U.S. CHAMBER OF COMMERCE

Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth Construction workers lowering a storm drain in Detroit, Mich.Construction workers in Detroit, Mich. Photo credit: Tim Galloway/Bloomberg.

Congress helped make it easier to cut through regulatory red tape that adds years of delays to needed projects. The transportation bill passed by Congress and expected to be signed by President Barack Obama contains a permit streamlining reform provision.

This will streamline permitting for a variety of projects costing more than $200 million:

[C]onstruction of infrastructure for renewable or conventional energy production, electricity transmission, surface transportation, aviation, ports and waterways, water resource projects, broadband, pipelines, manufacturing….

The bill creates a council, made up of over a dozen federal departments and agencies, that will catalog projects that need federal permits, publish them on an online permitting dashboard, put a lead agency in charge of coordinating federal and non-federal agency reviews, set deadlines, and establish best practices to ensure timely review and public input.

The U.S. Chamber has been pushing for years for improving the permitting process to create a “swift but safe” system that allows important projects to be built.

Despite this win, more needs to be done to improve the permitting process. There’s a provision in an energy bill that would streamline permitting for oil and natural gas pipelines to prevent future Keystone XL-type quagmires. While the bill passed the House of Representatives, a Senate version isn’t expected until 2016--and the White House has threatened to veto it.

If we get our rules right, we can make it easier to responsibly build big things in America.

Sean Hackbarth A road traffic sign in Paris, site of the COP21 climate summit. A road traffic sign in Paris, site of the COP21 climate summit. Photo credit: Christophe Morin/Bloomberg.

For the next few weeks, the nexus of international environment and energy policy is in Paris as world leaders try to hammer out an agreement to reduce carbon emissions.

President Barack Obama is there holding out EPA’s Clean Power Plan as the United States' main contribution to the talks. However, there are two serious problems with President Obama’s approach, one domestic and the other global.

Senate Majority Leader Mitch McConnell (R-Ky.) informed Washington Post readers that the president’s costly carbon regulations rest on shaky legal and political ground:

The courts appear likely to strike it down, the next president could tear it up, more than half of the 50 states have filed suit against it, and — critically — a bipartisan majority in both chambers of Congress just approved legislation to expressly reject it.

That bipartisan opposition in Congress remains even if Obama tries to veto the legislation we passed. So it wouldn’t make much sense to ask Congress to allocate resources for global commitments predicated on a plan the president went around Congress to impose — nor would it make sense for Obama to try to make those commitments in the first place.

The international foundation isn’t any firmer. The president’s mission in Paris ignores the fact that nations seek to advance their own interests. China and India, the second and third-highest carbon dioxide emitters, want continued economic growth. While U.S. carbon dioxide emissions have been flat since 1990, China’s and India’s have been rising.

For countries even more in need of economic development, they want the benefits (industrialization, greater access to clean water, better health care, etc.) that cheap energy provides. When push comes to shove, the desire for cheap energy to power economic growth and poverty eradication will trump any deal made in Paris.

What’s more, any agreement that comes out of the talks will be based on hollow, “trust me” numbers, as Douglas Holtz-Eakin of the American Action Forum explains:

First, countries are supposed to commit to carbon (greenhouse gas, more generally) emissions reductions. BUT, to identify reductions, one must first have a “baseline”— what would happen in the absence of policies to reduce carbon emissions — and a policy forecast — what would happen in the presence of the policies. For the Paris talks, every country gets to submit its own baseline and its own policy forecast. Put in the worst light, a country can achieve any level of emissions reductions by gaming its baseline. In terms of emissions reductions, concentrations of carbon dioxide in the atmosphere, and temperature rise any agreement in Paris will be utterly vacuous.

We saw this fuzzy math when we discovered that China was burning 17% more coal than originally thought—as much greenhouse emissions as Germany.

Holtz-Eakin also points out that the numbers in the agreement won’t be binding:

The second problem is that there will be no enforcement of the agreement. None. There cannot be effective global carbon emissions reductions without a combination of monitoring and enforcement. The absence of these provisions from the Paris agreement undercuts The Hill reporting that “the Paris meeting presents a rare opportunity to make significant headway in fighting climate change."

Assuming that an agreement is reached and every nation that signs it fulfills every obligation, U.S. Chamber President and CEO Tom Donohue notes, "Global emissions will still rise by 18% between 2010 and 2030."

Paris Climate Conference: $1-2 trillion per year but just 0.17°C (0.3°F) reduction by 2100. https://t.co/2vdp117PN5 pic.twitter.com/DMe8zjtZuK

— Bjorn Lomborg (@BjornLomborg) November 18, 2015

As we've seen recently with the shale energy boom, American innovation and stretching the technological limits will mean lower energy costs and a better environment. But that will be impeded if President Obama has his high-cost, regulatory way.

“We should be embracing this energy renaissance,” Karen Harbert, President and CEO of the U.S. Chamber’s Institute for 21st Century Energy, told Fox Business’ Maria Bartiromo. “And yet the president wants to penalize it and make energy prices more expensive here at home.”

EPA’s carbon rules will take us in the wrong direction for consumers and businesses. President Obama’s contribution in Paris is all pain for little gain.

Thomas J. Donohue

As President Obama begins talks with world leaders in Paris on a proposed climate change agreement, it is critically important that any agreement be thoroughly examined to determine whether it is fair to American workers, families, and businesses whose jobs and livelihoods depend on secure, affordable energy. Based on what we know about the president’s own proposal and the agreement that may be taking shape, several problems are already apparent.

What the administration has proposed can’t be achieved. The president has pledged that the United States will reduce its greenhouse gas emissions by up to 28% by 2025. While the administration has rammed through a series of regulations to achieve its goal, about 45% of the emission cuts are still unaccounted for. Moreover, the centerpiece of the U.S. pledge, the Clean Power Plan, stands in serious legal jeopardy.

Lopsided reduction targets among nations won’t curb rising global emissions. The United States, Europe, Japan, and a few other developed nations have pledged significant reductions—even though together they make up less than 30% of global emissions. But many developing nations are more concerned with growing their economies than cutting emissions and have made only modest pledges. Even if every nation reaches its reduction goal, global emissions will still rise by 18% between 2010 and 2030.

The U.S. and other advanced nations will also be expected to pony up cash to help finance climate programs in developing nations. China, for example, has proposed that developed countries kick in 1% of their annual GDP starting in 2020. In 2014, that would have been $170 billion from the U.S. Other financing suggestions are equally extravagant. And the president has already promised an initial contribution of $3 billion.

The president doesn’t have the power to unilaterally implement or pay for the agreement. Even if an agreement is reached, without Congressional buy-in, it won’t be legally binding on a future administration. Current efforts to reduce U.S. emissions are a result of executive action, not laws passed by Congress. Lawmakers are right to call on the administration to submit the agreement for Congressional approval. And if the administration doesn’t, the legislative branch still has the power of the purse.

Global environmental challenges require global responses. We should be guided by what has already been proven to work: improvements in efficiency; new technologies; leveraging natural gas, renewable fuels, and nuclear energy; and better methods for developing and using coal and oil. And efforts should be truly global so that the burden doesn’t fall disproportionately on U.S. workers, entrepreneurs, and taxpayers.