US President Joe Biden is set to announce the country’s steepest ever emissions cuts, as he hosts 40 world leaders on Thursday for a summit on climate change that will include China’s Xi Jinping and Russia’s Vladimir Putin.
Biden is expected to pledge to reduce US greenhouse gas emissions by as much as 50 per cent by 2030 relative to 2005 levels, according to people familiar with the administration’s thinking.
That marks a significant acceleration of the Obama administration’s pledge to cut emissions by 26-28 per cent by 2025.
Ahead of the summit, the Biden administration has launched several new climate policies, including efforts to integrate climate-related risk into the financial system as well as tax credits for clean energy as part of its $2tn infrastructure bill.
Janet Yellen, the US Treasury secretary, said in a speech that climate change had become an “existential risk to our future economy and way of life,” as she vowed to try to catalyse public investments in green energy and private financing of green technologies.
“The investment needed to green our economy is enormous,” Yellen said. “One estimate placed the needed incremental investments at over $2.5tn for the United States alone. Private capital will need to fill most of that gap.”
Since taking office, Yellen has appointed a new climate adviser to co-ordinate the agency’s efforts on the subject and has vowed to step up efforts to evaluate and disclose climate risks, to facilitate more investment in the sector.
Where climate change meets business, markets and politics. Explore the FT’s coverage here
“The thinking goes that because we know so little about climate risk, let’s be tentative in our actions — or even do nothing at all. This is completely wrong, in my view. This is a major problem and it needs to be tackled now,” she said.
The White House’s new emissions target — likely to be a reduction of between 45 and 50 per cent by 2030 — would require sweeping changes across the economy, including transportation, the power sector and manufacturing.
Net US greenhouse gas emissions totalled 5.8bn tonnes on a carbon-dioxide equivalent basis in 2019, down 13 per cent from 2005, the Environmental Protection Agency reported in official data last week.
Emissions plunged 10.3 per cent in 2020 as the coronavirus pandemic sapped energy demand, according to Rhodium Group, a research company, but forecasters believe that a recovering economy will fuel a rebound this year.
The US is the second-largest carbon emitter in the world after China.
Cutting emissions by 50 per cent would be “possible but very difficult”, said Jason Bordoff, co-founding dean of the Columbia Climate School. “You should be a little ambitious, and use a number that forces the country to stretch.”
The US hopes its climate target — also called a nationally determined contribution, or NDC — will encourage other countries to adopt similar goals ahead of the UN COP26 summit in Glasgow in November.
“We will bring our own NDC to the table, but we are looking for others to also raise their ambition,” said a senior administration official. “The US is responsible for just under 15 per cent of global emissions . . . It doesn’t mean we don’t have to act — we clearly do — but the rest of the world has a major part to play.”
John Kerry, Biden’s climate envoy, has been criss-crossing the world to rally support from other countries, including China, where he was the first senior member of the administration to visit last week.
Days before the summit, China and the US issued a statement pledging to work together on the “climate crisis”. Kerry has said the two countries “talked a lot about coal”, and also discussed the possibility of collaborating on renewable energy projects.
US allies including Canada, South Korea and Japan are also primed to announce climate targets at the summit.
Rachel Kyte, dean of the Fletcher School at Tufts University, said the US had been “extremely energetic, both at home and abroad” in promoting its climate agenda. The EU on Wednesday agreed a climate law to reduce emissions by 55 per cent by 2030.
“We expect to see a number of countries tightening their targets, and that is a good thing, that builds momentum. But there are some big question marks about co-operation,” she added, pointing out that the US, EU and China would have to work closely together ahead of COP26.