Wednesday, January 20, 2016

Climate and Energy Initiatives From President Obama's Final SOTU: Are they Enough?

By Tyler Johnson, GEI Policy Extern

President Obama addressed the nation this past Tuesday with his final State of the Union Address. The President made a number of comments regarding climate change and energy. Specifically, President Obama’s address mentioned 1) the need to revise the nation’s federal coal leasing program; 2) the need to transition the nation’s transportation system for the twenty-first century; and 3) the need to advance renewable energy development.

Coal Leasing on Federal Lands

Most significantly, Obama called for a push to change the way we manage our oil and coal resources, so that they better reflect the costs they impose on taxpayers and our planet.” The administration followed up the claim on Friday by issuing an Executive Order to overhaul the coal mining leasing process on federal lands. The stated purpose of the Order is to “consider whether and how the program may be improved and modernized to foster the Orderly development of Bureau of Land Management (BLM) administered coal on Federal lands in a manner that gives proper consideration to the impact of that development on important stewardship values, while also ensuring a fair return to the American public.” The Order calls for a significant review of the Federal coal-mining program and a temporary pause on new leases. The US Geological Survey will also monitor greenhouse gas emissions from all resources extracted on federal lands.

According to the Executive Order, federal coal represents 41% of U.S. coal production and 10% of total US greenhouse gas emissions. Furthermore, coal royalties, currently set at 12.5% for coal surface mining, are remarkably lower than the royalties received for offshore oil and gas exploration (18.75%), and don’t adequately account for environmental costs. A Congressional report concluded that the government is missing out on billions of dollars in lost revenue due to the low royalty rate (and additional accounting failures). The Executive Order directs BLM to address whether the current rate of return on leases is fair and whether it adequately accounts for externalities such as environmental harm. A rate adjustment could thus potentially be a win for both the environment and taxpayers.

While this is a step in the right direction, more must be done. For one, enough leases already exist on federal lands to maintain the current rate of coal production for another 20 years. Recently, Parties of the UN Climate Change Conference in Paris articulated that current science suggests that zero global emissions must zero out somewhere between 2030 and 2050 to hold global warming at 1.5 degrees Celsius above pre-industrial levels. Anything above a 1.5 degree global increase is predicted to come with drastic effects for humanity, including rising sea level, increased storm intensity, drought, and more. As unrealistic as it seems to achieve zero global emissions in the next 20-30 years, that’s no excuse to not do everything possible. Due to these warnings, many groups are calling for a complete end to fossil fuel extraction on federal lands, which doesn’t seem likely from this order.

Republican backlash is another cause for concern. The temporary pause on federal coal leases and the promise of a thorough review still remain in doubt with the looming 2016 presidential election. Republicans are reportedly furious over the Order, raising legitimate concerns that a Republican victory for the White House will result in the Executive Order being withdrawn.

A 21st Century Transportation System?

In addition to a federal coal mining lease overhaul, President Obama also referenced the need to transition to a 21st century transportation system. On Friday, the White House released plans to invest $4 billion in automated car research. The administration has been active in other transportation initiatives as well. For example, Beyond Traffic is “an invitation to the American public—including the users, developers, owners, and operators of the transportation network and the policy officials who shape it—to have a frank conversation about the shape, size, and condition of that system and how it will meet the needs and goals of our nation for decades to come.” Also, the Smart City Challenge offers $40 million for one mid-sized city to “put forward bold, data-driven ideas to improve lives by making transportation safer, easier, and more reliable.”

These transportation initiatives sound great because they address important concerns regarding how our cities are positioned to adapt to climate change and the new energy economy. However, the actions taken by the administration again only represent first steps. Much more needs to be done. As scientists repeatedly warn, we don’t have time to wait on action. Obama was correct in stating that we need an effort akin to the space race in the 1960s. These policy initiatives, by themselves, are not enough to jumpstart such an effort. One can hardly blame the administration, however. Executive action alone can only achieve limited progress. Congress must pass new laws to effectively deal with greenhouse gas emissions. Unfortunately, up to now the current Congress has been unwilling to take action to legitimately address greenhouse gas emissions or climate change.

Advance Renewable Energy

After criticizing climate deniers, President Obama’s State of the Union address also offered an economic argument to justify adopting policies to advance renewable energy development. President Obama called for American companies to be at the forefront of the new energy economy.

The modern economy thrives on innovation. If we as a nation give into special interest groups such as coal and big oil, who argue for the status quo, we are denying ourselves a fantastic economic opportunity by inhibiting technological innovation in the new energy economy. Investing in renewable technologies will both help ensure a more sustainable environment AND help the economy grow. While the scientific alarm for a potential environmental catastrophe is enough to act on climate change, economic benefits should not be ignored as another justification for embracing renewable energy development. As an added benefit, making the economic argument more often may help persuade climate skeptics that encouraging renewable energy development is sound policy.

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