Stabilize GHGs - public policy for the global energy transition from fossil fuels to clean and renewable energy
[Note: this article was written when Donald Trump was still the POTUS. Now that Joe Biden and Kamala Harris are the new United States President and Vice President; and Democrats are in charge of both the House of Representatives and the Senate, the United States will rejoin the international community focused on climate action. First and foremost, this means rejoining the Paris Climate Accord. The United States government is also poised to invest substantiallyin clean energy infrastructure, clean energy job development, environmental protections, and in many other significant sustainable climate, energy, environmental, and economic/job growth US sectors.]
Climate-focused public policy
This is a set of public policy guidelines to fight climate change by lowering greenhouse gas (GHG) emissions through transitioning from a fossil fuel-based economy to a clean energy economy. Here we discuss both the needed transition from fossil fuels to sustainable energy sources on a global basis; and the necessary transition from unsustainable practices to policies focusing on the clean energy transition.
With regard to the United States specifically, there are certain public policies that are recommended, and certain public policies that are specifically not advised. The pros and cons of the Green New Deal (GND) are discussed after the set of actionable climate policy recommendations are detailed later in this article. The United States should introduce carbon pricing, either on a federal level, or individually all 50 states should mandate their own unique carbon pricing systems. Carbon pricing systems are to go hand-in-hand with an increase in renewable energy industry subsidies, such as renewable energy feed-in tariffs.
Governmental energy subsidies for all energy sources should be renewed and maintained; but in order for energy subsidies to continue to work effectively, there must be a mandated and enforced parallel reduction in GHG emissions and other environmental pollution from fossil fuel intensive industries and fossil fuel power generation. ALL countries globally, including the United States, must adhere to NDC pledges (nationally determined contributions of GHG reduction pledges as made by all countries at the Paris Climate Accord). This will assure success as countries make progress in the global transition to an economy based on clean energy.
Clean and renewable energy, energy storage technologies, and promising emerging low carbon emissions energy technologies - like CCS and advanced nuclear - must have considerable investment going forward. This investment should be included in ongoing energy subsidies - direct subsidies, subsidies for R&D, investment tax credits, tax incentives for job-creating energy-intensive industries, etc.. A major part of the energy subsidy strategy should be investment for research and development of clean energy technologies.
Additionally, government-sponsored job retraining programs are necessary to help workers new to the clean energy jobs market with experience mainly in fossil fuel industries. Paid clean energy job retraining is necessary in order to make the transition from a fossil fuel based economy to a more productive, sustainable, renewable energy based economy a successful transition. Workers in fossil fuel intensive industries should have no-cost retraining in clean energy careers, and this should be through government-sponsored job programs.
In order to get to net zero GHGs globally, public policy worldwide must prioritize: carbon net neutral and low carbon energy generation (biomass, hydro, natural gas with CCS, along with other renewables) ; and low carbon transportation fuels (biofuels, hybrid transit options such as biofuel + electricity). Serious climate action policy also prioritizes investment in both of these fuel types - LNG and SNG made from a significant share of biofuel. Climate policy must also focus on investment in zero carbon emission energy generation such as nuclear power, and zero emission solutions for cities such as electrification of multiple sectors emphasizing zero carbon technologies such as electric transit, and mitigation solutions such as energy efficient building retrofitting. After these measures have been successfully deployed, the global focus must shift to deep decarbonization of all fossil fuel intensive sectors of the global economy – energy generation, transportation, buildings, and the hardest to decarbonize sectors - industry (and manufacturing), agriculture (land-use as well as food & water production), and aviation (& shipping freight).
Net zero by 2050 is needed to keep global warming well under 2° C by the end of the century...in order to stay below 2° C, there needs to be carbon-neutrality on a worldwide level – both with zero carbon emissions technologies for energy generation, transportation, buildings, and the hard to decarbonize sectors...and carbon sequestration/ carbon removal technologies and measures (stop deforestation, reforestation, sustainable agriculture, carbon farming, reduction of waste/ waste management, using waste to create energy as with biomass and anaerobic digestion).
