Rhein on Energy and Climate

2012 might become a pivotal year in US history.

Never before has the country been hit by a such a devastating combination of severe droughts and hurricanes in the very same year, the economic cost of which may run up to some $ 60 billion.

For the first time, leading politicians like Michael Bloomberg, the New York mayor, have openly admitted that man-made climate change has been the most likely cause of hurricane Sandy that has struck the East coast, and asked for solutions to prevent repetitions. Responsible politicians have thus started to put a price tag to climate change.

It will fall upon the incoming US Administration to draw the appropriate policy conclusions. Continuing business as usual cannot be the solution.

This is what the incoming Administration should do:

  • Launch a nation-wide debate on how to address climate change.

Two thirds of US citizens consider climate change as a serious problem; and 40 per cent attribute it to human activity. It should therefore be easy for a strong leadership to convince the nation that moving away from fossil energy is in the long-term interest of the country.

  • Reverse its negative position on international commitments in the fight against climate change.

Instead of opposing international action the USA should take the lead, jointly with the EU and other like-minded countries, for an effective international climate agreement to be adopted by 2015, as set out at the last international Climate Conference in Durban.

Equity and effectiveness plead for the USA taking global responsibility in the combat against climate change.

Though the country has ceased since 2009 to be the biggest emitter of green house gases, overtaken by China, it remains responsible for about a quarter of global green house gases; and its per capita emissions(17.5 tons/year) remain unacceptably high. EU per capita emissions of 7.2 tons prove that it is possible to enjoy high living standards with less than half of what the average US citizens emits.

  • Adopt a 2050 road map for reducing US green house gas emissions, with a focus on power generation and transport which account for two thirds of US emissions.

It should rely on mandatory rules and use the fight against climate change as a tool for job creation. The President may thus avoid futile battles in Congress and convince rank and file citizens that fighting against climate will improve their lot.

  1. Utilities should be mandated to phase out their CO2 emissions until the middle of the century by switching to gas, geothermal, wind, solar nuclear sources. A gradual switch to these sources will not make electricity more expensive. Gas and existing nuclear power plants are already among the most competitive; wind, solar and geothermal will become so in the next 10 years or so.

    Such a programme will offer the necessary benchmarks to industry. It will not require massive federal subsidies, but become a formidable boost to technological innovation, while ensuring long-term US independence of energy imports and reversing its current account deficit.

  2. The country’s private and public building stock should undergo comprehensive energetic retrofitting in view of reducing its excessive power consumption. To that end, the new Administration should enact appropriate standards for new and existing buildings and launch a multi-billion loan and grant programme for States, municipalities and mortgage banks
  3. The recipe for the transport sector will be a harder to sell to US citizens.
    US citizens still do too much “wasteful” driving and flying, due to the size of the country, urban sprawl and low fuel prices.

    Raising US fuel prices to present European levels will induce US citizens to use cars, trucks and planes a bit less lavishly, while accelerating the necessary switch to hybrid and electric engines and to public transport in the densely populated regions.

    By the same token, it will help the federal government balance its chronic budget deficit and introduce overdue “green taxation” to offset environmental costs.

    Such an initiative will, of course, require the approval by both Houses, which cannot be taken for granted. Nevertheless, the new Administration should introduce appropriate legislation, if only to provoke a proper debate. After all, the USA is the only OECD country without proper fuel taxation.

Independent of any taxation initiative, the new Administration should introduce stricter fuel efficiency standards for trucks and adopt a programme for more public transport in major urban centres and for high-speed trains in the densely populated areas, following European, Japanese or Chinese examples.

Brussels, November 6th 2012, Eberhard Rhein


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