ECONOMIC REPORT OF THE PRESIDENT

advanced vehicle technologies (CEA 2016c). Much like owning a car was difficult
until enough people had cars that gas stations were plentiful, the network
effects of electric vehicles provide an economic case for a policy push
supporting the necessary services to move the industry toward critical mass.
Reducing Emissions from High Potency Greenhouse Gases
To further help address the environmental externality from greenhouse
gas emissions, the Administration has also developed policies to
reduce the emissions of other potent greenhouse gases, such as hydro-fluorocarbons
(HFCs) and methane. When the President launched his Climate
Action Plan in June 2013, he pledged to reduce emissions of HFCs through
both domestic and international leadership (EPA 2016b). Through actions
like leader-level joint statements with China in 2013 and with India in 2016,
the United States has led global efforts to secure an ambitious amendment
to the Montreal Protocol to phase down HFCs. In October 2016, the 197
Parties to the Montreal Protocol agreed to amend the Protocol to phase
down HFC use in developed countries beginning in 2019, and to freeze
HFC use in developing countries in 2024, though some will wait until 2028
(UNEP 2016).
At the same time, the Administration has taken important steps
to reduce HFC consumption domestically under EPA’s Significant New
Alternatives Policy, a Clean Air Act program under which EPA identifies
and evaluates substitutes for industrial chemicals and publishes lists
of acceptable and unacceptable substitutes. The Administration has also
announced a suite of private-sector commitments and executive actions that
are projected to reduce HFCs equivalent to more than 1 billion metric tons
of carbon dioxide emissions globally through 2025.
The President has also taken steps to reduce methane emissions,
which accounted for 10 percent of U.S. greenhouse gas emissions in 2014.22
In January 2015, the Administration set a goal of reducing methane emissions
from the oil and gas sector by 40 to 45 percent from 2012 levels by
2025, which would save up to 180 billion cubic feet of natural gas in 2025—
enough to heat more than 2 million homes for a year. The Administration’s
commitment to this goal was reaffirmed and strengthened in March 2016 in
a joint statement with Prime Minister Justin Trudeau of Canada, in which
both countries pledged to reduce methane emissions from the oil and gas
sector and to explore new opportunities for additional reductions. In May
2016, EPA finalized methane pollution standards for new and modified
22 This is based on the U.S. EPA’s emissions inventory, for which the most recent data are from
2014. More recent research suggests that U.S. methane emissions may be much higher than the
estimates underlying EPA’s 2014 inventory (Turner et al. 2016; Schwietzke et al. 2016).
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