We Have the Right Tools. Let’s Use Them
Author
Robert McKinstry Jr. - Environmental and Climate Law Practice
Environmental and Climate Law Practice
Current Issue
January-February 2024
Issue
1
Parent Article
Time Is of the Essence
Robert McKinstry Jr.

There is still time to prevent the worst ravages of climate disruption from greenhouse gas emissions. We have both the technology and the legal tools to reach net zero by 2050. Although there is no silver bullet solution to the problem of climate change, we have the means to load the shotgun to accomplish this administratively and through the actions of state and local governments, NGOs, and the majority of industrial companies.

To reach net zero requires that the administrative branches of state and federal governments employ those tools. It also requires that both governments and NGOs put aside prejudices against particular technologies. Objections have been raised not only to nuclear energy, carbon capture and sequestration, and biomass energy, but also to offshore wind, hydropower, solar arrays, and electric vehicles and their resource-intensive batteries.

But all are essential elements of the climate solutions toolbox. The objections are often based on good-faith misunderstanding of the technology and failure to understand that adverse impacts can be mitigated. In addition, the adverse impacts that cannot be reduced or off set, when taken together, will be far less than the potentially catastrophic impact of not acting or acting too late.

Professors John Dernbach of Widener Law School and Michael Gerrard of Columbia Law School have identified over 1,000 legal mechanisms that can be employed to achieve deep decarbonization. Congress briefly overcame its institutional gridlock to enact the Infrastructure, Investment, and Jobs Act and the Inflation Reduction Act and thereby provide an array of financial mechanisms to encourage implementation of many of the necessary technologies. These in turn will accomplish the electrification of the transportation and building sectors. The IRA also amended the Clean Air Act to eliminate any doubt that the dissenters in Massachusetts v. EPA and their followers might have had that GHGs are pollutants that Congress intends EPA and the states to control, using the tools provided by the CAA.

We need state and federal administrators to use existing legal tools now to craft regulations that will create appropriate incentives or mandates to employ the financial tools that Congress has provided. The Biden administration is already using its authority to reduce and phase out mobile source GHG emissions and eliminate hydrofluorocarbons, a potent GHG. It has proposed regulations that will require meaningful emissions reductions from power plants, creating a legally sound path to decarbonize that sector. It is also using clear existing authority to address GHG emissions from the oil and gas sector.

Still more is needed to require action or impose a price on GHG emissions throughout the economy. Many legal scholars have argued that Section 115 of the CAA, governing international air pollution, could be used as a tool to require State Implementation Plans to achieve emissions neutrality by 2050. This would be consistent with decisions made under the Framework Convention on Climate Change—a treaty the United States has ratified with the advice and consent of the Senate and thus is the supreme law of the land.

In EPA v. EME Homer City, the Supreme Court affirmed an approach that EPA used to address interstate pollution. If the agency used a similar approach to GHGs, an economy-wide price could be put on GHG emissions without interstate and intersectoral leakage. This, as well as EPA’s existing regulations, can also support states that are already responding.

International action is also necessary. The United States, the largest contributor of GHGs historically, must take aggressive steps without waiting to induce action by countries whose per capita emissions still lag ours.

The latest science is encouraging—it tells us that atmospheric levels and temperatures can be brought down before irreversible damage occurs. Legal and technological challenges are inevitable, but those cannot be resolved in time unless action is taken now.

At What Cost Is Carbon Neutrality?
Author
Danielle Stokes - University of Richmond
University of Richmond
Current Issue
September-October 2023
Issue
5
Parent Article
Depoliticize to Decarbonize
Danielle Stokes headshot

Monetary values are ascribed to everything in regulatory policymaking—even human life. The question of how much often supersedes concerns about the impacts of the regulation itself. One example is policymakers’ attempts to quantify the “social cost of carbon.” But a just transition from fossil fuels will require qualitative measures in addition to such a financial calculus.

The concept of a just transition is deeply interwoven with principles of sustainable development—changing our ways to create regenerative, interconnected, just, and thriving economic systems and communities. In the world of sustainability, costs are but one factor to consider when planning for the future. Indeed, the sustainability framework is based upon the Three Es: environment, economy, and equity. Economic impacts take precedence over the other two within our current regulatory regime, but that need not be the case.

These ideals hold true for developing a resilient energy sector. Energy policy is powered by economic analysis. Discontentment with environmental regulations and the procedures required by the National Environmental Policy Act and other statutes is most often related to costs, as measured by the time and financial resources necessary for compliance. These concerns are valid, but do not warrant a one-size-fits-all response—which all too often has meant circumventing environmental assessments and community participation.

Sustainability and justice in the energy transition calls for a balancing of interests rather than relying upon economics as the core from which decarbonization originates. Instead, regulations that are dynamic and require all elements of sustainability to be assessed and incorporated methodically allow for more comprehensive and resilient policymaking. It is important to show that a carbon-neutral deployment scheme can be developed that is environmentally sound, expedient, and equitable.

This is not to say that value cannot be derived from existing regulatory structures. Nearly all utility-scale renewable energy projects trigger NEPA or a similar state-mandated review process. While these assessments can be inefficient and counterproductive to the goal of rapid deployment to achieve net-zero by 2050, they serve a necessary function. Without statutory mandates to consider environmental impacts and meaningful involvement of marginalized groups, the energy transition will likely succumb to the traditional winners-and-losers scenario, with environmental justice communities bearing the brunt of the burden.

The newly reorganized Alliance for Tribal Clean Energy serves as one exemplar for integrating principles of sustainability into renewable energy deployment. It incorporates a top-down and bottom-up collaborative structure whereby grassroots perspectives shape where and how public and private funding is dispersed. ATCE’s breadth of policy considerations is particularly noteworthy.

