U.S. Energy Policy Begins to Shift

Drafted By: Michael Piskur

In his sixth State of the Union address, U.S. President George W. Bush renewed his call to increase his country's energy independence and acknowledged "the serious challenge of global climate change," a topic that his administration has largely ignored since taking power in 2001. With two years remaining in a presidential term that will be defined by the grim realities of the conflict in Iraq, Bush used his annual address to Congress as an attempt to salvage a domestic agenda. No longer aided by a Republican-controlled Congress, Bush finds himself facing a Democratic Party that has vowed to move forward on domestic issues.

Anticipation of a bold plan to reduce U.S. reliance on foreign energy and combat global warming mounted in the days leading up to the president's address, since Congress pledged to tackle global warming and a group of C.E.O.'s from major U.S. companies pressed Bush to address environmental degradation. Bush called for a 20 percent reduction in U.S. gasoline consumption in ten years, the doubling of the capacity of the Strategic Petroleum Reserve, and increased research for clean energy sources such as clean coal, solar and wind energy, nuclear power, biodiesel and ethanol.

He failed, however, to endorse mandatory limits on carbon emissions, instead seeking a market-based solution centered on technological progress. "The president has always believed when it comes to climate change that the best way to achieve reductions is through innovation and to figure out ways to come up with energy sources that are going to meet our economy's constant demand for energy and at the same time do it in a way that's going to be friendly for the environment," said White House Press Secretary Tony Snow.

Washington Considers Global Warming

Bush, in explaining his 2001 decision to not ratify the Kyoto Protocol, said, "America's unwillingness to embrace a flawed treaty should not be read by our friends and allies as any abdication of responsibility. To the contrary, my administration is committed to a leadership role on the issue of climate change." The Bush administration, however, has largely failed to live up to these promises. The United States consumes approximately one quarter of world energy supplies and produces the same amount of carbon emissions, and yearly emissions have steadily increased since 2001.

While acknowledging that the planet is getting warmer, the White House has yet to take any action to limit pollution or energy consumption; it has downplayed and censored scientific studies that attribute global warming to human activity; and it continues to maintain that ratifying Kyoto would have disastrous results for the U.S. economy. Bush is also highly critical of Kyoto's exemption for the rapidly expanding economies of China and India.

Yet, as Washington ignored global warming, many U.S. cities have committed themselves to adhering to the framework established by Kyoto, a growing number of states have begun to pass legislation that closely mirrors Kyoto, and the Chicago Climate Exchange was established as the first voluntary, legally binding cap-and-trade system for greenhouse gases.

California, the world's eighth largest economy by G.D.P. and 12th largest producer of greenhouse gases, passed the Global Warming Solutions Act, which established mandatory statewide caps on carbon emissions, and the Low Carbon Fuel Standard, which seeks to increase the use of renewable energy sources for transportation. California Governor Arnold Schwarzenegger endorses a 25 percent cut in carbon output by 2020 that would follow a cap-and-trade system.

Since assuming control of Congress in January 2007, the Democratic House majority repealed a tax break for oil and gas firms that would provide approximately US$14 billion to fund renewable energy research, and House Speaker Nancy Pelosi created the Select Committee on Energy Independence and Global Warming to hold hearings and recommend approaches to mitigate the effects of global warming. "The science of global warming and its impact is overwhelming and unequivocal. We want to work with President Bush on this important issue in a bipartisan way. But we cannot afford to wait."

Bush's proposal for an increase in production to 35 billion gallons of "renewable and alternative fuels" by 2017 could reduce gasoline consumption by some eight billion gallons, yet falls short of the benchmarks established in six other energy plans. For example, the Biofuels Security Act would require all vehicles to be flex fuel equipped and all major U.S. gasoline retailers to offer E-85, an 85 percent ethanol fuel, and mandate production of 60 billion gallons of renewable fuels by 2030.

A Global Consensus Emerges

Despite acknowledging the "serious challenge of global climate change," Bush remains opposed to instituting mandatory limits on carbon emissions. In keeping with the refusal to ratify Kyoto, the White House is committed to tackling environmental issues so long as the solutions do not interfere with free enterprise. Yet, two groups that have firmly supported Bush, big business and evangelical Christians, are calling for the president to take immediate action. Many U.S. corporations have come to the conclusion that legislation on climate change is inevitable and that it is in their interests to be a part of the discussion from which the legislation will arise.

U.S. Climate Action Partnership, comprising such companies as Alcoa Inc., Duke Energy Corp., Dupont Co., General Electric Co. and several environmental groups, is pushing for "swift federal action on reducing greenhouse gas emissions and speeding the adoption of climate-friendly technology," and endorses the Electric Utility Cap-and-Trade Act. The plan would reduce emissions from the U.S. electricity sector by 25 percent beneath current levels by 2020.

As U.S. opinion of global warming undergoes a "quantum shift," as British Prime Minister Tony Blair put it, the energy sector views government intervention as an inevitability and undoubtedly wants to have a hand in crafting legislation while the White House remains apathetic toward the issue. Concurrently, evangelicals and scientists last week signed a statement demanding that U.S. leaders take immediate action to confront climate issues.

The U.N. Intergovernmental Panel on Climate Change (I.P.C.C.) will release a report on February 2, 2007 showing global greenhouse gas levels at a 650,000-year high and projecting catastrophic results, including rising sea levels, increased droughts and floods, and more powerful storms, during the course of the next century. The I.P.C.C. report aims to extend the Kyoto treaty, which will expire in 2012.

To that end, German Chancellor Angela Merkel is utilizing her country's current G8 presidency to lead the charge against global warming. Merkel said climate change and energy security are the two greatest issues facing the world and that global cooperation is necessary to overcome them. At this year's G8 summit in Heiligendamm, Germany, Merkel will seek to revive the Doha Round of trade negotiations and establish a global, legally binding regime to follow Kyoto. Moreover, global warming is at the center of this year's World Economic Forum and E.U. leaders have made it their top legislative priority for 2007.

Conclusion

Regardless of the long-term effects of global warming, continued reliance on non-renewable energy sources from geopolitically unstable areas is a policy fraught with risk. The recent example that Russia set by cutting gas supplies to Belarus represents merely the beginning of power that states rich in oil and gas supplies can have over the major energy consumers. The security of oil in the Middle East is at the center of U.S. foreign policy and will remain this way as long as the United States relies on foreign oil.

Whether action is taken as an immediate geopolitical necessity to secure energy and other natural resources, such as water and arable land, or because of a moral imperative on behalf of future generations, global warming stands to be a major political issue of the 21st century.

Report Drafted By:
Michael Piskur

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