Obama’s International Climate Strategy: More Grease for Renewables

It was good news for renewable energy when President Barack Obama in June proposed carbon dioxide restrictions on existing power plants. It is even better news now that he may use the plan to leverage an international climate accord.

That’s the word from renewable energy advocates who are closely watching as Obama works to broker a climate agreement with the world’s largest economies for signature at next year’s United Nations summit in Paris.

“Renewable energy is growing significantly in both developed and undeveloped country markets now. Any kind of international agreements, no matter how informal, just provides more grease in the financial community to sustain the support and direction in growing companies and projects globally,” said Scott Sklar, clean energy policy strategist and president of The Stella Group.

Such international brokering might have been more difficult if the Environmental Protection Agency were not moving forward seriously on the domestic proposal, called the Clean Power Plan, or 111D in Washington parlance. The proposal calls for reducing carbon 30 percent by 2030 over 2005 levels. EPA hopes to have a final rule in place next year.

The U.S. suffers from weak credibility internationally on climate change issues because of polarization in Congress. But now Obama can point to the Clean Power Plan as evidence that he’s figured out how to bypass Congressional gridlock and take action on carbon reduction.

“Having the Climate Action Plan in place helps the administration’s negotiating position, to the extent that they can now credibly say they have a plan in place to meet the U.S.’s short-term emission reduction commitment,” said Evan Juska, who heads U.S. policy at The Climate Group, an international non-profit organization.

Obama is using the same strategy on the international front as he did in pushing forward the Clean Power Plan — he is skirting a need for a Congressional vote, citing his executive authority.

To that end, Obama is pursuing not a treaty, but an international agreement. A treaty would require a Senate vote; an agreement does not. The down side is that an agreement will not carry the force of law. To be effective, the deal relies instead on a kind of public scorekeeping, what some describe as “name and shame” to encourage countries to meet their carbon commitments.

“It’s probably not as effective as a legally binding treaty would be, but it can encourage countries to do more than they otherwise would,” Juska said.

A Country’s MPG

Sklar likens the approach to the kind of labeling and shorthand that are already commonplace in the energy arena. Consumers understand MPG for cars, energy efficiency ratings for appliances, and building benchmarking.

“So it’s not a big step to essentially label what countries are doing and make a ranking public — so as to highlight who is making strides and who is not. I do not see that as a problem, I think just as we do with human rights, scorecards can be helpful,” he said.

In fact, the most important aspects of the international climate proposal center on measurement, said Hilary McMahon, director of research at the Carbon War Room. Countries would measure, report and verify their greenhouse gas emissions reductions, which would make clear the source of emissions and any actions taken to reduce them.

“This is an effective strategy as long as the focus is on supporting, improving and sharing our successes and failures, and not just producing a report that sits on shelf, with little attention or use. This requires a dynamic process, not a static process,” McMahon said.

While the international climate agreement would be a good next step, some question whether it is enough. Poor countries fear they will see little or no financial support to help them in dealing with the consequences of severe weather unless a deal is legally binding.

“Developing countries are especially concerned about climate finance, which has been difficult for the U.S. to deliver to date,” Juska said.

Early findings of a United Nations report recently leaked to Bloomberg say that risk exists of irreversible damage on ecosystems without quicker action on climate change. Should the findings bear out in the final report, they could help accelerate Obama’s efforts.

“The report just piles more international pressure on the world’s players — big and small — and does give the President some political momentum to try to move the ball on international agreements on climate, as well as pursuing more domestic mitigation strategies,” Sklar said.

Others, however, say economics continues to be the key driver to decarbonize the economy, spur more renewables and win over skeptics.

“The only way to give velocity to Obama’s efforts is to highlight the opportunity for companies, governments, and private citizens to bolster the economy,” said the Carbon War Room’s McMahon.

Knuckle Draggers Abound 

John Kourtoff, CEO, president & director of Toronto-based Trillium Power Wind, sees the climate agreement as important to “turbo charge” renewables. But the U.S. also needs to get energy economics right in its own backyard: the nation does not properly account for greenhouse gas emissions from coal, nor does it fully value renewables. Consumers do not see an “honest price” for energy, he said, because the U.S. socializes the environmental costs of fossil fuels.

“It is a replay of the 99 percent/one percent. You have one percent of the people who are benefitting from their investment in fossil fuels and you have the 99 percent who are paying the price,” he said.

Focusing federal efforts on carbon emissions from transportation — and accelerating the market for electric vehicles — would be a step in the right direction, he said. (The Clean Power Plan applies only to stationary emission sources.) Vehicles account for about 32 percent of carbon dioxide emissions in the US, while electricity production is responsible for 38 percent, according to the EPA.

In any case, with or without an international climate agreement, an energy transformation is clearly underway. Renewables are the fastest-growing sector in the power industry, according to the International Energy Agency’s second annual Medium-Term Renewable Energy Market Report issued in June.

Green energy will becomealmost 25 percent of the global power mix by 2018, including hydro. Not including hydro, renewables will make up 8 percent of the mix by 2018, up from four percent in 2011 and just two percent in 2006, the IEA report said.

That’s a strong trajectory. But Kourtoff points out there is still a long way to go and “knuckle draggers” abound.

“We’re in the top third of the top half of the first inning in renewables. We’re at the beginning of the beginning,” he said. “An international agreement will have a tremendous boost.”

Lead image: Smoke stacks via Shutterstock

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Elisa Wood is a long-time energy writer whose work appears in many of the industry's top magazines and newsletters, among them Renewable Energy World and Platts. She serves as chief editor of EnergyEfficiencyMarkets.com. Her work has been picked up by the New York Times, Reuters, the Wall Street Journal online, Utne, USA Today and several other sites. She is author of the report "Think Microgrid: A Guide for Policymakers, Regulators and End Users." See more of her work at RealEnergyWriters.com.

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