Climate Talks Are About Energy, National Security & Poverty and Nuclear Will Be Required

The U.S. Should Remain Engaged in
International Climate Talks and Promote Nuclear

This is an excerpt from my recent energy policy paper.

International climate talks are energy talks, and energy talks are talks about national security, poverty, and humanitarian relief, as well as opportunities for U.S. industry to engage in global investment opportunities, particularly in the development of power generation infrastructure. As such, climate talks are discussions about world order and the projection of worldviews. Therefore, these are opportunities for the U.S. to provide global leadership and remain diplomatically engaged in an issue of common interest to 196 other countries—a hallmark of U.S. diplomacy since World War I. It isn’t incumbent on the Trump administration to agree on the extent to which climate is changing or even on the cause of climate change. But, it can agree that international climate talks are opportunities to negotiate, to project America’s ideals, and to remain strategically engaged with world leaders on what is arguably one of the most critical issues of our time—energy. Consequently, the scale of U.S. energy policy must match the scale of the issues—that being, climate and poverty issues at the global scale. If the issues are global, the solutions must be as well and nuclear will be necessary.

The United Nations Framework Convention on Climate Change is an international environmental treaty ratified by the United States in October 1992, during the presidency of George H.W. Bush, and entered into force in 1994 (UNFCCC, 2016). As such, the UNFCCC is recognized by the United States as the formal organization of countries to facilitate international discourse on environmental issues of mutual concern—including climate change. The Obama administration chose to provide leadership in the climate change space by regulating U.S. carbon emissions out of the economy via the Clean Power Plan and the UNFCCC Paris climate agreement. More recently, at the Marrakech Climate Change Conference, Secretary of State John Kerry presented an even more aggressive U.S. proposal for deep decarbonization by 2050 which proposes that the U.S. could cut emissions 80% by 2050, indexed to 2005, primarily through the power sector (White House, 2016c; Walton, 2016)

President-elect Trump’s position is that President Obama’s climate actions have hurt U.S. industry, therefore he plans to cancel the Paris agreement, ratified in September 2016, and cut off U.S. funding to United Nations climate change programs (Santucci and Stracqualursi, 2016). Since it would require four years to withdraw from the Paris agreement, there remains concern that President-elect Trump may decide to expedite the cancellation of the Paris agreement by taking action to withdraw from the UNFCCC (Reuters, 2016). However, rather than reversing course or withdrawing from international climate talks altogether, President-elect Trump has the opportunity to project U.S. leadership along a different arc; one with the potential to have a greater impact on global carbon emissions, stimulate U.S. investment opportunities abroad, address humanitarian needs in poverty-stricken regions, and maintain America’s historical position of leadership and engagement in deliberations deemed important to the global community. Moreover, this can be done independent of President-elect Trump’s position on climate change.

Redirect Efforts Rather Than Reverse Course
China, the U.S., and India are the top three CO2 emitters in the world, in that order, and they represent countries in three distinct stages of economic growth. The U.S. is a well-established industrial economy with sound environmental health standards. China is a recently established industrial economy built extensively on coal and with substantial human and environmental health issues. India, a country with severe environmental stresses (McKinsey & Co., 2013; National Bureau of Asian Research, 2013; Patel, 2016b; Quartz 2016a; Quartz, 2016b;) is a fledgling economy trying to establish its industrial base and a reliable power generation sector to provide electricity to hundreds of millions of its citizens living in energy poverty. To do this, India is consuming coal. Of the three countries, only the U.S. has decreased both its coal consumption and CO2 emissions over the past fifteen years. In fact, in 2015 India surpassed the U.S. in coal consumption for the first time ever, whereas China surpassed U.S. coal consumption in 1987 and now leads the world in CO2 emissions at a rate 1.7 times that of the U.S. (Figures 1 & 2; Gattie, 2016a).

Figure 1. Comparison of CO2 emissions for the U.S., China, India and the world.tej-2017-figure-1

Figure 2. Comparison of coal consumption for the U.S., China, India and the world.tej-2017-figure-2

The power sector for each country reflects similar trends (Table 1; Figure 3). While all three countries have increased their respective power generation capacity, the rates of increase and the contribution of fossil fuel capacity to those respective increases differ, particularly over the past ten years. From 2005-2014, U.S. total capacity increased 97 GW (9.9% increase), of which 17 GW was fossil fuel capacity (2.2% increase in fossil capacity). During this same period, China increased its total capacity 882 GW (170% increase), of which 533 GW was fossil fuel capacity (136.3% increase in fossil capacity). For India, the increase was 161 GW (107% increase), of which 121 GW was fossil fuel capacity (116.3% increase in fossil capacity).