ATCE’s approach to renewable energy development is grounded in community trust and culturally cognizant land management. The group recognizes the need for financial partners to achieve their development goals, but does not promote economic benefits at the expense of other values. ATCE’s plan for building capacity via strategic master planning, education, and training is by no means novel, but offers unique insights into how energy values can be reimagined.

Climate risks demand new regulatory structures that appreciate all costs. Reframing and revising these structures may mean looking to other cultures for guidance, relying more heavily on local communities’ place-based understandings, and reconceptualizing the values within cost-benefit studies and other economic analyses. The federal government’s call to modernize regulatory review provides an opportunity to incorporate complementary perspectives into traditional policymaking. Transitioning to a carbon-neutral society will inevitably be an ongoing, iterative process. For the transition to be just, we must consider all costs.

Much Remarkable, but Insufficient, Progress Decarbonizing the World
Author
Joseph E. Aldy - Harvard Kennedy School
Harvard Kennedy School
Issue
4
Joseph E. Aldy

The 2015 Paris Agreement established the goal of limiting global warming to “well below 2°C above preindustrial levels.” The pact also provides for a periodic assessment of progress toward this objective through a “global stocktake.” In November of this year, the United Ar

The 2015 Paris Agreement established the goal of limiting global warming to “well below 2°C above preindustrial levels.” The pact also provides for a periodic assessment of progress toward this objective through a “global stocktake.” In November of this year, the United Arab Emirates will host the UN climate change talks that will include the first such worldwide assessment.

Over the eight years since the Paris conference, national governments have enhanced their near-term reduction ambitions. The United States has since pledged to cut its emissions at least in half by 2030, compared to its 2015 pledge of a 26-28 percent cut by 2025. The European Union has pledged to reduce its emissions by 55 percent by 2030, compared to its previous pledge of a 40 percent reduction. And about 140 countries have proposed, pledged, or enshrined in domestic law net-zero emission targets for 2050 or soon thereafter.

Governments have also advanced their mitigation actions, driving substantial gains in clean energy. In 2015, 10 percent of the world’s greenhouse gas emissions were covered by a tax or cap-and-trade program; by 2022, this share had increased to 25 percent. The average price on emissions has increased significantly since then across these carbon pricing systems. Over 2015-21, global renewable energy consumption—led by wind and solar power—more than doubled.

The Inflation Reduction Act’s clean energy subsidies are forecast to reduce U.S. carbon dioxide emissions by about 10 percent over the next seven years. The rapid growth in investment in clean energy manufacturing signals the potential to deliver accelerating deployment of next generation technologies. Last year, global installed manufacturing capacity for batteries grew by 72 percent, solar photovoltaics by 39 percent, and electrolyzers by 26 percent.

Despite this progress, fossil fuels still comprise more than 80 percent of global energy consumption. With the exception of 2020, fossil fuel consumption has been higher every year since 2015. Fossil fuel consumption may peak soon—McKinsey’s “Global Energy Perspective 2022” suggests peak consumption by 2025. But this peak will likely occur later and higher than is consistent with the Paris Agreement’s temperature objective.

Last year, the UN Environment Programme estimated that global greenhouse gas emissions would reach about 58 gigatons based on current policies. This level would be 15 gigatons higher than what is necessary to limit warming to 2°C, and 23 gigatons higher than would be consistent with a 1.5°C temperature goal. Cutting the level of annual emissions by at least 15 gigatons over 7 years is daunting. To put this in perspective, the largest single-year decline in global energy carbon dioxide emissions was about 2 gigatons in 2020, primarily reflecting the COVID pandemic.

The emergence of low-cost renewable power has displaced much of fossil fuels in meeting growing energy demand, but has not meaningfully driven existing fossil fuel-related infrastructure into retirement. A 2019 paper in the journal Nature estimated that if current fossil fuel infrastructure continued operating through their expected economic lifetimes—with no new fossil fuel-powered power plants, factories, vehicles, etc. coming online—then the world would likely exceed warming of 1.5°C and could go beyond 2°C. Since this analysis was undertaken, new fossil fuel-powered facilities and transportation systems have entered the market and, in many economies around the world, new fossil fuel infrastructure projects are planned for future investment.

This reflects the political challenge of designing and implementing aggressive decarbonization policies and the associated difficulty of raising the price of fossil energy. Given continued subsidies in developing countries and European energy subsidies in response to the energy shock induced by the Russian invasion of Ukraine, global fossil fuel subsidies exceeded $1 trillion last year for the first time. Outside of California, the vast majority of U.S. climate policy operates through clean energy subsidies, with little if any cost penalty applied to sources of carbon dioxide emissions.

The bottom line is that the global climate will very likely overshoot 1.5°C and likely go beyond 2°C. Even with unprecedented growth in clean energy, atmospheric concentrations of greenhouse gases will exceed levels consistent with these temperature goals. Returning to these temperature levels would require large-scale negative emission technologies, such as the direct air capture of carbon dioxide coupled with underground storage, or the deployment of solar geoengineering to reduce incoming solar energy to the planet’s surface. As temperatures rise, there will be a growing public debate about the potential role of these novel technologies and the need to manage the risks during this period in which we overshoot our temperature goals.

ab Emirates will host the UN climate change talks that will include the first such worldwide assessment.

Over the eight years since the Paris conference, national governments have enhanced their near-term reduction ambitions. The United States has since pledged to cut its emissions at least in half by 2030, compared to its 2015 pledge of a 26-28 percent cut by 2025. The European Union has pledged to reduce its emissions by 55 percent by 2030, compared to its previous pledge of a 40 percent reduction. And about 140 countries have proposed, pledged, or enshrined in domestic law net-zero emission targets for 2050 or soon thereafter.

Governments have also advanced their mitigation actions, driving substantial gains in clean energy. In 2015, 10 percent of the world’s greenhouse gas emissions were covered by a tax or cap-and-trade program; by 2022, this share had increased to 25 percent. The average price on emissions has increased significantly since then across these carbon pricing systems. Over 2015-21, global renewable energy consumption—led by wind and solar power—more than doubled.

