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How to meet America’s climate goals: 5 policies for Biden’s next climate bill

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Kelly Sims Gallagher, Tufts University
President Joe Biden’s new climate strategy, announced after his original plan crumbled under opposition in Congress, will represent a historic investment in clean energy technology and infrastructure if it is enacted. But it is still not likely to be enough to meet the administration’s emissions reduction goals for 2030.
As director of the Fletcher School’s Climate Policy Lab at Tufts University, I analyze ways governments can manage climate change.
As the new plan comes together, and the administration considers future steps, here are five types of policies that can help get the United States on track to achieve its climate targets. Together they would reassure the world that the United States can honor its climate commitments; help stave off the effects of a carbon border tax planned in Europe; and, if designed right, position U.S. workers and firms for the low-carbon economy of the 21st century.
The United States’ ability to compete in low-carbon and resilience technologies such as energy storage has eroded over the past two decades.
Part of the problem has been the political impasse in Washington over clean energy and climate policies. Over the past 20 years, tax credits, loan guarantees and regulations have started and stopped, depending on the political whims of whoever is in power in Congress and the White House. U.S. companies have gone bankrupt while waiting for markets to materialize.
Meanwhile, European companies, with backing from their investment and development banks, and Chinese companies have surged ahead, using their home markets to demonstrate new technologies and build industries. Wind turbines are a good example. European companies, led by Denmark’s Vestas, controlled 43% of the wind turbine market globally in 2018, and China controlled 30%. By contrast, the United States accounted for only 10%.
I believe the United States as a country needs to make choices about where it has a comparative advantage, and then the federal government can chart a clear course forward to develop those industries and compete in those global markets. Will it be electric vehicles? Electricity storage? Technology for adaptation such as sea wall construction, flood control or wildfire management? Independent advice could be provided to the administration and Congress, perhaps by the National Academies of Science, and then Congress could authorize an investment plan to conditionally support these industries.
Tempting as it is to support all technologies, public dollars are scarce. Companies that receive subsidies must be held accountable with performance requirements, and taxpayers should get a return when those companies succeed.
As part of industrial policy, officials also need to squarely face up to the fact that some workers, states, cities and towns with industries closely tied to fossil fuels are vulnerable in the transition to cleaner energy.
On an expert panel convened by the National Academies of Science and recent study, colleagues and I recommended that the government establish a national transition corporation to provide support and opportunities for displaced workers and affected communities. These communities will need to diversify their economies and their tax bases. Regional planning grants, loans and other investments can help them pivot their economies to industries that contribute less to climate change. Establishing a U.S. infrastructure bank or green bank to fund low-emissions and resilience projects could help finance these investments.
Equally important is investing in the workforce needed for a low-carbon economy. The government can subsidize the development of programs at colleges and universities to serve this economy and provide scholarships for students.
Other policies can help generate the revenue needed to support the transition to a clean economy.
Obviously, removing subsidies for fossil fuel industries is a crucial step forward. One analysis estimated, conservatively, that the U.S. provides about US$20 billion a year in direct subsidies to the fossil fuel industries. Estimates of indirect subsidies are much higher.
Tax reform can also help, such as replacing some individual and corporate income taxes with a carbon tax. This policy tool would tax the carbon in fuels, creating an incentive for companies and consumers to reduce use of fuels with the greatest impact on the climate. To avoid overburdening low-income households, the government could reduce income taxes on lower-income households or provide a dividend check.
Tax credits, loan guarantees, government procurement rules and investments in innovation are all useful tools and can shape markets for American companies. But these fiscal policy tools should not be permanent, and they should be phased down as technology costs come down.
The government has the ability to both “push” and “pull” climate technologies into the marketplace. Government investments in research and human capital are “push”-type policies, because supporting research ensures that smart people will keep moving into the field.
The government can also “pull” in technologies by creating vibrant markets for them, which will provide further incentives to innovation and spur widespread deployment. Carbon taxes and emissions trading systems can create predictable markets for industry because they provide long-term market signals that let companies know what to expect for years ahead, and they at least partially account for a product’s damage to the environment.
While the United States is investing in clean-energy research, development and demonstration, it has been less successful than China or Europe – both of which have emissions trading systems – in developing predictable, durable markets.
A tried-and-true U.S. policy tool is the use of performance standards. These standards limit the amount of greenhouse gas emissions per unit, such as fuel economy and greenhouse gas standards for motor vehicles, energy efficiency standards for appliances and industrial equipment, and building efficiency standards at the state level. Fuel economy standards on automobiles since 1975 have saved about 2 trillion gallons of gas and reduced greenhouse gas emissions by about 14 gigatons, roughly three times the country’s annual emissions from energy in 2020.
Performance standards give companies the flexibility to find the best way to comply, which can also fuel innovation. The Biden administration could develop new performance standards in each major emitting sector – vehicles, power plants and buildings. Federally imposed building codes, which are set at the state and local levels, would be a difficult political lift.
The laws that established the government’s authority to set standards, such as the Clean Air Act and Energy Policy Act, have some ambiguities that can leave standards vulnerable to court challenge, however. Legal challenges have led to a zigzag in regulations in some sectors, most obviously the power sector.
A final area where policy is needed is for nature-based solutions. These might be fiscal incentives for restoring forests, which store carbon, or protecting existing lands from development, or they might be regulations.
Laws and regulations at the state level can also be enormously powerful in changing the U.S. emissions trajectory.
The centerpiece of Biden’s original climate plan was a program designed to reward and pressure utilities to shift electricity production away from fossil fuels faster. With the Senate split evenly between Democrats and Republicans, West Virginia Democrat Joe Manchin’s opposition sank the plan.
The Biden administration’s new Plan B has a number of heroic assumptions and relies heavily on fiscal and regulatory tools, along with lots of state-level actions.
Missing from Plan B is the emphasis on innovation and industrial policy, both of which might have a larger impact on U.S. emissions. The elephant in the room that cannot be ignored is that the United States needs a climate bill that puts its targets for reducing emissions by 2030 and 2050 into law, gives the right government agencies the authority to set policies and addresses industrial and workforce needs.
Kelly Sims Gallagher, Professor of Energy and Environmental Policy and Director, Center for International Environment and Resource Policy at The Fletcher School, Tufts University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Initiative to create ‘world’s first’ transnational solar grid network formed at COP26

