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What About the Other Shoe?

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The most important thing to understand about the President's likely climate initiatives to be announced Tuesday is that they constitute only one of the two thrusts that will be required to cope with the climate challenge. All of the president's signaled new initiatives - appliance efficiency, building upgrades, and standards for both new and old power plants, aim at the building and electricity sectors, which together amount for 45 percent of US greenhouse emissions. The proposed Obama policies have virtually no impact on the other half of the country's carbon pollution problem - transportation and industry, primarily manufacturing.

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So what the President is NOT announcing may be as significant as what he is putting forward. Nothing in this week's actions, of course, precludes the Administration from putting forward robust new measures for transportation and industry. And in many ways the politics of the next round of changes needed in those sectors are easier than the very sticky politics of cleaning up power plants, with the unavoidable consequence of further reducing the already shrinking utility market for coal.

That's because transportation fuel is still 50 percent imported and very expensive - so there are lots of security, economic and political arguments for moving the US off of its exclusive dependence on oil.

Transportation and power plants are each responsible for a little more than a third of greenhouse emissions. The Administration, in setting up 2020 fuel economy standards in 2009, actually did the hard part, empowered by the strong desire of the US auto industry for certainty and support for vehicle innovation. The other needed steps in the transportation sector are:

1- A major new investment in transportation infrastructure, to make the whole system more efficient, flexible and to give shipper and passengers choices that avoid expensive trucks, planes and cars.

2-Derisking investments in alternative fuel infrastructure so that electric vehicles, biofuels and natural gas can compete with gasoline and diesel - they are already cheaper, but there is a chicken and egg problem. Daimler US reports that its natural gas trucks would sell themselves, even though they cost more up front, except that trucking companies cannot fuel them in most of the country.

The President has talked about the need to get us off imported oil, and in his speech in Miami in March talked about the need to invest to repair what he called America's "raggedy" infrastructure. (It gets a D+ rating from the American Society of Civil Engineers.) But unlike the climate announcement this week, which lays out an actual pathway to the progress it promoted, the Miami speech lacked clear targets, goals or mechanisms. Perhaps that is because infrastructure funding, unlike pollution regulation, requires Congressional action - although the politics of leveraging infrastructure spending with public-private partnerships is one of the least polarized issues in this partisan Congress.

But what is worrying is that the two major fuels related initiatives the Administration is known to be considering - whether or not to approve the Keystone Pipeline to export tar sands oil through the US, and how many additional LNG export terminals to license - would both make things for transportation and manufacturing emissions - and the economy - worse not better. In fact, more LNG exports will also make the political lift of power plant emission regulation tougher.

That's because exports mean more expensive domestic oil and gas - and that makes natural gas a less attractive competitor for oil in transportation and manufacturing and for coal in the utility sector. In effect, by approving natural gas exports and locking in dependence on tar sands oil (the world's most expensive) the Administration would be embracing the oil industry's high-price strategy, in which the US exports cheap, lower carbon natural gas and replace it with either more polluting coal or more expensive imported oil. That brings OPEC oil and gas prices back into the US economy, which for the past several years has benefited from somewhat cheaper oil and vastly cheaper natural gas.

The new team at the Department of Energy, under Secretary Ernie Moniz, is going to be faced with these realities - which the Beltway has been in deep denial of in the face of a very sophisticated oil industry propaganda campaign.

That campaign - not the intrinsic or political difficulty of cleaning up greenhouse emissions from the transportation and manufacturing sectors - is almost certainly why the Administration only opened one theater of its campaign to protect the climate this week. It's big oil's megaphone we're up against. But making sure that Obama doesn't foreclose climate progress on the other half of the equation by approving massive exports is an even more urgent imperative for climate campaigners after this week's major and important progress on the utility and buildings fronts.

A veteran leader in the environmental movement, Carl Pope spent the last 18 years of his career at the Sierra Club as CEO and chairman. He's now the principal advisor at Inside Straight Strategies, looking for the underlying economics that link sustainability and economic development. Mr. Pope is co-author -- along with Paul Rauber --of Strategic Ignorance: Why the Bush Administration Is Recklessly Destroying a Century of Environmental Progress, which the New York Review of Books called "a splendidly fierce book."

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