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HOW HARD IT WILL BE FOR BIDEN: President Joe Biden’s new pledge for the U.S. to cut its economy-wide emissions 50% to 52% by 2030 — unveiled at his climate summit this morning — means largely eliminating coal from electricity, reducing natural gas use significantly, and definitely no new gas plants without carbon capture, according to various recent analyses we’ve reviewed.
We’d also have to increase clean energy sources to more than double today’s share.
In short, the pledge, one of the most aggressive in the world, would require fundamentally transforming America’s fossil fuel-based economy.
Policy details are sparse, for a reason: Owing to that challenge, the administration is not yet providing a detailed road map for how it plans to reduce emissions from each economic sector to achieve its goal and is instead claiming that broad “multiple paths” could do it. That’s because the administration doesn’t know what it can count on without cooperation from Congress.
Biden’s $2.3 trillion green infrastructure spending proposal, if enacted as is, would certainly do a big chunk of the work in the electricity and transportation sectors.
The electricity side will need to account for the largest chunk of reductions this decade — providing over half of the cuts needed — researchers from the University of Maryland found in an analysis modeling a 51% emissions cut released in February.
Passing the infrastructure plan would be huge: Biden’s package would extend and expand tax subsidies for renewables, storage, transmission, and carbon capture. On its own, Biden’s proposed clean electricity standard requiring utilities to use 100% carbon-free power by 2035 could achieve nearly half of the nation’s progress toward Biden’s 2030 NDC goal, the environmental group Evergreen has projected.
Emissions reductions in transportation would account for a smaller slice of reductions (11% of 51%) by 2030, the UMD research showed, but play a more important role later on because the gas-powered vehicle stock will be slow to turn over.
Here, too, Biden is leaning on his infrastructure proposal to contribute, by expanding tax credits for EV purchases, giving cash-for-clunker style rebates, and building charging stations. But the Biden administration can also act on its own here by making stronger fuel efficiency standards.
Other sectors, such as buildings, heavy industry, and land, will play less of a role this decade, but changes there could set the stage for deeper reductions beyond 2030.
The Biden administration is also counting on reductions in non-carbon gases, by imposing strong regulation of methane from oil and gas operations, and phasing down hydrofluorocarbons, or HFCs, by 85% by 2035 as required by an energy bill passed by Congress late last year.
Why Biden is optimistic — it’s not just the federal government: Biden administration officials say the U.S. is in a better position today thanks to the dramatic fall in costs this decade of clean energy technologies such as solar, battery storage, and carbon capture. States, cities, and individual companies have acted more aggressively in the absence of the federal government during the Trump administration.
“We are standing here with better field position today than we had four years ago,” a senior administration official told reporters last night.
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BIDEN PLEDGES TO DOUBLE US CLIMATE FINANCING: Biden, speaking at the top of the climate finance session of the summit today, unveiled the first U.S. international climate finance plan that includes a commitment to double the amount of money the U.S. offers developing countries to help curb climate change within the next three years.
In addition, the U.S. also intends to triple its funding to global efforts to adapt to the effects of climate change by 2024. The plan says the Biden administration will work with Congress to meet those funding levels, though the White House is likely to face staunch opposition from Republican lawmakers.
Also in the plan, the Biden administration is calling on federal agencies to end financing fossil fuel-intensive projects overseas, though it doesn’t specify a date by which it will require agencies to do so.
The plan says U.S. support for fossil fuel projects may continue “in limited circumstances” if there is a “compelling development or national security reason” to continue financing.
CHINA KEEPS EXISTING PLEDGES, BUT SUGGESTS MOVE OFF COAL: China’s Xi Jinping, unsurprisingly, did not announce any new climate targets during his summit remarks, but for the first time he said that the world’s top emitter plans to phase down its coal use later this decade.
Xi reiterated China’s existing pledges to begin reducing its emissions before 2030 and reach carbon neutrality by 2060. But he also vowed that China will “strictly limit” its increase in coal consumption over the first half of this decade and “phase it down” over the 2026-2030 period.
China generated 53% of the world’s total coal power in 2020 (compared to 44% in 2015), making it the only G-20 nation to significantly increase its coal-fired generation last year.
So analysts we reached out to are in wait-and-see mode on what Xi actually meant.
“China’s coal building binge over the last year is responsible for the spike in global emissions in 2020, demonstrating again that overall emissions can only begin to fall when Chinese emissions do,” said Paul Bledsoe, former White House climate official in the Clinton administration, now strategic adviser with the Progressive Policy Institute. “China must curtail coal use and its overall emissions — that’s the only way to stay even remotely on track in meeting the Paris climate goals.”
RUNDOWN OF OTHER BIG NEW CLIMATE GOALS: Biden did manage to win new commitments from some large economies, even as China and India, the top emitters outside the U.S., held off.
*Japan’s Prime Minister Yoshihide Suga pledged to cut the country’s emissions 46% by 2030 compared to 2013 levels — and aim for a 50% cut if possible. It comes after Suga recently committed the world’s fifth-largest emitter and third-biggest economy to reach economy-wide carbon neutrality by 2050.
As we’ve written previously, Japan will likely need to restart most if not all of the nuclear power it shutdown after the 2011 Fukushima disaster to meet its goals, along with accelerating its ongoing expansion of renewables and phasing out coal. Japan, notably, did not commit to ending its overseas financing of coal.
*South Korea, however, did. President Moon Jae-in said the country would end all public financing for overseas coal-fired power plants. He also noted in his remarks that South Korea has stopped issuing permits for new domestic coal plants and is increasing production of wind and solar power.
“To become carbon neutral, it is imperative for the world to slow down coal-fired power plants,” Moon said. “Yet developing countries that will struggle due to the heavy dependence on coal should be given due consideration and access to proper support.”