These basic sustainability public policy priorities (as discussed in detail below) would work effectively in any country in the world.
The factors which support the advantages of renewable energy over fossil fuels include:
- Relatively lower (much lower) marginal cost of additional fuel supply; as utility-scale solar, wind, and other renewables are globally abundant, low-cost sources of energy vs. fossil fuels. Fossil fuels carry a cost to explore, develop, refine, and transport the fuel. Renewable energy is plentiful and abundant worldwide, and usually does not carry a marginal cost for additional fuel. Renewable energy does carry costs to maintain the energy plants/ generators, transmit/ distribute the energy- all costs also associated with non-renewable energy. The cost of harnessing wind or solar power does not need to include generating the renewable energy, which is usually free of cost, and generated by natural systems that do not necessitate human effort. Wind and solar farms do have a relatively high up-front capital cost associated with the initial investment, and this is where the bulk of the cost for these renewable energy sources is seen.
- No negative externalities ("social cost of carbon") with solar, wind, and geothermal energy (i.e. there is almost no environmental or public health risks associated with these forms of energy, and no pollution, therefore there is little cost to society with these forms of renewable energy). There are some negative externalities with the renewable energy sources biomass and hydroelectricity (as biomass still produces GHGs, and hydroelectric dams are not entirely environmentally-friendly). Fossil fuels carry a high cost of negative externalities- the risks to public heath and environmental risks associated only with fossil fuels, and not renewables (renewable energy doesn't produce pollution that represents a significant risk to the environment, or a public health risk).
- The lower levelized cost/ cost parity of renewables in relation to fossil fuels.For extensive information on the levelized cost of energy, see Lazard's levelized cost of energy (LCOE 12.0) below. Fossil fuels carry a substantial marginal cost for the fuel source - gas, oil, and coal carry a significant cost to extract, refine, transport, and/ or distribute the energy.
- Naturally occurring renewable energy is abundant and free, and only carries a cost associated with harnessing, and distributing/ transmitting the energy (for wind, solar, and geothermal, and to some extent, biomass. Both hydroelectricity and biomass carry some negative externalities). In the case of biomass/ biofuels, there are costs associated with producing the bioenergetic material; as well as opportunity costs associated with biomass.Crops used with biomass/ biofuel production (traditional 1st generation biomass) would otherwise be food crops; although that problem is addressed with 2nd and 3rd gen bioenergy crops. Bioenergy sources also do produce some greenhouse gases and environmental pollution (though significantly lower than fossil fuels). In the case of hydroelectric dams, there is some environmental pollution, destruction of ecosystems, and hazardous condition to wildlife around, and downstream from, hydroelectric projects.
- Presently, renewables have, or will soon have (for those renewable energy sources that don't already), a lower cost than fossil fuels for the production of energy (the marginal cost of most renewables is near-zero, and negative externalities are near-zero with solar, wind, and geothermal). Fossil fuel production represents a lower cost than renewables only in the initial capital investment associated with developing the coal mine, oil well, gas rig, etc...Generally speaking, this translates into a lower price for utility-scale renewable energy generation overall, even in the relatively short-term (under 5 years), particularly compared with coal energy, (as seen in the cost chart below). In levelized cost of energy models, rooftop solar PV is still more expensive than fossil fuels, but utility-scale renewables beat coal. Natural gas combined cycle energy generation technologies are on par cost-wise with utility-scale renewables. A comparison of levelized energy costs (adjusted for variables in generating the electricity from various fuel sources, capital costs, costs to bring electricity generated to market, other relevant costs) are presented here:
Examples of levelized costs of energy include: up-front capital costs/ costs of initial investment (which are generally higher for renewable energy than fossil fuel energy), marginal cost of the fuel source (which is much higher for fossil fuels, and almost nothing for free, abundant sources of renewable energy like solar and wind energy, and low cost for biomass), cost of maintenance for the power plant/ energy farm/ dam, etc..., cost of transporting the fuel (again, zero for most renewable energy sources), costs associated with transmitting/ distributing the energy, insurance costs for the energy producing facility, etc...
