The Future for Renewables and Our Low Carbon Ecomony

solar panels, window turbines, clean power

[Editor’s Note: Below is a guest post from Jesse Glicker LEED AP. Formerly, the Special Projects Coordinator at COOKFOX Architects, Jesse is currently a Masters Candidate at UCL’s Energy Institute studying Economics and Policy of Energy and the Environment.]

There is no shortage of news headlines about upcoming changes in the U.S. With the presidential inauguration only just behind us, we are already seeing intense shifts in policy targeting changes in the health care system, immigration reform and the renegotiation of trade deals. In this time of transition it is important not to lose sight of what this means for the environment and the U.S.’s role in fighting global climate change. Under the old administration, climate change was an accepted fact and U.S. environmental policy reflected that.

The Paris Agreement, considered the most ambitious global climate change efforts to date, was signed by 195 nations in December 2016. The agreement shows how serious the international community is about combating climate change.While the United States often claims the position of a leader in global policy, its waning commitment in the transition to a low carbon economy leaves it open to become outpaced by other world powers. The U.S. must remain focused on staying competitive in the high-growth industry of renewable energy and assess the options for doing so with or without federal support in order to remain a leader in this global effort.

The Numbers

Investment in renewables is a potential indicator for the feasibility of our country’s transition to a low carbon future. In 2005, total global investment in clean energy was low by today’s standards at 88 $USD billion. The U.S. was the clear leader at the time with 17 $USD billion, while China trailed behind at 8.81 $USD billion. That trend has changed significantly. Ten years later, global investments are up to 349 $USD billion with China soaring to the lead with clean energy investments totaling 119 $USD billion, more than 12 times what it was 10 years prior. Meanwhile, the U.S. came in at 56 $USD billion, nearly half that of China.

This month his China announced it plans to invest 361 $USD billion into renewables by 2020. This investment could reportedly create 13 million new jobs in China according to Reuters, adding to China’s current 3.5 million renewable energy jobs. By comparison, the U.S. has less than 1 million and the outlook for this figure to increase under Trump is very unclear (certainly if the US is relying on government funding for those jobs).

China is utilizing clean energy as an economic tailwind while the U.S. remains a tepid participant. What sectors these investments are going to is a clear indicator for where the jobs will be and the majority of growth will take place. While China’s still relies mainly on coal for its energy supply, new investments largely targeting the solar PV, hydro and wind industries will go a long way toward creating that growth.

Renewable Energy vs. Cleaner Carbon

One main factor to explain the U.S.’s stagnant growth rate in the development of renewables is the recent increase in natural gas production from shale. Production rates are at an all-time high and projected to continue to increase.

Natural gas is not completely evil here: As coal plants retire, natural gas production is filling the void (coal being a far worse culprit in CO2 emissions). Combined with the onset of the Great Recession, the switch from coal to natural gas is largely responsible for a net reduction in CO2 emissions nationally. But, for better or for worse, the move toward more natural gas, stifles the need to invest in alternative energy. While the cost and price of renewables are decreasing, set to undercut the price of fossil fuels, without the investments in infrastructure and innovation or the political will, the transition will be a slow one.

Cleaner Policy

The United States is leaving behind a previous administration that strove to identify itself with advancements in environmental policy. U.S. interest rose greatly to enter the fight against climate change and to increase energy efficiency. Under President Obama, the Clean Power Plan (CPP) was introduced and the Paris agreement was signed, additionally, grants were set up to invest in a smart grid and money was set aside for research and development (many of these efforts have since been removed from the official White House website since this past Friday).

While still controversial, the CPP is facing support from coastal states. The CPP aims to limit national CO2 emissions from power plants by setting regulations and standards on the state level. Although currently tied up in court, the Plan has the potential to lower U.S. CO2 emissions by 30% from 2005 levels and spur investment in alternative energy production (mainly due to the fact that the CPP would mean clear, stable support that investment in renewables will pay off in the future). According to the Annual Energy Outlook for 2016 by the U.S. Energy Information Administration (EIA), the CPP alone could result in a 20.5% increase in the construction of new renewable capacity between 2015 and 2030.

EIA, renewable energy, CCP

Source: U.S. EIA


Internationally, under the Obama administration the Paris Agreement was signed. The Paris Agreement is potentially the most ambitious multilateral environmental agreement to date. 125 countries have ratified the agreement, agreeing to stay below an increase of 2 degrees Celsius from pre-industrial temperatures. All countries party to the Agreement were required to submit Intended Nationally Determined Contributions ((I)NDCs), essentially a plan for how they will adhere initially to the Paris Agreement (not to meet the full agreement). The United States’ (I)NDC states:

The United States intends to achieve an economy-wide target of reducing its greenhouse gas emissions by 26%-28% below its 2005 level in 2025 and to make best efforts to reduce its emissions by 28%.