Figure 3. Comparison of power generation capacity (total and fossil fuel) for the U.S., China and India.tej-2017-figure-3

Table 1. Profile of power generation in the U.S., China and India. (Data from BP Statistical Review of World Energy 2016 and the U.S. Energy Information Administration).tej-2017-table-1

These trends highlight the need to focus on those regions of the world where economic growth is occurring (China), where economic growth is about to occur (India and other developing economies), and where CO2 emissions are increasing (all developing economies). These are regions where advanced energy systems such as nuclear, CCS, and renewable energy can be implemented to meet complex and emerging economic and environmental needs and where carbon reduction can have the greatest climate impact (Gattie 2016b). As such, this is an opportunity for a Trump administration to redirect U.S. energy policy and global carbon reduction efforts toward emerging economies, so that U.S. strengths can be leveraged more effectively as part of a comprehensive and globally strategic energy policy. This would also provide the opportunity to renegotiate U.S. carbon reduction targets rather than walk away from them. The intent should not be to simply preclude the U.S. from reducing its own carbon emissions—something the U.S. is already doing through its power sector. Rather, the intent should be to leverage U.S. strengths of technology, innovation, industrial capacity, research and development where they can be most effective—to regions of the world where economic growth is occurring, fossil fuel consumption and emissions are increasing and poverty is prevalent.

U.S. Industry and Humanitarian Relief
Global poverty issues are energy poverty issues. Therefore, international climate talks, which are inherently energy talks, are by proxy humanitarian relief opportunities to engage the global community in energy-based efforts to alleviate poverty. Current estimates indicate that 1.2 billion people (~18% of global population) live without access to electricity and more than 2.7 billion depend on wood or some other form of biomass, including animal dung, for heating and cooking (IEA, 2016). While energy poverty is bad enough for entire communities, its impacts are particularly acute on the day-to-day lives and health of women and young girls (Oparaocha and Dutta, 2011; Habtezion, 2013). It’s estimated that in India alone 92% of rural domestic energy needs are met by women gathering firewood, crop waste and cattle dung (Habtezion, 2013). Developing countries, particularly those encumbered with energy poverty, may view these talks as opportunities to build relationships with industrialized countries sympathetic to their energy and economic challenges and willing to work with them in meeting those challenges. These countries have energy system, industrial and infrastructural needs that are fundamental to their economic development goals and they’re looking to build international partnerships with countries willing to invest in them and provide the industrial heft to help. Withdrawing from international talks risks alienating U.S. industry as some countries may seek partnerships with countries that demonstrate an abiding interest in global economic development and have remained engaged in the climate discussion. In addition, climate talks also represent an opportunity to strengthen the case for U.S. corporate tax reform. U.S. industry is up to the challenge of engaging with developing regions on developing energy infrastructure, but it needs a sensible investment climate in countries where the financial risk is high. To this end, high level diplomatic climate talks can be leveraged as opportunities to negotiate friendlier business environments for U.S. industry in developing regions and as an argument for much-needed corporate tax reform in the U.S. to stimulate investment in regions where advanced technologies are critical but the investment climate is perilous (Ramamurti and Doh, 2004; Rose-Ackerman and Tobin, 2005; Henisz and Zelner, 2010; Williams, et al., 2015; De Villa, et al., 2015).

Diplomacy and Leadership
International climate talks are energy talks, and energy talks are national security talks. As such, climate talks are discussions about world order and the projection of worldviews. Therefore, these are opportunities for the U.S. to provide global leadership and remain diplomatically engaged in an issue of common interest to 196 other countries—a hallmark of U.S. diplomacy since World War I. It isn’t incumbent on the Trump administration to agree on the extent to which climate is changing or even on the cause of climate change. But, it can agree that international climate talks are opportunities to negotiate, to project America’s ideals, and to remain strategically engaged with world leaders on what is arguably one of the most critical issues of our time—energy. Therefore, what is perhaps most concerning is that a U.S. withdrawal from international climate talks will create a global leadership vacuum. And this vacuum will be filled by countries such as Germany, China, India, Canada, Russia or other countries looking to expand their own sphere of political, economic and diplomatic influence. If the U.S. steps away from these talks, it may very well abdicate a leadership role it can never regain.

Conclusion
As President-elect Trump and his administration look to relieve the U.S. power sector from what he considers regulatory overreach and unleash America’s energy potential, it is recommended that he do so with a view towards developing a comprehensive energy policy resilient enough to withstand subsequent political transitions and to provide the power sector with a stable, more predictable investment climate. That is, complement upstream energy resource development with downstream technologies such as carbon capture and storage and nuclear power, which can serve as a long-term hedge for the power sector and limit its exposure to inevitable political changes. This will provide those in the pragmatic energy-environmental center with a strong base on which to argue for, and sustain a policy correction—particularly if equipped with a renewed focus on nuclear power.

Also, a unilateral exit by the U.S. from international climate talks is a risky prospect with unpredictable outcomes and few, if any, upsides. Not only does it create a potential marginalization of U.S. industry as a partner in global energy infrastructure development, it isolates the U.S. from critical energy negotiations. Moreover, it creates a vacuum in global leadership with unknown geopolitical consequences and national security concerns. As such, the U.S. should remain diplomatically engaged in international climate talks independent of the administration’s position on climate change.

