection. If the scenario changes—say, if the US’ growth rate doubles, scenario, or oil and gas prices reduce more significantly than assumed—then the outcome will be different. Thus, this metric—32 percent reduction from 2005 levels, a figure much bandied about—is misleading. CPP is misleading for another reason. For that matter, all commitments of the US on climate change are misleading. It takes 2005 as the baseline year for emissions reduction. 2005 was a year in which US emissions peaked. Whereas US emissions have fallen but also risen, year-on-year, since then, the US has picked and promoted 2005 as the baseline year for emissions reduction, first in the global climate treaty arena and now in CPP. To be honest, if the baseline year in CPP had been 1990—which is the baseline year chosen in the Kyoto Protocol of the United Nations Framework Conference on Climate Change—then the projected emissions reduction by 2030, à la CPP, would have been a paltry 15 percent.

CPP comprises two key elements. One is setting carbon dioxide emission guidelines—a limit, if you like—for existing coal and gas-based power plants. The second is converting these standards into state-specific emission goals for the entire power sector. EPA has also notified, separately, CO2 emissions standards for new, modified, and restructured power plants. These standards are so poor that the existing gas fleet will meet them without even changing a screw. 

A good way to attain clarity regarding CPP is to look at the projected energy mix in 2030: which energy sources are going to be used, or not. It is quite clear from the modelling done by EIA that if oil and gas prices will be low, the US will try to achieve its CPP projections by using large quantities of natural gas. If expensive, renewables will play a more significant role. But it is clear that till 2030 most of the emissions reduction will happen due to more use of natural gas and less use of coal. So, the past trend will continue. Let’s look at the energy mix more closely; fuel by fuel.

King coal: In the CPP scenario, coal production comes down by 20 percent by 2020 and 32 percent by 2030. This matches projected reductions in CO2 emissions. Coal production reduces further in a scenario where gas is highly available and prices are low. In this scenario, coal production can reduce by 40 percent by 2030. However, in all scenarios the least amount of coal the US will produce in 2030 is still going to be around 600 million MT. That’s really high: equivalent to what India consumes today. In fact, in the CPP scenario, coal production in 2030 could well be as high as 725 million MT.

Prince gas: In all scenarios, natural gas production continues to increase till 2030 and beyond. In fact, in all scenarios, natural gas production will be about 75 percent higher than 2005 levels. Indeed, in the scenario where gas is highly available and prices are low, production could more than double compared to 2005 levels.

The orphan: Even in 2030, the total electricity produced from all renewables (excluding hydropower) in the US will still be 25 percent less than the amount produced from coal. If hydropower is included, total electricity from all renewables is going to be the same as that produced using coal. In 2030, electricity produced from all renewables and coal will be about 25 percent, each. Gas and nuclear will account for the remaining 50 percent.

Essentially, even by 2030 under Obama’s CPP, fossil fuels will produce 57-60 percent of all electricity; in 2014 they produced 67 percent. In 2030, solar power will contribute just three percent to the total electricity produced. What about wind? Only 12 percent. So, renewables such as wind and solar energy will remain a marginal player.

All in all, the CPP will hardly transform the energy system in the US even in 2030. It will remain fossil-heavy. In 2030, the US will produce 22 percent more primary energy than 2013 levels. In 2013, 78 percent of the total primary energy came from fossil fuels; in 2030, 76 percent will come from fossil fuels. In fact, in 2030, total fossil fuel production in the US will be 20 percent higher than in 2013.  

Renewables contributed 11 percent of the total primary energy in the US in 2013. In 2030, this alternative will increase slightly to 15 percent.  How is this plan the most ambitious the US has ever imagined? For a country that has been most unimaginative, or practical, about climate change, is the CPP another proof that it has run away from ambition, yet again? Most sadly, has the world lost its capacity to critique and challenge the US?