If the US EPA is waging war on coal, what does it mean for Paris 2015?

Power plant near Page, Arizona, USAThis post is by Bryony Worthington, founder and director of the Sandbag Climate Campaign.

Announcements in the US on Monday received a huge amount of coverage. In his search for a climate legacy, President Obama has sidestepped the political impasse on Capitol Hill and used his presidential authority to bring in new regulations designed to limit emissions from the power sector.

The good news is that the president, backed by public opinion, is clearly committed to climate action. And he has worked hard to frame action as delivering net benefits in terms of human health and the economy. He has also demonstrated that he is not afraid of a fight with the fossil fuel lobby, which is intent on defending the status quo.

A phoney war against the fossil fuel lobby
However, a close look at the proposals reveals that this fight is something of a phoney war. Emissions in the US have been falling in recent years, thanks to a glut of cheap fracked gas and investment in renewables and efficiency. Ten states, representing around 600 million tonnes of emissions, are already in a cap and trade market designed to reduce emissions at least cost.

Coal is still the dominant fuel in many states; but, even in them, stricter air quality standards and the age of the fleet means existing coal plant will soon be replaced with cleaner plant. If emissions continue falling at the rate they have been since 2005 (the US’s preferred baseline year) they would deliver a reduction of around 39 per cent by 2030. The new regulations require only a 30 per cent cut by 2030, 15 per cent of which has been achieved already. A quick analysis by Sandbag shows that, according to these regulations, the US’s economy wide emissions target of a 17 per cent reduction by 2020, offered in Copenhagen, could be delivered a full decade late.

The pace of change is too slow
The reality is that these regulations are not going to be the only driving force to meet the target. Other policies will have to help achieve it. They are, however, an attempt to introduce a nationwide plan for weaning the US off its highly emitting infrastructure, to make room for newer cleaner alternatives. But the pace of change required is clearly far too modest and too slow. Montana, for example, is to be given 15 years to reduce the carbon intensity of its coal fired power stations from over 1,000g/kWh (the highest in the Union) to just over 800g. But what the regulations will hopefully achieve when the fight with the coal lobby is won, is the normalisation of the idea that greenhouse gases need to be regulated in every state in the Union. With this established, it should be possible for future administrations to steadily tighten the targets.

The US Chamber of Commerce had a pre-prepared negative reaction to the announcement, based on an assumed all economy target for the US of a reduction of 42 per cent in 2030. This number stems from comments made in 2009, in relation to the US’s longer term climate goals, but clearly this level of ambition seems to have already fallen victim to compromises. The consultation process, now open for comment for the next 120 days, could see more ambitious targets being resurrected, and perhaps in the first year of a new term rather than in a pre-election year. This would rescue the regulations from being largely irrelevant in terms of investment and emissions. If it cannot increase ambition over time, the US risks locking itself into a low ambition scenario even as technologies to reduce emissions become more cost competitive.

The UK has an interesting story to tell
The risk of lock-in is prevalent in every country. The EU is way ahead of schedule in meeting its 2020 climate targets and is debating setting another low ambition target for 2030. Lack of political will is preventing anything more ambitious being agreed. The challenge is to design policies that allow us to escape the bind of locked-in low ambition. To set low targets, over-achieve and retrospectively tighten caps, seems to be one possible way to do it.

Interestingly, without fanfare, the UK has decided to do just that, choosing to cancel 36 million tonnes from its first carbon budget rather than carry them over to weaken the next budget. This is significant because, as we all know, it is the volume of emissions over time – the area under the curve – rather than ‘point in time’ targets that determine climate impact. Taking emissions allowances away from budgets reduces that risk.

Having established this precedent, the UK should be straining every sinew to ensure the EU adopts the same approach. There is an estimated 8-12 gigatonne gap between the international targets pledged for 2020 in Copenhagen. The EU in 2020 is likely to be carrying a surplus of emissions allowances of between 3-4 gigatonnes. Volunteering to cancel this would be a big step towards bridging that gap, and the good news is that it can be achieved with the couple of strokes of a pen: by agreeing not to carry over the equivalent of two gigatonnes of unused allowances from non-traded sectors and to cancel one gigatonne from the EU Emissions Trading Scheme.

As we move towards an international climate agreement in which countries set their own (inevitably unambitious) targets, it is imperative that the new deal provides for similar ratcheting mechanisms. The use of carbon budgets and allowance cancellation is one way of doing this. The UK has a highly relevant story to tell the world and it must do so now with a loud voice.

@bryworthington

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