Carbon Regulations and Keystone Silence: Previewing Obama’s Climate Speech

President Obama is set to give a major address on climate change today — one that won't include the Keystone XL pipeline. Will carbon regulations make a real difference?

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President Obama speaks at the U.N. climate conference in Copenhagen in December 2009

In just a few hours, President Obama will give what the White House is calling a major speech on climate change at Georgetown University — and for his increasingly wobbly environmental supporters, this is a long time coming. The White House complains that it doesn’t get enough credit for its environmental accomplishments: reducing carbon emissions, negotiating tough new auto fuel-efficiency standards and pouring billions upon billions of dollars of funding into renewable-energy research and deployment. The White House is right, but the reality is that the environmental history of Obama’s first term will always be dominated by the conspicuous failure of carbon cap and trade. There was a narrow two-year window when comprehensive climate legislation might have been possible, but Obama — and, it should be said, his environmental allies — couldn’t push the ball across the goal line. Add in the fact that Obama has largely cheered the rapid increase in U.S. oil and gas production, while sending decidedly mixed signals on the proposed Keystone XL oil-sands pipeline, and it’s not hard to see why that segment of the American population that views climate change as an existential threat is feeling so dissatisfied.

Will today’s speech settle the green dissent? Perhaps. The White House is releasing a laundry list of green initiatives to accompany Obama’s address — the most important of which is a presidential memorandum that will direct the Environmental Protection Agency (EPA) to establish carbon-pollution standards for new and existing power plants, under the authority of the Clean Air Act. This could potentially be a very big deal. Power plants are the largest concentrated source of emissions in the country, accounting for about a third of U.S. greenhouse-gas emissions — much of it from older coal plants. If the EPA were to establish strict pollution standards for carbon (none exist right now), utilities might well be forced to close down coal plants in favor of newer natural gas, coal plants with carbon sequestration (a technology that doesn’t yet exist on a commercial scale), nuclear or renewables. Obama would likely leave the White House with an impressive legacy on climate change.

(MORE: 145 Obama Campaign Staffers Call for Rejection of Keystone XL Pipeline)

But energy and climate policy is a matter of details, and it’s far from clear now just how strict Obama’s carbon regulations will be. Nor are we likely to get more specificity today. Expect the President to talk in sweeping terms about the urgency of combatting climate change, but don’t expect clarity on how urgent is urgent. It won’t unfold quickly; it will take the EPA a year to prepare carbon regulations for existing power plants, and another year to finalize them. In between, we can expect legal challenges from the power industry, as well as lot of kicking and screaming from Republicans and some conservative Democrats about the potential costs of those regulations. And don’t forget that the EPA still doesn’t have an administrator: former EPA head Lisa Jackson stepped down at the start of Obama’s second term, and his new nominee Gina McCarthy is stuck in confirmation purgatory. Republicans in the Senate can’t do much to stop EPA regulations, but they can make McCarthy’s nomination fight hell.

And while environmentalists will cheer power-plant regulations and the rest of Obama’s climate agenda, they’re still worried about the possible presidential approval of the Keystone XL pipeline. There won’t be any news on that today — a senior White House official told reporters in a press call that the proposal was “not yet ready for a decision,” even though it’s been on the table for years. Green activists from groups like plan to be on hand at Georgetown today to remind Obama that they will settle for nothing less than a rejection of the pipeline. I think it’s a tactical mistake, but I doubt carbon regulations now will be enough to appease them should the President eventually decide to approve Keystone, as many anticipate. This is a battle that has only been deferred.

(MORE: Obama Talked Climate Change in His Inaugural Address. Now Can He Do Something About It?)

As Obama often takes pain to note, carbon regulation is a second-best policy. He and most experts would have preferred cap and trade or some form of carbon taxation. As Matthew Yglesias notes over at Slate, any carbon regulation that has teeth will impose real economic costs on utilities and therefore ratepayers — and that cost will be most felt by the Midwest and the Southeast, where coal is the dominant source of electricity. A carbon tax would at least generate revenue that might cushion that blow, but the EPA can’t institute a tax or auction off carbon permits as California is doing right now. All it can do to lessen the economic cost is weaken the actual regulations — which is precisely what may happen. Obama’s climate speech may well be historic, but the bar for history when it comes to federal action on climate change is not very high.

Additional actions to be announced today:

  • Up to $8 billion in loan guarantees to be made available for advanced fossil fuel — including carbon capture — and energy-efficiency projects.
  • Fast-track permits for renewable-energy projects on public lands.
  • Toughened efficiency standards for appliances and federal buildings.
  • New fuel economy standards for heavy-duty vehicles.
  • New strategies for climate adaptation.
  • An end to U.S. government support for public financing of most new coal-fired power plants overseas.

MORE: Obama Talks Climate Change. California Is Acting on It