Energy & Telecommunications

Climate Strategy

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June 26, 2013

Obama's Climate Change Action Plan

Climate Strategy Alert

On June 25, President Obama unveiled his climate change action plan. The outline of his plan was set forth in a 21-page written document, coupled with a speech delivered at Georgetown University and broadcast online at whitehouse.gov/live, and presents his vision for a unilateral approach to controlling carbon emissions and mitigating the effects of climate change.

President Obama's plan has three main focuses. First, he proposed measures to reduce the emission of carbon dioxide and other greenhouse gases from domestic industry. These measures include strict standards for carbon emissions from new and existing power plants, promoting investment in renewable energy, and improving energy efficiency in homes, businesses, and industry. The plan calls for accelerated permitting and development of renewable electricity generation projects on federal lands ranging from Department of Defense properties to lands managed by the Department of the Interior.

Second, he proposed measures to prepare the country for the effects of climate change. These measures include infrastructure improvements, such as preparing buildings and communities for sea level rise and more intense storms. These measures are also designed to protect the economy and natural resources, for example conserving land and water resources, preparing for floods and drought, and managing agricultural sustainability.

Third, he called for the U.S. to lead international efforts to address global climate change. Measures in this category include expanding international use of clean energy and energy efficiency technologies, negotiating global free trade in environmental services and goods, and strengthening global resilience to climate change.

While some of the measures are likely to find widespread support, others such as the power plant emissions standards are controversial. The plan states that President Obama will issue a Presidential Memorandum directing the U.S. Environmental Protection Agency to "work expeditiously to complete carbon pollution standards for both new and existing power plants." The standards, which may be put into place by mid 2015, are likely to hit coal-fired power plants hardest. If they are imposed, the effect may be to force power plants with marginal economics to close or convert to other fuels such as natural gas. Some fear the impact of new EPA regulations on the cost of electricity, while some proponents of climate action support efforts to price the cost of carbon emissions into electricity produced from coal to encourage a switch to natural gas and other lower-carbon fuels. Indeed, the plan calls for promoting natural gas as a "bridge fuel" to help domestic and international markets move away from coal and oil, calling for the U.S. to "promote fuel-switching from coal to gas for electricity production and encourage the development of a global market for gas."

Notably, some elements that observers had speculated might be included in the plan were omitted. For example, the plan does not call for taxing carbon emissions or imposing a federal cap-and-trade regime for carbon. Likewise, the plan outline does not conclusively address current issues such as whether or not the Keystone XL pipeline or coal export terminals will be approved. Rather, the outline is relatively bullish about the opportunities to help foreign nations develop projects featuring natural gas, nuclear power, clean coal, and energy efficiency without mentioning the U.S.'s role as importer or exporter. That said, in his oral remarks, President Obama said that Keystone XL can only be approved if it is found to be in the national interest, including whether or not it exacerbates climate change-related problems.

All eyes are watching whether President Obama is able to implement his plan effectively. In the coming months, we can expect the federal administration to roll out significant new policies outlined in the plan. Whether the policies can be put into action, their impacts, and whether they are able to achieve his goals, remains to be seen.

You can find this and other posts on energy resources, energy policy and their effects on society and the environment on our Energy Policy Update blog.

For more information on this alert, contact Todd Griset or any of our Energy Group attorneys.

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