The Business Case for U.S. Policy Leadership in Combating Climate Change: Part two

According to data released last year by the World Meteorological Organization, global average temperature has already warmed 1.2 °C since the start of the industrial revolution. We are already more than halfway to the 2 °C disaster point and the warming we’ve experienced has already impacted society. Oceans are rising and becoming more acidic, food and water are becoming scarce in some areas due to increased drought seasons, invasive plants and animals are spreading to areas of the world in which they couldn’t previously survive, and disease-carrying insects are able to reproduce in longer cycles, to name just a few impacts. The World Bank calls climate change a “threat multiplier” and projects that it could force more than 100 million people into extreme poverty by 2030 if large-scale action isn’t taken immediately. The Pentagon concurs and warned in a 2015 report that climate change will have wide-ranging implications for U.S. national security.

 The 2050 Global Challenge

The next thirty years will be critical in determining whether or not global climate goals are met. New research published in the journal Science shows that “[global] fossil-fuel emissions should peak by 2020 at the latest and fall to around zero by 2050,” to limit global temperature rise to 2 °C by 2100. This is backed up by modeling data from the Intergovernmental Panel on Climate Change, which shows that 80-100% global decarbonization by 2050 is needed to reach the same scenario. This means that over the next thirty years, nearly 100% of emissions from energy production and consumption—from cars, planes, trucks, residential and commercial buildings, to industrial facility emissions—all need to be reduced close to zero. This is a huge leap from the marginal progress being made right now to the total transformation that will need to take place in almost every facet of society. This may be the greatest challenge civilization has ever faced.

Under the rules of U.N. international agreements, the Paris Agreement technically doesn’t start until 2020. Near the end of the Agreement’s first five-year commitment period (2020-2025), the first “Global Stocktake” will be conducted to assess the international community’s progress. At roughly the same time, the latest report on the collective body of climate science and research will be published. What all of this means is that by 2025 the international community will have the most accurate window it’s ever had into what has been done so far to reduce human causes of GHG emissions and what still needs to be done to ensure we don’t exceed 2 °C.

Much will be determined between now and the first few rounds of the Paris Agreement’s review periods. What is clear already, however, is if humans continue to burn carbon at current rates we will have no chance of averting disaster. The total allowable carbon limit that we have left to burn before we reach 2 °C is 800 gigatons. At current global emission rates of 35 gigatons of carbon dioxide per year, we’ll hit that limit in only about 20 years.

The commitment the United States made under the Paris Agreement’s first five years was to reduce GHG emissions by 26-28% below 2005 levels (our baseline year) by 2025. The plan for how we achieve that goal is here and it’s important to note that whether or not we remain in the Agreement has nothing to do with the existing laws we will continue to implement to achieve reductions. A 26-28% reduction by 2025 calls for a 17% reduction by 2020 in order to remain on track and recent reports from energy analysts at the Rhodium Group as well as environmental organizations show that we should be able to hit this initial benchmark. As mentioned in Part One, existing U.S. laws have been very successful in reducing GHG emissions to date and the U.S. has already reduced carbon emissions by more than any other country. However, according to the Rhodium Group report, “absent new policy (whether at the federal or state and local level), the United States is on course for a 15-19% reduction in GHG emissions by 2025–considerably short of its 26-28% commitment under the Paris Agreement.” Yet, the report continues, “there is still time to correct course, whether at the subnational level over the next couple years or through new federal policy a little further down the road.”

The idea of passing new and more aggressive climate policies as time goes on is built in to the Paris Agreement. If, for instance, by 2025 the international community assesses that we are likely to exceed 2 °C of warming by 2100, then nations will be able to submit more aggressive goals for the next five-year round of commitments (2025-2030). This process will repeat every five years as long as necessary in order to bend our trajectory down over time from where it is now and onto a more sustainable climate path. This “ratchet mechanism” of reporting, evaluation, and strengthening plans every five years is a key component of the Paris Agreement and is an incredibly intuitive way of meeting needs as time goes on. Indeed, it’s already been projected that under the current round of Paris commitments submitted by all countries as their best case scenarios for GHG emissions reductions by 2025, we are still collectively on track for 3 °C or more of warming by 2100. Closing the gap between our current trajectory based on global annual GHG emissions rates (4 ˚C – 6 ˚C), current best-case Paris commitments (3 ˚C), and sustainability by the year 2100 (2 ˚C) is a daunting task. But, because of the Paris Agreement, international negotiators and evaluators have great tools at their disposal for getting the job done over time.

The Role and Historical Responsibility of U.S. Policy Leadership in Combatting Climate Change

Addressing climate change in the United States is an inherently political pursuit and it is important to work within that framework in order to develop realistic and effective policies. One argument used by some to justify a lack of continued U.S. leadership is that the United States has met its obligations and that the burden now lies with more populous developing countries like China and India. However, this is a false equivalency that forgets the United States’ historical responsibility in contributing to the current climate crisis.

For over 100 years, the United States was the top emitter of human-driven GHGs into the atmosphere. Almost one third (27%) of total carbon dioxide (CO2) emissions produced from 1850-2007 can be attributed to the United States alone. Since CO2 remains in the atmosphere for around 100 years before dissipating, the changes in the climate system observed today have largely been driven by American emissions of the past. Even now, the United States is still the second highest emitter, sending more GHGs into the atmosphere than the entire European Union and five times more emissions than India. In 2014, the United States, with less than 5% of the global population, was responsible for almost 16% of the world’s total carbon emissions. Simply put, the United States has a historical responsibility to rapidly reduce its GHG emissions and to help address the impacts of climate change already being observed. As a top emitter, policies the United States pursue to reduce domestic emissions will not only significantly contribute to global emissions reductions, but will also provide a model for other countries to follow.

