Week Ending April 23, 2021

Biden Sets Aggressive Emissions Target While Details, Reactions Take Shape

This Article Appears as Published in Foster Report No 3346
Biden Sets Aggressive Emissions Target While Details, Reactions Take Shape

President Joe Biden said his emission reduction target for the U.S. is aggressive but achievable, with a whole-of-government approach that will spur job growth, advance environmental justice and put the U.S. in a better position to tackle climate change.

The target of a 50% to 52% reduction in greenhouse gas (GHG) emissions from 2005 levels in 2030 for the entire U.S. economy was announced April 22 at a White House event where leaders from other nations also increased their emissions-reduction goals. Biden and other administration officials, who spoke during the Leaders Summit on Climate, with online presentations from foreign leaders, said the private sector is shifting to address climate change and that the nations and companies who lead will reap benefits.

John Kerry, special presidential envoy for climate, said companies that are working on breakthroughs for energy storage, green hydrogen, direct air carbon capture and other technologies are striving to “hit pay-dirt” with patents in different areas. “And whoever does that will make more money than Jeff Bezos pretty quickly,” Kerry said during a press conference.

Initial reactions from the energy industry to Biden’s announcement of a nationally determined contribution (NDC) for the U.S. under the Paris climate agreement show that the trade groups are accustomed to ambitious climate goals from the Biden White House.

They avoided direct criticism, pledged to make progress on reducing emissions of methane and carbon dioxide, and vowed to work with the administration on being part of a solution to climate challenges. Natural gas groups said any clean energy targets should include investments in gas infrastructure, and that steps such as increased use of hydrogen, renewable natural gas and other technologies can move the U.S. economy toward a low-carbon future.

Republicans in Congress released their infrastructure plan April 22, with a price tag of $568 trillion, and some used the measure as a way to counter the larger infrastructure plan of the Biden administration and signal a more reasonable route for addressing climate issues.

Sen. John Barrasso (R-Wyo.) said Biden’s NDC is a drastic and damaging emissions pledge that will harm American workers and consumers. Countries like China and Russia are increasing emissions and the announcement from the White House will result in higher energy prices and fewer jobs, said Barrasso, ranking member on the Senate Energy and Natural Resources Committee.

Kerry, Gina McCarthy and other administration officials countered such views by noting that the energy transition is already in motion and companies, financial institutions and other governments are moving to realize opportunities in clean energy and emission-reduction technologies. The Biden administration has “many policy levers” it will use to regain a climate leadership position, with job growth around stopping methane leaks, plugging abandoned oil and natural gas production wells, adding renewable resources and boosting transmission grid investments, said McCarthy, national climate advisor at the White House.

Countries representing 55% of the global gross domestic product have committed to the temperature change elements of the Paris agreement, including oil-producing nations, and during the summit countries like Japan, Canada and India have either increased their emissions reduction target or pledged to work with the U.S. on growing renewable resources, Kerry said. Japan bumped its commitment to reduce GHG emissions by 46% to 50% by 2030, compared with 26% before the summit, Kerry noted.

Canadian Prime Minister Justin Trudeau announced a new NDC target of 40% to 45% below 2005 emission levels by 2030. That change, from 30% previously, reflects the highest possible ambition in light of the current national circumstances in Canada, Trudeau said.

During his remarks, Trudeau highlighted the importance of working with other leaders around the world to address climate change. “Climate change knows no borders, so every country must do its part to invest in a cleaner world,” he said.

The U.S. effort includes financial resources for developing countries to reduce or avoid GHG emissions and build projects to improve resilience and adaption in the face of climate change. The Climate Finance Plan stems from Executive Order 14008 from Biden and scales up financial support needed “to re-establish leadership in international climate diplomacy.” The plan aims to double, by 2024, public climate financing to developing nations compared with the second half of the Obama administration, and Biden said he would work with Congress to meet such goals.

Biden, Kerry and other administration officials said nations that step up their climate commitments will win job growth and economic gains for the future. Countries that take decisive actions now will be the ones that reap benefits down the road, Biden said. Climate change is undeniable, and it is “a moral imperative” to take steps to “overcome the existential crisis of our time,” he said.

The NDC announcement is only the first step towards the plan to rejoin the Paris agreement and a United Nations climate summit later this year in Glasgow, Scotland, Biden said. He and Kerry acknowledged that details still need to be worked out, but they referred to endorsements by major industry groups and private sector entities.

During the press conference, Kerry said future presidents would not undo the NDC announcement and plan because the market transition is overwhelming. Financing a coal-fired power plant in the U.S. today is essentially impossible, and no politician, no matter how demagogic, would want to reverse the transition and harm the market changes taking place, Kerry said.

Numerous energy industry trade groups had initial reactions to the NDC announcement, though they are heavy on noting existing climate change statements or actions of their members on reducing GHG emissions.

The Edison Electric Institute said its investor-owned utility members are committed to “getting the energy we provide as clean as we can as fast as we can, without compromising the reliability or affordability that our customers value.”

The head of the Interstate Natural Gas Association of America (INGAA) said the pipeline network provides opportunities for the U.S. to achieve climate goals and pursue low-carbon solutions. Amy Andryszak, president and CEO of INGAA, encouraged the Biden administration “to embrace the foundational role that natural gas infrastructure will continue to play in reducing GHG emissions.”

The American Petroleum Institute emphasized its climate action framework, which includes support for a price on carbon and other steps to reduce GHG emissions, while noting that Biden administration plans should be workable for all industries and avoid a prescriptive approach that would stifle work underway to address climate risks and opportunities.

The Natural Gas Supply Association and the Center for LNG said natural gas will play a big role in achieving the climate goals set out in the NDC. U.S. LNG exports are helping nations around the world reduce emissions and U.S. gas supplies are a building block for a cleaner energy future, officials with both groups said.

By Tom Tiernan ttiernan@fosterreport.com

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