The Inflation Reduction Act’s clean energy subsidies are forecast to reduce U.S. carbon dioxide emissions by about 10 percent over the next seven years. The rapid growth in investment in clean energy manufacturing signals the potential to deliver accelerating deployment of next generation technologies. Last year, global installed manufacturing capacity for batteries grew by 72 percent, solar photovoltaics by 39 percent, and electrolyzers by 26 percent.

Despite this progress, fossil fuels still comprise more than 80 percent of global energy consumption. With the exception of 2020, fossil fuel consumption has been higher every year since 2015. Fossil fuel consumption may peak soon—McKinsey’s “Global Energy Perspective 2022” suggests peak consumption by 2025. But this peak will likely occur later and higher than is consistent with the Paris Agreement’s temperature objective.

Last year, the UN Environment Programme estimated that global greenhouse gas emissions would reach about 58 gigatons based on current policies. This level would be 15 gigatons higher than what is necessary to limit warming to 2°C, and 23 gigatons higher than would be consistent with a 1.5°C temperature goal. Cutting the level of annual emissions by at least 15 gigatons over 7 years is daunting. To put this in perspective, the largest single-year decline in global energy carbon dioxide emissions was about 2 gigatons in 2020, primarily reflecting the COVID pandemic.

The emergence of low-cost renewable power has displaced much of fossil fuels in meeting growing energy demand, but has not meaningfully driven existing fossil fuel-related infrastructure into retirement. A 2019 paper in the journal Nature estimated that if current fossil fuel infrastructure continued operating through their expected economic lifetimes—with no new fossil fuel-powered power plants, factories, vehicles, etc. coming online—then the world would likely exceed warming of 1.5°C and could go beyond 2°C. Since this analysis was undertaken, new fossil fuel-powered facilities and transportation systems have entered the market and, in many economies around the world, new fossil fuel infrastructure projects are planned for future investment.

This reflects the political challenge of designing and implementing aggressive decarbonization policies and the associated difficulty of raising the price of fossil energy. Given continued subsidies in developing countries and European energy subsidies in response to the energy shock induced by the Russian invasion of Ukraine, global fossil fuel subsidies exceeded $1 trillion last year for the first time. Outside of California, the vast majority of U.S. climate policy operates through clean energy subsidies, with little if any cost penalty applied to sources of carbon dioxide emissions.

The bottom line is that the global climate will very likely overshoot 1.5°C and likely go beyond 2°C. Even with unprecedented growth in clean energy, atmospheric concentrations of greenhouse gases will exceed levels consistent with these temperature goals. Returning to these temperature levels would require large-scale negative emission technologies, such as the direct air capture of carbon dioxide coupled with underground storage, or the deployment of solar geoengineering to reduce incoming solar energy to the planet’s surface. As temperatures rise, there will be a growing public debate about the potential role of these novel technologies and the need to manage the risks during this period in which we overshoot our temperature goals.

Much Remarkable, but Insufficient, Progress Decarbonizing the World.

Building Efficiency
Author
Katrina Wyman - New York University Law School
New York University Law School
Current Issue
March-April 2023
Issue
2
New York City at Night

>In September 2017, with Manhattan’s skyscrapers rising behind him, New York City Mayor Bill de Blasio announced that he wanted to cap the amount of fossil fuels that large buildings in the city can use each year. He was two months away from easily being re-elected, and he may already have been thinking ahead to the run he would make in 2019 to be the Democratic presidential nominee against President Trump. At the time of de Blasio’s announcement, during Trump’s first year as president, regulating fossil fuel use in large buildings was not only a means of decarbonizing New York City’s largest source of GHGs, but also a way of signaling resistance to Trump and his skepticism about climate change.

>Under de Blasio’s proposal, large buildings—including those owned by the Trump family—that exceeded their caps would be fined, and the fines might be substantial, up to millions of dollars per year. Although de Blasio did not release draft legislation when he made his announcement, over 18 months later the city council overwhelmingly passed Local Law 97, capping greenhouse gas emissions from large buildings along the lines de Blasio had first sketched. The emissions limits take effect starting in 2024. With de Blasio no longer in office, the implementation of LL97 has fallen to his successor, Eric Adams, a more real-estate friendly mayor who has expressed concerns about fining building owners for not complying with the law.

>In recent months my colleague Danielle Spiegel-Feld and I have been researching the history of LL97 and other 21st century environmental laws and policies in New York City—and pondering their fate. Although there was a lot of talk about cities and states acting to limit climate change to counter the Trump administration as it was rolling back environmental regulations, we are somewhat unusual among teachers at law schools in devoting significant scholarly attention to local environmental law. As has been the case since the 1970s, environmental law in the United States is reflexively assumed to be federal law, or law in a few progressive states, such as California. Municipal laws like LL97 tend to fall under the radar. Perhaps many observers instinctively dismiss the potential for local and state governments to do much to protect the environment in light of their celebrated failures in the 20th century on air and water pollution. After all, these failures are part of what led to the passage of robust federal environmental statutes in the 1970s.

>Yet within New York City’s environmental policy community, LL97 is widely regarded as a signature climate law, and a model for other jurisdictions. Pete Sikora, an advocate who helped get the law through the city council, describes it as “the city’s world-leading climate and jobs law” because he hopes that the mandates will create employment in upgrading buildings to reduce their use of fossil fuels. Costa Constantinides, who oversaw the drafting of the bill as chair of the city council’s environmental protection committee, has publicly defended the law since leaving the council. Mark Chambers, who headed the Mayor’s Office of Sustainability while LL97 was drafted, is now senior director for building emissions and community resilience in the Biden administration’s Council on Environmental Quality. There he has helped to form a National Building Performance Standard Coalition to spur the adoption of similar laws in cities and states throughout the country.