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At the United Nations COP26 climate summit that began this week, 80 countries endorsed plans for the world’s first transnational solar power network, led by the UK and India.
The Green Grids Initiative seeks to connect 140 countries to clean, renewable energy and reduce dependence on coal. As part of the initiative, the International Solar Alliance aims to mobilize $1 trillion in financing by 2030 to assist developing countries in expanding their solar power grids.
“What we want… is to take these inventions, these breakthroughs, and get them the finance and the support they need to make sure that they are disseminated through the whole world,” UK Prime Minister Boris Johnson said.
U.S. President Joe Biden expressed support for the initiative in his speech at the launch of COP26.
“We have to scale up clean technologies that are already commercially available and cost competitive like wind and solar energy,” Biden said.
International financing for clean energy and climate change resiliency will be a focus of COP26. Developed countries committed in 2009 to provide $100 billion annually in climate finance to developing countries by 2020.
report released in September by the Organisation for Economic Co-operation and Development found that developed countries mobilized $79.6 billion in 2019. Research from the World Resources Institute determined that most developed countries are not contributing their fair share toward meeting the $100 billion goals.
“Three major economies — the United States, Australia, and Canada — provided less than half their share of the financial effort in 2018, based on objective indicators such as the size of their economies and their greenhouse gas emissions,” WRI authors wrote. “Other nations that provided less than half of their fair share were Greece, Iceland, New Zealand, and Portugal. In total, more than a dozen developed countries were falling short of their responsibilities.”
Biden is working to secure enhanced emissions reduction targets from world leaders at COP 26, while his signature domestic climate change agenda remains in the balance in Congress.
On Tuesday, Biden unveiled plans to target methane emissions with a rule from the Environmental Protection Agency. The president announced in September that the U.S. would join the European Union in signing the Global Methane Pledge to reduce the world’s methane emissions by 30% below 2020 levels by 2030. More than 100 countries have now joined the pledge.
“The EPA is today proposing new regulations that will significantly broaden and strengthen methane emissions reduction for new oil and gas facilities. In addition, for the first time ever, it will require that states develop plans that will reduce methane emissions from existing sources nationwide—including from an estimated 300,000 oil and gas well sites,” the White House said in a statement. “Overall, the proposed requirements would reduce emissions from covered sources, equipment, and operations by approximately 75%.”

