Clean energy and climate change unlikely to lead American recovery
Economists, investors and environmentalists are calling on the United States — and the world — to inject big clean energy and climate policy into recovery plans.
Reality check: Such prospects face uphill battles almost everywhere, and especially in the United States, where proponents are on defense while the Trump administration and lawmakers are in crisis mode.
The big picture: It’s not just environmentalists clamoring for a green economic recovery. The United Nations, the International Monetary Fund and a broad swath of investors and corporate executives are calling for a range of clean-energy policies as well.
- They argue that these policies will not only help the economy better than alternatives, but will also help combat another existential threat: climate change.
Where it stands: Congress is going to spend the next several months debating legislation to provide different levels of relief, rescue and recovery to the economy, which is still reeling from coronavirus-fueled shutdowns.
- In theory, this provides a lot of opportunities to incorporate clean energy and climate-change ideas, but the reality is that they could just get lost in a crowded and messy crisis.
“As long as the country is gripped by the fear of significant personal family trauma and grinding months of unemployment, that's what Congress is going to focus on. I think we are going to be in emergency policy subsistence for the rest of 2020.”— Jason Grumet, president, Bipartisan Policy Center
What they’re saying: Sen. Jeff Merkley (D-Ore.), one of Washington’s most progressive advocates for climate-change action and clean energy, is on defense.
- He introduced legislation recently that seeks to restrict the Trump administration’s efforts to help the oil industry, which is struggling as demand for fuel craters.
- While that bill won’t pass the GOP-controlled Senate, Merkley is also not ready to pursue legislation helping clean energy in any recovery package, he told me late last week in a phone interview.
- “That’ll be another chapter. I’m not introducing a bill on it right now, but I’m holding conversations with others to develop a strategy on it,” Merkley said.
Driving the news: The paralysis is not stopping a growing number of organizations from suggesting numerous policies to green the economy while also rebuilding it, including Grumet’s group. Here's just a sampling.
- On Wednesday, top executives of 250 companies are holding what backers are calling the “largest virtual lawmaker education and advocacy day” to lobby Congress. The coalition, organized by the sustainable investment nonprofit Ceres, is calling for a price on carbon emissions and better infrastructure.
- In a recent speech, the head of the IMF implored the world to recover with green policies, while the fund issued a paper with specific proposals, including tying any support for fossil-fuel to pledges for action on climate-change.
- An Oxford University report released last week, written by such notable authors as Nobel laureate Joseph Stiglitz of Columbia University and prominent British climate expert Lord Nicholas Stern, details green policies that could help revive the economy, like insulating buildings to make them more energy-efficient.
The intrigue: One policy idea Washington insiders have talked about is a classic pairing of a Republican priority — buying excess oil for the nation’s strategic reserves — and a Democratic priority, reauthorizing renewable-energy tax credits.
- Five years ago, Congress legislated a similar pairing by lifting the 40-year-old oil-export ban while extending the same type of tax credits for renewable energy.
Yes, but: Such a swap would do little to reduce heat-trapping emissions in the long run and at the deep levels scientists say is necessary, experts say.
- Most major policies that would have the biggest impact on climate change are not huge job creators in the short term, says Varun Sivaram, a senior visiting fellow at the Columbia University’s Center on Global Energy policy.
- “I think horse-trading of near-term emissions cuts and gains is an awful way to do climate policy, but it’s the most likely thing to happen,” said Sivaram. “If we’re not looking at deep decarbonization, we shouldn’t be doing climate policy.”
How it works: Innovation into new technology, like long-term energy storage and carbon-capture equipment that are key to big emission reductions, will create jobs over a long period of time, but not immediately, according to both Sivaram and Grumet of the Bipartisan Policy Center.
- In the meantime, renewable-energy companies are likely to get at least some narrow and immediate economic relief.
- The Treasury Department signaled late last week it will allow more time for wind and solar projects that previously qualified for federal tax credits to be completed, given that the industry is facing supply-chain delays while much of the world is locked down.
What’s next: Stay tuned for deeper dives into some of the discussed policies and the potential for other countries to green their economic recoveries.