>Non-New Yorkers might be tempted to dismiss the pride of some of these people as over-claiming, another example of the city’s penchant for bluster. Still, since New York City passed LL97, a small number of other cities, including Boston, Denver, and St. Louis, and states such as Colorado and Washington have passed similar laws for their building sectors. To its credit, Washington, D.C., actually passed a law requiring improvements in building energy efficiency before New York City.

>LL97 has also been noticed by people engaged with cities outside the United States on climate change. David Miller, the managing director of the C40 Center for City Climate Policy and Economy, and a former mayor of Toronto, wrote about LL97 as an example of a bold local solution to reducing greenhouse gas emissions in his 2020 book Solved: How the World’s Great Cities Are Fixing the Climate Crisis.

>As the growing number of advocates for decarbonizing buildings emphasize, removing fossil fuels from buildings will be an important component of societal decarbonization. Buildings account for over two-thirds of greenhouse gas emissions in many large U.S. cities; nationally, residential and commercial buildings account for almost 31 percent of GHGs. (These statistics incorporate emissions from fossil fuels burned on site in buildings, for example from burning natural gas for heating, and emissions from generating the electricity used in buildings, for example in coal- or natural gas-powered plants.) Removing fossil fuels from buildings also stands to improve public health: evidence is accumulating that burning them in buildings, for example by using gas stoves, contributes to asthma and may cause cancer.

>Nonetheless, the potential benefits of building performance laws such as LL97 have yet to be realized. No building in New York City will be subject to fines until 2024. Mayor Adams is almost certain to be under increasing pressure from real-estate owners in the coming year. A small number of building owners have even launched a Hail Mary legal challenge to the law on preemption and other grounds.

>Ironically, whether LL97 and other similar laws become a key technique for decarbonizing buildings may depend in part on whether the tax credits, rebates, and grant programs in the federal Inflation Reduction passed in 2022 are defined so as to shift onto federal taxpayers some of the costs that building owners will face to comply with the local and state laws. If building owners are able to use some of this federal largesse to reduce the costs of complying with the subnational laws, the combination of mandatory local and state building laws and federal tax credits and subsidies for satisfying them may mollify real estate opposition. More significantly, it also may establish a new form of cooperative environmental federalism—combining local and state regulation with federal subsidies paid directly to individuals as well as state and local governments—that could be scaled to promote decarbonization in other economic sectors where there are obstacles to aggressive federal regulation of greenhouse gas emissions.

>In considering the potential for performance standards to become a tool for forcing fossil fuels out of buildings, it is useful to start with a brief description. LL97 works as follows: Large buildings in the city (25,000 square feet and over) are grouped into different categories based on their types of use (multifamily housing, office, hospital, etc.). Each of these types is permitted to emit up to a specified amount of CO2 equivalent per square foot (for example, under draft regulations released by the city in October, laboratories are allowed to emit more per square foot than bowling alleys). A building’s limit, that is the volume of greenhouse gas emissions that it can emit each year, is based on multiplying the square footage of the building by the allowable amount of CO2e for the structure’s use type. Owners that exceed their emissions limits are liable to pay up to $268 per ton of excess emissions, a penalty that was designed to incentivize upgrades. To calculate a building’s annual emissions to determine if it is under its limit, owners must multiply the total amount of energy purchased for the building by the carbon intensity coefficient that the city assigns for the relevant type of energy (i.e., electricity procured from the grid, natural gas, fuel oil, etc.). Buildings’ emissions are first limited in 2024 and more stringent limits take effect starting in 2030. The limits gradually ratchet down until 2050, by which point, buildings are expected to be carbon neutral.

>Like many environmental laws, LL97 also contains some flexibility mechanisms. To protect low-income tenants from rent hikes, buildings with a specified share of rent-regulated apartments can opt to implement a list of measures to improve energy efficiency rather than comply with greenhouse gas emission limits. This is an example of a local government prioritizing housing affordability (in a city with a perennial affordability crisis) over limiting global warming. To fully decarbonize its building stock, New York City will need to find a way of decarbonizing the many rent-regulated and publicly owned apartment buildings in the city. Until it does, the environmental benefits of building decarbonization—including reducing on-site emissions that cause asthma, which is more prevalent in communities of color and low-income neighborhoods in the city—will not be equitably shared.

>Another flexibility mechanism that environmental advocates are currently seeking to limit allows building owners to buy Renewable Energy Credits for solar and wind energy and other carbon-free electricity delivered to New York City. When the law was passed, its sponsors thought that allowing buildings to comply by buying RECs might encourage large players in New York City’s real estate industry to support introducing more renewable energy into the city. The bill’s sponsors did not anticipate that the ability to use RECs to comply would be a major loophole. But after LL97 was passed, New York state adopted aggressive targets for fully decarbonizing the state’s electricity supplies by 2040 and has approved massive projects to bring renewable energy to the metropolitan area. As a result, there will be an abundance of RECs available for building owners to buy in the future. Whether the city takes action to limit their use will be an indication of how committed it is to decarbonizing buildings.

>There is a small cottage industry of literature going back to the 2000s examining why cities and states have sought to reduce greenhouse gas emissions. The literature generally starts from the premise that these local actions are puzzling, because cities would appear to be imposing costs on local actors for the benefit of the outside world. Various economic explanations might be offered for these local actions: maybe the cities are merely posturing to enhance their reputations and not planning to actually enforce costly requirements on local actors to decarbonize; or perhaps cities are attracted to the side benefits of reducing emissions, such as lower energy costs for residents, or the new jobs and industries that decarbonization might generate. These economic considerations contributed to the passage of LL97, but they don’t fully explain it. Climate activists fighting for the good of the planet, union officials, social justice-oriented groups representing low-income tenants, and a few key do-gooder politicians—all played a critical role in getting the law across the finish line.