For more information on LCOE and cost of negative externalities (of fossil fuels), please see "What makes a city sustainable"
Public policy recommendations for a successful transition to a clean energy economy
Recommended public policies include, first and foremost: putting a price on carbon. Carbon pricing is a market based (i.e. capitalistic-based) solution that will encourage (but not mandate, as seen in the Green New Deal, discussed below) the transition to clean energy, and specifically, a transition to the ideal outcomes for world cities detailed in the Stabilize Greenhouse Gas Emissions article. The funds from carbon pricing systems can potentially be directed towards clean energy priorities. Carbon pricing can also be in the form of a revenue--neutral carbon tax - with the funds from carbon taxes on fossil fuel industries redistributed to taxpayers as a dividend check, income and payroll tax reductions, among other means.
The other priorities for climate-based policies are: investment in clean energy technologies, strict regulations and enforcement of those regulations for the fossil fuel industry, and job retraining programs for a just transition to a clean energy, sustainable economy. Carbon pricing, and the fines from regulation enforcement are both policies which force the fossil fuel industry to potentially fund clean energy priorities; such as clean energy job retraining, and/or other priorities as determined by policy makers and the public through legislation.
Carbon pricing (both cap & trade and carbon tax) encourages the transition to clean and renewable energy, and energy efficiency practices in energy production, by encouraging fossil fuel-based industry to avoid the additional cost to the economy (negative externalities) of creating CO2 and other GHGs during energy production. The industry, manufacturing, and power generation sectors can simply switch to renewable energy and retrain employees to work with sustainable energy technologies, and avoid the additional cost of emissions altogether. The mass transit and building sectors can go the route of electrification, energy efficiency, and clean energy technologies.
The reason emissions deserve to have a financial cost applied to them is that there is already tremendous health and environmental costs associated with fossil fuel energy production and use of fossil fuels (see the "What Makes a City Sustainable" article for more information on the "social cost of carbon", i.e. negative externalities). The majority of energy plants ideally would run on renewable energy or natural gas, to limit GHG emissions from the energy producing and energy consuming sectors.
Fossil fuel-based industries can reduce GHG emissions by finding energy efficient means such as carbon capture and storage (CCS), integrated gas combined cycle, and/ or other energy efficiency measures to increase energy efficiency during energy production, and decrease emissions. In power plants with CCS using natural gas as the fuel source, CCS technologies have limited GHG emissions to as little as 5% of what would otherwise be emitted by the coal or gas fired plant without CCS. Another potential emerging technology that might see growth in a carbon pricing environment; bioenergy with CCS (BECCS) is an emerging, though unproven, negative emissions technology still in R&D phases. CCS becomes unnecessary, and industry would not be subject to any future carbon pricing, if energy generation and use was transitioned to renewable energy sources that do not produce GHGs (solar and wind).
Regulations for Energy Industries
The "What Makes a City Sustainable" article, here on Green City Times, includes details on the need for strict regulations for energy production from fossil fuels. Many strict EPA regulations for industries producing and using energy from fossil fuels have been largely eliminated in the United States since regulatory rollbacks began in 2017. The United States federal government, along with all 50 states individually, must mandate, monitor, and the federal + state EPA must enforce, strict environmental regulations; including environmental pollution regulations, and greenhouse gas reduction targets by the industry/ agriculture, power generation, transportation, and building sectors. The U.S.federal government and all state governments must adhere to guidelines for GHG emission requirements as set forth under the Paris Climate Accord, which the United States must immediately rejoin.
Adhering to strict environmental and health regulations will force industries to transition to more clean energy and energy efficient means of energy production with less GHG emissions and pollution at a minimum; and ideally will motivate industries to transition to clean, renewable, efficient, modern 21st-century means of energy production. Funds from fines levied against industries for failing to comply with GHG and pollution regulations for fossil fuel intensive industries (as well as carbon pricing systems) can potentially be used in funding renewable energy subsides, job retraining for clean energy jobs, and/ or other priorities as determined by policy makers through legislation.
