On Tuesday, June 25, President Barack Obama presented his Administration’s 21- page Action Plan on climate change.
The President committed the United States to cutting greenhouse gases to the range of 17 percent below 2005 levels by 2020, acknowledging that in 2012 the United States suffered no fewer than 11 major weather and climate disaster events that brought both human tragedy and more than $ US100 billion in estimated damages.
The President stated that whilst limits are in place for arsenic, mercury, and lead, the United States allows power plants to release “as much carbon pollution as they want” and that failure to act on climate changes would mean that “[we] betray our children and future generations.” This echoes the Kingdom of Saudi Arabia’s Oil Minister Ali Al- Naimi’s statement last year that global warming is “among humanities most pressing concerns.”
The Patton Boggs Climate Change, Energy and Resources practices, in conjunction with a number of international consultancies, can help business and industry take advantage of the opportunities the international component of President Obama’s plan will create for business and industry. The President’s declaration that U.S. scientists will create new fuels and that farmers in the United States will grow them, and that “our engineers [ will ] devise new sources of energy, our workers will build them, and our businesses will sell them,” resonates with Saudi Arabia’s active engagement and leadership within all UNFCCC, COP and related activities and negotiations, which has also been advanced by the establishment of such bodies as the Centre of Excellence for Climate Change Research and The Environment Council and last year’s announcement of the $100 Billion Solar Plan.
The global problem of climate change determined that a large section of the President’s plan is devoted to international initiatives and finance. In particular, the President called for a mobilization of international climate finance recognizing America’s bi and multilateral collaborations which will be given further impetus.
The President signaled his intention to negotiate global free trade agreements in environmental goods and services, including clean energy technologies such as solar, wind, hydro and geothermal particularly, which currently stands at roughly $ US481 billion annually.
The financing of carbon abatement measures and the significant income streams that can be generated through, for example carbon offsetting projects, will be of particular interest to the region and build on one of the principal achievements of Cop 18, namely its focus on the development of the newly established Green Climate Fund which is now on its way to raising $US100 Billion per year by 2020. Patton Boggs finds significant interest in the regulatory and project management work the firm can undertake in Saudi Arabia in developing carbon offset and food and water security projects, thereby providing additional revenue streams and costs savings for the nation. Such projects are made even more attractive when coupled with joint funding through Islamic finance and the Green Climate Fund contribution, and the President’s emphasis on international financing is to be welcomed.
The President stated America’s call for climate resilient investments during his speech. It can be expected that this “resilience” component will increasingly become a perquisite in international trade. Therefore, identifying international, and in country, regulatory mechanisms to satisfy the definition of “climate resilience” will be an increasingly complex task for business and industry.
The President gave prominence to the push for programs to improve and disseminate energy efficient technologies, the development of innovative financial risk management tools to support low emission development strategies that help countries to identify the best ways to reduce greenhouse gas emissions while growing their economies, and increased long term investment funding for clean energy technology to approximately $US7.9 billion for the fiscal year 2014.
In response to requests from business, industry and regional governments, Patton Boggs will be delivering, together with a number of international consultants, a number of such programs in the region in September. In particular, these workshops will deal with the creation of additional revenue streams and costs efficiencies, carbon offsetting projects, food and water security solutions, and technologies and innovation.
Other components of the President’s plan include:
- Establishing the first ever federal rules in respect of carbon pollution from power plants to prevent, as the President said, “power plants from releasing as much carbon pollution as they want”
- Facilitating up to $US8 billion in (self-pay) loan guarantee authority available for advanced fossil energy projects accelerating efficiency gains in the buildings sector
- Proposals for land and water resources conservation and maintaining agricultural sustainability
- Increasing transport fuel economy standards and developing and deploying advanced transportation technologies
- Drought preparedness and longer-term resilience strategies
- Establishing a new goal for energy efficiency standards
- Reducing barriers to investment in energy efficiency
- Supporting communities as they prepare for climate impacts
- Promoting resilience in the health sector
- Promoting insurance leadership for climate safety
Should you have any questions regarding the developments addressed in this Client Alert, please contact Simon Harrison at sharrison@pattonboggs.com or +61 (7) 3211 9992. For more information regarding the firm’s climate change, energy and resources practices, visit www.pattonboggs.com.