This article concludes a five-part series by Robert J. Klee, Ph.D., J.D. exploring policies from states across the country that, if adopted nationally with sufficient speed and ambition, could form the basis for the deep decarbonization of the U.S. economy. Read the rest of the series here.
Klee is a lecturer at the Yale School of Forestry & Environmental Studies and Yale Law School, and the former commissioner of the Connecticut Department of Energy and Environmental Protection (2014-2019).
The latest science on climate change underscores an increasingly urgent need for the U.S. to quickly reduce its carbon emissions. In response, growing numbers of Americans have demanded an ambitious national plan to do so, reflected in proposals like the Green New Deal.
But what would such a plan look like? The articles in this series have explored how a collection of policies from U.S. states can together form a blueprint for nationwide decarbonization.
We can follow state models for setting climate goals: They have established greenhouse gas emission reduction targets, instituted clean energy standards, and procured renewables to make progress toward those benchmarks. States have demonstrated how to begin transforming today’s electric grid that Thomas Edison would still be able to recognize — by building distributed generation, boosting energy efficiency, and making sure new technologies are available to all. And they have begun to decarbonize transportation, mandating zero-emission vehicle production, developing the infrastructure to support those vehicles once they are on the road, and finding ways to get people out of their cars altogether.
These policies, taken together and adopted at national scale, would allow the United States to do its part in limiting global warming to 1.5°C. But without a doubt, such a plan would be expensive as well as politically contentious. Can it be done? This final installment of “Look to the States” concludes with an outlook and some tools — drawing once more from state-level successes — for putting the plan into practice.
Unlocking Private Capital
The funds for climate mitigation efforts are often unavailable in public budgets. So to deploy clean energy, states have had to figure out how to access private capital in a number of ways. For example, state procurements of clean energy are typically structured to have utilities purchase energy and renewable energy credits from a clean energy project at a flat rate over a fixed time (usually 15 or 20 years) through a power purchase agreement. These long-term agreements are “bankable” — they ensure that the selected clean energy project is a safe enough bet for financing from private capital providers.
But to access the deep pockets of larger groups of investors that we need to meet our ambitious deployment goals, states have created more innovative structures. State and regional green banks — like those found in Connecticut, Maryland and New York — have leveraged limited state funds to attract billions of dollars in private investment in clean energy by reducing risk for large projects, and creating new standardized financing products, making them more attractive to the private sector. For example, Connecticut’s Green Bank in its first five years used less than $200 million in ratepayer funds to spark over $1 billion in investment in clean energy and energy efficiency, creating tens of thousands of green jobs along the way. One of those successful new financing structures green banks have helped deploy at scale is Commercial Property Assessed Clean Energy — commonly known as C-PACE. Under these public-private partnerships, commercial property owners can finance clean energy investments with private capital providers (like solar on their roof, or more efficient HVAC systems), with payments made through their municipal tax bill.
State and regional green banks have leveraged limited state funds to attract billions of dollars in private investment in clean energy.
Building on the success of the green bank model, a good place for a national decarbonization plan to start would be an actual bill already presented to congress — the United States Green Bank Act of 2019 (H.R. 3423 and S. 1528). This bill proposes creating a national green bank that would be initially capitalized with $10 billion, and could receive future funds up to $50 billion. The national green bank would then pass these funds through to state-level green banks who would in turn finance the deployment of clean energy. While a good framework, the Green Bank Act is too small for the size and scale of the program. To rapidly catalyze dramatic investment in clean energy deployment, instead of $50 billion total, the U.S. Green Bank should be funded at $50 billion per year for ten years.
Embracing Hybrid Approaches
As shown by the examples throughout this series, states recognize that the future of energy and environmental policy is neither “command and control” nor “market mechanisms” — it is both. States use competitive procurements, reverse auctions and other market-based tools to drive down costs and increase competition between and among clean energy technologies.
But states also pick winners by choosing clean energy over dirty energy, and they have found that market mechanisms alone are not enough. The 10-state Regional Greenhouse Gas Initiative (RGGI) is the nation’s first cap-and-invest system putting a price on carbon from the electric generation sector. It illustrates how states have hybridized public and private approaches to decarbonization: This fully functioning carbon market ultimately does not result in a high enough price on carbon to drive significant behavior change. RGGI, therefore, co-exists with and is supported by complementary state policies and programs that increase energy efficiency and deploy renewables. In fact, most RGGI states invest their proceeds from the RGGI carbon auctions in their clean energy programs.
