Tdworld 4152 Climatechange3
Tdworld 4152 Climatechange3
Tdworld 4152 Climatechange3
Tdworld 4152 Climatechange3
Tdworld 4152 Climatechange3

Another Climate Agreement

July 20, 2016
This agreement between the U.S., Canada and Mexico calls for the three countries to obtain 50% of their combined electricity from clean energy sources, including wind, solar, nuclear and hydropower by 2025.

If you blinked, you missed it. There were some brief press stories and some late night parody about the meeting a few weeks ago between President Obama and the leaders of Mexico and Canada. The joke was about how the three awkwardly tried to shake hands at the same time. Fist bumps might have done the job much more cleanly. But heads of state apparently are discouraged from using fist bumps.

The meeting agenda was far more serious. The purpose was to announce yet another climate pact.  This agreement between the U.S., Canada and Mexico calls for the three countries to obtain 50% of their combined electricity from clean energy sources, including wind, solar, nuclear and hydropower by 2025. There are also measures for carbon capture/storage, energy efficiency and methane reduction.

If you have been in the power industry a long time, then you are aware of two constants:  complaints about power prices being too high and climate change debate. If you are really an old timer you will remember the jokes made when Dan Quayle suggested that we limit greenhouse gases by somehow reducing cow flatulence. Cows actually produce a lot of methane due to their digestive system and methane is a very powerful greenhouse gas, so the concept was not that farfetched. However, implementation is a real bugger. If you don’t believe this is a real issue, you can read more on the topic here: http://www.todayifoundout.com/index.php/2014/04/cow-farts-really-significantly-contribute-global-warming/.

The whole climate change issue and related regulations or agreements such as treaties that get reflected in government programs are not a laughing matter, but laughing is a defense when we are really feeling like crying. The current pact falls on the heels of the EPA’s Clean Power Plan (CPP) and the signing of the Paris Climate Agreement in December 2015. The CPP, which has been stayed by the Supreme Court pending appeals, would essentially eliminate coal as a source for new power plants. At the Paris Climate summit (COP21), 195 countries adopted the first legally binding climate deal that could further alter rational energy decisions for individual countries.   

The question becomes: Do we really need more international agreements to control our emission reduction efforts? One only has to look at the current problems with the European Union to see that regrets are a real possibility. Whether one agrees or not with the premise that anthropogenic CO2 emissions are a significant factor in global warming, we must acknowledge that every international treaty or agreement to reduce or alter emissions is significant and may affect the domestic energy landscape. Even though climate policy is so critical in terms of the new energy resources we choose, the capital resources we have in place now with economic life remaining, and even the viability of some industry sectors and millions of jobs, our eyes glaze over when someone starts talking about climate change policy.  I may have lost you already…

Our indifference or maybe ignorance regarding climate policy activity needs to change. We have to engage in the discussions, weigh in on the agreements and make our voices heard regarding the potential actions that will likely change the power industry for the foreseeable future. Much of the growth in emissions between now and 2040 is projected to come from countries outside the Organization for Economic Cooperation and Development (OCED); that is, from countries that have not agreed in the past to cooperate on policies that improve the economic and social wellbeing of people around the world. This alone makes it critical that we cautiously evaluate treaties and agreements that bind some parties but not others regarding energy and emissions policy. 

The U.S. and other countries have done an amazing job of reducing fossil fuel-related emissions, improving energy efficiency and incorporating renewable energy technologies into the mainstream supply equation. These countries have lead by example. It may be time to stop layering on more restrictions and difficult to monitor treaties and instead use emissions trading, trade in general and other market mechanisms to reward desired progress, while still giving each country the ability to optimize domestic assets.  What are your views?

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