Of course, this does not exempt other powerful emitters from their responsibilities. China became the top carbon emitter in 2007, and emissions from most developing countries are projected to increase in coming decades as they meet the needs of 1.2 billion people around the world currently without electricity. There is a convincing argument that developed countries like the United States should rapidly decarbonize their economies first in order to create space for developing countries to continue to increase their emissions in the short term in order to meet their basic energy needs. Isn’t it only fair that developing countries should be able to industrialize and pursue the same level of prosperity that developed countries have enjoyed for over 100 years? Perhaps yes, still, if we have a limited amount of total carbon left that we can emit into the atmosphere before we blow past 2 °C then we are all responsible for figuring out how best to allocate that resource.

Regardless of whether or not ideas of climate justice resonate with all world leaders, the United States has a historical obligation to act that many current politicians forget and, by acting, the United States will reap large economic rewards. According to a recently leaked draft report on climate change conducted by 13 U.S. federal agencies, it is “extremely likely” that humans are to blame for the rise in temperature in recent years. If one-third of the human-driven carbon currently in the atmosphere is from U.S. emissions, if human emissions are to blame for the existing rise in temperature, and if this temperature rise has already created serious implications both at home and around the world, then the United States is obligated to act.

Conclusions

 Even though we’ve signaled our intent to withdraw, the United States is still in the Paris Agreement for the next few years under U.N. rules. We are still sending State Department delegations to yearly international climate change negotiations. We are still at the international table. The world is watching, and the federal, state, and local policy decisions we take over the next few years will determine our relevancy in the coming global energy transition. American businesses will either remain at the forefront of innovation and create the jobs for this transition or the United States will cede leadership to those countries willing to invest in the future.

It is imperative that legislators at the federal, state, and local levels pass policies that make clear our decarbonization goals over the next 30 years. Private sector investment will be the most important factor in providing the necessary capital to facilitate this transition. However, immediate government action is needed to create the right kind of policy framework in order to correct the climate change market failure and provide long-term market certainty and stability to the private sector. There is an astronomical opportunity for the private sector in meeting the coming global demand of electric vehicles, renewable energy production, and energy efficiency technologies. There is no doubt this demand will be met. The question is whether U.S. companies will be the ones who meet it.

2050 may seem like a long way off, but the importance of early action cannot be overstated. A recent joint report from the International Energy Agency and the International Renewable Energy Agency concluded that “urgent action on a global scale” is required in order to have just a 66% chance of avoiding 2 °C of warming and that “policies would need to be introduced immediately and comprehensively.” “Early, concerted and consistent policy action,” the report continues, is necessary to help leverage the investment needed to facilitate the low-carbon energy transition—“investment is the lifeblood of the global energy system.”

These claims are backed up by the scientific community, private sector energy analysts, renewable energy trade associations, multiple federal and international agencies, environmental advocacy groups, and a coalition of over 1,400 U.S. cities, states, and businesses that collectively represents nearly one-third of the entire U.S. economy. To once again cite the 2009 Center for American Progress report, a “Comprehensive Approach to Building the Low-Carbon Economy,” “smart policy sets a framework for investment. It sends signals to the market that in time can transform the larger economy.”

Smart policies should focus on two major goals: scaling up low-carbon energy production and decarbonizing all facets of the economy—and both rapidly. Policy suggestions could include: creation of domestic and international carbon markets and/or a carbon tax (the most economically effective way to reduce carbon emissions according to most economists); zero-emission energy efficiency mandates for all buildings in the U.S. as well as the transportation and energy sectors; a phase out of fossil fuel subsidies that continue to prop up the biggest source of pollution; tax incentives for renewable energy sources, like the Production Tax Credit for the wind industry (PTC) and the Industrial Tax Credit for the solar industry (ITC) that have both been highly effective in the United States already and should be continued; and other innovative state and local solutions like mass transit and the electrification of transit. This is an exciting time for policy innovation that, if fully embraced by our elected officials, will lead to a clean, sustainable, and economically prosperous world.  

The United States is a model of Democratic ideals, morality, and individual freedoms to the world. When major nations were ravaged after World War I and II, the U.S. mobilized under a common cause and stepped up to rebuild. We provided manpower, innovation, financing, and led the creation of the very institutions that we must now rely upon for international cooperation on climate change. Climate change is the 21st century’s World War and we must similarly mobilize in order to avoid disaster.

Will Hackman is a Master of Public Policy student at the Georgetown McCourt School of Public Policy specializing in energy, environmental, and climate change policy and has a Bachelor’s degree in International Relations from Bradley University in Illinois. During the 2010 and 2012 election cycles, Will served as a political fundraiser and campaign manager on four federal races for the U.S. House and Senate as well as a gubernatorial campaign. In 2013, Will joined the public sector conservation community as a marine fisheries conservation advocate. Since then, he has closely worked on federal legislative issues related to energy and the environment. At Georgetown, Will founded a graduate student organization dedicated to developing energy, environmental, and climate change policy solutions (McCourt E&E), he served as the 2016-2017 graduate student representative to the Steering Committee of the Georgetown Environment Initiative, as a Research Assistant to the Georgetown Climate Center, directed the Young Professionals Board of the Sustainable Oceans Alliance, represented Georgetown at multiple United Nations climate change conferences, and is a contributing author on energy, environmental, and climate change topics for the Georgetown Public Policy Review. This fall, Will has been selected to serve as a Student Leader to the McDonough School of Business’s Global Social Enterprise Initiative.