US: Mid-term elections could impact environmental policies

Dan X. Mcgraw

07-Nov-2014

President Barack Obama’s environmental policies, including a proposal to regulate carbon emissions from existing power plants, are uncertain after Republicans produced a strong showing in the mid-term elections this week.

Republicans, who strongly oppose cap-and-trade programmes, will take control of the US Senate and House of Representatives based on Tuesday’s results. Environmental and carbon sources said Republicans could focus their legislative power on reversing some of Obama’s environmental policies, including a proposal to cut emissions from existing power plants.

The proposed rules on existing power plants, or the so-called 111D rules, would require US power emissions from existing sources to decline by 30% from 2005 levels by 2030 ( see EDCM 2 June 2014 ). Market participants believe the rules could give other states an incentive to join regional cap-and-trade programmes.

Republicans believe the rules could restrict power supply and cut jobs, and the party has previously said it would likely to prevent the implementation of the rules.

“It will face some congressional opposition, but the question is whether that is a credible threat,” said a senior carbon advisor for a non-profit analysis group.

The advisor said Obama’s administration is showing that carbon emissions are a key priority during the president’s second term, but it is unclear how willing the Republicans are to reverse those rules.

Peter Shattuck, director of market initiatives at non-profit Acadia Center, said those rules may not be appetizing for Republicans, but they may be willing to deal with them if they can reverse course on other more important issues for the party, such as health care.

“I get the sense 111D isn’t at the top of their priorities,” Shattuck said.

Obama is widely expected to veto any bills that strip the EPA of its power or dismantle the agency’s rules on existing power plants. Republicans would not be able to overturn a presidential veto, which would take a two-thirds majority in both chambers, but they could disrupt the administration’s agenda during Obama’s final two years.

Depending on the course Republicans take, the future expansion of regional cap-and-trade programmes could be impacted by the national politics. The EPA’s proposed rules are seen as an incentive for regional cap-and-trade programmes, but without them or a delay of the rules, some states may be unwilling to adopt those carbon emission strategies.

Several states in the midwest and northeast are looking at joining the Regional Greenhouse Gas Initiative (RGGI), which regulates carbon emissions in nine northeastern states. Washington is also exploring linking with California’s cap-and-trade programme. Dan X. McGraw

READ MORE

Global News + ICIS Chemical Business (ICB)

See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Contact us

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?