>Enacting legal obligations on buildings to reduce greenhouse gas emissions required overcoming the political power of the real estate industry, which had thwarted Michael Bloomberg from mandating that the city’s large buildings improve energy efficiency when he was mayor. Overcoming real estate’s opposition this time around took a combination of committed insiders within the city council and mayoral administration, and interest groups that pushed through mandates. Their task was made easier in the late 2010s by having a climate skeptic president born in New York to a real estate developer who was wildly unpopular in his home city. Few people could better rally progressive Democrats in New York City behind a climate bill that took aim at real estate than President Trump.

>Those favoring building performance mandates had some other helpful facts on their side as well. By 2017, it was apparent to anyone seriously committed to addressing climate change in New York City that mandating building upgrades would be necessary to decarbonize the sector that accounted for an overwhelming share of the city’s GHGs. Bloomberg-era laws like a benchmarking law that in theory might have spurred buildings to reduce their emissions by showing them how inefficient they were compared to other buildings had not incentivized the aggressive decarbonization that it was clear would be needed to address the climate crisis.

>Among the insiders who recognized the urgency of mandating upgrades was Constantinides, the chair of the city council’s environmental protection committee who oversaw the drafting of LL97. Fiercely committed to passing environmental laws in the city—he has a son with asthma—he had worked in 2009 for the chair of the environmental protection committee, when Bloomberg dropped the idea of requiring building upgrades due to real estate opposition. When Mayor de Blasio announced his support for building mandates in 2017, he had few details of what these mandates would look like. It was Constantinides who supplied the law.

>But even someone as committed as Constantinides probably couldn’t have passed a law imposing potentially costly obligations on a powerful economic sector like the real estate industry in New York City without the support of outsiders. In the fights over LL97, a constellation of local interest groups helped provide that needed support, campaigning for the bill, and signaling to New York City’s overwhelmingly Democratic city council members that they should pass it. Among the most important was the Climate Works for All Coalition. Organized in 2014 by ALIGN, an alliance of community and labor groups, the coalition included District Council 37, the largest public-sector union in the city; the union-backed Working Families Party, which strives to move Democrats to the left through involvement in party primaries; and New York Communities for Change, a community group that works on economic and social justice as well as climate change. NYCC’s staff includes Pete Sikora, whose climate work seems to be premised on the theory that in a blue city in a blue state such as New York City, a multiracial coalition of “activists from communities of color” and “white progressive climate activists” can persuade the city’s government to adopt climate policy by targeting key municipal decisionmakers. Sikora recognizes that activists like himself can exert such power because local Democratic politicians in early 21st century New York City pay attention to groups that can credibly claim to influence the outcomes in the low-turnout Democratic primaries that largely determine who wins political office in the city. For this coalition, building mandates promised to reduce greenhouse gas emissions and create jobs for low-income New Yorkers. Meaningfully, mandates also represented a tangible way of opposing Trump—ALIGN published a report cataloging the energy inefficiency of Trump buildings using data disclosed under the Bloomberg-era benchmarking law. As progressive Democrats such as Alexandra Ocasio-Cortez won primaries and elections in New York City in the second half of 2018, centrist Democrats moved to the left and the building mandate bill seemed more politically palatable.

>What does this history suggest about the potential for other jurisdictions to pass building performance standards? One lesson is that it is possible to pass a law that, on paper at least, imposes the substantial cost of decarbonizing buildings on historically politically powerful real estate owners. Indeed, the Real Estate Board of New York, the main group representing owners in the city, did not outright oppose the law at the main city council committee hearing on it; the board emphasized its support for the bill’s goals and then listed serious concerns with its design. But 2019 was also a special time, with Trump in office and progressive Democrats in ascendance. To mandate that buildings decarbonize in more places across the country it may be necessary to find ways of spreading the cost beyond building owners of removing fossil fuels from people’s homes and workplaces.

>A classic way of overcoming opposition to a new law is for the government to offer subsidies to those who are opposed to it. Cities have some resources that they can devote to easing the burden on building owners of transitioning away from fossil fuels, but even a large city such as New York is not in a position to pay for switching out oil and gas boilers and gas stoves in the thousands of buildings in its borders. The Inflation Reduction Act may help lower the costs to owners of making some of these changes, and perhaps make it politically feasible for jurisdictions like New York City that already have laws to decarbonize to enforce them, and for other local and state governments to adopt such laws.

>Many of the tax credit provisions in the IRA are intended to spur the expansion of renewable energy such as solar and wind so that renewables can displace fossil fuels. While building owners will not directly benefit from these tax credits for electricity generation, they could benefit indirectly. Insofar as these credits help to decarbonize electricity buildings buy from the electric grid, this will reduce their emissions without owners having to invest in other measures. Because commercial buildings like large office buildings in New York City already get a lot of their energy from the electric grid, the decarbonization of grid-supplied electricity will particularly help commercial building owners to meet their LL97 emission limits.

>The owners of large residential buildings in the city will also benefit from greening grid-supplied electricity. But they tend to burn more fossil fuels on site in their buildings, so they may face higher costs to decarbonize because they have to remove gas and oil powered boilers and furnaces and gas stoves. The IRA could help these building owners too.

>To get a feel for how useful the IRA might be to the owners of residential buildings, I listened in October to a webinar on the IRA organized by Bright Power, a company that helps large building owners in New York City manage their energy use, and that has clients working to comply with LL97’s emission limits. Bright Power identifies government incentives for its clients to help them defray the costs of the projects that Bright Power manages for them, and so it has a strong incentive to understand under what circumstances the IRA could financially help building owners in the city. The webinar laid out the multitude of tax credits and government grant and rebate programs in the IRA. It also gave some concrete examples of the micro-level determinations that the Department of Treasury, Internal Revenue Service, other federal agencies, and state policymakers will need to make, and how important their decisions will be for the extent to which the IRA will help reduce the costs of taking out fossil fuels from buildings in New York City. As Amanda Clevinger, policy and programs manager at Bright Power, emailed me afterwards, “Although several states already offered incentives for building decarbonization prior to the passage of the IRA, the federal subsidies have the potential to offer consistency, scale, and accessibility unmatched by existing programs. For instance, New York City’s program for heat pumps ran out of money three years ahead of schedule, and most states don’t have any incentives available for electrical upgrades” which are needed to put in heat pumps. “The IRA could fill many gaps for buildings across the country,” Clevinger explained. How the uncertainties about the IRA subsidies are resolved will determine whom the IRA helps and how much, and the extent to which it helps to make politically palatable laws such as LL97 that mandate building decarbonization.

