Chinese leader Xi Jinping and President Obama struck a surprise deal Wednesday to limit greenhouse gases that will likely intensify clean energy action around the world — and propel environmental changes on American soil.
China, the world’s biggest emitter of greenhouse gases, announced it will cap carbon emissions by 2030. It also pledged to increase use of non-fossil fuels over the next 15 years. The United States will strive to cut emissions 26 to 28 percent below 2005 levels by 2025, Obama declared. The new target comes as the country still aims to hit a 17-percent reduction goal by 2020.
But how will the move affect Americans? The air we breathe? The cars we drive? Environmental groups laud the agreement as a historic win. Coal advocates call it a non-binding deal — and a threat against cheap energy and middle-class prosperity.
Storyline asked three top energy policy analysts to weigh in:
* Michael A. Levi, the David M. Rubenstein Senior Fellow for Energy and the Environment and Director of the Maurice R. Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations.
*David B. Sandalow, the Inaugural Fellow at the Center on Global Energy Policy at Columbia University and former under secretary of energy at the U.S. Department of Energy.
*Nick Loris, Herbert and Joyce Morgan Fellow, Institute for Economic Freedom and Opportunity at the Heritage Foundation
Storyline: How could this announcement affect our energy costs? Our electricity supply?
Levi: It’s impossible to know because we don’t have a clear idea of how the administration envisions meeting the goal that’s laid out. We don’t yet know all the policy that would ultimately be used to achieve these goals.
You will continue to see announcements from the administration on regulatory actions. If the U.S. follows through on these targets, you won’t know the full contours of the policy until the next president is in office. The new goal is set for 2025 — that’s 11 years away. The U.S. is still currently trying to meet the 2020 target
Loris: When 85 percent of our energy needs come from carbon-emitting fossil fuels and you set ambitious plans to reduce emissions, the price of energy is going to rise so people use less. Driving up the price of energy will hurt American families and make businesses less competitive.
There are economic ripple effects: When gas prices go up, you’re hit at the pump — and you’re hit at the grocery store. Businesses are going to pass higher costs onto consumers.
SL: Will it change the way Americans feel about clean energy initiatives — and climate change, in general? We don’t generally rank those issues as high priority, according to this Pew survey.
Levi: Climate diplomacy has never been the central driver of energy systems. It’s not the thing that will change everyone’s course. It will help reassure some people that the U.S. isn’t acting alone. It will also make some people nervous as to what, exactly, the U.S.’s actions will be.
Any communication like this makes it more difficult to backtrack on existing policy.
SL: Moving forward, what will the new goals mean for our economy?
Sandalow: The transition to clean energy is one of the biggest economic opportunities of the 21st century. The U.S. is so well positioned to capitalize on this. We have the best universities in the world. We have the innovators, the entrepreneurial spirit.
Loris: Sure, investment in new clean energy technology can drive economic growth. But it won’t be done through government intervention. It will be due to the free market driving growth forward. We shouldn’t regulate other sources of energy — like coal and oil — out of existence to get there.
SL: How will this impact our cars, for example?
Sandalow: I think the American automobile industry is particularly well-positioned (for the transition ahead). Look at General Motors and the Chevy Volt, their electric car. It’s been named the car with the most enthusiastic drivers.
Look at Ford. The F150, their most popular model, is transitioning to a lightweight aluminum frame — which will save money for drivers.
And Tesla. Tesla is one of the most interesting car companies in the world, on the forefront of innovation.
SL: Do you already see the impact in other countries?
Sandalow: When I woke up in Delhi this morning, the announcement was all over the news. I saw the numbers, and I was impressed. This is the most important bilateral climate announcement. Ever. It brings together the two largest emitters in the world. Together, they have 45-percent of global emissions.
It sends a signal to the world. Other countries will look at this and say, “We need to think seriously about our policies.” India, for example, is working on its climate policies now. So, the announcement has good timing. (Indians I spoke with today report that) the Prime Minister is very serious about clean energy. He wrote a book called “Convenient Action.”
SL: Does Miami Beach have a chance?
Sandalow: The short answer is yes. This is just part of a package, though. No individual announcement can solve the problem. This alone won’t stop sea level rise. But it’s a very important piece.
Loris: China’s commitment is a mission so far into the future.Our relationship is similar to an addicted gambler’s relationship with his bookie. The gambler promises he’s good, he’ll pay for it later. But it’s a raw deal. China says, “You can make the sacrifice now, restrict your energy use now. We’ll start doing it in the next decade and a half…”
*Sandalow said Tesla is not the biggest company, but the most interesting. Context has been added for clarity — and certain quotes have been removed.