Clean Energy Investment/ Energy Industry Subsidies
This brings into focus the third public policy topic: energy industry subsidies (such as renewable energy feed-in tariffs, direct subsidies, investment in R&D for clean energy technologies, investment tax credits, tax incentives for job-creating energy-intensive industries, etc...). Progressive proponents of increasing subsidies to renewable energy and decreasing/ or eliminating subsidies to fossil fuel companies are both right on some points, and wrong on others. As long as fossil fuel and petrochemical companies in fossil fuel intensive industries comply with EPA regulations, and meet all carbon pricing policies in place on both a state and federal level, there is no reason to eliminate or dramatically decrease fossil fuel subsidies. The Americans in fossil fuel intensive industries, who for decades have been treated as the "winners" in American energy, and the American economy, should not suddenly be financially penalized and treated like economic "losers", especially when the United States' economy is still largely run by fossil fuel industries.
There should be modest decreases in fossil fuel subsidies, especially for industries that fail to comply with (new, robust, strict) EPA regulations, and international GHG emission reduction targets as per the NDCs pledged at the Paris Climate Accord) There should be an increase in federal and state funding for research and development of clean energy technologies. These technologies include: energy storage, renewable energy, energy efficiency technologies, low and zero-emission energy and mass transit technologies; and smart grid and electrification technologies must also be prioritized for transportation and building sectors.
The coal industry must be brought to an end (as discussed below), but with a just transition for all coal workers. Coal energy generation should not be subsidized, and there should be a federal moratorium on all new coal mines in the country (which is effectively happening anyway, as the coal industry is fading in the United States). Existing coal mines should be carefully closed down, with help from the federal government and states, with a focus on a just transition for coal workers, and management of hazardous pollution left behind as coal mines are closed down permanently.
Coal is an outdated 19th and 20th century means of energy generation that carries a high amount of negative externalities; making coal generally more expensive than renewables and natural gas, after the LCOE and negative externalities are accounted for. See "natural gas vs. coal", and "What Makes a City Sustainable" for more on negative externalities of coal, why natural gas is a better choice, and renewable energy is the best option.
Job retraining/ Just Transition
Another important component of the energy transition that should be part of public policy moving forward, are government-sponsored retraining programs of fossil fuel workers. Job retraining would be the first part of the just transition from a fossil fuel-based economy to a clean energy economy (starting with workers in the coal industry, then oil and gas).These programs would train to workers in fields of their choosing among renewable energy, energy efficiency, and clean energy jobs, especially the featured clean energy jobs in- greencitytimes.com/renewable-energy-jobs-are-up-and-re-cost-is-down
Some jobs in the new sustainable clean energy job market are growing exponentially faster than fossil fuel based jobs. These fast-growing jobs are included in the job training programs that fossil fuel based workers will have the opportunity to choose from. These programs are government sponsored, all expenses paid, training programs that include: wind turbine technician, solar panel installer, jobs in the smart grid, Energy Star, and the electric and hybrid vehicle industry; among other clean job opportunities.
As just transition issues are addressed, by offering fossil fuel workers free job training in clean energy, other environmental justice issues can be addressed. Chief among those issues is the prevalence of minority populations living near heavy industry, fossil fuel power generation, and other environmentally hazardous sites, such as waste treatment facilities. Less affluent, and minority communities, are disproportionally exposed to hazardous environmental pollution through air, land, and water pollutants from fossil fuel reliant industries. For ideas on how these issues can be addressed, please see: greenamerica.org
Impacts from fossil fuel plants are contributing factors to higher mortality rates in minority communities as they are more exposed to pollution...The long-term consequences of pouring greenhouse gas emissions and other pollutants into our atmosphere are dire, and there are also immediate impacts, which often afflict [less privileged, less affluent] people worldwide. Studies have shown that the effects of climate change affect communities differently, and that minorities and marginalized groups are the most affected. The question of environmental justice then becomes that of the distribution (among individuals, social groups, countries) of the burdens related to environmental policies (risk prevention, changes in practices, restoration of degraded environments). Who will pay for the environmental degradation? and how? The burden is usually felt by the most vulnerable, known as "frontline communities".
