Posts tagged “climate change”
Keystone XL’s Insignificant Contribution to Climate
Last week President Obama unveiled a new plan to combat climate change in a speech at Georgetown University. While there is generally broad consensus that his comments further threaten the already battered US coal industry, his comments on TransCanada’s (TSX: TRP, NYSE: TRP) Keystone XL pipeline project had pundits guessing at his meaning. Here is what the President said in his speech about Keystone XL:
Now, I know there’s been, for example, a lot of controversy surrounding the proposal to build a pipeline, the Keystone pipeline, that would carry oil from Canadian tar sands down to refineries in the Gulf. And the State Department is going through the final stages of evaluating the proposal. That’s how it’s always been done. But I do want to be clear: Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. It’s relevant.
The reason that there have been widely differing views on the President’s intentions boils down to his use of the phrase “only if this project does not significantly exacerbate the problem of carbon pollution.” The State Department’s Draft Supplementary Environmental Impact Statement (SEIS) for the Keystone XL Pipeline project already concluded that approval of the project would have little impact on global carbon dioxide emissions or on the development of the oil sands because of their view that the oil will get to market one way or another. More on that below. CONTINUE»
An article I wrote was published yesterday, Why a Global Shale Gas Boom is Key to Combating Climate Change. Because I had actually written the article a week ago, I didn’t know that it would come out at the same time as the release of the President’s big speech on climate change. As I demonstrated in the post, the U.S. has been the most successful country over the last decade in reducing its emissions; most of that is due to fuel switching from coal to natural gas. Natural gas generates more than 50% less greenhouse gas emissions than coal, not even including the many harmful particulate pollutants coal emits. To achieve similar benefits around the world, we need to replicate America’s shale gas revolution around the world.
While most of the news about the speech will be about how Obama is planning to accelerate renewable energy, I believe the biggest area of near-term action on reducing emissions will come from some underreported sections that will encourage the replacement of coal with natural gas for energy generation, both in the U.S. and globally.
Reduction in Energy-Related CO2 Emissions
The United States has seen a remarkable run in reducing its greenhouse gas emissions over the last five years, reducing energy-related CO2 emissions from 2007 to 2012 by 12%, from six billion tons to 5.29 billion tons. While part of this reduction in emissions is attributable to a reduction in energy demand due to the economic downturn, another reason for this huge reduction is an increase in the use of natural gas for electricity.
In a story that is now familiar to most readers, the shale gas revolution in the United States has dramatically reduced the cost of natural gas. From a peak of $10.54 per million btu (mbtu) in July 2008, the spot price of gas at the well-head had fallen to less than $2/mbtu by April 2012.
Because utilities respond to price incentives, this caused fuel-switching of baseload electricity production from coal to natural gas, leading to a time in April 2012 when natural gas equaled coal as an energy source for the first time. This switch has partially been undone, with coal now producing 40% of electricity and natural gas 26% as gas prices have bounced back to $3.85/mbtu. Because burning natural gas for electricity produces half as much carbon emissions as coal, fuel switching is one of the main causes in the U.S. reduction in emissions.
Bringing together climate policy and innovation to form a cohesive carbon tax proposal reframes U.S. climate advocates’ near-myopic focus on carbon pricing, mandates, and subsidies and expands the discussion on how we can use those tools to spur innovation, writes Matthew Stepp.
Joint Statement on ‘Dangers’ of Climate Change
A few weeks ago, Secretary of State John Kerry went to Beijing to meet with the leadership of the Chinese government. This meeting was mostly noted in the press as an effort to defuse tensions in the ongoing crisis over North Korea – and clearly that was important; there has been a notable ratcheting down of tensions since then.
However, over the long term, there was an agreement that came out of the meeting that could be much more important to the world’s future stability and security – a joint U.S. – China Statement on Climate Change. It was so overlooked in the press, that I missed it for the last two weeks. The statement indicated that the U.S. and China recognize the “dangers presented by climate change” and that a “more focused and urgent initiative” is needed.
This statement is invariably true – and these two countries are in a position to have an impact. Together, China and the United States are the largest emitters of greenhouse gases in the world, with 29% and 16% of global emissions, respectively. Like Willie Sutton and the Banks, if you want to affect greenhouse gas emissions, start where the emissions actually are.
Mutual Concern About Present Day Impacts
Importantly, the statement notes that the reasons for each country’s mutual concerns about climate change come from the impacts that are already being seen. The statement lists ocean acidification, Arctic sea ice loss, and the “striking incidence of extreme weather events” as reasons for concern about climate. Climate change has moved from being a hypothetical worry in world politics (this will harm us) to an actual threat (this is harming us).
This agreement is important because it will catalyze action by each country at the national level, it will open up areas of cooperation between the two, and it could act as a signal to international negotiations, leading to an ambitious UN agreement.
Formally, the agreement will create a new Climate Change Working Group in the annual U.S. – China Strategic and Economic Dialogue (S&ED). The S&ED was the brainchild of then-Secretary of the Treasury Hank Paulson, with the first one taking place in September, 2006. Over the last six years, the S&EDs have successfully brought together the highest levels of both governments to meet and discuss important areas of the bilateral relationship. Mostly, however, the discussions have focused on economic and trade issues.