>Widely touted as a breakthrough because it is the first federal legislation to aggressively incentivize decarbonization, the IRA also may be historically significant because it could be seen as setting up a new model of cooperative federalism in environmental law. The 1970s-era environmental laws often require the federal government to set standards that states may assume responsibility for implementing instead of the federal government. Early in the history of these laws, the federal government provided considerable funding to help defray the costs of building sewage treatment plants and the like that were necessary to meet some of the federal standards.

>The IRA also proposes to transfer large sums of money to states and local governments and tribes for environmental purposes, some of which they could distribute to individuals as rebates. What is novel about the IRA is that much of the federal spending that it appropriates may come in the form of tax credits that flow directly to individuals and businesses without any role for states and local governments. These tax credits could help to decarbonize sectors whose emissions the federal government has had difficulty regulating, most notably the electric power sector, but also potentially buildings. Against the backdrop of these federal subsidies, local and state governments will hopefully be better positioned to set aggressive targets to decarbonize large buildings because owners and occupants will have access to federal subsidies to defray the costs of the transition, assuming that the promise of the IRA is fulfilled through its implementation. If successful, the tacit combination of state and local standards and federal subsidies for individuals to meet those standards would be a novel way of achieving environmental improvements in the United States. TEF

OPENING ARGUMENT New York City is addressing its climate impact by mandating that large buildings sharply reduce their greenhouse gas emissions. In a new cooperative federalism, the Inflation Reduction Act can mesh with these mandates through subsidies and incentives.

Seeing Green: Can EPA Effectively Manage Its Billions for Grants?
Author
David P. Clarke - Writer & Editor
Writer & Editor
Current Issue
March-April 2023
Issue
2
David P. Clarke

During the Biden presidency, Congress has appropriated billions of dollars for EPA to award as grants supporting clean water, environmental justice, climate action, and other priorities. While many are elated at the funding, some observers suggest the agency will be highly challenged to spend it all effectively.

Last November, EPA released a “Year One Anniversary Report” describing its activities so far under the 2021 Bipartisan Infrastructure Law, which provides the agency’s largest-ever appropriation: $60B over five years to support environmental projects. The BIL expanded EPA’s traditional role from conducting scientific research and writing regulations to now serving as “a large-scale funder of critical infrastructure,” the agency says.

In its first year, EPA awarded only $6.4B in grants of the $14.1B that Congress appropriated for fiscal year 2022. But states, tribes, or territories can receive distributions from the FY22 appropriation “on a rolling basis” until the end of FY23 in line with their Clean Water State Revolving Fund timeline, an agency spokesperson says. Since November an additional $7.1B has been distributed.

The BIL appropriation, while far-reaching in itself, was followed by the 2022 Inflation Reduction Act, which created a $27B Greenhouse Gas Reduction Fund as a new Clear Air Act section. Until the end of FY24, EPA can award GHGRF grants, including $7B for zero-emission technologies in disadvantaged communities, and the rest for “green banks” that will invest in clean technologies for reducing GHGs and other pollution, especially (once again) in “low-income and disadvantaged communities.” With the 2024 deadline, EPA will have about a year “to dole out $27B,” notes one observer.

After IRA passage, the massive new funding led EPA Administrator Michael Regan to write, “This is a moment unlike any other in our history.” Also, after years of shrinking budgets, the agency’s 2023 appropriations included $575 million in new funding. The EPA spokesperson adds that the agency “is committed to distributing the funds equitably, responsibly, and impactfully,” working closely with regions, states, tribes, and territories. EPA’s new technical assistance programs will identify infrastructure needs and help applicants navigate federal funding processes to give everyone “their fair share” and unlock the IRA’s possibilities.

According to the Natural Resources Defense Council—which responded to EPA’s request for public comments on how it should design and implement the GHGRF—the $20B reserved for green banks and other “nonprofit lenders” could produce up to 80,000 investments. While recognizing the $27B total as a “critical down payment” on an equitable, low-carbon future, NRDC notes that the agency faces “a clear challenge” in designing a program that can efficiently and equitably deploy the money. A key decision will be to accurately define “low-income and disadvantaged communities” whose benefit the law emphasizes, NRDC and others note. The definition will shape how grant recipients spend funds to achieve the law’s goals.

A second core question concerns which technologies to direct funds toward. NRDC suggests that the law’s goals would be best met by funding “distributed” technologies to cut carbon, such as decarbonizing buildings, moving to electric vehicles, and the like. Another commenter, the Center for Biological Diversity, urges EPA to devote “a large portion” of its GHG grants to support EV charging stations to enable widespread adoption.

The American Water Works Association—representing more than 4,300 drinking water utilities—points to numerous GHG-reduction opportunities at water facilities and makes a case that its members should be eligible to receive GHGRF funds. Likewise, the American Chemistry Council, representing 190 chemical manufacturing companies located in communities nationwide, calls on EPA to allow fund leveraging for public-private partnerships involving communities, businesses, manufacturers, and industrial facilities.

The nonprofit Coalition for Green Capital, a green-bank leader, notes that its members, along with private-sector investors, have funded more than $9B in clean energy projects. Citing a letter from congressional GHGRF authors calling for that fund to capitalize a single “national climate bank,” the coalition comments to EPA that it intends to seek GHGRF funds to capitalize a national green bank.

