Obama’s mixed signals

Jake Schmidt is an expert in international climate policy. Catching up with Meng Si in Tianjin, he talked about America’s low-carbon prospects, and the need for major powers – including China – to agree on transparency.

Jake Schmidt is international climate policy director at the US-based Natural Resources Defense Council.

Meng Si: The United States has a special role in international climate-change negotiations. What are the difficulties and advantages of its position?

Jake Schmidt: I think that the United States is a key player. It’s the world’s largest economy. The fact that the US didn’t move forward on the Kyoto Protocol cast a huge shadow over this international effort for years, so I think you can see that countries really want the US engaged because it’s hard to envision dealing with this issue without that.

The key for the United States is not just to come to an international process and say that it can do something, but actually to be able to deliver it at home – and that’s always been the tension. I think with the failure of the Senate to take action on a climate bill, now the Obama administration has to make do with the set of tools that it already has. So it has authority under the Environmental Protection Agency (EPA) and the Clean Air Act to regulate emissions from both existing and new facilities. It has the authority to establish new vehicle standards and has begun to do that. It has authority to implement standards for how much energy appliances can use and to send guidance on how much energy buildings can produce.

So the administration is going to have to make the strongest case for taking action only under these existing authorities and be able to tell the world what kind of direction that is leading to in terms of overall emissions. Both Todd Stern and Jonathan Pershing have continued to reiterate that the administration is sticking to its commitment to cut emissions by 17% over 2005 levels. That is a signal that is critical to the world.

MS: We know that Obama has made promises on clean energy. What is the president’s plan for the development of the fossil-fuel industry? How does it differ from energy strategy in China?

JS: In the United States, we had proposals for 150 new coal-fired power plants a couple of years ago. I think about 110 of those have been officially put in the trash bin. And part of that is because of the future carbon regulations that have been set. Part of that is because of lawsuits on the ground. And part of that is because the financial industry has seen investing in a 40 or 50-year power plant that burns coal, with the prospects of climate controls in the future, as a bad economic investment.

And so we’ve seen a much greater shift from building coal-fired power plants in the US to much greater investment in natural gas, but also in renewables, wind and solar. The president doesn’t make determinations for which coal-fired power plants are built in the US, that’s left to the market, but the president sets the legal framework and the political direction for those investment decisions. So, some of this is because Obama has sent the signal that climate control is for real in the United States. But also, in terms of the US stimulus, we’ve seen the largest investment in US history in renewables and energy efficiency. The market has seen those signals and has started to shift.

We won’t see as much clarity in terms of those investments as many companies want because of the failure of the Senate to take action, but I don’t think we’ll have a shift where people basically say, “OK, well, climate control is never going to happen in the US, so therefore we just build as many coal-fired power plants as we can.” In contrast, China sort of has this dual challenge, which is how does it meet the growing energy needs of an increasing middle class, while at the same time making significant investments in non-fossil fuel energies.

The key for both countries is to create a framework that encourages the fastest transition out of CO2-emitting plants and the quickest deployment of renewables, so that the cost of those renewables comes down. At the same time, there is a huge amount of low hanging fruit in terms of energy efficiency.

MS: What about the petroleum industry?

JS: On that front, the [Obama] administration has been mixed in some sense. It sent a pretty clear signal from day one that it was going to try to improve the efficiency of vehicles. But at the same time they’ve shown an interest in expanding offshore oil investments. We think that offshore oil investments are the wrong signal. We should be weaning ourselves off foreign oil and domestic oil as we move to a low-carbon future. And that can be done through improving our efficiency, while at the same time better tapping into existing oil and creating incentives for taking that CO2 and putting it underground and permanently sequestering it.

MS: On what conditions will the United States move forward in international negotiations? On the MRV [measuring, reporting and verification] issue, there are still people in China who say that implementing it would mean China has to provide its development plan to developed countries – and that those demands are kind of insulting.

JS: I won’t fully speak for what the US is thinking, but in terms of what they’ve said they’re pretty clear that they would like an outcome in Cancún, but that that outcome has to contain agreement on all the elements captured effectively in the Copenhagen Accord and that includes the transparency provisions, the MRV provisions. I think that Todd [Stern] has been very clear in all of his statements, which is without forward progress on MRV in Cancún, the prospects of agreeing on things that other countries want in terms of finance and adaptation of clean energy are not going to happen. 

And it’s not just the US that’s been saying that, Europeans and Australians have been saying similar things. I still continue to believe that it is in China’s interests to be able to show what it’s doing in a credible way. It’s not a matter of taking the development plan and letting others criticise it. It’s more creating the confidence that China’s really moving forward. The question is: isn’t it in China’s interest to actually tell that story in an effective way?

Words mean different things to different people. I don’t think we are creating a framework where individual people will be walking around the country looking at whether or not that smoke stack really is emitting as much pollution as you said it was. The US wouldn’t allow other countries to walk around and test their smoke stacks, so I don’t think they should expect that of others and I don’t think that they do. Similarly, we can’t have an international response to climate change which doesn’t provide us with basic information about how much progress we’re making towards dealing with this challenge.

MS: What is the outlook for green jobs in the US?

JS: Well, there are not enough. We know for example that a dollar invested in clean-energy jobs produces four times as many jobs as in the fossil-fuel industry, sometimes as much as 10. If you look at the US$80 billion that was spent in the US in terms of clean energy, renewables, energy efficiency, it created four times as many jobs as if we had spent that US$80 billion [534 billion yuan] on fossil fuels, coal and oil. If you talk to the labour unions in the US, they are convinced that the future of their industry, the future of their jobs is on the clean-energy basis. They really, I think finally, believe that. And I think the key is to turn these prospects into delivery and I think unfortunately politicians haven’t done a good enough job of creating policy frameworks to send those signals.

All those industries in China, for example, that have popped up to create renewables. Those facilities are massive and lots of people are manufacturing solar and wind turbines. The Chinese have really seen a huge opportunity to create jobs and new industries and are taking advantage of it. Unfortunately the US has not made as significant strides of late as other countries.

MS: And the renewable industry doesn’t have as much influence as the fossil-fuel industry.

JS: The opponents to action always have a lot of money because they’ve built up huge industry and they can send misinformation to the American public and to the global public. And we continue to believe that people will see their claims as that – myths, not reality. The impacts of climate change are real, being felt everyday. If you look at what’s happening in Pakistan and Russia, it’s hard not to see the forecast of the future and I think that people will have to see that things are happening now as we speak.

But the other thing is that the fossil-fuel industry, which supposedly is defending them, is not creating new jobs for them. The new jobs are in clean energy and energy-efficiency deployment and not in old industries of the past – dinosaur industries as opposed to future industries.


Meng Si is managing editor in chinadialogue’s Beijing office.

Homepage image from The White House shows president Barack Obama with solar executives in Florida.