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Will President Barack Obama’s Climate Action Plan put the United States on a pathway to sustainable development? And will this re-legitimize the United States as a global leader against climate change? The plan, presented by the President at Georgetown University on June 25th, 2013, certainly includes a commitment on the President’s behalf to spend the much needed political capital to push forward a comprehensive climate change strategy.

Due to divisions within Congress, the President’s strategy heavily relies on his executive powers. The corner stone of his plan is a mandate to the Environmental Protection Agency (EPA) to develop regulations to regulate carbon dioxide emissions from power plants. Such a mandate lies within the President’s discretionary power under the Clean Air Act, and can be adopted without Congressional approval.

However, there are limits to the degree in which a strategy that relies on the President’s executive powers will be effective in tackling climate change. First, future presidents can also make executive decisions that can impact on President Obama’s plans and mandate of the EPA. Logically, the preparation of legislation within the EPA takes time and the key element of limiting power plant emissions via the Clean Air Act may only be fully developed within a few years’ time, close to the end of the President’s second term. This would mean that President Obama’s long-term plan is in part dependent on future administrations.

Second, important parts of the President’s Climate Action Plan rely on legislative procedures in which Congress is involved. A good example is President Obama’s call for the elimination of fossil-fuel tax subsidies in the budget of Fiscal Year 2014.

The proposed FY 2014 budget would represent a cut of US$ 4 billion per year in fossil fuel subsidies related to production, mainly of oil and natural gas. The OECD estimates that in 2011 federal producer subsidies to fossil fuels in the US—for the purpose of this article including R&D subsidies and expenditure related to the administering of a strategic petroleum reserve program—were at least US$ 4.2 billion, of which about half went to oil with the remainder being roughly equally split among coal and natural gas.

Yet political economy challenges associated with fossil fuel subsidy reform are considerable. It is telling that since he took office, President Obama has proposed cutting fossil fuel subsidies from the budget every year. But gaining approval from Congress has been a barrier. Even though fossil-fuel subsidy reform would unlock financial resources that could be invested in the domestic economy, President Obama’s efforts to phase out fossil fuel subsidies have so far gone without result.

Nevertheless, it remains that reforming fossil fuel subsidies globally is an important step towards tackling climate change. The International Energy Agency estimates that a partial phase out of fossil fuel consumption subsidies could save 12 per cent emissions and support energy efficiency efforts. If it aspires to be a true leader against climate change internationally, the US would do good setting an example by reforming inefficient production subsidies at home.

While the G-20 committed in 2009 to a fossil fuel subsidy phase out, progress towards that goal has been modest. Earlier research by the IISD Global Subsidies Initiative suggests that the failure to reform fossil-fuel subsidies lies in the failure to fully appreciate the political economy behind reform. In particular well-organized interest groups benefiting from existing subsidies have been effective in blocking reform. This is often done through campaign financing and disproportionate political participation.

As President Obama already indicated during his “change-campaign” in 2008, these are issues ‘Washington’ has been struggling with. Despite structural challenges and political barriers, achieving subsidy reform is an important objective, but one which requires cooperation with Congress. Executive powers alone will be insufficient.

Tom Moerenhout is a project researcher at the International Institute for Sustainable Development.