Fortunately, there are solutions ready to be implemented to protect the planet and the most vulnerable communities burdened with fossil fuel effects. Let’s explore the problems, solutions, and how you can get involved.
Support the work of environmental justice organizations and search for a local movement near you to support.
2. Explore our climate justice resources to learn more about organizations and experts on the frontlines as well as legislation to support.
4. Search our Get a Better Bank database to find community development banks and credit unions that support people and the planet. Our Fossil Fuel Divestment Campaign provides resources for divesting more broadly from fossil fuels through your mutual funds and stock holdings, including lists of financial products and service providers who can help create fossil-fuel-free portfolios.
5. Take action directly by cutting your own carbon emissions through energy efficiency measures and switching to clean energy sources.
So, the main components of public policy needed to drive the energy transition from a fossil fuel based economy and job market, to a more productive, sustainable, clean and renewable energy based future are:
- Carbon pricing
- Clean Energy Investment/ Energy Subsidies
- Retraining programs/ Just Transition
The proposed energy public policies which should definitely NOT be implemented, are those policies proposed in the Green New Deal (GND). Sustainable energy sources, as emphasized in the GND, are both better for the environment and the economy. However, instead of relying on reasonable market mechanisms like carbon pricing, subsidies, and regulations, the GND picks "winners" and "losers" without letting the market have a say.
Mandating an immediate transition from fossil fuels to renewable energy, as with the GND, will have an immediate cost of at least $5 trillion (a trillion dollars up-front cost and around 1/2 trillion dollars annually for at least the next decade). Tens of millions of Americans are still dependent on fossil fuel intensive industries for jobs, especially in oil, gas, and petrochemical production, manufacturing, and shipping/ transportation industries. Not only the several million Americans (6.4 M in 2017) working in fossil fuel industries, but those working in fossil fuel-intensive industries (such as non-electric auto manufacturing), would be adversely affected by such a dramatic shift in public policy regarding energy.
The American Petroleum Institute (API) estimates that over $1 trillion in gas and oil infrastructure will be added in the US by 2035; added to what is already a trillion dollar+ investment in oil and gas in America. Oil and gas intensive industries have been the largest economic contributors to the United States economy. Employment in fossil fuels energy production, petrochemical and fossil fuel-related manufacturing, and conventional oil and gas driven transportation and shipping, have historically been the largest sectors of existing good paying middle class jobs; especially when industries related to oil like non-electric vehicle domestic auto manufacturing are thrown in. That said, it must be noted that there is currently more employment potential and growth in the clean energy jobs sector than fossil fuels.
Good paying fossil fuel jobs have traditionally been ubiquitous throughout most states in the United States; as has been the mass production and consumption of fossil fuels and goods that use petrochemicals. Due to the high reliability, and high energy density, of fossil fuels, the world remains in a state of dependence on coal, oil, and gas. Coal, gas, and oil, are still currently used in large quantities globally, even though burning fossil fuels is the primary cause of anthropogenic global warming. Fossil fuels represent a constant stream of energy- steady energy sources which are not subject to intermittency, as renewable energy sources occasionally are.
Ideally, the optimal transition for energy production and consumption of energy, goods, and services would be fossil fuels straight to renewable energy as quickly as possible, as outlined in the GND. However, the most practical solution for an efficient transition that does not disrupt the economy is to invest in renewable energy, energy efficiency, energy storage, and clean, zero-emissions energy technologies. However, as noted previously, API forecasts over $1 trillion in infrastructure investments for oil and gas in the United States for the next 15+ years, thus it is prudent to include oil, as well as natural gas, along with renewable energy, in energy plans going forward. The GND would disrupt, and possibly replace, the market system for energy, seeking to eliminate all fossil fuels immediately. Instead, market mechanisms should be used (carbon pricing, energy policies) in order to effectively and efficiently transition energy and financial markets from those based on fossil fuels, to those based on renewable energy.
