"Obama’s First Term: Assessing Progress On Top Energy And Climate Priorities"
by Daniel J. Weiss
Barack Obama’s 2008 presidential campaign was built on “hope and change.” Millions of Americans went to the polls hoping that the federal government would change its approach to many of the nation’s challenges after eight years of retreat, neglect, and inertia under President George W. Bush and Vice President Dick Cheney. This was particularly true for concerns about providing greater public health protection from climate change and air pollution, while also increasing security of our energy supplies. The Bush administration gave scant attention to these challenges, and instead pursued policies designed by Big Oil and coal companies for their economic benefit—policies that ignored growing threats from climate change.
In December 2008, during President-elect Obama’s transition, the Center for American Progress proposed the “Top 10 Energy and Environment Priorities for the Obama Administration and 111th Congress.” This progressive agenda was designed to protect public health from carbon and mercury air pollution, reduce oil consumption, and simultaneously boost the economic recovery. Four years later the administration accomplished nearly all of these goals despite the worst economy in nearly 80 years and strong opposition from Big Oil, coal, and other energy interests. Unfortunately, the priorities that required congressional action did not occur, though some progress was still made in each of these areas.
Here are brief descriptions of these top 10 energy and environment priorities outlined by CAP in 2008, and their status at the end of President Obama’s first term. Shortly, we will propose the top 10 energy and environment priorities for President Obama’s second term and the 113th Congress.
Let’s look at each of the above priorities in greater detail.
Wish they all could be California cars
On his seventh day in office, President Obama launched the development of the first improved fuel economy standards in 20 years. His administration, supported by 13 major auto companies, the United Auto Workers, the state of California, and environmentalists, promulgated rules to double automobile fuel economy by 2025 while slashing carbon pollution by 6 billion tons. The modern standards will save drivers $8,200 in lower gasoline purchases over the life of their 2025 vehicle, and will reduce oil consumption by 2.2 million barrels per day.
The White House also adopted the first ever efficiency and carbon pollution standards for commercial trucks, vans, and other heavy vehicles. According to the White House, the new standards will “save over 500 million barrels of oil and save vehicle owners and operators an estimated $50 billion in fuel costs.”
Thanks to these standards, the average fuel economy of cars and light duty trucks (SUVs, minivans) was 23.9 miles per gallon in 2012, the highest ever, according to a University of Michigan analysis.
Take first step to limit carbon pollution under the Clean Air Act
Global warming is a real and present danger
In addition to setting the first limits on carbon pollution from motor vehicles, the Obama administration also made the “endangerment finding” for greenhouse gas pollutants under the Clean Air Act, as recommended by Environmental Protection Agency scientists. President Bush refused to make this finding during his administration despite the strong recommendation by then-EPA Administrator Stephen Johnson. The endangerment finding is a critical step in the process of establishing limits on carbon pollution from power plants and other large sources.
Invest in clean energy as part of economic recovery plan
Green stimulus and recovery
The American Recovery and Reinvestment Act, passed in February 2009, included $90 billion in grants, tax incentives, and loan guarantees to increase investments in clean energy. This was the largest clean-energy program in history. It included assistance for wind and solar electricity generation, advanced batteries, public transportation, advanced energy research, and many other clean energy projects.
Case in point: The Recovery Act, which financed weatherization to make nearly 900,000 homes of low-income families more energy efficient, saving an annual average of $400 per household in lower energy costs. The act also “supported 30 new advanced battery and electric vehicle component plants opening across the country so that, by 2015, the U.S. will be able to produce enough batteries and components to support one million hybrid and electric vehicles.”
Slash mercury pollution from power plants
The Clean Air Act of 1990 required major industrial polluters to severely limit their emission of toxic and hazardous air pollutants. The George W. Bush administration’s mercury reduction standard for power plants—the largest domestic emitter— was struck down by the federal courts because it was too weak. In December 2011 the Obama administration finalized a mercury and toxic pollution standard for power plants that will slash this neurotoxin by 90 percent. Additionally, the standard will save at least an estimated 11,000 lives and prevent 130,000 asthma attacks annually. The mercury standard for power plants will also generate up to $90 billion in net economic benefits from saved lives, reduced health care costs, and fewer missed work days.