To achieve President Biden’s goal of reducing GHG emissions 50-52 percent by 2030, the coalition writes, in the coming decade “at least $1 trillion” must be invested, with disadvantaged communities needing at least one fifth of that amount.

Clearly, EPA has an opportunity to turbocharge decarbonization across the economy. With so much at stake, and so many watching critically, transparency and accountability will be crucial.

Seeing Green: Can EPA Effectively Manage Its Billions for Grants?

Designing Energy Tax Credits to Drive Greater Emission Reductions
Author
Joseph E. Aldy - Harvard Kennedy School
Harvard Kennedy School
Current Issue
September-October 2022
Issue
5
Joseph E. Aldy

Governments may choose among three types of policies to promote carbon dioxide emission reductions. They can prescribe specific low-emission technologies through regulatory mandates. They can raise the price of fossil energy through carbon tax and cap-and-trade systems. And they can subsidize investment and operation of low- and zero-emission technologies. In the United States, the most politically viable of these types have been subsidies, especially through the tax code.

Since 1992, the federal government has subsidized the electricity output of wind farms and other renewable power plants through the production tax credit, ranging up to about 2.5 cents per kilowatt-hour. In recent years, this subsidy is equal to about half of the average price the wind farm receives from selling its power. The federal government has also used investment tax credits, such as subsidies equal to 30 percent of the costs of installing solar panels and $7,500 for a new electric vehicle.

Subsidies for clean energy technologies have historically faced challenges in delivering the biggest bang for the climate buck. In order to claim tax credits, a business typically needed to have tax liabilities at least as great as the value of the tax credits.

To unlock access to these tax credits, financial companies began providing “tax equity”—financing for a renewable project in which the equity supplier gains returns by claiming the project’s tax credits. A large bank, such as JP Morgan or Bank of America, would then become a financial partner for the project and effectively monetize the tax credits to enable the project to move forward. Providing this financial service comes at a cost: as much as 15 cents of each dollar of taxpayer subsidies for renewable power went to a large bank for this financial engineering instead of the renewable developer.

In the wake of the 2008 financial crisis—and of banks, such as Lehman Brothers, exiting the tax equity market—the American Recovery and Reinvestment Act gave renewable power developers the option of claiming a grant equal to 30 percent of investment costs—effectively equal to the value of the investment tax credit without the need for tax liability to monetize the subsidy. For the first time, wind project developers could claim a subsidy for their investment, instead of their output.

This policy innovation jump-started a decade of unprecedented growth in U.S. wind and solar power investment. On the downside, subsidizing wind power investment, as opposed to wind power output, weakened incentives for wind farm maintenance and optimization necessary to maximize electricity generation. In my research with Todd Gerarden and Rich Sweeney, we find that investment subsidies caused wind farms to produce about 10 percent less electricity than they would under output subsidies.

Recent legislative proposals have attempted to circumvent the need for tax equity without such adverse incentives for output through “direct pay” of tax credits. Under these proposals, a firm with a qualifying renewable project would be deemed as having sufficient tax liability such that the government would directly pay the subsidy under the applicable tax credit. As a result, a wind farm would receive its subsidy for production without having to give up some of its value by entering into a financial arrangement with a tax equity supplier.

The other barrier to maximizing the climate bang for the taxpayer buck lies in the uncertainty about what these subsidized renewable projects displace in the electricity system. If a new wind farm’s output substitutes for electricity generated by a coal-fired power plant, then that delivers twice the emission reductions than if it displaced power from a gas-fired power plant. And if the wind farm displaces power from a nuclear power plant, then it would deliver no incremental emission benefits. Exploiting high frequency, high-resolution spatial data and power system modeling tools could enable the design of modified subsidies that target and value power generation that delivers the greatest emission reductions.

In the absence of more ambitious carbon pricing legislation and in the wake of the Supreme Court’s West Virginia v. EPA decision, constraining Clean Air Act regulations, subsidies may be the most viable near-term policy tool for decarbonization. Modifying such subsidies to be more cost-effective will contribute to deeper decarbonization for a given amount of federal spending, which is critical given the political constraints—especially in a period of relatively high inflation—on public spending.

Designing Energy Tax Credits to Drive Greater Emission Reductions

Declining Fossil Fuel Prices May Slow Progress in Decarbonization
Author
Joseph E. Aldy - Harvard Kennedy School
Harvard Kennedy School
Current Issue
March-April 2022
Issue
2
Joseph E. Aldy

In the last issue, I addressed the recent run-up in fossil fuel prices resulting from demand outpacing production of oil and gas. In the longer term, however, as governments pursue more ambitious energy policies and consumers shift to new, climate-friendly technologies, the demand for fossil fuels will decline. As a result, energy costs will likewise decline. In the presence of falling fuel prices, how governments design climate policies will have important implications for the pace of decarbonization.

The vast majority of energy and climate policy in the United States focuses on the carbon intensity of new products. Tax expenditures subsidize new wind and solar power, new electric vehicles, and new energy-efficient windows. Regulations imposing the latest fuel economy and appliance efficiency standards apply to new items. As households and businesses buy new products and equipment subject to these subsidies and standards, they reduce their demand for fossil fuels.

These policies, however, do not influence the use of existing fossil fuel-reliant technologies. Indeed, absent policies directly targeting the price of gasoline, for example, as electric vehicles take over a larger fraction of the new-car market, someone who already owns and drives an internal combustion vehicle may soon find it cheaper to operate over time. This could slow the electrification of transportation, and reduce the scrappage rate of old, polluting gasoline-powered cars. This bifurcated market—a fast-growing new EV market and a used gas-engine market —could occur in the United States, with larger public health benefits accruing to those communities taking up EVs—typically those composed of higher-income households.

This phenomenon could also occur across countries, if one set of governments moves rapidly with policies that drive down their fuel demand while a second set does little to promote vehicle electrification. As a result, a form of emission leakage occurs—the emission reductions associated with the set of countries pursuing ambitious policies are offset some by drivers in the second set of countries who may drive gas cars more intensively and for a longer time in response to lower fuel prices.

