What Does the Trump Victory Mean for Climate Change Policy?

 

Those of you who have read my previous essay at this blog, “This is Not a Time for Political Neutrality” (October 9, 2016), know that my greatest concerns about a Trump presidency (then a possibility, now a certainty), were not limited to environmental policy, but rather were “about what a Trump presidency would mean for my country and for the world in realms ranging from economic progress to national security to personal liberty,” based on his “own words in a campaign in which he substituted impulse and pandering for thoughtful politics” … and “built his populist campaign on false allegations about others, personal insults of anyone who disagrees with him, and displays of breathtaking xenophobia, veiled racism, and unapologetic sexism.”

That’s a broad indictment, to be sure, but whatever real expertise I may have is actually limited to environmental, resource, and energy economics and policy, and so that has and will continue to be the real focus of this blog, “An Economic View of the Environment.”  With that in mind, I return today from last month’s brief immersion in partisan politics to discuss climate change policy.

Yesterday, an editor at The New York Times asked me to write a 500-word essay giving my view of what the Trump victory will mean for climate policy.  This morning, my very brief essay was published under the headline, “Goodbye to the Climate.”  Given the brevity of the piece, it does not touch on many issues and subtleties (I come back to that at the end of today’s blog post), but rather than take the time to expand it, I want to get this to you quickly, and so I am simply reproducing it as it first appeared in the Times (along with an interesting group of other essays, under the overall heading, “What Happened on Election Day:  How the election and Donald Trump’s victory looks to Opinion writers.”

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The New York Times

Goodbye to the Climate

By Robert N. Stavins

Donald J. Trump once tweeted that “the concept of global warming was created by and for the Chinese in order to make U.S. manufacturing noncompetitive.” Twitter messages may not be clear signs of likely public policies, but Mr. Trump followed up during the campaign with his “America First Energy Plan,” which would rescind all of President Obama’s actions on climate change.

The plan includes canceling United States participation in the Paris climate agreement and stopping all American funding of United Nations climate change programs. It also includes abandoning the Clean Power Plan, a mainstay of the Obama administration’s approach to achieving its emissions reduction target for carbon dioxide under the Paris agreement.

What should we make of such campaign promises? Taking Mr. Trump at his word, he will surely seek to pull the country out of the Paris pact. But because the agreement has already come into force, under the rules, any party must wait three years before requesting to withdraw, followed by a one-year notice period.

Those rules would seem to be mere technicalities. The incoming Trump administration simply can disregard America’s pledge to reduce carbon dioxide emissions by 26 to 28 percent below the 2005 level by 2025. That is bad enough. But the big worry is what other key countries, including the world’s largest emitter, China, as well as India and Brazil, will do if the United States reneges on its pledge. The result could be that the Paris agreement unravels, taking it from the 97 percent of global emissions currently covered by the pact to little more than the European Union’s 10 percent share.

In addition, Mr. Trump’s Environmental Protection Agency probably will stop work on regulations of methane emissions (a very potent greenhouse gas) from existing oil and gas operations. Undoing complex existing regulations, such as the Clean Power Plan, will be more difficult, but a reconstituted Supreme Court will probably help President Trump when that plan inevitably comes before the court. Also, the new president will most likely ask that the Keystone XL pipeline permit application be renewed — and facilitate other oil and gas pipelines around the country.

On the campaign trail, Mr. Trump promised to “bring back” the coal industry by cutting environmental regulations. That may not be so easy. The decline of that industry and related employment has been caused by technological changes in mining, and competition from low-priced natural gas for electricity generation, not by environmental regulations. At the same time, Mr. Trump has pledged to promote fracking for oil and gas, but that would make natural gas even more economically attractive, and accelerate the elimination of coal-sector jobs.

If he lives up to his campaign rhetoric, Mr. Trump may indeed be able to reverse course on climate change policy, increasing the threat to our planet, and in the process destroy much of the Obama legacy in this important realm. This will make the states even more important players on this critical issue.

Robert N. Stavins is a professor at Harvard, where he directs the Harvard Project on Climate Agreements.