In addition, on December 20, 2012, the EPA finalized mercury and toxic pollution-reduction standards for industrial boilers, incinerators, and cement kilns. The new standards for the first two sources will:
- “Avoid up to 8,100 premature deaths, 5,100 heart attacks, and 52,000 asthma attacks [annually]”
- Enable Americans to “receive between $13 and $29 in health benefits for every dollar spent to meet the final standards”
The new pollution-reduction standard for cement kilns will cut mercury pollution by 93 percent and other toxic pollutants by more than 80 percent. Although the cement kiln safeguards provide new public protections, the American Lung Association determined that “industry pressure resulted in weaker standards and delayed implementation.”
Reduce carbon pollution with cap and trade program
Curb the enthusiasm for greenhouse gases
There was great optimism at the start of the Obama administration that the 111th Congress would finally pass comprehensive climate change and clean-energy legislation. In June 2009 the House fulfilled its responsibility by passing Reps. Henry Waxman (D-CA) and Ed Markey’s (D-MA) American Clean Energy and Security Act with bipartisan support. It would have cut carbon pollution by at least 17 percent below 2005 levels by 2020, while reducing oil use and creating hundreds of thousands of clean energy jobs. Unfortunately, the Senate was unable to pass the similar American Power Act, drafted by Sens. John Kerry (D-MA) and Joe Lieberman (I-CT). This failure occurred because the worst unemployment in 30 years inhibited enough senators that it was impossible to muster a super-majority of 60 votes needed to pass the bill. The jobless rate in 2009 and 2010 was 50 percent higher compared to the time periods when most major environmental laws passed between 1970 and 2009. In addition, Senate Minority Leader Mitch McConnell (R-KY) insisted that his caucus oppose all legislation supported by Democrats. Finally, Big Oil and coal companies, along with other special interests, spent more than $500 million in lobbying and advertising to ensure enough opposition to defeat the bill.
Despite this disappointment, the Energy Information Administration recently concluded that the United States has reduced its carbon pollution by 9 percent below 2005 levels— halfway to the 2020 goal of the 17 percent reduction below 2005 levels set in these bills. The reduction in carbon pollution is due to emission reductions from motor vehicles (see “Cleaner cars” section) and lower electricity demand. The Energy Information Administration projects, however, that carbon pollution from the energy sector will begin to rise in 2017 without additional action.
In 2012 the Obama administration proposed a carbon pollution standard for new power plants that would allow only half the emissions compared to an uncontrolled plant. That standard must be finalized to slow the growth of emissions. The administration must also adopt pollution limits on existing power plants, which emit one-third of all climate pollution in the United States.
Establish national renewable electricity program
The answer is blowing in the wind (and shining in the sun)
Thirty states and the District of Columbia have renewable (or alternative) electricity (or portfolio) standards that require utilities to generate a certain portion of their electricity from wind, solar, or other renewable energy sources. A renewable electricity standard was included in both the American Clean Energy and Security Act and the American Power Act in the 111th Congress.
Since neither bill became law, in 2011 President Obama proposed a clean-energy standard that would require utilities to generate 80 percent of their electricity from no- or low-carbon pollution sources by 2035. In 2012 Senate Energy Committee Chair Jeff Bingaman (D-NM) introduced such a bill, but it was never voted on.
Despite these setbacks, however, the combination of renewable energy investments in the Recovery Act, concerted administration efforts to site solar projects on appropriate public lands, existing tax incentives, and state standards led to the doubling of renewable electricity generation under President Obama. Nationwide wind electricity doubled to 50 gigawatts, enough to power every home in Alabama, Colorado, Connecticut, Nevada, Virginia, and Wisconsin.
Bridge loans to auto companies to prevent bankruptcy and produce more fuel-efficient cars
Bridge loans to the 21st century
When President Obama took office both General Motors and Chrysler teetered on the brink of bankruptcy. Despite some public and congressional opposition, the president provided loans to the automakers to prevent their collapse and provide them with time to restructure.
One of the stipulations of the auto bailout was that the companies had to develop aggressive plans to return to viability by investing in energy-efficient cars. Both companies agreed to move toward a more fuel-efficient fleet. In a March 2009 press statement President Barack Obama said the landmark agreement would create “a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us towards an energy-independent future.”
In addition to the successful bridge loans, other major Obama administration policies helped the auto industry and the nation by creating jobs, reducing oil use, saving families money, and cutting pollution. These policies included modern fuel economy standards, investments in research of alternatively fueled vehicles, retooling facilities to manufacture cleaner cars, and incentives for consumers to buy more fuel-efficient vehicles.
In addition to returning General Motors and Chrysler to profitability, GM announced on January 4, 2013, that it is the first automaker to sell 1 million cars in one year that get 30 miles per gallon.
