Obama has more options on climate than Gillard

Originally posted Wednesday 10 November, 2010.  The announcement of new greenhouse emissions standards for new power stations by US EPA Administrator Gina McCarthy earlier this month (Sept 2013) confirms the point of this post which first appeared as an op-ed in The Courier Mail Wednesday 10 November 2010 p25 under the title “Climate retreat causes ripples”.


Last week’s election in the US ended any chance of a cap and trade emissions program for the American economy leaving the Obama Administration to re-think how it will “skin the climate change political cat”.

 For Australian opponents of emissions trading and carbon taxes, America’s retreat from putting a price on carbon is giving new credence to what Opposition Leader Tony Abbott and his environment spokesman Greg Hunt call “direct action” – like buying and closing down obsolete brown coal fired power stations in Victoria.

 Prime Minister Gillard says that Australia does not need to follow America’s lead and she is keeping emissions trading and carbon taxes on the table.

 There is good reason for the Gillard Government not to give up so quickly on the market options in fighting climate change.

 Gillard simply does not have the constitutional flexibility available to Obama.

 Gillard must work within a Federal framework to achieve an outcome that delivers anything close to the emissions targets Australia has set itself.

 In Australia the primary governance of the environment rests with the States and not the Commonwealth.

 It is exactly the reverse to the US situation.

 To secure a major deal on climate before he leaves office, Obama has a back pocket option which he is unlikely to use or even threaten to use until his re-election

 That option is to use the power of the US EPA to regulate emissions reductions across the board.

 When a President is determined to use its powers, the US EPA is without peer as an environmental regulatory body with sweeping powers to protect human health.

 Even before the “carrot” approach of a carbon pricing approach was killed off by the Republicans mid-term win in Congress last week, the Obama Administration was quietly redrawing its principal environmental initiative into an old fashioned regulatory “stick”.

It is an approach that can only be stopped by a Republican presidential win in 2012 because Obama has the power to veto any attempt to change the Clean Air Act as some representatives from coal states have been advocating.

That Obama has the power to regulate American greenhouse gas emissions is certain.

Using provisions of the powerful US Clean Air Act last December EPA Administrator Lisa Jackson found that “the current and projected concentrations of the six key well-mixed greenhouse gases…in the atmosphere threaten the public health and welfare of current and future generations”.

She also found that “the combined emissions of these well-mixed greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas pollution which threatens public health and welfare”.

Less certain is whether President Obama will ever have to use the EPA to bludgeon an outcome on US greenhouse emissions.

More likely is a re-elected Obama threatening to let the EPA off its leash and using that prospect to drive a politically negotiated outcome involving a mix of regulatory and trading options.

It’s the kind of political lever Prime Minister Gillard can only dream about.

Author: Professor John Cole OAM

Professor Emeritus and founder of the Institute for Resilient Regions at the University of Southern Queensland and Honorary Professor, UQ Business School, The University of Queensland.

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