$2 Trillion Investment Can Decarbonize Energy by 2050, Paid for with a Carbon Tax

Meteor Blades / The Daily Kos

 (February 3, 2021) — In the primaries, Joe Biden wasn’t the first choice of most climate hawks. For, example, the youth-led Sunrise Movement, which supports radical climate proposals, graded the top three candidates, putting Bernie Sanders and Elizabeth Warren in first and second place, Biden coming in third with a score less than half that of the two senators. But after Sanders ended his campaign in April and endorsed Biden, the two set up a unity task force that came up with far more ambitious climate-related plans.

Consequently, although Sunrise never formally endorsed Biden, it encouraged its 10,000 members and other supporters to work on getting him elected. Said co-founder and executive director Varshini Prakash in July,  “We’ve seen a pretty huge transformation in Biden’s climate plan. What I’ve seen in the last six to eight weeks is a pretty big transition in upping his ambition and centering environmental justice.”

Still not as far as Sunrise and other climate hawks would prefer, but a good first step, she said, one that responded in a good way to past criticisms.

One change was Biden’s commitment to a public investment of $2 trillion over four years — up from his primary campaign’s pledge of $1.7 trillion over 10 years — to accelerate the transformation to a clean energy economy. This would generate millions of union jobs to build renewable energy infrastructure, get zero-emission cars and mass transit systems on the road, boost sustainable home construction, improve conservation, and perform a multitude of other tasks that decarbonizing the economy by 2050 — as the president has pledged—will require.

Now, the National Academies of Sciences, Engineering, and Medicine has released the pre-publication draft of a 209-page study — Accelerating Decarbonization of the U.S. Energy System — which concludes that a net-zero economy is not only achievable by 2050, but would “also build a more competitive economy, increase high-quality jobs, and help address social injustice in the energy system.”

The authors sped up the publication of their acceleration study specifically with the idea of influencing the direction of the new administration’s climate action, but without consulting the Biden-Harris team. 

Stephen Pacala, the Frederick D. Petrie Professor of Ecology and Evolutionary Biology at Princeton University and chair of the committee that wrote the report, said in press statement, “Because of dramatic decreases in the costs of renewable electricity and batteries, the U.S. can now — during the 2020s — make strides toward achieving a net-zero emitting energy system at a cost lower than investing in reduced air pollution alone. Because the energy system impacts so many aspects of society, a transition to net-zero will have profound implications well beyond climate and energy — and it is paramount that we maintain a strong social contract to ensure this transition benefits all communities.”

That perspective is one climate hawks have expressed for at least two decades even as the technology to make it happen has improved and gotten cheaper, some of it gradually, some of it by leaps and bounds. 

Over the next 10 years, the authors state, $2 trillion in federal money should be invested in the green transformation that is already underway. And the funding for it? A $40 ton carbon tax increased by 5% annually possibly with dividends going to the more vulnerable population, especially those already harmed by environmental damage from the extraction, processing, and burning of fossil fuels. The tax, they say, would “would unlock innovation in every corner of the economy and send appropriate signals to encourage a cost effective route to net zero.”

This, of course, is likely to be showstopper. While certain elements of a green transformation — say a point-of-sale tax credit for electric vehicles — can probably count on bipartisan backing in Congress the way previous credits have done, opposition to a carbon tax includes Americans on the right, left and center.

All the arguments for and against a carbon tax aside, there is no need for the government to raise taxes to pay for this investment any more than it needs to do so to cover the outlay for the American Rescue Act that will provide relief from the impacts of the Pandemic Recession. See Stephanie Kelton for a relevant analysis on the matter. 

There is also the problem of timing. Biden originally proposed $1.7 trillion in green investment over a decade. The switch to $2 trillion in less than half the time takes the climate crisis more seriously. Once again, it’s worth remembering the stunning four-year transformation of the U.S. economy when it was remade to defeat the Axis fascists. Not even most of the 1940 isolationists were calling for a go-slow approach in 1942. 

And there are the critics like Naomi Klein and Jacobin magazine who argue that dismantling capitalism is necessary if we are to fully address the climate crisis. 

Critics aside, John Fialka at the paywalled ClimateWire reports on what the scientists specifically propose:

The report calls for tripling Department of Energy funding for research, development and demonstration of low- or zero-emission technologies over the next decade. It suggests that a number of federal agencies might have to be created to help industries and groups promote and implement new technologies.

They might include a federal “National Transition Task Force” to help evaluate long-term implications for transitioning workers, communities and families. Another could be the White House “Office of Equitable Energy Transitions” to act on its recommendations and track progress.