South Korea also plans to strengthen its national climate target later this year, though Moon didn’t provide details.
*Canadian Prime Minister Justin Trudeau announced the country would strengthen its pledge, targeting a 40% to 45% reduction below 2005 levels by 2030. Trudeau also touted Canada’s step in December to set a “world-leading price on pollution,” which he said would reach $170 per ton in 2030.
Trudeau said Canada would codify its new 2030 target into law, as well as a longer-term goal to reach net-zero emissions by 2050. He also noted the country outlined additional climate-related investments in its budget this week.
*Brazilian President Jair Bolsonaro, who is under fire globally for deforestation of the Amazon, committed today that the country will strive for carbon neutrality by 2050, 10 years earlier than its previous climate pledge.
Bolsonaro also said Brazil will reduce its greenhouse gas emissions by nearly 50% by 2030, as well as commit to eliminate illegal deforestation in the Amazon by that year.
BIG BUSINESS (AND OIL) RESPONDS LUKEWARMLY TO BIDEN’S NDC: The Chamber of Commerce called the target “ambitious” and “welcomed Biden’s focus on returning the U.S. to international leadership on climate change.” The largest U.S. business group has previously called on Biden to embrace “all of the above” approaches to emissions reductions, and to consider the value of exporting natural gas to replace coal overseas when setting its NDC.
The American Petroleum Institute, in a round-about way, suggested Biden’s new NDC will jeopardize “affordable, reliable energy.”
“The new U.S. [NDC] addresses only half of the dual challenge of reducing the risks of climate change while ensuring affordable, reliable energy for all Americans,” said API CEO Mike Sommers, who also reiterated the group’s preference for a price on carbon.
NO EXPLICIT METHANE TARGET IN BIDEN’S CLIMATE PLAN: Despite pressure from many environmental groups, the Biden administration declined to set an explicit target to curb methane emissions in its new climate plan.
An administration official told reporters that the administration sees reducing methane emissions as a priority, and the official stressed that curbing oil and gas emissions in particular offers an opportunity to create jobs by putting people to work capping abandoned oil and gas wells. Nonetheless, the official didn’t directly answer a question about why the administration did not set a methane target.
DEMOCRATS PLAN VOTE ON METHANE CRA: Senate Majority Leader Chuck Schumer said this morning the chamber will vote next week on a Congressional Review Act resolution to cancel a Trump administration action blocking the EPA from directly regulating methane.
The fast-tracked procedural tool enables the split 50-50 Senate to scrap the methane rollback with a simple majority vote. The vote is expected to be bipartisan, though, after Republican Susan Collins endorsed the resolution yesterday.
REPUBLICANS CUT CLIMATE FROM INFRASTRUCTURE COUNTER-PROPOSAL: Republicans in the Senate unveiled a $568 billion infrastructure framework this afternoon that removes climate-related provisions sought by Biden, with the goal of improving roads and bridges, public transit systems, water infrastructure, airports, and broadband internet.
Read more on the proposal here.
INHOFE WANTS TO BLOCK EPA CLIMATE REGS: On the heels of the Biden administration’s new climate target, Sen. James Inhofe introduced legislation to bar the EPA from issuing any climate regulations until China, India, and Russia commit to the same level of emissions reductions as the U.S.
“[W]e can’t risk a one-sided climate restriction that would give them a leg up on economic growth and trade,” Inhofe said of China in particular. The legislation is in a similar vein to other Republican opposition, including legislation from House Republicans last week that would push Biden to obtain a more aggressive emissions pledge from China before re-engaging in the Paris Agreement.
TREASURY WILL WORK WITH SEC ON CLIMATE DISCLOSURE: The Treasury Department will work with the Securities and Exchange Commissions as it develops a framework for climate disclosure and works with global partners to promote consistency across disclosure regimes, Treasury Secretary Janet Yellen said yesterday.
Yellen, speaking virtually to the Institute of International Finance, said a key challenge to addressing climate-related financial risks is “that the current financial reporting system is not producing the reliable, consistent, and comparable disclosures needed for investors to accurately compare climate-related risks and opportunities across companies.”
The Treasury Department also backs efforts by the International Financial Reporting Standards Foundation to develop a climate disclosure standard, Yellen added.
The SEC is currently seeking input on how to set up a regime under which companies report their greenhouse gas emissions and the risks they face from climate change. Biden is also expected to sign an executive order requiring such disclosures from public companies, a promise he made on the campaign trail.
OIL AND GAS LEASING PAUSE EXTENDING: The Interior Department’s Bureau of Land Management announced yesterday it is canceling oil and gas leases on public lands during the second quarter of this year as the agency continues to review the future of the fossil fuel leasing program.
The decision does not affect existing operations or permits for existing leases, which continue to be reviewed and approved, BLM said.
MEANWHILE, A NATURAL GAS BOOM IS COMING: Natural gas production in the U.S. is set to grow to a new record in 2022, at 93.3 billion cubic feet per day (Bcfd) and will continue to rise further, exceeding 100 Bcfd in 2024, a Rystad Energy analysis released today shows.
U.S. natural gas output reached a record in 2019, at 92.1 Bcfd, but production declined to 90.8 Bcfd last year as a result of the pandemic. Production will fall even further this year, to 89.7 Bcfd, but the trend will quickly change as the pandemic subsides and activity builds up across the country’s major gas basins.
The Rundown
Wall Street Journal Biden administration moves to unwind Trump auto-emissions policy
New York Times Trudeau was a global climate hero. Now Canada risks falling behind.
Calendar
THURSDAY | APRIL 22
10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing “to examine the opportunities and challenges that exist for advancing and deploying carbon and carbon-dioxide utilization technologies in the United States.”