Creating a Climate Change Working Group will ensure that the highest levels of government are forced to deal with the problems of climate change.
Forcing Entrenched Bureaucracies to Collaborate
One of the key reasons why this agreement is important is not even the potential areas of cooperation between the countries – it is the action it will generate within each country’s government. In the United States government (I can’t speak with any familiarity about the Chinese government), it will force entrenched bureaucracies to deal with one another on climate and environmental issues. There is often a tendency in government for issues to become ‘stovepiped’ – and on climate, which is pegged as an environmental issue, but is actually a cross-cutting issue of energy, trade, economics, national security, and more, the stovepipes have not worked.
I started to go with “Fiddling While Rome Burns” in the title, but I know many people who would take great exception to the notion that the Keystone XL protesters are fiddling. Indeed, they do not believe they are fiddling. They believe they are standing up for the most important cause of our generation. Yet, as I argue in this column, the fire in Rome is burning faster than ever. Except in this case, Rome is China and what they are burning is coal.
In my most recent column – Why Environmentalists are Wrong on Keystone XL – I argued that the level of attention environmentalists are devoting to stopping the Keystone XL pipeline expansion is grossly disproportionate to the impact that the project can possibly have. I provided some numbers to support my argument, and observed that those opposing the pipeline are generally making emotional arguments.
As if to emphasize that point, the comments and emails that I got from people who were unhappy with my article were almost exclusively emotional in nature. Comments like “this post is dumb” and “we have to stop the dirtiest, filthiest oil on the planet” were typical. But nobody challenged the numbers. CONTINUE»
If not for the US government’s latest demonstration of incompetence that played out at the end of last week (a.k.a. sequestration), the top news story might have been a report issued by the US State Department late Friday.
The report was the Draft Supplementary Environmental Impact Statement (SEIS) for the Keystone XL Pipeline project, and it was unwelcome news for environmentalists who have been protesting the crude pipeline extension that would link Canada’s oil sands to Gulf Coast refineries.
It may seem arbitrary, given the large number of oil and gas pipelines that already criss-cross the US, that this particular one has generated such a high profile debate around energy security and the environment. But this debate isn’t really about a pipeline. This pipeline isn’t going to make or break the development of Canada’s oil sands, nor — as I will show here — is it going to make a measurable difference with respect to climate change.
President Obama aggressively called for addressing climate change in his fifth State of the Union address, but ultimately came up short of outlining a clear and compelling vision with the necessary policy scope to address the significant technological challenges impacting clean energy.
Here are my five top take-aways:
1) Demanded Action to Address Climate Change
It is indicative of the sad state of the U.S. climate debate when a mere mention of support for addressing climate change elicits celebration. Nonetheless, the President deserves credit for calling on Congress to take action against climate change and using about 10 percent of his speech to discuss what he would like to see.
“But for the sake of our children and our future, we must do more to combat climate change. Yes, it’s true that no single event makes a trend. But the fact is, the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, floods – all are now more frequent and more intense. We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science – and act before it’s too late.”
2) Aggressively Called for Increasing Public Investments in Energy R&D
One of the biggest issues impacting clean energy innovation is declining public investments. Of particular concern are stagnant energy R&D programs, which are a fraction of what is necessary to aggressively develop breakthrough clean energy technologies. According to the Energy Innovation Tracker, federal funding for energy R&D totaled $3.6 billion in fiscal year 2012. In comparison, the Defense Department’s R&D budget that year was $72.3 billion, or more than 20 times as much.
Europe’s Emissions Cap
This shows a fundamental misunderstanding of the European Emissions Trading Scheme (ETS) in particular, and the nature of a market-based emissions cap (AKA cap-and-trade) system in general.
Granted, the ETS is an imperfect cap because it only covers about 45% of total emissions in the EU – most notably it does not include emissions from home heating or automobile transportation. Importantly, though, it does cover major industrial emitters and utility-scale electricity production, which are the major users of coal.
(Read More: Global Carbon Dioxide Emissions — Facts and Figures)
However, the articles continually say things like this, in Friday’s Washington Post: “Green-friendly Europe has a dirty secret: It is burning a lot more coal.” The schadenfreude exhibited in these articles is unrelated to Europe’s actual record on climate policy.
What Can Obama Do?
The President has begun his second term in office by saying that he will act on climate change, stating in his inaugural address: “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.”
However, the question now becomes: what can President Obama do about climate change? He made action on climate change a central argument during his 2008 campaign and early in his first term, but failed in the effort to pass major emissions reduction legislation through Congress. While the stimulus had many important clean energy sections, it is unclear whether these will result in lasting changes in our economy.
Market-Based Actions Are Most Effective
Having tried and failed to pass major climate legislation through Congress in 2009 and 2010, and knowing that a polarized Congress is unlikely to address this again in the next few years, I believe that the Administration will move towards a two-pronged approach that uses regulation at home, but prioritizes action on climate as a tool of international relations.
(Read More: Why Climate Change is a Matter of National Security)