In what may be a defining legacy of the Obama administration, the United States Environmental Protection Agency has announced far reaching regulations to set a national standard to reduce carbon emissions from existing power plants.
“In what is being called the ‘Super Bowl of climate change’, US President Barack Obama has signalled it’s Game On!” says Carbon Market Institute chief executive officer Peter Castellas.
The release of the US EPA’s Clean Power Plan to reduce carbon emissions from the power sector by 30% nationwide below 2005 levels by 2030 signals a significant step forward in addressing climate change not only in the US, but internationally.
“Importantly the new regulations will offer US states the flexibility to adopt measures to comply such as joining or creating new cap-and-trade programs, building on the 10 states that currently employ market-based mechanisms,” says Castellas. “States can also deploy more renewable energy or ramp up energy efficiency technologies.”
“With bold action the US is taking the lead in the economic transition to a low carbon economy. The 600 US coal-fired power plants will face the greatest impact, but the regulations will spur innovation and clean energy solutions, creating jobs and investment,” Castellas says. “As the US President said this week: ‘A low carbon clean energy economy can be an engine of growth for decades to come.’”
“In Australia we are in the midst of political debate around the repeal of the carbon tax, the review of the Renewable Energy Target, the introduction of the Emissions Reduction Fund, and consultations are underway on the Safeguard Mechanism,” Castellas says.
“Although the major parties have differing views about how to achieve the policy objective of curbing emissions growth in the economy, it should not be forgotten that we currently have a bipartisan target – 5% reduction on 2000 levels by 2020. It’s not often we can use the ‘B’ word in Australian politics.”
The Australian Government has committed to review its international targets in 2015. This review will consider Australia’s international emissions reduction targets and settings in the context of negotiations in Paris on a new global climate change agreement to apply to all countries from 2020. It will focus on the extent to which other nations, including the major economies and Australia’s major trading partners, are taking real and comparable actions to reduce emissions.
“The economic, environmental and social consequences of the approach our political and business leaders take in constructive dialogue over the next year to position Australia in international negotiations to address climate change will resonate for decades to come,” Castellas says.
“If the US Clean Power Plan is the Super Bowl of climate change, then the Paris 2015 summit is the World Cup.”
“So as our major trading partners are positioning their economies for a low carbon future and making commitments to get a global deal negotiated in Paris in 2015, now is the time for a mature, national dialogue about what Australia’s post-2020 targets should be,” Castellas says.
The Carbon Market Institute is an independent membership-based not-for-profit organisation. Our aim is to assist Australian businesses in meeting the challenges and opportunities associated with market-based approaches to emissions reduction and the transition to a low carbon economy.
As the peak body for carbon market participants, CMI has established an important role in the evolution of the carbon market in Australia. The Institute facilitates the networks, knowledge exchange and commercial interaction amongst key government policy makers and regulators, industry, financiers and investors, professional services companies and technology solution providers.
CMI membership represents a broad range of professionals, organisations and industry. Our members include leading professional service providers, NGERs reporting entities, secondary market participants, offset providers, academia and international organisations. Individuals within the CMI membership base are some of the most respected Australian carbon market innovators and leaders.