WASHINGTON, Nov. 24, 2015 /PRNewswire/ -- A substantial gap exists between the U.S. climate pledge to the United Nations – or U.S. Intended Nationally Determined Contribution (INDC) – and President Obama's 2025 target of a 26 to 28 percent reduction in greenhouse gases (GHGs), compared to 2005. Consequently, future greenhouse regulation of other sectors, including industry (i.e., cement, chemicals, paper, refining, and steel) and agriculture/land use, is likely – particularly with a Democratic presidential victory next year. Taking unilateral U.S. domestic action, without an effective global approach, would certainly have a negative impact on the competitiveness of U.S. manufacturing, according to a new report by the American Council for Capital Formation: Success Of U.S. Climate Pledge Depends On Future GHG Regulation Of U.S. Industry, Other Sectors.
"While the White House claims that the U.S. is on track to meet the President's reduction targets, the numbers behind the policies listed in the U.S. climate pledge tell a much different story," said ACCF Executive Vice President George David Banks. "The only way the U.S. can meet its pledged international targets is to saddle U.S. manufacturing with stringent GHG reduction targets that will likely harm jobs and economic growth."
The ACCF report highlights a series of questions and answers related to the U.S. INDC as well as independent analyses on the gap that were conducted by a number of politically diverse groups including environmental organizations and the U.S. Chamber of Commerce.
While the U.S. INDC fails to provide specific details on all IPCC sectors (e.g., cement and steel), it does include several policies and measures that focus on reducing emission levels in power generation, transportation, and from other smaller sources. Those policies identified in the INDC produce likely emissions reductions of 11 to 17 percent. Thus, there is a notable gap of 9 to 15 percent, considering the 26-percent INDC target.
The ACCF cites a World Resources Institute (WRI) which determined that "[A]ctions taken to implement the [Climate Action Plan] are not enough to get the United States to its 2020 or 2025 climate goals. To meet these goals, the country will need to strengthen and expand some of the actions already taken or proposed, and take action on additional sectors not yet addressed."
The aggressive regulation of industry alone probably could not fill the U.S. INDC gap. The United States would also likely need to regulate other sectors, including land use and agriculture, to meet President Obama's target.
"Environmental groups and industrial interest agree that this gap will need to be filled in order to meet the President's target," Banks said. "Adding these new requirements to an already increasing list of regulations would slow the growth of industry and decrease the sector's global competitiveness, which would result in slower GDP and job growth. Because this pledge will be inherited in the next administration and beyond, it should be a centerpiece economic policy discussion in the 2016 election."
Banks surmises that the Obama administration is likely to spend its remaining time after the Paris international climate meetings working toward a global approach for each major industrial sector to help mitigate political criticism and the foreseeable negative impact on U.S. industry.
"Creating a global approach that covers a critical mass of emissions in each industrial sector with comparable monitoring, verification, and enforcement across major economies will be incredibly difficult – if not politically impossible," Banks added. "In particular, environmental governance in developing countries is simply not at a level at this time that would give U.S. industry and labor unions any real confidence."
Founded in 1973, The American Council for Capital Formation (www.accf.org) is a nonprofit, nonpartisan economic policy organization dedicated to the advocacy of pro-growth tax, energy, environmental, trade and economic policies that encourage saving and investment.
SOURCE American Council for Capital Formation