When U.S. President Barack Obama and Chinese President Xi Jinping unveiled plans to curb emissions of greenhouse gases today, many were surprised at the depth of commitment. They shouldn’t have been. The two leaders basically formalized what’s already been happening in their countries.
According to the White House, America would double the average pace of its carbon-dioxide reductions after 2020, aiming at an overall reduction of greenhouse-gas emissions of between 26% and 28% by 2025, compared with 2005 levels. China would stop increasing its greenhouse gas levels by 2030—an ambitious goal for an economy that’s growing 7% annually.
Can both nations achieve these goals? That’s up for grabs given the long disappointing history of international climate agreements. China has an ambitious program to employ renewables. Despite all the publicity about the nation building one new coal plant a week, this year it will manufacture and employ more wind and solar power than any other country on earth. But countries can backslide on their promises, especially in a country like China where local governments can be at odds with national goals.
The real significance of President’s Xi’s announcement is that is serves as a unifying theme for the country’s energy sector and reinforces that idea that renewables are the future. Says Ethan Zindler, an analyst with Bloomberg New Energy Finance: “In China when policy announcements get made at the very top, they get implemented down the line.”
The impact on America’s clean-tech market is likely to be much less pronounced. That’s because Obama’s target is basically a recap of his administration’s existing regulations for vehicle-emissions standards and power plants. It’s good that he addressed his climate goals on an international stage and confirmed that the U.S. and the Chinese see eye to eye on this issue. The more pressing worry is that the Republican rout in the mid-term elections could threaten the administration’s ability to achieve the climate goals that Obama agreed to in his deal with China.
Mitch McConnell, who is likely to be the next Senate majority leader, hails from Kentucky, which gets almost all of its electricity from coal and is home to coal mining companies. Some in the environmental community think that McConnell might try to block the EPA, which is in the process of regulating CO2 emissions from coal plants, by attaching amendments to budget bills that could cut funding for the agency. President Obama would then be faced with the stark choice of either vetoing the bill and thus shutting down the government or letting the EPA be gutted.
The good news for the planet is that no matter what the politicians do in Washington, the U.S. power sector is already going through a dramatic change. The average age of coal plants in the U.S. is 40 years, and many are nearing the end of their natural lives. On top of that, cheap natural gas is making coal less attractive. Although it’s great that some politicians are trying to push progress on climate change—and it is important to implement some political solutions—the market may end up doing much of the job itself.