The US returns to the Paris Agreement, a change of course in world energy policy

Climate scientists around the world are looking forward to the Democrats’ victory in the United States. In these four years, President Donald Trump has questioned whether climate change was real. Their denialism overthrew all the ‘Obama-era’ regulations aimed at changing the fossil fuel-based production model.

However, Joe Biden’s energy and climate policy could mean a 180-degree turnaround. The inclination of that change will depend largely on who has a majority in the Senate. But until January it will not be known.

Meanwhile, the president-elect has already announced as a priority that the US return to the Paris Agreement and that it will invest some 1.7 trillion dollars (1.684 trillion euros) in a massive program of green jobs to build renewable energy infrastructure during these next four years. Democrats want to end fossil fuel subsidies and ban new oil and gas permits on public lands.

“For the oil industry and the international market, what has really revolutionized prices (this Monday) is the Pfizer and BioNTech vaccine,” sources from an investment fund specialized in the raw materials market explain to Invertia, “but in the medium term, if the ‘Blue Wave’ occurs in the Senate, that is, a Democratic majority, the energy transition in the US could be accelerated.”

This would have global consequences. “If they pass more restrictions to control _CO2 emissions, it would hurt the U.S. oil and gas industry, but it would be very positive for the commodity market, and it would benefit oil companies in other countries because it would raise the price of crude.”

Therefore, it is important to know what the US energy policy is, “its Oil & Gas industry is the price adjustment valve for the international market”, conclude the same sources.

_CO2 emissions

For the former vice president and now president-elect, global warming is an era-defining challenge and combating it is an economic opportunity. By 2050, at the latest, it would bring the country to net zero greenhouse gas emissions under the plan.

Biden’s proposal is very ambitious. Larger than the plans he put forward during the Democratic primary and incorporates political ideas, such as investing in disadvantaged communities, that appeal to the party’s liberal wing and climate voters who were skeptical of it.

Climate Action Tracker (CAT), an environmental analysis group, says that, if met, Biden’s plan would reduce greenhouse gas emissions by about 75 gigatons of carbon dioxide by 2050, decreasing global warming by 0.1°C by the end of the century.

“Joe Biden’s victory is a radical turn to Trump’s climate policies,” José Luis García Ortega, Head of Energy at Greenpeace, told Invertia, “his decisions went against all logic, not only environmental, but also economic and social.”

Shale oil and gas

The only aspect of energy policy on which both American leaders agreed was to protect the fracking industry. “However, if it assumes its climate responsibility, one of the first decisions should be to withdraw all kinds of aid to shale oil and gas companies,” says García Ortega.

An industry that has suffered a lot with the pandemic and that has not yet recovered because oil prices remain well below the levels that allow it to be profitable.

Over the past decade, the shale boom has made the U.S. the world’s largest oil producer and an energy export powerhouse, which has allowed it to boast of “energy dominance” until now.

There are about 9,000 independent oil and natural gas producers in the United States. These companies operate in 33 states and employ an average of only 12 people. About 91% of U.S. oil wells are owned by independent producers and produce 83% of the country’s crude and 90% of its natural gas.

But the coronavirus has precipitated many of them to ruin and bankruptcy. Biden’s arrival could well be the tip.

Influence by country

This is a historic turning point for global energy policy. The United States, now more in line with the Paris commitments, thus joins great powers that are also great polluters.

On the one hand, the European Union, which wants to lead this change in energy policies. The Green Deal is presented to make Europe the first continent with zero greenhouse gas emissions.

On the other, the powerful Southeast Asia with China at the head, since a few weeks ago announced that it would be carbon neutral in 2060. It is followed by Japan and South Korea, and with them two-thirds of the world economy and more than 50% of global greenhouse gas emissions.

“But this is not enough, even if all these countries meet climate targets, this century will end with an average rise of the planet of 3ºC,” continues the energy expert.

And while Europe and Asia join that fight, there are other big countries that do not finish taking the step.

“Nobody is waiting for Bolsonaro’s Brazil, he is another denier like Donald Trump. It also remains to be seen how Mexico, whose president is a fossil nationalist who is hindering the development of renewables, will react.”

There’s more. “Countries like Indonesia, with a destructive forest policy, or South Africa, another key country, remain stagnant in the consumption of fossils such as coal.” In the case of Australia or India, “they are very contradictory, both defend renewables but on the other, they are large producers and consumers of coal.”

In Australia, for example, there are states that have exceeded 100% of their solar capacity, “in fact, it is the country with the most self-consumption in the world” but a power in coal export”.

And watch out for Vietnam. “Their economic growth is meteoric, but it is based on the consumption of coal, financed from China, because they are the factory of the world,” adds the head of Greenpeace.

Finally, we must also count on the position of Russia, the fourth largest emitter of greenhouse gases in the world. Three days ago its president, Vladimir Putin, signed a decree to try to reduce emissions by 2030 up to 30% below 1990 emission levels.

“It is a planetary problem, which we have to fix together, the responsibility is global,” concludes García Ortega.

10 climate measures

During the race for the US presidency, Democrats presented at least 10 executive actions to carry out immediately:
1. Enforce aggressive methane pollution limits for new oil and gas operations.
2. Promote, with 500,000 million dollars each year, clean energy vehicles and zero emissions.
3. Ensure that all public facilities are more efficient.
4. Reduce emissions in transport. To this end, a Clean Air Act and new, more rigorous standards will be developed to electrify vehicles.
5. Double the liquid fuels of the future, for example advanced biofuels, which make agriculture a key part of the solution to climate change. This sector can create jobs and new solutions to reduce emissions from aircraft, ocean vessels and more.
6. Aggressive new efficiency standards in buildings and appliances.
7. Commitment that all federal investment in infrastructure includes emissions reductions and require that any federal permitting decisions consider the effects of greenhouse gas emissions and climate change.
8. Require public companies to disclose climate risks and greenhouse gas emissions in their operations and supply chains.
9. Protect biodiversity and harness natural climate solutions by conserving 30% of America’s land and waters by 2030.
10. Protect America’s natural treasures. Permanently protect the Arctic National Wildlife Refuge and other areas affected by President Trump’s attack on federal lands and waters. Establish national parks and monuments that reflect the natural heritage of the United States. Ban new oil and gas permits on public lands and waters. Modify royalties to account for climate costs. Establish specific programs to improve reforestation. Finally, develop renewable energies with the aim of doubling offshore wind energy by 2030.

Source: The Spanish