Australia: US Climate Change Policy

Last Updated: 2 July 2003
Article by John Taberner

There have been numerous recent developments in the US Government's climate change policy including:

  • the release in November 2002 of the draft 'Strategic Plan for the Climate Change Science Program'
  • an announcement by the White House in February of pledges by industry to reduce greenhouse gas emissions.
  • a proposal for the formation of an international carbon sequestration leadership forum
  • an announcement of a clean coal energy project called FutureGen on 27 February 2003.

Other initiatives at the state level include the setting up of Climate Action Registries where companies can record their emissions reduction on a voluntary basis.

Some details of these initiatives appear below.

The implications for Australia of these developments are particularly significant. Although policy measures in the US and Australia were similar a year ago, it now appears that the US is steadily diversifying its approaches to climate change while Australia still appears to be adopting a 'wait and see' approach.

One significant departure from this approach is Australia's participation in the US-led Carbon Sequestration Leadership Forum. It is clear that the US is seeking to engage a with a wide international audience for the Forum. Some details of this Forum also appear below.

Finally, internal pressure is mounting on the US federal government to legislate for a national emission trading market. Many American states are passing legislation to set up voluntary registries and by doing so are seeking to secure to the industries within their states a competitive advantage in anticipation of the establishment of any federal emission trading system.

Draft strategic plan for the climate change science program
The establishment of the US Climate Change Science Program, a cooperative effort of 13 federal agencies, led to the release in November 2002 of a draft Strategic plan for the climate change science program. The draft strategic plan set priorities for a US$1,800 million annual multi-agency research program on climate change.

The National Research Council of the National Academies of Science and Engineering was appointed at the Bush administration's request to analyse the draft strategic plan. A press release by the National Research Council on 24 February 2003 commented that the draft strategic plan was a good first step but that further revision was required. The press release also noted that the draft strategic plan does not adequately build on prior US and international reports that have provided scientific information to policy makers.

A press release from the US Climate Change Science Program, on 27 March 2003, announced that the release of the revised Strategic Plan is scheduled for 25 June 2003.

National voluntary registry for reporting GHG reductions
On 14 February 2002, President Bush directed the US Department of Energy (DOE) to recommend improvements to the Voluntary Reporting of Greenhouse Gases Program established under section 1605(b) of the Energy Policy Act of 1992 (1605(b) program). In particular, the President directed the Secretary of Energy to recommend reforms to ensure that businesses and individuals that register greenhouse gas (GHG) reductions are not penalised under a future climate policy – an assurance known as 'baseline protection' – and to provide transferable credits to companies that achieve real GHG emissions reductions.

As part of the 2002 public comment process, DOE hosted workshops in a number of US cities. DOE intends to begin formulating its proposed revisions in early 2003 and hopes to issue proposed guidelines for public comment later in the year.

Voluntary pledges by Industry
On 14 February 2002, President Bush committed to reducing America's greenhouse intensity by 18 per cent in the next decade and challenged US business and industries to undertake voluntary efforts to assist meeting this objective.

On 20 January 2003 the New York Times reported that senior Bush officials were travelling the country collecting written pledges from industries to curb emissions of greenhouse gases in a drive to stave off mandatory controls. It was further reported that the White House was insisting on concrete commitments measured in tonnes of gases and had rejected written offers from some groups to take non-specific action.

In a ceremony on 12 February 2003, the Bush administration launched a voluntary initiative called 'Climate VISION'. It was announced that 12 major industrial sectors and many leading corporations had committed to taking action to reduce greenhouse gas emissions. The Business Roundtable (BRT) made a commitment to achieving 100 per cent participation of its members to reduce, avoid, offset or sequester emissions. The companies represented produce one-third of US Gross Domestic Product. In June 2004, the BRT will release its first annual public report on accomplishments under the program. Other industrial sectors committed to reducing greenhouse intensity by a given percentage by 2012. However, no figures for overall projected emission reductions were given.

Carbon sequestration leadership forum
On 27 February 2003, the Bush administration announced the launch of the Carbon Sequestration Leadership Forum. The Forum is an initiative for the US and other countries to collaborate on research to develop technologies that will capture greenhouse gases and store them underground. Ministerial representatives from Australia, Brazil, Canada, China, Colombia, EU, India, Italy, Japan, Mexico, Norway, Russia, South Africa and the United Kingdom will be invited to a meeting in June 2003 to discuss the initiative.

Clean energy projects
On 27 February 2003, President Bush announced that the United States would sponsor a $1 billion, 10 year demonstration project to create a coal-based, zero emissions electricity and hydrogen power plant called FutureGen.

The Bush Administration has also recently proposed initiatives to accelerate research and development of hydrogen fuel cells to be ready for commercialisation in 2020 and fusion energy by the middle of the century.

The New York Times reported that scientists, environmental groups and power industry officials generally approved of FutureGen but many said that the resulting technology would probably not change the status quo unless new emission standards forced plant owners to buy new equipment.

Hydrogen fuel initiative
In February 2003, President Bush announced a $1.2 billion hydrogen fuel initiative to reverse America's growing dependence on foreign oil by developing the technology for commercially viable hydrogen-powered fuel cells to power cars, trucks, homes and businesses with no pollution or greenhouse gases. The hydrogen fuel initiative will include $720 million in new funding over the next five years to develop the technologies and infrastructure to produce, store, and distribute hydrogen for use in fuel cell vehicles and electricity generation. Combined with the FreedomCAR (Cooperative Automotive Research) initiative, President Bush is proposing a total of $1.7 billion over the next five years to develop hydrogen-powered fuel cells, hydrogen infrastructure and advanced automotive technologies.