Establish federal energy-efficiency resources standard
Pick the low-hanging energy fruit
Policies encouraging energy efficiency enjoyed bipartisan support over the past four years, and a number of landmark pieces of efficiency legislation were advanced in both houses of Congress only to languish along with the stalled climate legislation. An Energy Efficiency Resource Standard, which requires utilities to reduce energy use, was included in the American Clean Energy and Security Act. The Senate’s American Clean Energy Leadership Act had standards for energy efficiency, including strong new building codes and significant investments in industry, utilities, homes, and offices. Likewise the bipartisan Home Star, Rural Star, and Building Star bills created incentives for efficiency upgrades. The first two bills (Home Star and Rural Star) passed the House in the 111th Congress but were not voted on in the Senate. At the conclusion of the just completed 112th Congress, a modest energy-efficiency bill became law. That bill, the American Energy Manufacturing Technical Corrections Act, will modernize some efficiency standards for appliances, and study efficiency strategies employed by businesses and the federal government.
Despite congressional inaction on nearly all energy-efficiency legislation, the Obama administration provided leadership through other avenues. The American Recovery and Reinvestment Act of 2009, for example, included a historic investment of $14.5 billion in energy efficiency measures alone. President Obama repeatedly used his executive authority to promote energy efficiency. The Better Buildings Initiative made a combined federal-private commitment of $4 billion for efficiency upgrades on federal buildings. Executive Order 13514 complemented these efforts, requiring that all new federal buildings achieve “net zero” energy usage by 2030. And new federal building construction must meet guiding principles for sustainability. In the near term, 15 percent of the existing federal building stock must meet these principles by 2015.
Adopt reforms to ease rehabilitation and siting of transmission lines
Green the wires
The comprehensive House and Senate bills that failed to pass in the 111th Congress included provisions to ease the siting and construction of electricity transmission lines. Such reforms are essential to ease the transmission of wind or solar generated electricity from rural areas where it’s generated to urban areas where it is consumed.
Despite this failure, administration policies in the first term helped modernize the power grid and made electricity transmission more efficient. The Recovery Act, passed in February 2009, has invested $4 billion in efforts to modernize the electricity grid. The Department of Energy reports that customers are “experiencing fewer outages, faster power restoration when outages do occur, more efficient operations, and cost savings” due to these investments.
The Energy Information Administration reports that 36 million electricity customers had “smart meters” by August 2012. The agency says that these meters “support demand response and distributed generation, can improve reliability, and also provide information that consumers can use to save money by managing their use of electricity.”
The president also created an Interagency Rapid Response Team for Transmission, which “aims to improve the overall quality and timeliness of electric transmission infrastructure permitting, review, and consultation by the Federal government on both Federal and non‐Federal lands.”
In 2011 the Federal Energy Regulatory Commission used its existing authority to encourage the use of power lines that will carry renewable energy. Richard Caperton, Director of Clean Energy Investment at CAP, concluded:
[The] FERC’s new rule does two big things that will lead to new transmission lines: It strengthens regional planning processes and clarifies rules on who will pay for new lines… Broad cost allocation can make it easier to build important new lines… FERC’s rule instructs planners to consider certain goals, which will change which lines are prioritized. Ultimately, Order 1000 will give more priority to lines that serve renewable energy and will make those lines more affordable.
Invest in clean energy research, development, and deployment
Rise of the new machines
The first Obama administration invested $90 billion in clean-energy projects—far more than any previous administration. This investment included support for research, development, and deployment for new and emerging technologies.
In addition to previously noted programs, the investment in clean-energy projects included $400 million for the Advanced Research Project Agency-Energy, or ARPA-E, for “high-risk, high-reward efforts to develop transformational energy technologies…[including] 60 cutting-edge research projects in 25 states.” Nearly $17 billion was spent on projects under the Department of Energy’s Energy Efficiency and Renewable Energy office. A special program (Section 1603) was created to assist companies with solar projects even if the companies could not use existing tax credits. The Advanced Energy Project Credit program (48c) helped industrial facilities become more energy efficient or employ renewable energy.
This tally of the Obama administration’s first-term accomplishments is quite impressive despite congressional failure to pass essential legislation to reduce carbon pollution and establish a renewable electricity standard. Nonetheless, the administration successfully adopted policies to protect public health from air pollution, lower oil consumption, and create jobs. The administration must continue this progress in its second term by building on these successes.
Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy at the Center for American Progress.
Thanks to Richard Caperton, Director of Clean Energy Finance; Bracken Hendricks, Senior Fellow; and Jackie Weidman, Special Assistant for the Energy Team at the Center for American Progress