In summary, the following policy recommendations are offered:

  1. Focus on policy correction rather than reversal in order to incorporate resilience into a comprehensive energy policy that can stand up under political shifts and provide stability for the U.S. power sector
  2. Build a strong coalition of pragmatic energy-environmental centrists who will champion and sustain a comprehensive policy correction through subsequent administration transitions
  3. Complement any expansion of coal and natural gas development with research and development of environmental technologies to help sustain these upstream resource expansions through future administrations that may shift the focus of energy policy back to carbon emissions
  4. Promote nuclear power as the climate-neutral and politically-bipartisan energy resource that it is, incentivize the U.S. nuclear industry to expand America’s nuclear capacity, and stimulate U.S. research and development in advanced nuclear reactor designs for implementation at home and abroad
  5. Remain engaged in international climate talks as a matter of leadership, diplomacy, humanitarian efforts to alleviate poverty, and in the interest of cultivating global investment opportunities for U.S. industry, independent of the administration’s position on climate change.

…ilyh…

References

  1. De Villa, M.A., Rajwani, T. and Lawton, T., 2015. Market entry modes in a multipolar world: Untangling the moderating effect of the political environment. International Business Review, 24(3), pp.419-429.
  2. Gattie, DK, 2016a. November 17. Athens Banner-Herald. U.S. Should Lead World in Developing New Energy Infrastructure. Available at http://onlineathens.com/opinion/2016-11-16/gattie-us-should-lead-world-developing-new-energy-infrastructure
  3. Gattie, DK. 2016b. Climate Change, Energy Poverty, Reliable Electricity and Economic Aspirations. 6th Annual Energy Policy Research Conference, Santa Fe, NM, Sept. 8-9, 2016
  4. Habtezion, S. 2013. Gender and Energy. United Nations Development Programme.
  5. Henisz, W.J. and Zelner, B.A., 2010. The hidden risks in emerging markets. Harvard Business Review, 88(4).
  6. IEA. 2016. Accessed November 26, 2016 at http://www.worldenergyoutlook.org/resources/energydevelopment/
  7. McKinsey & Co. (Ed.). 2013. Reimagining India: Unlocking the Potential of Asia’s Next Superpower. Simon and Schuster Publishers.
  8. National Bureau of Asian Research. 2013. India’s Water Crisis: Causes and Cures. Produced for the Senate India Caucus, August 2013.
  9. Oparaocha, S. and Dutta, S. 2011. Gender and Energy for Sustainable Development. Current Opinion in Environmental Sustainability 3(4): 265-271
  10. Patel, S., 2016b, August 1. Power Magazine. India Water Crisis Shuts Down Multiple Power Plants. Available at http://www.powermag.com/indian-water-crisis-shuts-multiple-power-plants/
  11. Quartz, 2016a, April 6. India’s Looming Water Wars Can Destroy Everything, From “Make in India” to Smart Cities. Available at http://qz.com/654851/indias-looming-water-wars-can-destroy-everything-from-make-in-india-to-smart-cities/
  12. Quartz, 2016b, April 14. Toilet, Toilet Everywhere in India, But Where Does All the Shit Go?. Available at http://qz.com/661119/toilets-toilets-everywhere-in-india-but-where-does-the-shit-go/
  13. Ramamurti, R. and Doh, J.P., 2004. Rethinking foreign infrastructure investment in developing countries. Journal of World Business, 39(2), pp.151-167.
  14. Reuters, 2016, November 10. Fortune. Here’s How Soon Donald Trump Could Pull Out of a Historic Climate Deal. Available at http://fortune.com/2016/11/10/donald-trump-climate-change-paris-agreement/
  15. Rose-Ackerman, S. and Tobin, J., 2005. Foreign direct investment and the business environment in developing countries: The impact of bilateral investment treaties. Yale Law & Economics Research Paper, (293).
  16. Santucci, J. and Stracqualursi, V., 2016, May 26. ABC News. Donald Trump Vows to Cut US Funding for UN Climate Change Programs If Elected. Available at http://abcnews.go.com/Politics/donald-trump-vows-cut-us-funding-climate-change/story?id=39410375
  17. UNFCCC. 2016. United Nations Framework Convention for Climate Change. Status of Ratification of the Convention. Accessed on November 26, 2016 at http://unfccc.int/essential_background/convention/status_of_ratification/items/2631.php
  18. Walton, R., 2016, November 17. Utility Dive. Obama Administration Unveils Path for Deep Decarbonization for Paris Climate Accord. Available at http://www.utilitydive.com/news/obama-administration-unveils-path-for-deep-decarbonization-for-paris-climat/430665/
  19. White House. 2016c. United States Mid-Century Strategy for Deep Decarbonization. Accessed on November 26, 2016 at https://www.whitehouse.gov/sites/default/files/docs/mid_century_strategy_report-final.pdf
  20. Williams, N.J., Jaramillo, P., Taneja, J. and Ustun, T.S., 2015. Enabling private sector investment in microgrid-based rural electrification in developing countries: A review. Renewable and Sustainable Energy Reviews, 52, pp.1268-1281.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s