Several factors are needed to achieve this goal. The Center for Climate and Energy Solutions published a paper in November 2016 detailing such actions. On the policy side, stricter fuel economy standards for medium and heavy duty trucks and policies to reduce methane emissions from oil and gas. The paper also outlines the important role of technology to “fill the gap” between business as usual and actually meeting the emissions target, namely, advancements in battery storage and the development of carbon capture and storage on natural gas plants. These measures are obtainable, but focus on only just meeting the Paris targets with incremental advances in technology. To be a world leader in the fight on climate change the US needs to focus on long term, radical technology, policy and process change.

Already, the newly-elected President Trump has been promising (or threatening, depending on your view) to withdraw from the agreement. Even the conversation surrounding pulling out of the Paris Agreement signals instability to firms and organizations looking to invest in eco-innovation. Why restructure if the policy will become irrelevant during the upcoming term? A lack of consistent support from federal policy has plagued renewable development since its inception and could still stymie growth even in the face of the most critical environmental accord of modern times. international level. Additionally, as U.S. policy on renewables and clean energy investments become less clear, foreign countries and companies seeking investments will look to more stable investing landscapes.

Robinson Meyer, of the Atlantic, wrote on the consequences of the U.S. withdrawing from Paris. After an speaking with Todd Stern, the former US special envoy on climate change. He stated, “If the Trump administration withdraws the United States from the Paris Agreement, the country would face a massive global diplomatic backlash and permanently cede worldwide leadership on climate and renewable-energy issues to China…”

All is not lost -the potential failure of action at the federal level forces the nation to look to the states.

The 10th Amendment – Power to the States

There is a growing perception of the potential of state level government to fill the void left by federal policy. A prime example is the polarizing effect the Clean Power Plan had on states; while some states did bring the Clean Power Plan to court, several fiercely fought for it. Click here for a breakdown of where each state stands.

Notably, California has been a national leader in such efforts. California has set their own emissions reduction targets and their governor has gone so far as to say they will work with other states and nations on climate change policies. On the other side of the country, the Regional Greenhouse Gas Initiative was formed between Connecticut, Delaware, Maine, Maryland, Massachusetts, New York, Rhode Island and Vermont to cap and reduce CO2 emissions in the power sector.

C40, an NGO based on a collaboration of cities around the world to address climate change, recently released a report on the role that US cities in particular are playing in meeting environmental targets. The report aptly states, “The U.S. federal system endows cities with greater power than many other cities elsewhere in the world. The System allows state and city governments to set policy and targets, design laws and stands, implement financial mechanisms to develop and support markets (e.g green bonds), and enforce regulatory compliance.” This could continue to serve as a mechanism for local economies to prioritize environmental goals in the same way we have seen renewable energy portfolio standards grow over the past decade. The report goes on to point out that if all U.S. cities with populations over 50,000 followed subscribed to C40’s measures, they could reduce city emissions by 28%, representing 36% of the total necessary to hit the U.S. target for the Paris Climate Agreement by 2025.

It is important to note that even under the environmentally friendly Obama administration, the United States’ standing slipped in terms of its investments. This is where the private sector comes in to fill in where policy cannot; there is strong support for Paris from more than 100 American companies including Nestle, JLL and Nike. These companies were part of a coordinated effort, started in 2015 to support a low carbon economy called, “Business Backs Low Carbon USA.” The opener to the effort states, “Failure to build a low carbon economy could put America’s prosperity at risk. But the right action now would create jobs and boost competitiveness.” The effort advocates the implementation of the CPP and recently released this letter to now-President Trump in support of the Paris Agreement.

America is still in control of its own destiny when it comes to participating in a direction that will bring a cleaner energy grid, more jobs, and more innovation. Current efforts (both political and market based) in the U.S., if maintained, can get the U.S. to meet the Paris goals. Technological growth occurring in carbon capture and storage, battery storage and other incremental improvements taking place are certainly moves in the right direction. While it is the responsibility of the country to help guide this process, the “country” may end up having to be the people, companies and governments in each of the 50 states rather than the federal government charged with their management.  In the words of Donald Trump himself, “…we are transferring power from Washington, D.C. and giving it back to you, the people.”

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