Energy and Climate Change: C+
By Daphne Wysham | Foreign Policy in Focus | January 22, 2010
When Barack Obama was elected president, many climate activists were thrilled. With the concentration of carbon dioxide in the Earth's atmosphere reaching dangerous levels, and Democrats controlling the House and Senate, hopes couldn't have been higher among climate campaigners that Obama would act swiftly to make energy and climate change one of his top priorities.
In his first few months in office, Obama did in fact take some significant actions. In the stimulus package, according to budget analysts, he provided $32.80 billion in funding for clean energy projects, $26.86 billion in energy efficiency initiatives, and $18.95 billion for green transportation, giving a total of $78.61 billion directly earmarked for green projects.
In May, Obama announced tough new vehicle gas-mileage standards. The agreement requires automakers to meet a minimum fuel-efficiency standard of 35.5 miles per gallon, roughly 30 percent greater than today, by model year 2016 — four years earlier than Congress currently requires. However, compared to the Obama plan, California's clean car laws would achieve 41 percent more greenhouse gas emissions reductions by 2020.
Obama's "cash for clunkers" program was somewhat misguided on several fronts. Instead of encouraging U.S. consumers to buy fuel-efficient U.S. cars, and help out the ailing auto industry in Detroit, it handed a major taxpayer subsidy to mostly foreign auto manufacturers. The program also did not set the fuel efficiency standards for a car trade-in high enough, thereby allowing people to get cash for new cars that were still relatively fuel inefficient.
Similarly, the stimulus dollars invested in roads, another subsidy for the more polluting automobile, could have been invested in public transportation.
Obama took a hands-off approach with the climate and energy legislation as it moved through the House. Despite his campaign pledge that there would be a 100 percent auction of pollution allowances, he remained silent as the Waxman-Markey bill (officially known as the American Clean Energy and Security Act of 2009) became weighted down with giveaways to polluters, including a free allocation of over 80 percent of pollution permits. Yet the budget submitted to Congress counts on raising $627 billion through a 100 percent "cap and trade" auction from 2012-19, with 20 percent dedicated to clean energy investments ($15 billion/year) and the rest funding the “Making Work Pay” tax credit for working families. The free giveaway will reduce this revenue stream and adversely affect the intended beneficiaries.
An expanding cast of characters has come to recognize climate change as, among other things, a security issue. The last Bush administration budget, however, allocated $88 to its military forces for every $1 spent on climate change. The Obama administration significantly narrowed this gap to a proportion of $9 to $1. But the vast majority of the investment—87 percent--came in the American Recovery and Reinvestment Act (ARRA). In the future, these investments will need to be made in the regular budget.
Obama’s efforts in Copenhagen did break down one obstacle imposed by the U.S. Senate: In the so-called Copenhagen Accord, major developing countries (China, India, Brazil and South Africa) and the U.S. — representing roughly 50 percent of global emissions — agreed to a target of two degrees Celsius as an upper limit in the rise in global average temperature. However, in reaching this agreement outside the formal UN process, the Copenhagen Accord has given a boost to the Major Economies Forum to the detriment of multilateralism. The challenge now is to make these commitments legally binding, to strengthen them to reach a target of 350 parts per million of CO2 in the Earth’s atmosphere, and to reaffirm and restore a multilateral approach.
So, too, Secretary of State Hillary Clinton’s pledge to help raise $10 billion per year in climate adaptation and mitigation funds by 2012, and $100 billion per year by 2020 (as noted in the Copenhagen Accord), is ambitious but open to criticism. While the United States is at least rhetorically supporting a significant cash infusion to a global climate fund, critical in building trust with developing countries, the U.S. contribution has yet to be put on the table. The challenge remains: to push the Obama administration to support an adequate and unconditional U.S. contribution beyond existing development aid spending, to shift the fund’s sourcing from carbon markets to a financial transaction tax and other mechanisms, and to house the new body in the United Nations and not the World Bank.
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