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Given the brevity of the piece, it is not intended to be comprehensive of the many implications for climate change policy of the Trump victory (nor the implications of the Republicans continuing to hold majorities in both houses of Congress).

And I did not get into the many subtleties of the issues I identified.  At a bare minimum, these would include:

  • the possibility of the new administration trying to bypass the four-year delay involved in dropping out of the Paris climate agreement by taking the one-year route of dropping out of the overall United Nations Framework Convention on Climate Change (UNFCCC) – signed by President George H.W. Bush and ratified by the U.S. Senate in 1992;
  • federal “climate change policies” that have been bipartisan and are therefore much less likely to be repealed, such the latest CAFE and appliance efficiency standards, and the recently extended wind and solar tax credits; and
  • the myriad of sub-national climate change policies, ranging from AB-32 in California to the Regional Greenhouse Gas Initiative in the northeast (It’s not a coincidence that there’s a high – although not perfect – correlation between the states Secretary Clinton won in the election and the location of the most ambitious climate change policies).

On another occasion, after I’ve had an opportunity to reflect more calmly and carefully on the implications of the forthcoming Trump presidency for environmental, natural resource, and energy policy, I will return to this topic.  But for now, I have to prepare for my trip in a few days to Marrakech, Morocco, for the annual UNFCCC negotiations.  Given the election results, my meetings there may be quite strange, if not surreal. I hope to write about that in my next essay at this blog.

Misleading Talk about Decoupling CO2 Emissions and Economic Growth

You can call it my pet peeve or even my obsession, but whenever I read about the claimed “decoupling” of CO2 emissions and economic growth, I get annoyed.  Webster’s Dictionary defines decoupling as “eliminating the interrelationship” between two processes.  But the interrelationship between CO2 emissions and economic growth has certainly not been eliminated.

Decoupling is the wrong word and metaphor to describe what has been happening.  When a caboose is decoupled from a train, it stops moving altogether.  A better metaphor, although less linguistically appealing, would be a “slipping clutch.”  The engine continues to transmit power, and as a result the driveshaft continues to rotate, but with less velocity than when the clutch was new.

What Has Been Happening

True enough, the carbon intensities of many economies in the world, particularly those of the industrialized nations, have – for many years – been falling, as those economies have become less energy intensive (less energy use per unit of economic activity – Gross Domestic Product or GDP), and therefore less carbon intensive.  For each dollar of economic activity, CO2 emissions are less than they used to be.  For each unit of economic growth, there is less growth in CO2 emissions than previously.

Furthermore, in some cases, as economies grow, CO2 emissions can actually fall.  First, picture an economy which is growing exclusively in its services sector.  In this case, economic growth might be accompanied by no change in CO2 emissions.  Now picture an economy which is growing in its services sector, while shrinking in its manufacturing sector (sound familiar?).  In this case, economic growth might be accompanied by reduced CO2 emissions.  Now add to this picture the presence of some public policies, such as those that cause the closure of coal-fired electric generation plants, as well as greater dispatch of electricity from natural gas-fired plants.  The result:  economic growth continues, with falling CO2 emissions.  But there has been no decoupling.

Confusion Due to Failure to Employ Appropriate Counterfactual

The problem and the confusion arises from a very common mistake in the popular press and, for that matter, in many casual conversations:  failure to use the right counterfactual for analysis.  The fact that GDP is rising while emissions are falling does not mean that GDP is not affecting emissions.  The appropriate counterfactual for comparison is how much would emissions have fallen had there been no growth in GDP.  Presumably, emissions would have fallen even more.  The excess of emissions in the factual case, compared with the counterfactual case, is the magnitude of emissions growth due to (actually, “associated with”) economic growth.  There has been no elimination of the relationship between the two, although the nature and the magnitude of that relationship has changed.

What Factors Affect CO2 Emissions?

So, why have CO2 emissions been declining in some countries?  Or, more broadly and more to the point, what factors have affected CO2 emissions?  Four stand out (although there are others).