State climate action registries
A bill tabled in March 2003 in the Washington State Legislature will, if passed, create the Washington Climate Action Registry, a voluntary program that would record the amount of greenhouse gas emissions and the mitigation programs used by power plants and heavy industry.

A number of US states have already set up voluntary climate change registries. California has launched a voluntary program for reporting greenhouse gas emissions, in November 2002, called the California Climate Action Registry. The registry is a private non-profit corporation created under legislation passed two years ago to help industry and others monitor and document greenhouse gas emissions. The California registry opened with 23 charter members including BP and PG&E Corporation. New Hampshire and Wisconsin also have active registries, while several other states, including Illinois, Maine, Maryland, New Jersey, New York, Oregon, Texas, and Washington, are working to establish such programs.

Recent US state GHG legislation
A majority of states have implemented plans to reduce the emission of greenhouse gases (GHG). Two examples of recent legislation that employ different views and methods are Texas and New Jersey. While the former focuses on one policy sector, the latter takes a more comprehensive approach and targets several policy sectors.

The Texas state legislature focused attention on renewable energy after it saw the state's consumption of energy rise to ten times more than it produced by 1998. New projects were launched involving solar sources, hydro and landfill gas, but the major focus was on harnessing the power generated by wind, the so-called 'Texas Wind Rush.' The Texas utilities have undertaken to provide 2.2 per cent of electricity through renewable energy by the year 2009. 'It is estimated that the reduction in fossil fuel use facilitated by this renewable energy will reduce state CO2 emissions by 1.83 million tonnes per year.' Fifteen other states have enacted similar legislation to utilise renewable resources.

While the approach used in Texas relied primarily on renewable energy to reduce GHG emissions, New Jersey used a broader approach. New Jersey was the first state to establish an official GHG reduction goal and actively involve all relevant sectors in attempting to attain that goal. The sectors targeted include: energy conservation in residential, commercial, industrial and transportation sectors, pollution prevention and waste management. The State has recognised the need to involve not only large industries, but also smaller companies and individual consumers. New Jersey pioneered a covenant system that is voluntary and not enforceable, with the exception of the state's largest utility, Public Service Enterprise Group, which signed an agreement to 'reduce total CO2 emissions by 15 per cent from its coal, natural gas and oil power plants from 1990 levels by 2005'. New Jersey has realised a reduction in annual GHG emissions and may even exceed its 2005 reduction goal by one per cent.

While various states have used different techniques, it is clear that the vast majority of states see the need to take action that will effect long-term reductions of GHG emissions. The states, individually, are the testing grounds for new methods, but some states assert that in order to effectively address the seriousness of GHG emissions, the federal government must step in to create federal policy. In July 2002, the Attorneys-General of 11 states wrote to President Bush to urge the Bush Administration to 'adopt a comprehensive policy' that will 'fill the regulatory void' left by allowing the states whether or not to create policy.

(Read the letter, from the Attorneys-General of Alaska, California, Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont here.)

Presidential candidates
Democratic presidential candidates John Kerry and Dick Gephardt, if elected, promise to end America's dependence on foreign oil, citing national security concerns. Both candidates believe that goal can be achieved in 10 years. Kerry says that automobiles are key to reducing oil consumption and his plan calls for an increase in fuel efficiency. Gephardt calls for investment in wind and solar power as well as further research into hybrid and fuel cell vehicles.

Both Kerry and Gephardt claim that the current administration is not doing enough to safeguard the environment and vow to focus on renewable energy, with Kerry's plan to produce 20 per cent of America's electricity from renewable sources.

See Kerry touts security through energy independence and Gephardt vows to end US foreign oil addiction.

Bipartisan efforts
A new independent group has joined the energy debate. The Energy Future Coalition (EFC) is comprised of both Democrat and Republican representatives, a combination that is likely to enjoy broad political support. Members of the EFC include former Counsel to President George H. W. Bush, C. Boynden Gray and former Chief of Staff to President Bill Clinton, John Podesta. Steering committee member Timothy Wirth said, 'We stand together because this is not a partisan issue – it is about our future and the kind of world we live in and leave for our children.' The group will centre on a 'triangle of issues.' Wirth said the three energy issues are, 'global oil dependence, the risk of climate change, and the need for modern energy to enable economic development.' The group believes the US transportation sector should be first addressed because it accounts for 'two thirds of US oil consumption, is 95 percent dependent on oil, and accounts for one third of US carbon dioxide (CO2) emissions.'

See Group aims to take politics out of energy policy.

US and international efforts
The European Union and US have agreed to pool their research efforts into hydrogen fuel cells. 'While the European Union views the fuel cells as a way to harness renewable power sources like solar or wind energy, the United States is focusing on ways to use it along with fossil fuels and nuclear energy.' Despite their differences, they agree that hydrogen research is an important matter.

Additionally, America's neighbours to the north, specifically Manitoba, are creating a 'commodities exchange to buy and sell greenhouse gas emission credits.' Canada is 'one of the only countries in the western hemisphere to have ratified the Kyoto accord,' which puts Canada in an ideal 'position to lead the world in this important new market.' Canada is working from the successful US model for sulphur dioxide. 'An exchange would allow governments and countries that emit large amounts of CO2 to pay others to keep their emissions low, thus keeping total emissions lower.

See Europe and US will share research on hydrogen Fuel, New York Times, 17 June 2003, and Manitoba to create greenhouse gas exchange. The Globe and Mail, 18 June 2003.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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