It is economically counter-intuitive to promote the GND, which would make the transition from fossil fuels to renewables immediate, targeting the oil and gas industries at the same level as coal. Instead, the United States can use the market mechanisms of carbon pricing, subsidies for renewables, and incentivized investment in cleaner, energy efficient means of energy production, along with strict regulations for fossil fuel industries- to transition the economy of the United States from fossil fuels to renewables.
Topics for further exploration:
- stranded assets of ALL fossil fuels (coal, oil, and gas) (esp. with a sudden shift to renewable energy from fossil fuels), capital costs of investments in fossil fuels, fossil fuel infrastructure that represent the backbone of the US economy
- opportunity costs, missed opportunity costs relating to investing in fossil fuels vs. renewables and vice-versa; economic risks of investing in fossil fuels
- opportunity costs (savings, competitive advantages, and employment creation) of investments in infrastructure of specific energy projects- renewables vs. fossil fuels
- cost/ benefit analysis of fossil fuel vs. renewable energy projects, esp. existing and proposed investment in capital assets, infrastructure relating to specific projects
- need for natural gas and/ or energy storage as a back-up energy source and to balance the energy generation of renewable energy, which is intermittent
Renewable energy investments in the United States economy
Forbes is projecting a $1 trillion dollar private sector investment in renewable energy for the next decade, a similar projected number as API forecasts for fossil fuels and fossil fuel infrastructure. The number Forbes has forecast is without government subsidies, or massive public investment due to a seismic change in public policy, as seen in the GND. AS the LCOE of renewable energy continues to decrease, the ROI of investing in clean energy, renewable energy, and energy efficiency will continue to increase in terms of most economic measures (as highlighted in this recent report produced by Michael Bloomberg, Henry Paulson, and Tom Steyer), attracting even more private investment in sustainable technology. This is without taking into factor private investors motivated to invest in renewable energy vs. fossil fuels to avoid the negative externalities of fossil fuels. For more information on the LCOE of various energy sources, as well as on the "social cost of carbon", i.e. negative externalities of fossil fuels, please see the article "What Makes a City Sustainable".
Forbes also predicts that the energy transition from fossil fuels to renewable energy could save the United States economy up to $160 trillion by mid-century, in part by taking advantage of the lower LCOE of renewable energy sources vs. fossil fuels, and by avoiding the cost of negative externalities of fossil fuels.The cost savings to the United States economy by transitioning from fossil fuels to renewable energy includes, most significantly, reducing the cost of mitigation and adaptation to anthropogenic climate change by investing in sustainable technologies such as renewable energy and energy efficiency vs. fossil fuels. Similar numbers to the numbers reported by Forbes are touted by progressive advocates of the GND, but in this article is described the least disruptive ways (market mechanisms) to transition the United States economy from fossil fuel-based to renewable energy- based.
The renewable energy industry employs over 500,000 people in the United States. The coal industry is responsible for under 120,000 jobs in the U.S. (see: nytimes.com/interactive/climate/todays-energy-jobs-are-in-solar-not-coal). There is already billions of dollars invested in installed renewable energy capacity in the United States, including over $10 billion annual private investment in the last 2 years in United States wind energy alone. Individual states that are leaders in solar & hydroelectricity include coastal and southwest states, especially west and northeast coastal states for hydroelectricity, and southwest states for solar.
*** Please note that states like California produce hydroelectricity at a rate (over 20% of the state's energy is from hydroelectric sources) that makes hydroelectricity the dominant form of renewable energy in the state. However, California produces a significant amount of solar energy (over 11% statewide). California has a mandate from the state legislature to produce all of its energy statewide from sustainable energy sources by 2045.
In looking at energy production in the United States as a whole until 2020, the EIA forecasts natural gas continuing to increase its majority share of energy generation in the United States over coal (energy generation from gas passed coal in 2016), and renewable energy production increasing to over 12% of energy production in the US (over 16% when hydroelectricity is included)-