First, energy comes at a cost in all economies, and so economic incentives exist to economize on energy use through technological change.  The energy-intensity of the U.S. economy has gradually fallen – almost monotonically – since early in the twentieth century.

Second, putting aside energy-intensity and focusing on carbon intensity, some technological change has worked against the use of carbon-intensive sources of energy.  The most dramatic example, specific to the United States, has been the combination of horizontal drilling and hydraulic fracturing (fracking), which has caused a significant increase in supply and dramatic fall in the market price of natural gas, which has thereby led to a massive shift of investment and electricity dispatch from coal to natural gas.

Third, in the richer countries of the world, including this one, the process of economic growth has led to changing sectoral composition:  heavy industry to light manufacturing to services.  The deindustrialization of California is a graphic example.  Does the fact that California’s economy has grown while emissions have fallen mean that decoupling has occurred?  Of course not.  And, in the California case, there has also been a fourth factor …

Fourth, public policies have in some jurisdictions of the world (Europe, the United States, and most of the other OECD countries) discouraged carbon intensity.  In the USA, this has happened both through climate policies and other, non-climate policies.  Some non-climate policies, such as EPA’s Mercury Rule, discourage investment, encourage retirement, and discourage dispatch of coal-fired electricity, while other non-climate policies, such as CAFE standards for motor vehicles, bring about greater fuel efficiency of the fleet of cars and trucks over time.  Climate-specific policies have also mattered, such as in California, where the Global Warming Solutions Act of 2006 (AB-32) has brought down emissions through a portfolio of policies, including an economy-wide CO2 cap-and-trade system.

The Bottom Line

So, yes, the carbon intensity of many economies continues to fall – for a variety of reasons, including but by no means limited to public policies.  And, in some cases, the combination of energy price changes, technological change, changes in sectoral composition, and climate and other public policies has meant that emissions have fallen in years when economic growth has continued.  But don’t be fooled.  Economic growth does affect CO2 emissions.  There has been no decoupling; just some (desirable) slipping of the clutch.

Of course, this is not an anti-environment message.  On the contrary, a belief in decoupling per se could lead to a misguided laissez-faire attitude about the path of CO2 emissions.  Being honest and accurate about the links between (desirable) economic growth and (desirable) CO2 emissions reductions puts our focus and emphasis where it ought to be:  finding better ways to have both.

The Future Role of Economics in the IPCC

Despite attacks from “climate skeptics” and other opponents of action on climate change, as well as its own missteps, the Intergovernmental Panel on Climate Change (IPCC) is broadly viewed as the world’s most legitimate scientific body that periodically assesses the economics of climate change for policy audiences.  But growing inefficiencies and other limitations have made the IPCC an increasingly problematic forum for qualified scholars.  This has been particularly true with regard to expertise from economics.

In an article that has appeared in the journal, Climate Change Economics, “Reforming the IPCC’s Assessment of Climate Change Economics,” my colleagues and I draw on our personal experiences writing the most recent IPCC report to identify some of the main problems faced by this institution and to propose some possible solutions.  My co-authors are, in alphabetical order:  Gabriel Chan (University of Minnesota), Carlo Carraro (Ca’ Foscari University of Venice), Ottmar Edenhofer (Technische Universität Berlin), and Charles Kolstad (Stanford University).

Background and Context

The IPCC was established in 1988 by the World Meteorological Organization and the United Nations Environment Program to assess and synthesize scientific research on climate change, its impacts, and response options. The IPCC is governed by its Plenary (composed of representatives of member governments), Bureau, Executive Committee, and Secretariat, which have distinct roles to provide oversight, develop procedures, and facilitate operation.

Coverage of the scientific literature is divided into three Working Groups that respectively assess climate change science, impacts and adaptation, and mitigation. Authors are nominated by national governments, and selected by the IPCC Bureau.  Authors serve as Coordinating Lead Authors (CLAs), with responsibility for leading the writing of a chapter, or as Lead Authors (LAs), who serve on a chapter team and participate in the writing process.  CLAs and LAs participate in numerous meetings held at diverse locations around the world.  Other experts serve as Contributing Authors (CAs), but the process for nominating these contributors is less formal, and the CAs typically do not participate in meetings and deliberations.