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Microsoft to power Virginia data centers with 24/7 clean energy

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Microsoft will power its data centers in Virginia with 24/7 clean energy through a 15-year agreement with AES Corporation.
The partnership supports Microsoft’s goal of matching 100% of its electricity consumption with zero carbon energy purchases by 2030.
“By leveraging AES’ capability and presence in the PJM market, we are able to both secure additional renewable supply in support of meeting our commitment to use 100% renewable energy by 2025, and also take a meaningful step toward having 100% of our electricity matched by zero-carbon resources all of the time in the region,” said Brian Janous, General Manager Energy & Renewables at Microsoft. “We believe innovative commercial structures like this with AES and integrating new technologies will be key as we continue to move toward our 100/100/0 commitment.”  
AES will source the energy from a portfolio of 576 MW of contracted renewable assets, including wind, solar, as well as battery energy storage projects in PJM.
“Microsoft is a leader in the energy transition with its commitment to being 100% powered by zero-carbon electricity by 2030. We’re proud of the solution we co-created with Microsoft to help meet that commitment with the delivery of 24/7 zero-carbon electricity to its Virginia-based data centers,” said Andrés Gluski, AES President and CEO. “Working together with leading corporations, we are setting new standards for decarbonizing their operations and the grid.”

By matching energy consumption with clean energy produced elsewhere on the grid, power purchase agreements have allowed corporations to take action to address the current and future risks posed by climate change.
But, in some cases, there’s an opportunity to go beyond the PPA, and more effectively decarbonize the grid through hourly load matching, or 24/7 matching, according to an analysis by RMI. RMI defines hourly load matching as “where a buyer attempts to procure sufficient carbon-free energy to match a given facility’s load in every hour.”
The findings of the “Clean Power by the Hour” determined: costs increased with the level of hourly load matching compared to costs for meeting annual procurement targets, near-term emissions reductions for hourly load matching depend on the regional grid mix, and hourly procurement strategies can create new markets for emerging technologies.
“Overall, we find that hourly load-matching strategies can help lay the groundwork for a decarbonized grid in the long term but should be carefully tailored to region-specific grid dynamics to also maximize emissions reductions in the near term,” RMI authors wrote in the report. “Buyers who have not yet offset 100% of their annual electricity use with procured (carbon-free energy) can feel confident that doing so based on annual targets in regions with low renewable energy adoption will continue to create material climate benefits. This can be done even as buyers who have already met that goal continue to push the envelope of sophistication and pave the way toward a 100% CFE grid.”
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Idaho National Laboratory to research net-zero microgrids

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Supported by funding from the U.S. Dept. of Energy, the Idaho National Laboratory will research microgrid technologies that can reduce greenhouse gas emissions and provide enhanced grid resiliency.
The Net-Zero Microgrid program aims to accelerate the removal of carbon-emitting technologies, leveraging the expertise and platforms in INL’s Energy Systems Laboratory and its nuclear energy research testbeds. This includes the Microreactor Applications Research Validation and EvaLuation (MARVEL) research microreactor, funded under the Department of Energy’s Office of Nuclear Energy.
“Nuclear, renewables, and energy storage can potentially have a large advantage over typical diesel or natural gas microgrids,” INL senior microgrid researcher Kurt Myers said. “Decreasing or removing the fuel supply chains can reduce potential impacts and costs for remote applications and improve availability in cases where pipelines or supply systems could be disrupted by weather, disasters or cyberattacks.”
The program sets out to reduce the share of new microgrids supported by fossil fuel generation to 50% in the next few years, down from 80% in 2020.

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