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Climate Change Decision Memo

Memo to the President: Executive Actions on Climate

MEMORANDUM TO THE PRESIDENT

FROM: Chetan Hebbale

SUBJECT: Executive Actions on Climate Change

Issue for Decision:
What kind of take executive actions can the U.S. president take to reduce greenhouse gas emissions and prepare for climate change in the absence of meaningful Congressional action?

The Situation: 

Time is running out to prevent a 2°C rise. The world has 29 years to make annual emissions 40 – 70% lower than they are today. Failure to do so will expose 190 million people to extreme droughts, flood more than 70 percent of Earth’s coastlines, and cost the U.S. $100 billion annually in damages. 

Meeting the commitments under the Paris Climate Agreement will only bring the world one third of the way to avoiding the planet’s warming more than 2°C, meaning that further emission reductions will be necessary. As the world’s largest per capita emitter of greenhouse gases, the U.S. has a unique obligation and opportunity to take the lead on this issue.

Currently, the U.S. Congress is mired in gridlock and unable to advance the bold policies needed to decarbonize the economy. Presidential executive action provides a path to avoid catastrophe. A portfolio of executive actions which institute new energy performance standards, establish economic signals, and support R&D is the most effective and lowest-cost way to reduce the main sources of U.S. greenhouse emissions. 

Objectives:

Every path to a low-carbon future is measured against advancing one or more of these five goals.

  1. Reducing electricity demand in the building and industry sectors.
  2. Reducing the carbon intensity of electricity generation.
  3. Reducing transportation emissions.
  4. Reducing process emissions needed to develop heavy industry products.
  5. Reducing deforestation and forest degradation in tropical forest nations.

Options:

The president has some broad authority to take action on all of these objectives. Some of them face fewer legal and institutional constraints than others. But every action will fall into one of these three categories:

  • Performance Standards: setting quantitative targets at the device, fuel, or sector level which specify what level of performance certain businesses or equipment must achieve. Examples include: 
    • Instituting a national clean electricity or renewable portfolio standard.
    • Requiring higher fuel efficiency standards.
    • Establishing a framework for more sustainable building codes and appliance standards 
  • Economic Signals: instituting fees that discourage pollution and/or subsidies that encourage cleaner alternatives. Examples include: 
    • Setting a market-price for the social cost of carbon.
    • Establish long-term purchase guarantee contracts with clean energy providers, known as a feed-in-tariff (FIT)
    • Subsidize the consumer purchase of electric vehicle through tax credits or cash payment.
  • Supporting R&D: strengthening the overall R&D environment for clean technology research at universities, national laboratories, and private companies. Including: 
    • Convening and funding public and private sector collaboration
    • Strengthening intellectual property protections 
    • Ensuring access to STEM talent 

Recommendations and Rationale: 

Performance Standard: Expand the national renewable portfolio standard to require all utilities to generate 100% of their electricity through non fossil fuel-based sources by 2050

  • An RPS is one of the most successful policies for promoting renewable energy by requiring a certain percentage of electricity generation coming from clean sources. On its own a 100% renewable standard would reduce nearly 21% of cumulative emissions. 
  • Achieving such a high standard in 19 years may be difficult politically and technically as only 29 states currently have an RPS and at levels much lower than 100%. Additional incentives would be required to meet this target. 
  • The other options like fuel efficiency standards or building codes are weaker in driving down emissions due to substitutes that still allow for fossil fuels to be burned for a longer period. 

Economic Signal: Levy a carbon tax of $75 per-ton of CO2 emissions.  

  • While this option is politically fraught, a carbon pricing scheme is the single most effective policy to influence energy use and investment decisions. On its own it can deliver at least 26% of the emission reductions necessary. 
  • A $75 price recommendation was set by the International Monetary Fund but a range of options, both higher and lower, can be explored for specific industries including prices that scale over time ultimately to $75 by 2050.
  • The other economic signal options like feed-in-tariffs and electric vehicle subsidies would not be able to effectively radiate across all sectors of the economy like a carbon tax.

Supporting R&D: Establish “net-zero innovation hubs” with federal purchase agreements for the technology outputs. 

  • Innovation on the scale of the Manhattan Project or landing humans on the moon is necessary to address climate change. Rather than funding numerous, disparate R&D efforts, the U.S. should concentrate all federal funding on a specific set of topics, technologies, and institutions. 
  • The federal government can establish hubs in specific metro areas to bring together academic, private sector, and government researchers. From here, establishing purchase agreements to buy a certain quantity of clean technology output will incentivize researchers to participate and help scale the products globally. 
  • Other R&D policies around intellectual property and STEM talent are complementary to this goal and can be instituted further down the line once the early infrastructure is established. 

About The Author

Chetan Hebbale is currently a graduate student at the Johns Hopkins School of Advanced International Studies (SAIS) in Washington, D.C. focused on international economics, climate change, and sustainability.

Prior to this, he spent over 4 years at Deloitte Consulting working on technology and strategy projects at the CDC and U.S. Treasury Department.

He is a native of Atlanta, GA and attended the University of Georgia.

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