Obama Skirts Hostile Congress on China Climate Deal Goals

Nov. 12 (Bloomberg) — Facing a hostile Congress as a lame-duck president, Barack Obama will turn to his regulatory powers
to meet the climate goals he promised in a landmark deal with
China, bypassing already angry Republicans.

The Environmental Protection Agency will join with the U.S.
Energy, Interior and Agriculture departments to target carbon
pollution from power plants, methane from oil and natural gas
drillers, chemicals used in millions of appliances and tailpipe
emissions from trucks, railroads and even airplanes, business
and environmental lobbyists predicted.

For Obama, the regulatory road offers a chance to claim the
legacy on climate change he’s sought since his 2008 campaign.
For Republicans opposed to the plan, it’s one more example of an
out-of-control imperial presidency. While regulators can make
significant changes in policy, they’ll arrive just as the
president is set to leave office in 2016.

The new goals will be “pushing the limits of what can be
done under existing law,” said Bob Perciasepe, president of the
Center for Climate & Energy Solutions and a former EPA deputy
administrator, in a statement.

Still, they’re achievable “if Congress doesn’t get in the
way,” he said.

Under the climate agreement announced today, China said its
carbon dioxide emissions would peak by 2030, the first time that
nation has formally accepted such a cap. Obama promised the U.S.
will pare emissions by 26 to 28 percent below 2005 levels by
2025. The current goal is 17 percent by 2020.

U.S. Analysis

The target set in the deal is grounded in a U.S. government
analysis of what actions can be taken under existing law,
without congressional support, according to an administration
official who spoke on the condition of anonymity to discuss an
analysis not yet made public.

An aggressive U.S. target “will have pretty serious
implications across the United States economy,” said Elliot Diringer, a former environmental adviser to President Bill Clinton, in an interview before yesterday’s announcement. “It’s
going to be closely scrutinized by interest groups and many of
them may find things to worry about.”

The groups will have eager listeners among Republicans, who
won control of both houses of Congress in last week’s elections.
The party had already vowed to fight power plant rules proposed
by Obama’s EPA. Several condemned the latest pact as well.

“This unrealistic plan, that the president would dump on
his successor, would ensure higher utility rates and far fewer
jobs,” said Mitch McConnell, the Kentucky Republican expected
to be Senate majority leader in the next Congress.

For Obama, “it’s time for more listening, and less job-destroying red tape,” McConnell said in a statement.

Tough to Block

Blocking the president’s rules may not be so easy. The
White House proposed the power plant rules and has also enacted
tougher fuel economy standards for cars using existing laws,
including the Clean Air Act. While Congress could pass
legislation to block regulations, Obama is likely to veto such a
move.

Congress will also increase scrutiny of the EPA with
oversight hearings and may seek to cut its budget, said Scott
Segal, a lobbyist for energy companies at Bracewell & Giuliani
LLP in Washington. A budget fight could set up another
government shutdown battle like the 2013 clash over Obamacare.

“Don’t expect the president to move to the right on
energy,” Benjamin Salisbury, a senior energy policy analyst at
FBR Capital Markets Corp. in Arlington, Virginia, said in a
research note today. “The extremely aggressive targets suggest
that, contrary to some post-election hopes, the president is not
poised to soften his environmental regulation approach.”

Climate Funding

Republicans have more power to derail another initiative
considered essential to international talks — funding for
developing countries to deal with climate change.

As a down payment, climate negotiators have sought a U.S.
pledge of about $2 billion this year, said Jake Schmidt,
director of international policy at the Natural Resources
Defense Council, an environmental group that has advised the
administration on climate policy. At least some of that money
would require congressional approval.

It’s not the first time Obama’s tried to take the debate
into his own hands.

In late 2009, after his attempt at a carbon-cutting cap-and-trade bill failed in the Senate, Obama tried to break a
deadlock at a United Nations climate conference in Copenhagen.
His proposal on how to hold China accountable for its promised
emissions cuts cleared the path for a deal in which nations
agreed to voluntary emissions cuts.

Uncertain Future

How much the latest agreement will achieve is unclear,
given the uncertainties over how Obama’s policies will play out
in the years after he leaves office.

The utility rules, sure to be challenged in court, would
cut emissions from the power sector by almost a third below 2005
levels by 2030, according to a memo distributed by the White
House yesterday.

Just reaching the U.S.’s previous, lower goal for 2020
emissions probably requires “ambitious” action, according to a
report last month by the Rhodium Group, a New York-based
consultancy that studies climate issues. The report cited limits
on methane pollution and a phase-out of hydroflurocarbons, a
potent greenhouse-gas used in refrigerants.

The White House memo contemplates both steps.

Fuel Economy

New fuel efficiency standards for heavy vehicles like
tractor-trailers are due by March 2016, the memo said. The U.S.
and China also will pour money into research on clean energy and
carbon capture, technology that could reduce emissions from
fossil fuels like oil and coal.

The administration could also use the Clean Air Act to put
limits on refineries, cement and steelmakers and other carbon
sources, said Raymond Kopp, a senior fellow at Resources for the
Future, a policy research group. If the collection of measures
doesn’t achieve enough cuts, it could be up to a future
president and Congress to seek more far-reaching legislation,
such as a tax on carbon or more support for renewable energy.

Obama’s ultimate goal is an 80 percent reduction in
greenhouse pollution by 2050, the target scientists have said is
necessary to avoid dangerous changes to the Earth’s atmosphere.

For the U.S. to reach the proposed cuts, the EPA may have
to tighten its proposal on power plants, Michael Levi, a fellow
at the Council on Foreign Relations, wrote in a blog post.
Utilities have been pushing in the other direction, asking EPA
to ease off on timelines and warning that it threatens
reliability on the power grid.

“The administration appears to be putting forward the most
it thinks it can do on all fronts,” Levi wrote. “Achieving
these goals will almost certainly require changes to the
implementation of the EPA power plant regulations.”

To contact the reporters on this story:
Alex Nussbaum in New York at
anussbaum1@bloomberg.net;
Mark Drajem in Washington at
mdrajem@bloomberg.net

To contact the editors responsible for this story:
Susan Warren at
susanwarren@bloomberg.net
Reg Gale, Will Wade

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