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US, Biden aim for “ambitious” 50-52% cut in GHG emissions by 2030

22 April 2021 Amena Saiyid

Arguing the "science is undeniable" when it comes to the threat climate change poses, President Joe Biden announced a new goal 22 April of halving the US economy's GHG emissions compared with 2005 by 2030.

The White House said this new target would allow the US to meet its 2015 Paris Agreement climate commitments by "building on progress to-date and by positioning American workers and industry to tackle the climate crisis."

The 50-52% target nearly doubles the nationally determined contribution (NDC) of 26-28% in GHG emissions cuts -- compared with 2005's 7.423.03 billion mt of CO2-equivalent (CO2e) -- that President Barack Obama set in March 2016 a few months after joining the global climate treaty, according to a White House fact sheet on the plan.

An NDC is a country's contribution under the treaty and is updated every five years to show the progress made in meeting GHG cuts.

Obama's NDC, however, was rendered void in November after President Donald Trump left the treaty, leaving Biden with a clean slate to start afresh.

The White House issued the fact sheet highlighting the plan ahead of Biden's speech at the Leaders Climate Summit, which will run through 22 and 23 April.

The steps the US takes now will limit global warming to a maximum 1.5 degrees Celsius by midcentury, Biden said, alluding to the Paris treaty's goal.

"We must get on the path now ... we can breathe easier, literally, and figuratively," he added.

Climate change poses an existential threat, but the White House said responding to this threat offers an opportunity to support good-paying union jobs, protect public health, and advance justice.

"The United States is not waiting, the costs of delay are too great, and our nation is resolved to act now," the White House added.

The White House said the 50-52% target would be achieved via multiple pathways. The cuts would be achieved through weaning the country away from fossil fuel-based power generation, which remains the greatest source of CO2 emissions, by deploying carbon pollution-free generation from renewables, transmission, and energy storage as well as "leveraging the carbon pollution-free energy potential of power plants retrofitted with carbon capture and existing nuclear."

The US would also reach this target by limiting methane emissions from new, existing, and abandoned oil and natural gas wells, hydrofluorocarbons, and other short-lived climate pollutants, it said.

The 50-52% is predicated on congressional approval of Biden's American Jobs Plan, and his $14 billion federal spending request to boost investment in clean energy technologies and climate programs. It also builds on the GHG emissions reductions that state and local governments have already achieved through their own actions.

"Building on and benefiting from that foundation, America's 2030 target picks up the pace of emissions reductions in the United States, compared to historical levels, while supporting President Biden's existing goals to create a carbon pollution-free power sector by 2035 and net-zero emissions economy by no later than 2050," the White House said.

Whole of government

According to the White House, a National Climate Task Force, which Biden established when releasing his climate blueprint on 27 January, developed the target by using a whole-of-government approach, and relying on a detailed bottom-up analysis that reviewed technology availability, current costs, and future cost reductions, as well as the role of enabling infrastructure in every sector.

The White House said the task force would release a detailed national climate strategy analysis later this year.

Ahead of the Leaders Climate Summit, a World Meteorological Organization report on climate released 19 April showed 2020 is on a path to surpass the Paris treaty's goal of limiting temperature increase to 1.5 degrees Celsius when compared with pre-industrial levels.

The report's findings prompted UN Secretary General António Guterres to sound the alarm and to urge countries to act now to limit global emissions to 45% below 2005 levels by 2050.

At the Biden summit, Guterres called for a creation of a global coalition committed to net-zero emissions that would cover all countries, cities, regions, businesses, and financial institutions.

Countries should "stop financing and building coal-fired power plants" by 2030, he added.

New interim goal for Japan

Also participating virtually in the summit were the leaders of China, India, Japan and the Russian Federation, who, along with the US, make up the world's top five GHG emitting nations.

However, neither China nor India announced any change to their climate ambition, though China has promised to work with the US to help other countries decarbonize. India too has signed an agreement with the US to promote resilience and green infrastructure.

China is aiming for a peak in its carbon emissions in 2030 and to achieve net carbon neutrality before 2060, while India wants to install 450 GW of renewable power by 2030, a goal most analysts have said is ambitious as the country remains heavily reliant on coal-fired generation.

President Xi Jinping said China is strictly limiting coal-fired generation in its just released 14th Five-Year Plan and intends to phase it out completely in the next five-year plan.

Japan, in contrast, provided an update on its NDC with an interim goal of achieving 46% GHG cuts compared with 2013 levels by 2030, which Prime Minister Yoshihide Suga said would be "an ambition aligned with its net zero by 2050 goal."

Russian Federation President Vladimir Putin also did not discuss an updated net-zero goal other than its already announced target of reducing its GHG emissions by 70% compared with 1990 levels by 2030. Putin did point out though that it is imperative to tackle emissions of methane, which is far more potent GHG than CO2.

