“We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations… The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it.”
-President Obama’s Inauguration Address, January 21, 2013
As president, Barack Obama has rarely spoken so forcefully on the topic of climate change. Indeed, the speech was one of the most progressive ever given by a president, and it signaled the Administration’s intent to move forward on a host of issues that were stymied in the previous Congressional session. While many environmentalists were surprised by this strong rhetoric on climate change, they should not be.
Ever since the failure of the American Clean Energy and Security Act of 2009 (Cap-and-Trade) in the Senate, discussion on the president’s role in addressing climate change has largely been negative. The failure of Cap-and-Trade was so catastrophic for the climate change movement that many in the environmental community still have not gotten over it. The ongoing fight regarding the Keystone XL pipeline—whose economic benefits and carbon producing effects are widely misunderstood—has only made this perception worse. Indeed, the widespread perception within the environmental community is that the Obama administration has been a disappointment. The good news is that these disillusioned environmentalists are wrong.
When one actually looks at the administration’s record, this perception of administrative failure is demonstratively false. The results speak for themselves: In 2012, carbon dioxide emissions in this country reached their lowest level since 1994, and these emissions have declined by 13 percent over the last five years.
Certainly, some of this decrease is the result of the exponential increase in hydraulic fracturing (fracking) and the market-based transition from coal-burning fossil fuels to natural gas. Still, this number is highly significant and the direct result of the Administration’s commitment to the cleaner production of energy. The prevailing goal of the national climate change movement is to systemically reduce carbon emissions. By this measure, this administration has not been a disappointment but an unmitigated success. These results did not occur by accident or simply because of the economic downturn. They are the product of concrete legislative and regulatory efforts that have largely been ignored by the mainstream environmental movement.
The most important piece of environmental legislation since the early 1970s was introduced in 2009. It was not Cap-and-Trade; rather, it was the American Recovery and Reinvestment Act (Recovery Act). The Recovery Act began the systematic restructuring of the American energy sector during the first half of President Obama’s first term. Investments in clean energy projects and tax credits for commercial and private citizens accounted for $90 billion of the bill’s $789 billion spending package, which has allowed the U.S. to best China and Germany and lead the world in clean energy investment.
During the second half of Obama’s first term, the Administration’s environmental policy was largely defined by administrative rule-making from the Environmental Protection Agency (EPA) and the Department of Energy (DOE). The most important step that the EPA took during this period was in December 2009, when the agency issued an endangerment finding concluding that greenhouse gases (GHG) constitute a threat to public health and welfare. This provided the administration with the legal basis for regulating carbon emissions, setting the stage for many important GHG regulations to follow. Another significant action taken by the EPA was to increase the Corporate Average Fuel Economy standard to 54.5 miles per gallon by 2025. This deal—negotiated between the administration, labor groups and thirteen of the nation’s largest automakers—is expected to cut GHG emissions by six billion tons by 2025.
“But if Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”
-President Obama, State of the Union Address, February 12, 2013
With this Congress unlikely to address climate change in any significant way, the EPA will be given an even wider range from which to enact meaningful climate change policies in Obama’s second term. The first important regulatory action should come this year when the EPA updates its ozone regulation. In the fall of 2011, then-Administrator Lisa Jackson was prepared to issue the EPA’s final rulemaking standard on ozone. Much to the chagrin of environmentalists, however, President Obama scuttled this regulatory change in September 2011. With a mandatory review scheduled for this year and the weight of an election behind them, the Administration will likely move forward with this regulatory change sometime in 2013.
Another regulatory change to come soon from the EPA is the regulation of existing coal-fired power plants. During the spring of last year, the EPA issued stringent new standards for GHG emissions for new power plants, effectively phasing out the production of carbon intensive coal-fired plants. This EPA has already issued regulations on non-GHG emissions in existing power plants, but these new regulations would specifically address carbon dioxide emissions from these sources for the first time.
The exponential increase in natural gas production, through the process of fracking, has also played a major role in the phase-out of coal-fired power plants. Unfortunately, with the “Halliburton Exemption,” added to the Safe Drinking Water Act in 2005, the federal government’s ability to regulate this activity is limited. However, the Department of the Interior has the authority to regulate fracking on public lands, and the EPA can regulate fracking when diesel fuels are used. While there has been legislation introduced to repeal the exemption, the EPA has decided to look into the practice on its own. To this end, the EPA is in the process of introducing a final report on the dangers of fracking, due in 2014, which could be the impetus for a repeal of this exemption later in Obama’s second term. This repeal legislation, known as the “FRAC Act,” has been introduced several times but has failed to gain much traction in Congress. In following with the logic of the GHG endangerment finding, this EPA’s use of rigorous scientific and cost-benefit analyses generally make a strong case for federal regulation across the energy sector. If the environmental dangers caused by fracking are significant, the EPA should be able to make a strong case for the need for federal regulation of this activity.
Other proposals that could potentially be on the legislative policy agenda are the long-term extension of federal tax credits for renewable energy producers. These tax credits were part of the Recovery Act and were extended by a year during the fiscal cliff negotiations. The uncertainty over the continuation of these tax credits caused much anxiety for energy producers and a slow-down of renewable energy production. Perhaps the economic disturbance generated by this uncertainty could serve as a means to push for a long-term extension. In addition, ending the Oil Depletion Allowance for fossil fuel producers has been discussed as part of a broader tax reform bill. An extremely useful, although unlikely, solution is the introduction of a carbon tax. The carbon tax has the broad support of liberal and conservative economists alike, because it would send a price signal to the carbon market, add much needed government revenue, and decrease carbon emissions. While Congressional Republicans are hardwired to reject anything with the word “tax,” environmental groups and the Administration would be wise to build a foundation from which a carbon tax could be levied during the next Congress.
President Obama’s first term saw an extraordinary increase in domestic renewable energy production, a decrease of GHG emissions, and the establishment of carbon dioxide as a public health hazard that the EPA can regulate. In the face of continued Congressional gridlock with regards to climate change, the administration will likely continue to combat climate change with more EPA-sponsored regulations. The promotion of Gina McCarthy, the head of the Office of Air and Radiation to replace Lisa Jackson as EPA Administrator should ensure a level of continuity within the agency. This appointment also indicates that the President will continue to use the EPA and its authority under the Clean Air Act to regulate GHG emissions.
So far, the Administration’s success in addressing environmental issues has largely gone unnoticed. Environmentalists remain stuck in a fictional narrative of failure and disappointment. Efficiency and emissions’ reduction has moved into the mainstream of the business community. Environmentalists now have an incredible opportunity to take the lead in this national endeavor. President Obama is keen to take his climate change message from the bureaucratic backroom to the big stage. The environmentally-conscious would be wise to join him in touting his accomplishments and working with the administration to help shape the new policies to come over the next four years.
Established in 1995, the Georgetown Public Policy Review is the McCourt School of Public Policy’s nonpartisan, graduate student-run publication. Our mission is to provide an outlet for innovative new thinkers and established policymakers to offer perspectives on the politics and policies that shape our nation and our world.
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