Putting a price on carbon and other greenhouse gases at the national level would be completely consistent with strong mandates to switch from dirty to clean generation, and dirty to clean vehicles. Funds generated by that price on carbon could support those investments in clean energy, clean transportation and strengthening the resilience of our built environment to our changed climate. Or those funds could support vulnerable populations as the economy decarbonizes.
Researching Unanswered Questions
Do the states have all the answers? Of course not. The states have not filled the void created by the federal government’s decreased funding of the basic science needed to understand the changes we are making to the planet. Nor can states alone fund the research and development necessary for the complete transformation of our energy systems and economy. The federal government should invest at least $10 billion per year in research and development to ensure that the United States leads the world in creating the next generation of renewable energy and storage technologies.
We will also need more research on removing greenhouse gases from the atmosphere with “negative” carbon emissions. All of the scenarios in the Intergovernmental Panel on Climate Change 1.5°C report require some negative emissions to offset any overshoot of emissions in the near term, and balance the hard-to-avoid emissions from areas like air travel, long-distance trucking, and parts of the agricultural sector over the long term.
The agricultural sector, by the way, currently is the Dr. Jekyll and Mr. Hyde of the decarbonization story. Right now, it’s more Mr. Hyde: The agricultural sector is directly responsible for 9% of the greenhouse gas emissions in the United States (not including the significant greenhouse gas emissions from the energy it takes to make fertilizer, or from refrigeration, transport and packaging of food). Nearly two-thirds of agricultural emissions come from methane (CH4) generated by ruminants (e.g., cow burps and farts), and nitrous oxide (N2O) from fertilizer use — which makes agriculture one of the largest contributors of non-carbon-dioxide emissions. There is the potential to tap into agriculture’s Dr. Jekyll through better tilling practices to retain carbon in the soil, better quality feed for ruminants to produce less methane, and better management of manure as either a source of nutrients in place of fertilizer, or a source of energy through creation of biogas.
There are still many more questions than answers on how to achieve dramatic negative emissions. Land use changes have tremendous decarbonization potential, but what are the best species and prime locations for reforestation (replanting trees that have been cut down) and afforestation (planting trees on lands that haven’t been forested in recent memory)? Is bio-energy with carbon capture and storage a negative emission unicorn? Can we find a way to affordably and sustainably grow plants to pull carbon dioxide from the atmosphere, extract useful energy from those plants, and then bury any carbon dioxide emissions from that energy production deep underground? Or can we skip the plant growing step, and find technological means — using chemistry, physics and likely a lot of energy — to pull carbon dioxide directly from the air and permanently sequester it in useful products? Scientists, inventors and entrepreneurs across the United States are trying to answer these questions, and trying to scale up laboratory experiments to real-world conditions.
But a reality check is needed here: none of these negative emission techniques have been attempted at the scale needed to offset current and projected future emissions. Even the natural solutions (like planting trees or engaging in sustainable agricultural practices) that do not involve new, untested technology are proving politically and economically difficult to implement. The federal government should invest at least $5 billion per year for research to find ways to overcome the technical, political and financial hurdles standing in the way of negative emissions — something the states really have not figured out.
Is this all too expensive? The direct investment portions of the initiatives in this series come with a price tag just under $110 billion per year, or about $1.1 trillion over the next 10 years.1 Adding $15 billion per year in investments in research and development for clean energy and negative emissions2 would bring the total to nearly $1.25 trillion over the next 10 years.
For perspective, this proposed direct investment is less than the projected 10-year cost of President Donald Trump’s 2017 Tax Cuts and Jobs Act, and less than 20% of the approximately $700 billion we spend on defense each year. Unlike the Trump tax cut, these direct investments in decarbonization have a demonstrated track record of creating good jobs, avoiding future costs and spurring additional investments of private capital (which, in the case of green banks, occurs at a ratio of over five to one).
But we must face the fact that there are real costs — physical, economic and social — both from inaction (which the insurance companies know very well), and aggressive action on the time frames we need (which the French have learned the hard way through the Yellow Vest protests). The complete transformation of our entire economy and society cannot be done for free, and will not be easy.
Can the examples of aggressive climate action from the left-leaning coasts translate to the rest of the country, or the hyper-partisan world of Washington, D.C.?
Of course this transformation presents tremendous economic opportunities, and existing and new businesses and industries will thrive as part of the deep decarbonization economy. But any sufficiently ambitious endeavor to decarbonize our country will be doomed to fail without real investments in policies to manage and ease the inevitable disruption that lies ahead, particularly for the fossil fuel industry, and those industries that are integrally linked to fossil fuels. Any new deal on climate must include programs to ensure we all have an equal opportunity to thrive in the sustainable economy of the twenty-first century.
