Obama bets on the climate !

Author: Jules Harduin, Currently pursuing a Master’s degree in Entrepreneurship at Rouen Business School, he is particularly interested in developing a new business models and approaches that integrate the environment as an essential component of creating value. Coming from an eco-friendly family and truly convinced of the need to fight against climate change, he joined CliMates to participate in changing the world.

It’s safe to say that President Obama’s speech on climate change surprised a lot of people, myself included. He presented himself with an aggressive position ready to tackle pressing global warming issues. Commentators around the world agreed it was an uniting, inspiring speech that gives every reason to have hope: a committed president, new announcements, headlined targets etc.. But what is behind it all?

What are the numbers the President bets on?

Over the years, the different American figureheads have declared their rightful fight against climate change. In 1984, Ronald Reagan already said that “preservation of our environment is not a liberal or conservative challenge, it’s common sense”. Promises of better days are a somewhat recurring narrative in US international politics but lack consistency too often when it comes to action. This speech may need a bit of analysis. Here are some examples that struck me.

President Obama is outlining that the US should take a leadership position in global climate negotiations. Being a huge contributor to global pollution, these are wise words. But Obama’s Climate Action Plan only spends half a page on the subject matter. All points of the 18 contents are important but not all seem to have received the same attention from the government and interior improvements seem to have a higher priority than completing international agreements.

But President Obama gives one easy target that could be handled: to have a 54.5 miles per gallon of gas limit for cars (4.3 L/100km) in 2020. This standard is applied through the CAFE method (1) that all specialists consider being obsolete because it has been established in the 70s with the standards of the time. Using an actual method of calculation, the Union of Concerned Scientists  suggests it would rather be 39.4 miles/gallon. It even falls to 34.9 miles if we take into account other variables. This is a variation of 36% compared to what has been announced by President Obama. Moreover, the objective of 54.5 miles/gallon if still inferior to the standards targeted by all other developed countries as this graph from International Council for Clean Transportation shows:

graph1.jpg

I took those 2 examples just to show that once again we must be careful on all the figures that were given. In addition, many announcement made by the President were in fact only catch-ups of other countries standards. The speech needs now to turn into reality. What is really sure though is that this Plan is heading in a good direction and I can only hope to see actual achievements in the future! May these figures be on the side of the winning team in the fight against climate change.

The USA finally says “Yes we can” but…

This speech may be very important for the economic field. The Climate Action Plan is much more a declaration that the government is now backing up this sector. The “green sector” is already relevant and almost all economic analyses and projections forecast a massive growth. The figures differ from one source to another but low brackets in the energy production sector center for example around an annual growth rate of 5% in the EU. Compared to the current flat growth of the European GDP, there is no need for further explanations to understand that this area has an interesting future. It also represents thousands of jobs, which, at the moment are lacking in many developed countries. The USA do not have the lead in the sector – which is true for almost all other economic sectors since environmental concerns have always been placed secondly. Contrary to the EU for example where public policies have permitted early blossoming of the issue. Nonetheless, this speech may be the launch of the American force in the race to catch up and stay the wealthiest economy of the world.

With its striking force, there is no doubt that American champions will participate in the game very soon. On one hand, this might significantly change the international negotiations around climate change and ecology because such an economic mammoth could speed-up the whole process. On the other hand, it could also bring a pragmatic cash-oriented aspect to the table driven by huge lobbies which, as everyone knows, serve the general interest before their own. Therefore, economic conceptualization and pragmatism are necessary but the EU’s role is too keep high-standards and ambitious positions in coming international conferences. The Chinese solar panel case already showed the sector’s proneness to pressure and in the future, it is going to pressure up more. Having said that, I think it is also important to be positive, the fight against climate change will need big companies being able to deal with different issues: build dikes, innovate etc… And companies may find a win-win situation with the huge market and the big money it represents. Going further, ecology is not a cost but a profitable investment on future and I bet the companies who will miss the green shift will lose a lot in the future.

As Obama said, climate change is a challenge and we need to face it all together and we need to face it now, for us and for future generations. More than it is a threat, it is an opportunity. And who knows? Maybe this speech finally pulled the trigger and the whole sector can be expected to boom as the world is expected to agree on climate issues?

by Jules Harduin

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