The latest version of the Clean Power Plan of the US Environmental Protection Agency (EPA) issued in August was dubbed the toughest environment and energy policy in US history, following the issuance of the first version in 2014. If it is put into effect, hundreds of US coal-fired power plants could possibly be forced to shut down, and construction of new ones could be suspended.
Meanwhile, it could also prompt the US power industry to speed up the adoption of clean energy such as wind and solar energy, as well as distributed power generation.
The latest version is designed to cut emissions from the power sector by 32 percent by 2030, rather than the 30 percent goal in the previous version. It also provides flexibility for US states on how they can meet the target.
However, despite greater flexibility in terms of implementation, the feasibility of the plan remains questionable. First, part of the Clean Power Plan is beyond the regulatory authority of the EPA, according to the existing US legal framework. This could bring problems in the execution of the plan.
Second, to offer greater flexibility to state governments, the plan allows them to work out tailored emission plans on their own within one year. If a state government refuses to submit the plan within the specified timeframe, the federal government can draft a mandatory plan for the state. But this approach could offer a chance for opponents to postpone the implementation of the plan, possibly until the next presidency. And obviously the change of administration could have a substantial bearing on how the Clean Power Plan is executed.
Third, the progress the US has made in emission reduction in recent years is largely attributed to the replacement of coal due to rapid development of shale gas and the continuous decline in natural gas prices. As a result of this achievement, the US economy and manufacturing industry have shown signs of recovery, but with less emissions. However, the recent low oil prices will inevitably impact on shale gas companies, and that may cause difficulties in sustaining the development of shale gas.
Fourth, the North American Electric Reliability Corporation (NERC) expressed concern over the quality of electric energy and the grid's safety after the announcement of the first version of the Clean Power Plan in 2014, particularly when more renewables like wind and solar power will need to connected to the grid.
Meanwhile, although it is the world's biggest carbon dioxide emitter, China has made extraordinary progress in cutting the growth of emissions in recent years. White House spokesman Josh Earnest said at a recent press briefing that China's huge investment in developing clean energy has motivated the US to invest in the field as well. Therefore, the issuance of the new Clean Power Plan could somehow be a response to China's efforts to strengthen clean-energy investment. The plan could also offer a way for the US to assert its dominance at the upcoming 2015 Paris Climate Conference and put pressure on emerging economies like India and China that depend substantially on coal.
Cooperation between China and the US in addressing climate change has started early. The Obama administration has always regarded cooperation on clean energy as a key element in the diplomatic ties between the two nations. To many Americans, assisting China in developing clean energy and its economic transition is conducive to combating global climate change and is in line with the US' long-term interests.
Besides, China's progress in developing clean energy and energy cooperation between the two nations can help the US expand the Chinese market by providing clean energy related services and technologies. In fact, China, with its huge market potential, is the major destination for US clean energy firms to export their products and technologies.
Conversely, it is also not difficult to find Chinese elements in the US energy market in recent years. For example, Chinese autoparts manufacturer Wanxiang Group invested $12.5 million to build a solar panel manufacturing plant in Illinois as early as in 2010. Chinese solar panel firm Hanergy set up a research and development center in Silicon Valley in 2014.
To sum up, the launch of the US Clean Power Plan has caused a big stir inside the US and globally.
It could certainly make a positive contribution to addressing global climate issues but its implementation will by and large depend on flexibility of US legal framework to match the plan, good execution by state governments, close collaboration from major energy firms, and the result of the 2016 presidential election. However, the plan could also be used by the US to pressure developing nations at the Paris Climate Conference.
In recent years, China has made big strides in development of clean energy and in cutting the growth of emissions.
As well as understanding the US actions and intent in issuing the Clean Power Plan, China should also seize the opportunity to make greater breakthroughs in developing clean energy by seeking international cooperation. Such an effort could definitely help China meet its defined emission goals.