The US and China revealed new emission reduction plans last week as nations met in Bonn to progress negotiations over a global climate treaty to be signed in Paris in December 2015.
In the ground-breaking “Clean Power Plan” released June 2, the US Environmental Protection Agency proposed to work with 49 states to slash the CO2 intensity of fossil-fuel power generation by 2030.
The US aims to cut its emissions 30 per cent from 2005 levels. Notably, there has already been plenty of momentum on emission reductions since that baseline year, Bloomberg New Energy Finance’s Ethan Zindler pointed out on Bloomberg TV. The US has cut emissions by more than 10 per cent in the power sector from 2005 to now and it will likely reach an 18 per cent reduction by 2020, he said.
Still, the regulation is not simple. It lays out a series of convoluted state-level targets designed to reduce the carbon intensity of states’ power. Full analysis can be found here: EPA’s Clean Power Plan: 50 chefs stir the pot.
It also will not be easy to enforce. Bloomberg New Energy Finance’s Michel Di Capua noted there will likely be push-back from states and a legal battle over the next several years. The Obama administration has failed in the past to enact climate legislation, he said, but the president is now using executive channels to push through emission rules and hopes to have more luck with this approach.
On the heels of this new policy announcement from Washington, China said last week that it is working on how to cap its greenhouse gas emissions for the first time.
The world’s biggest producer of fossil fuel emissions said it has been studying for more than a year how and when it might be able to make its pollution levels peak and hopes to act as soon as possible, said Xie Zhenhua, China’s lead envoy to the United Nations global warming talks.
"China will behave in a very responsible way for Chinese people and the world and we will try our utmost to peak as early as possible," Xie said in an interview at the talks in Bonn with Bloomberg and other news organisations.
While both the US and China looked at putting forward climate agendas last week, they were at odds on another issue: trade. The US Department of Commerce took the first step in applying hefty, comprehensive tariffs on Chinese PV imports, based on the findings of an inquiry into illegal subsidies.
On June 3, the Department of Commerce released a ‘preliminary determination’ in favour of SolarWorld. The company had filed a petition in December 2013 to close ‘loopholes’ that have existed for the past two years allowing Chinese manufacturers to skirt tariffs by sourcing cells from Taiwan. The decision is the latest in a sequence of petitions and trade rulings dating back to October 2011.
There are winners and losers in the US solar industry as a result of this latest step, according to a Bloomberg New Energy Finance Analyst Reaction, US slaps stickier tariffs on Chinese PV. It represents marginally good news for a handful of major PV manufacturers without operations in China, such as First Solar, SunPower and SolarWorld, Yet, many utility-scale US pipeline projects, which had recently won record low power purchase agreements, were counting on cheap Chinese modules to make their sums work. Instead, they face an unanticipated rise in module pricing.
Originally published by Bloomberg New Energy Finance. Reproduced with permission.