Do the examples above from small New England states translate to the Midwest, Mountain West or Appalachia, where large scale agriculture and extractive industries dominate regional economies? Perhaps not in all circumstances. I could point to the deployment of anaerobic biodigesters to turn food waste or manure into biogas for electricity, vehicles or renewable natural gas. But this is still a long way from a successful model for deep decarbonization of large-scale agribusiness. I could point to the steady, century-plus evolution of New England’s coal and ice haulers into oil dealers, and then into energy services companies. But this is hardly an example of a successful, just transition of large numbers of workers from mining and extractive industries to new green collar jobs in the clean energy economy.
Can the examples of aggressive climate action from the left-leaning coasts translate to the rest of the country, or the hyper-partisan world of Washington, D.C.? The policies and programs explored in these articles would require major overhauls to federal environmental and energy laws — which in most cases hasn’t happened in decades.
A debate is currently raging over how meaningful federal action on climate might occur, given the current state of Congress. Some like Jerry Taylor at the Niskanen Center argue that climate action will only occur through an incremental, bipartisan approach that appeals to centrist Democrats and Republicans. Others, like David Roberts at Vox argue that recent history shows that bipartisan legislative deals on big issues like climate (or healthcare, gun control, etc.) are impossible. Therefore, Democrats — as the party that currently understands and embraces the science on climate change — should go it alone as boldly as possible, with “Hail Mary” legislative efforts, including ending the filibuster in the Senate.
True, most leading climate states benefit from either general bipartisan support on issues of environment, sustainability and climate action (which stands in stark contrast to the state of our federal politics), single-party dominance of the executive and legislative branches, or both. But there are some signs of action in states that had not previously taken climate seriously, with the announcement of growing numbers of Midwestern and Mountain West states joining the U.S. Climate Alliance (the states that are “still in” the Paris climate accord). Perhaps the political shifts in the leadership of these states are an expression of the fact that residents have shifted their perceptions of the climate crisis.
The trends tracked by the Yale Program on Climate Change Communication also show recent increases in understanding that climate change is happening, awareness of the risks it poses, and support for policies that address it. Whether or not those shifts are sustained over time and are sufficiently robust to change the behavior of politicians in Washington remains to be seen.3
The Great Climate Awakening in the United States has arrived at an auspicious moment. We are now 50 years after the publication of “Earthrise,” an image taken by the Apollo 8 astronauts of the blue ball of Earth rising above the dull grey moonscape, with the darkness and emptiness of space as background. This image helped galvanize the modern environmental movement by highlighting the rarity, fragility and singularity of our habitable planet in the lifelessness of space — and the need for common effort to protect this only planet we have. The images of the devastation from the fires in Paradise, California, the floods in Nebraska and Iowa, and Hurricane Maria in Puerto Rico seem to be having a similar effect.
The scientists have loudly proclaimed that the fate of the planet is at stake, and demand ambitious and urgent action to deeply decarbonize our economy and society starting right now and continuing over the next 30 years. So have our kids demanded action, directing their justified frustration and anger at our elected leaders who squandered the last 30 years, and so far seem incapable of proposing solutions bold enough to solve the problem. States, the laboratories of democracy, have tested and applied most of the policy puzzle pieces needed to achieve what the scientists and our kids demand. We need only bring the leading states’ level of ambition and models of success to the rest of the country.
1 Specifically, $50 billion/year for Green Banks, $20 billion/year for renewable energy incentives, $20 billion/year for the smart grid, $10 billion/year for energy efficiency, $2.5 billion/year for complete streets projects, $4 billion/year for electric transit buses, and $3 billion/year for electric and hydrogen fuel cell vehicle infrastructure.
2 For context, the National Science Foundation funds about $5 billion in scientific research each year, across all fields of science. The Department of Energy funds about $10 billion in scientific and applied energy research (on efficiency, renewables, fossil fuels, nuclear, transmission, etc.) each year. The National Institutes of Health funds about $36 billion in biomedical research each year.
3 Another concern is that even if any of these highly ambitious laws happened to pass, the litigation brought by entrenched fossil fuel interests would tie up implementation in the courts for decades (as happened in the original New Deal). Care and attention must be paid to the crafting of these laws, to give them the best chance of surviving constitutional legal challenge.