'Important signal'

As with any climate announcement, the new US target had its detractors and supporters at home.

The sustainable investor network represented by Ceres, along with a host of business and labor groups, as well as a number of environmental groups, had sought this target.

"The Biden administration NDC sends an important signal to the world. We can only meet our long-term climate goals if we begin taking ambitious action today," said Bob Perciasepe, president of the US-based Center for Climate and Energy Solutions, a nonprofit that seeks non-partisan climate solutions.

However, Perciasepe added that "the urgency of this moment" will require leadership and collaboration between the Biden administration and Congress to provide crucial support to state and local governments as well as the private sector in the coming decade.

To that end, US Senator Tom Carper, Democrat-Delaware, who chairs the US Senate Environment and Public Works Committee, said he is working on writing laws, including "a transportation infrastructure bill, that will drive down dangerous emissions, tackle the climate crisis head-on, and build a stronger future for us all."

In contrast, a US environmental nonprofit, the Center for Biological Diversity (CBD), said the goal "wasn't simply enough" to tackle the climate emergency and that Biden should immediately put an end to fossil fuel use.

"Solving the climate crisis requires applying both science and equity," Jean Su, CBD energy justice director, said in an emailed statement. "On both counts, the US -- the largest historic polluter and one of the wealthiest nations -- must do its fair share and cut domestic emissions by at least 70% by 2030."

Investment opportunity

While the announcement put an end to speculation about the goal Biden would announce, analysts at IHS Markit began analyzing this target in terms of investment opportunities.

A clear 2030 target that leverages the American Jobs Plan and the accompanying tax blueprint could be a roadmap for investors and asset managers who have been looking for "clear price signals on carbon" from the administration, IHS Markit Cleantech Executive Director Peter Gardett said in a 21 April note.

According to Gardett, the key number to monitor will be the emissions cuts that the Biden administration attributes to the cleantech and climate infrastructure aspects of the American Jobs Plan, which he said will give investors modeling an emissions-constrained operating environment two important pieces of information.

"The emissions reduction number would let investors derive a dollar-per-ton metric for avoided emissions that can be incorporated into future cost projections," Gardett wrote. "It also would indicate the anticipated size of the US carbon market that remains after the scale of the [American Jobs Plan]-linked reduction is factored into the total emissions cut goal."

What mix of projects and assets would benefit was unclear as yet, Gardett said, as the fate of the jobs and tax plans remain in the hands of the US Congress, and especially the US Senate, where Democrats command a razor-thin majority.

Geopolitical impact

Others who view US global climate policy through a geopolitical lens questioned the Biden administration's strategy for achieving these targeted cuts.

Among those questioning the Biden administration's global climate strategy was Anatol Lieven, a senior research fellow on Russia and Europe at the Quincy Institute of Responsible Statecraft who a year ago published a book on "Climate Change and the Nation State:The Case for Nationalism in a Warming World."

In a 21 April interview with IHS Markit, Lieven said US Secretary of State Anthony Blinken's climate speech a few days earlier was "not very helpful" because it was linking the American quest to lead the global climate change fight to a rivalry with China in the renewable sphere.

"I can't understand the messy political logic of the Biden administration using rivalry as a spur for domestic reform and innovation spending," Lieven told IHS Markit.

On the one hand, "we say that climate change is an existential threat, but it seems actually in terms of spending and intention we think that sand bags in the South China Sea are more important; rivalry with China to defend US global hegemony is more important; and even who controls coal fields in Eastern Ukraine is more important," Lieven said.

He said the US spends $800 billion a year on military expenditure, which is twice as much what the Biden administration has said it wants to spend on infrastructure and climate programs in the next four years.

The fact is, uncontrolled climate change will destroy the US as well as China and India, he said.

In contrast, Jennifer Turner, director of the China Environment Center at the Washington DC-based Wilson Center viewed the competition between China and the US as the one area where the two countries have indeed cooperated despite tensions over human rights, trade, and security issues.

"Even after saying China would not expand its Paris CO2 reduction commitments, President Xi did agree to attend the Biden administration's Leaders Summit on Climate Change," Turner said. "This is very encouraging, but not surprising, as climate has been one arena of cooperative competition between the two."

Turner said China remains the largest investor in clean energy technology, a fact Blinken also highlighted in his speech, but in the past year, its provinces have built new and unneeded coal-fired power plants to help stimulate jobs and the country's Belt and Road Initiative also remains focused on carbon-intensive projects.

However, Lieven was quick to note that India also remains coal-intensive, though not at the same pace as China.

Both Lieven and Turner agreed though that the Biden administration has to make up for the ground the US lost during the past four years of climate inaction.

Posted 22 April 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit

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