The assessment cycle for each round of the IPCC begins with a scoping process, with government representatives, together with a large group of scholars and other interested parties, drafting outlines of each chapter of the IPCC. Following the scoping process, the IPCC Plenary approves the outlines, sometimes after some modification.

CLAs and LAs are then nominated and subsequently approved by the IPCC Bureau.  CLAs and LAs serve as volunteer labor (although some have their travel expenses reimbursed).  In the Fifth Assessment Report Working Group III process, Lead Author Meetings (LAMs) were convened four times from July, 2011, to July, 2013.  These meetings took place in Changwon, Korea; Wellington, New Zealand; Vigo, Spain; and Addis Ababa, Ethiopia.  Over the course of the LAMs, CLAs led their chapter teams to review relevant literature and prepare chapter text, tables, and figures.

At three points during this process, external Expert Reviewers and government representatives submit detailed comments on subsequent draft. These comments, numbering in the many thousands in AR5, are made public following the assessment cycle, and, are checked by appointed Review Editors, who confirm that authors have replied adequately to comments. After four drafting rounds, the Working Group reports are preliminarily finalized.

Towards the end of the assessment cycles, authors of each Working Group, primarily CLAs, engage in writing two summary documents for each report, a Technical Summary (TS) and a Summary for Policymakers (SPM).   The Summary for Policymakers is subject to line-by-line approval by the IPCC Plenary (that is, the governments).  By the way, in case you’re interested, I have written about these government approval processes at length in previous essays at this blog:  Is the IPCC Government Approval Process Broken? (April 25, 2014); Understanding the IPCC: An Important Follow-Up (May 3, 2014); and The Final Stage of IPCC AR5 – Last Week’s Outcome in Copenhagen (November 4, 2014).

Finally, concurrent with much of the chapter-drafting process, a subset of CLAs and LAs from all three Working Groups convene to draft a Synthesis Report (SYR) and its own Summary for Policymakers.

I’m exhausted, just having written that summary of the multi-year process in which we were engaged in the IPCC’s Fifth Assessment Report.

Categories of Key Reforms

I hope you’ll turn to our article in Climate Change Economics to read about the procedural and substantive reforms we propose.  So, here I’ll provide just a list as a guide to what you can find in the article.

We propose four potential procedural reforms that could lower the cost for volunteering as an IPCC author:

  • Improving interactions between governments and academics
  • Making IPCC operations more efficient
  • Clarifying and strengthening conflict of interest rules
  • Expanding outreach

In addition, we propose three reforms to the IPCC’s substantive coverage to clarify the IPCC’s role and to make participation as an author more intellectually rewarding:

  • Complementing the IPCC with other initiatives
  • Improving the integration of economics with other disciplines
  • Providing complete data for policymakers to make decisions

Looking Forward

My co-authors and I all found that working for the IPCC was at times enormously frustrating. As an IPCC author, particularly as a CLA, scholars can at times feel as if they are inside a political process, forced to respond to critical government comments based on political sensitivity, and even directly negotiating text with professional climate negotiators during the SPM Approval Sessions.

Despite such distractions and frustrations, however, the group of us believe that the IPCC remains a critical institution for the communication of scholarly knowledge about climate change. Engaging governments in often detailed deliberations over climate science, economics, and policy helps build a knowledge base that is broadly based. And the process of consensus-building around the SPM and the work of the underlying chapters play key motivating roles in driving international climate negotiations under the United Nations Framework Convention on Climate Change (UNFCCC).

Going forward, the greatest risk is that scholars with sound and balanced understanding of the relevant literature may be deterred from participating as IPCC authors, and thereby surrender the process to quasi-academics with political motivations.  The potential harm to the policy process (and the reputation of academia) would be very great.

To prevent this from happening, the IPCC needs to reform its operational procedures and substantive scope so that qualified scholars perceive the time investment as authors to be worthwhile. At the same time, scholars of climate change economics should not dismiss the opportunity to provide a significant public service by volunteering for the IPCC in its future assessments.