Republican Gains to Mean More Focus on Jobs Than Carbon Fixes, Yergin Says

The likelihood of Republicans gaining control of the U.S. House of Representatives means more focus on creating jobs than reducing carbon emissions, said Daniel Yergin, Pulitzer-winning author of oil-industry history “The Prize.”

Republicans could gain 39 seats in the House after elections today, according to a Bloomberg National Poll of voters from Oct. 24-26. Such a shift will take energy policies “in a different direction” from efforts by President Barack Obama’s administration, Yergin, chairman of IHS-Cambridge Energy Research Associates, said today.

“There just isn’t the political traction for big legislation” on climate change, he said in an interview during Singapore International Energy Week. “The main thing now is the U.S. economy. The critical thing is the restoration of confidence, a sense of predictability, in which you know what’s going to happen with regulation and tax. Then people will make investment decisions and that will create jobs.”

The U.S. unemployment rate probably held at 9.6 percent for a third month, according to the median of 61 estimates in a Bloomberg News survey. Critics of plans by the Environmental Protection Agency to enforce greenhouse gas emission limits under the Clean Air Act say the economy can’t handle new regulations on cars, trucks, oil refineries and factories. The U.S. is the world’s second-largest carbon emitter after China.

The EPA moved after Congress failed to enact laws putting in place a cap-and-trade program. Senate Republicans were defeated in June in their efforts to strip the agency of that authority. The ability to regulate greenhouse gases under existing law stems from a 2007 Supreme Court decision on the scope of the Clean Air Act.

China’s Embrace

“The EPA was given authority to intervene on this and that’s what is in motion now,” said Yergin. “It’s going to be controversial. There is big philosophical debate that underlies what mechanisms you use to address carbon. Cap-and-trade was invented to be a more market-friendly tool but it’s also more complicated.”

Efforts to address energy efficiency and carbon reductions have gained more credence in both China and the U.S. as the countries embrace economic benefits, said Yergin.

“Efficiency used to be a controversial issue,” he said. “But it’s been embraced across the political spectrum and by countries. China has put it at the top of its energy priorities.”

Global energy demand from all sources will climb by between 32 percent and 40 percent in the next 20 years, said Yergin, driven by emerging economies such as China and India.

New Sectors

In 2007, China became the largest emitter of energy-related carbon dioxide, according to International Energy Agency data. The country’s annual discharge of CO2 was more than six billion tons in 2008, almost tripling from 1990s levels, IEA said in a report on its website.

“I think we’ll see the 12th Five-Year Plan will have much bigger focus on new energy, new strategic sectors. And the Chinese have the resources and finances now to invest and see that they can build a position in what may well be the technologies of the day after tomorrow,” he said.

China’s primary energy consumption in 2015 will be between 4 billion metric tons and 4.2 billion tons of standard coal, Xinhua News Agency said, citing Jiang Bing, the director of the development and planning department of the National Energy Administration.

Consumption needs to be kept below 4.2 billion tons in the 2011-2015 five-year plan for the country to meet its targets of drawing 15 percent of energy needs from non-fossil fuels, and cutting emissions per unit of GDP by 40 percent to 45 percent, Xinhua reported.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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