We’re still far from stopping climate change altogether. But at least something is finally being done. President Obama wants to circumvent Congress to cut power plant emissions.

Last week, the US’ Environmental Protection Agency (EPA) announced plans for new regulations on CO2 emissions from existing power plants. The level of carbon emissions would decrease by 30% until 2030, compared to 2005. This sector is responsible for the largest share (around 40%) of total US carbon emissions.

‘The power is yours!’ – Captain Planet

Congress would have of course rejected any such plan, so Obama had to resort to legal detours. And it’s still uncertain whether Congress or courts won’t obstruct it.

This is how the plan would work

The EPA’s competence in the matter derives from a Supreme Court ruling requiring it to regulate power plant emissions. The EPA has already enacted rules on new power plants, making it practically impossible to construct coal-fired power stations (i.e. without prohibitively expensive stuff like carbon capture and storage).

The current proposal concerns existing power plants. It does not regulate emissions from individual power plants; rather, it sets state-level targets. States are given plenty of options for meeting these goals, be it through energy efficiency measures, renewables, nuclear energy, the upgrade of existing plants or cap-and-trade systems. But they do have to submit a detailed plan to the EPA on how they want to realize emission reduction, in an iterative process.

This approach is completely different from the EU’s zombie-like carbon trading system: they don’t rely solely on a market to decide what happens. The EU’s system wasn’t that market-based either, since everyone could choose among the various renewable options. This is one of the reasons for the system’s steady demise.

We’re still on the brink

A 30% reduction certainly sounds drastic, but it doesn’t matter all that much in the grander scheme of things. Why? Because the US only accounts for a little under 20% of global emissions. China is already emitting more than 1.5 times as much carbon dioxide as the US.

  Furthermore, the reduction in US emissions isn’t even that substantial. First off, emissions have been steadily falling for years now: thanks to the shale gas boom, gas-fired power plants have been slowly crowding out coal-fired ones. (At least in the US, since part of the US coal is now burnt elsewhere.) This means that almost half (13%) of the required 30% reduction has already occurred. Second, the target does not refer to emissions in absolute terms; instead, it pertains to intensity, meaning emissions from any given unit of electricity generation. Despite the rise of gas-fired power generation in recent years, coal-fired power plants still generate a substantial (almost 40%) share of electricity in the US (according to the EIA’s 2013 figures), leading to a high CO2 intensity level in power generation.

In 2011, the EU’s CO2 emissions per unit generated electricity was 30% below the US level (see the IEA’s data here). So realizing Obama’s plan by 2030 would still put the US in a slightly worse position than the EU is nowadays – at least in terms of intensity.

But the US uses so much electricity that per capita absolute emissions (in the power sector) would still be much higher in 2030 than they currently are in the EU.

Why the new plan still matters

Despite all the above, we don’t agree with the pessimists: this is in fact an important milestone. Obama’s most recent plan is also a “signal” – it shows that the American government is committed to doing something about climate change, even in the face of the political risks this move may entail.

First, it’s a signal towards the general population, and could potentially rally support for the cause. In other cases, such as gay marriage or the legalization of marijuana, we have seen how public opinion (or at least a general majority) can get behind an issue relatively quickly. (Who would have thought just a few years ago that marijuana would be legalized and decriminalized in several states?)

But Obama’s step is also a signal towards other countries. While it remains unlikely that a global deal on climate change can be struck in the short term, it may be time to accept that such a global deal may not even be necessary, say, if every country were to individually start curbing its emissions and spending more on research and development. China is becoming even more committed to reducing CO2 emissions itself (partly for political reasons, of course); several provinces have introduced quota-trading schemes, and the country is emerging as the largest market for renewables globally.

Furthermore, the current American plans are a signal towards markets, too. America has a huge domestic market. If it generates demand for energy efficiency, or any other tools to curb emissions, there will be even greater incentives for investing in such technology.

Climate change is about decades-long processes

Nevertheless, the political stance of any given administration is less important than the general direction of political (and public) consensus. In the years immediately following the global financial crisis, many greens were disappointed: the average voter was more interested in the short-term problem of unemployment than in the long-term trend of climate change. China was unveiling a new coal-fired power plant every other week, the EU’s incompetent CO2, renewables* and biofuel policies were undermining their minimal public support, renewables were only feasible with expensive state subsidies, and US public debate was dominated by climate skeptics. (*OK, maybe we were the ones disappointed about the EU’s silly renewables policies and not the greens.)

Already then, we believed that the situation is not so dire. With the recession finally ending, the political consensus seems to be shifting, and thanks to rapid technological development, solar PV may soon be feasible on markets without state subsidies. President Obama is renowned for his ability to pick up on changes in public opinion, and not for changing public opinion itself. The Chinese leadership is also realizing that the next generation of voters will not be willing to risk so much environmental degradation in exchange for any additional economic growth.

We will put aside our (usual) skepticism for now…

…and just be glad that something has finally happened. We may well be witnessing the start of an important turnaround…

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Tags: climate change, CO2, electricity, USA