An independent “National Transition Corporation” might be needed to help communities and regions implement new technologies and help mitigate impacts, such as the loss of fossil fuel jobs. The panel also suggests that a “Green Bank” be capitalized by $30 billion to encourage rapid expansion of private investing.

As outlined in the study:

• Producing carbon-free electricity. The nation needs to double the share of electricity generated by non-carbon-emitting sources to at least 75 percent. This will require deploying record-setting levels of solar and wind technologies, scaling back coal and some gas-fired power plants, and preserving operating nuclear plants and hydroelectric facilities where possible.
• Electrifying energy services in transportation, buildings, and industry. Fifty percent of new vehicle sales across all classes should be zero-emission vehicles. The U.S. should replace at least 20 percent of fossil fuel furnaces with electric heat pumps in buildings and initiate policies so that new construction is all electric except in the coldest climate zones. Where industrial processes cannot be fully electrified, they should begin the transition to low-carbon heat sources.
• Investing in energy efficiency and productivity.  Total energy use by new buildings should be reduced by 50 percent.  In existing buildings, energy used for space conditioning and plug-in devices should be lowered every year to achieve a 30 percent reduction by 2030.  Goals for industrial energy productivity (dollars of economic output per energy consumed) should increase each year.
• Planning, permitting, and building critical infrastructure.  The nation should increase overall electrical transmission capacity by approximately 40 percent in order to better distribute high-quality and low-cost wind and solar power from where it is generated to where it can be used across the country.  The U.S. should also accelerate the build-out of the electric vehicle recharging network and initiate a national CO2 capture, transport, and disposal network to ensure that CO2 can be removed from point sources across the country.
• Expanding the innovation toolkit.  The nation should triple the U.S. Department of Energy’s investment in clean energy research, development, and demonstration in order to provide new technology options, reduce costs for existing options, and better understand how to manage a socially just energy transition.
• Strengthening the U.S. economy. Studies estimate that the transition to a net-zero emissions economy could increase net employment by 1 million to 2 million jobs over the next decade and provide a net increase in jobs paying higher wages than the national average.  Establishing a federal “Green Bank” to finance low- or zero-carbon technologies, business creation, and infrastructure would ensure industrial competitiveness.
• Promoting equity and inclusion. Policies should work to eliminate inequities in the current energy system that disadvantage historically marginalized and low-income populations.  For example, the U.S. should increase funds for low-income households for home electrification and weatherization and for broadband Internet access for low-income and rural areas, and increase electrification of tribal lands.
• Supporting communities, businesses, and workers.  Any fundamental technological and economic transition creates new opportunities as well as job losses and other associated impacts in legacy industries.  Policies should promote fair access to new long-term employment opportunities and provide financial and other support to communities that might otherwise be harmed by the transition.  Educational programs should be created to train the net-zero workforce, including a “GI Bill” style program.  The report also recommends the creation of a two-year National Transition Task Force to assess the long-term implications of the transition for workers and communities, a White House Federal Office of Equitable Energy Transitions to act on that task force’s recommendations, and a new independent National Transition Corporation to provide support and opportunities for displaced workers and affected communities.
• Maximizing cost-effectiveness.  A cost-effective strategy (balanced by equity considerations) will reduce carbon emissions, strengthen the U.S. economy, and avoid undue burdens on American households and businesses during the transition to a net-zero emissions economy. If the country can avoid spending more than necessary to achieve net-zero emissions, additional resources will be available to meet other societal needs.

There is quite a lot of good stuff there. The scientists obviously did not provide a roadmap for implementing the Green New Deal and not surprisingly, since it was beyond their scope, they didn’t look at numerous details of the transformation that could make it more … transformational.

For instance, ownership. Not only would a broad municipalization of electric utilities mean democratizing a key element of our energy system, it would also provide an opportunity for a more people- and environment-oriented approach. About 15% of current systems are municipally owned, but most of them need more democratic governance.

All the more important as more and households generate much if not all of their own electricity with rooftop solar. In addition, when the federal government invests in green technology, it should, just like private investors, get a tangible return on investment other than the mere promise of more jobs. But such moves would make getting a carbon tax look like a cakewalk.

Fifteen or even 10 years ago, the acceleration report would have been viewed as an extremist, no-way, no-how, pie-in-the-sky document. These days, it’s good to have an administration in the White House that seeks to go further faster and intends to do what it can to go around the opponents whose propaganda and obstructionism have for 40 years delayed taking action on the climate crisis and delivered us into our current circumstances. 

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