A Look Back on Four Years of Energy and Climate Policy: Successes and Failures
photo credit: whitehouse.gov
Last week, ASP Senior Fellow Andrew Holland took a look at Mitt Romney’s proposed energy plan. He noted that while often vague and short on demand-side policies, his proposal to give states more authority over energy production was a unique idea.
With Romney’s plan in mind, let’s look at the other side of the aisle. How did President Obama fare on energy and climate change policy over the last four years?
A look back on Obama’s four years on Energy and Climate Change
Successes:
The stimulus act (The American Recovery and Reinvestment Act): Passed in 2009, the stimulus was intended to address the financial and economic difficulties facing this country, but people often forget it was a huge energy bill. The stimulus put $26.7 billion towards energy efficiency, incentives for development of renewable energy, support for energy R&D and other energy-related programs. A once-in-a-generation energy bill, the stimulus went a long way towards bringing down the costs of clean energy.
Higher fuel standards for vehicles: Announced last year and finalized just last month, the Department of Transportation, the EPA and automakers reached an agreement on new fuel economy standards for the nation’s auto fleet, which must achieve 54.5 miles per gallon by 2025. This effectively doubles the required efficiency set in 2007. The standards will reduce American oil consumption by an estimated 2 million barrels of oil per day by 2025. That is a huge number and it will keep money in consumers’ pockets and reduce our vulnerability to volatile oil prices.
Higher Oil Production: Oil and gas production significantly climbed over the past four years. In January 2009, the year the President took office, the U.S. produced 5.1 million barrels of oil per day. That number increased to 6.3 million barrels of oil per day by June 2012, an increase of 21.7%. While the President should not receive much credit for this achievement since this occurred independent of his policies, the criticism that he has actively attempted to limit production is unfounded.
Doubled the share of renewable energy: When President Obama took office, non-hydro renewable energy represented only 3% of the nation’s electricity generation. Today that number has reached about 6%.
Lower Greenhouse Gases: U.S. greenhouse gas emissions declined by 7% between 2007 and 2011. While a large portion of that can be attributed to lower economic activity from the recession, U.S. emissions still declined by 1.7% between 2010 and 2011, a year in which the economy was growing. While the EPA under the Obama administration has issued multiple regulations aimed at air emissions, much of the credit goes to low natural gas prices, causing utilities to shutter coal plants in favor of natural gas plants.
Failures:
Very little leadership on climate change: The President spent most of his political capital in the first two years in office on the stimulus bill and his healthcare bill. Legislation aimed at reducing greenhouse gases did not take priority, and the Senate never took up the House-passed cap-and-trade bill. President Obama did not lead on the issue of climate change. His appearance at the Copenhagen conference in 2009 salvaged a last minute agreement, but it was too little, too late.
Lack of a national energy policy: The U.S. has never really had a national energy policy, and President Obama failed to break that pattern. He belatedly spelled out a direction for the nation’s energy policy by supporting a clean energy standard in his 2011 State of the Union Address, which would seek to achieve 80% clean energy by 2035. However, as noted above, he did not make the issue a priority. As such, the U.S. lacks a plan on how to adjust our energy mix to the economic, national security, and environmental risks that may crop up in the coming decades.
Adopting the Republican approach, he has said he supports an “all-of-the-above” strategy. Despite this, there is no clear plan to support the development of clean energy (or any energy). There is no plan on how to prepare the electricity grid for increasing quantities of variable sources of power. There is no plan on how to develop next-generation energy technologies. There is no plan on how to mitigate greenhouse gases in our energy system.
In absence of a national energy policy, energy initiatives have been a “hodgepodge”…with only mixed success: Without a strategic vision, President Obama supported initiatives to make incremental changes. He supported battery technology through stimulus grants. He supports an extension of the wind tax credit. He is opening up public lands to renewable energy development.
However, several companies supported under the stimulus act are struggling. The much-maligned loan guarantee program has been a public relations disaster. Renewable energy is expanding, but policy has been inconsistent.
In short, he has supported incentives through the tax code (the wind production tax credit; the Treasury’s 1603 Program, which provided grants to renewable energy projects, for example), which only supported technology-specific industries, i.e., it “picked winners”. This helps specific companies and industries, but does not offer a long-term plan.
Conclusion
Overall, the President’s record is mixed on energy. He has achieved some significant victories, but failed in other areas – mostly due to not making energy and climate change a priority.
As for the next four years, it is a bit unclear what an Obama reelection would mean. He has expressed support to reduce greenhouse gases and continue to transition to low-carbon sources of energy, but has offered very little on his intentions for his next term.