In the meanwhile, the potential for long-term declines in natural gas prices—resulting from the transition toward building electrification—has a more complicated impact on residential consumers. Rapid electric heat pump adoption could reduce demand for natural gas and depress the price for the fuel. This could lower the cost to keep a house warm for those relying on natural gas furnaces or boilers.

Heat pump adoption, however, would reduce the number of gas customers on a given distribution network. Over time, the natural gas utility would likely need to increase rates per customer to cover the fixed costs of the local system. This could offset the fall in fossil fuel prices. The question is whether those slow to adopt heat pumps have the resources to make a large up-front investment in a new unit. Households with financing constraints may bear the higher costs of being the last movers to the new technology, and these costs could be regressive, given the socio-demographics of early heat pump adoption.

The functioning of energy markets coupled with incomplete climate policy that focuses primarily on new investment highlights two decarbonization challenges. First, those slower to adopt new technologies may find it economic to continue to delay clean energy adoption as fuel prices fall. This would slow the transition away from fossil fuels. Second, the distribution of the net benefits of decarbonization may continue to skew toward higher-income households and communities. This could weaken public support for an aggressive decarbonization program.

Policymakers could expand the climate policy toolkit to address these challenges. First, directing electric vehicle and heat pump subsidies to lower-income households could enhance the progressivity of decarbonization and target slow adopters of zero-carbon technologies.

Second, an economy-wide carbon price—through a cap-and-trade program or a tax—would ensure that fossil fuel markets don’t work against decarbonization. Carbon pricing provides incentives to decarbonize both new technology and existing technologies. This is in contrast to subsidies and regulations for electric vehicles and heat pumps—which influence only the carbon intensity of new investment.

Carbon pricing can also accelerate the timing of new investment and facilitate the transition away from fossil fuels. This occurs because the carbon price raises the retail price for fossil fuels, while decreasing the price paid to fossil fuel producers. In contrast to subsidies and regulations, which do not raise revenues, a carbon pricing policy could raise significant monies. Returning these revenues to households would promote progressivity and public acceptance of higher fuel costs.

Declining Fossil Fuel Prices May Slow Progress in Decarbonization

The Public Supports Clean Energy but Politics Is Preventing Win-Wins
Author
David P. Clarke - Writer
Writer
Current Issue
November-December 2021
Issue
6
David P. Clarke

An August United Nations scientific assessment concluded that “unequivocal” evidence shows human activities have inflicted “widespread and rapid changes” across the planet. In September, another UN report prompted the secretary general to warn, “The world is on a catastrophic pathway” even if all Paris Agreement commitments are met. To the Union of Concerned Scientists’ Rachel Cleetus, her organization is now “beyond concerned,” with members’ feeling “heartbroken” by worsening climate damage and “alarmed” and “angry” at policymakers’ failure to act.

Frustration runs deep, not only because the climate crisis is mounting but also because major policy advances are so tantalizingly close and hold out prospects for win-win actions.

In September, following an intensive two-day markup, the House Energy and Commerce Committee passed a major portion of the Democrats’ $3.5 trillion budget reconciliation package. The bill included a $150 billion Clean Electricity Performance Program that environmentalists and Democratic sponsors argue would generate almost eight million jobs, $1 trillion in economic activity over the next 10 years, and serve as the “most powerful tool” for decarbonizing the power sector. The Department of Energy would offer electricity suppliers grants if they increase their clean supply by four percent compared with their previous year’s performance, and would penalize generators that fail to.

But Senator Joe Manchin (D-WV), whose vote is indispensable for Democrats to pass a reconciliation bill in the 50-50 divided Senate, opposes both the CEPP and the Democrats’ $3.5 trillion package full of clean energy funding.

Another significant clean energy proposal that has galvanized attention is a DOE study described as “the most comprehensive review to date” of solar energy’s potential role in decarbonizing both the U.S. electricity grid and broader energy system. The study concludes that solar energy could “power all of the homes in the U.S. by 2035 and employ as many as 1.5 million people in the process,” said Energy Secretary Jennifer Granholm in a statement. But Granholm emphasized that “strong decarbonization policies” will be needed to raise solar energy’s level from its current 3 percent to 40 percent (or 1,000 gigawatts) by 2035, and as high as 3,000 gigawatts by 2050.

However, as noted by the CEO of the Solar Energy Industries Association, Abigail Ross Hopper, “policy, plain and simple” will be the greatest hurdle to raising solar to 40 percent. “The blueprint is there, the American people support it, and now it’s up to policymakers to make it happen,” she says.

Greg Wetstone, CEO of the broad-based nonprofit American Council on Renewable Energy, expresses optimism that legislation can move forward, despite the challenges of “default partisanship on every issue.” DOE’s solar study demonstrates that the United States can make the needed clean energy transition “rapidly enough” without increasing electricity costs to consumers, “two really important conclusions.” Democrats’ reconciliation bill policies will be “foundational” both for achieving the study’s targets and for driving national economic growth, he adds.

SEIA’s Hopper also emphasizes the solar study’s significance in helping to “make it clearer than ever that solar is a real solution to the climate crisis.” With the right policies, the U.S. can decarbonize its electric grid using solar and storage while keeping electricity costs low and generating hundreds of thousands of new career opportunities across the country, she says.

Among necessary policies are the CEPP and a 30 percent investment tax credit for solar. The House panel’s September markup includes investment tax credits for solar and for storage, and other provisions that SEIA and more than 700 solar companies called for in a letter to President Joe Biden and congressional leaders. Although SEIA is “encouraged” by the “sweeping climate and energy legislation” approved by the House Energy and Commerce and Ways and Means committees, says Hopper, she cautions that “there is a long road ahead in getting legislation to the president’s desk.”

Doubtless, intense legislative fights can be expected. But Wetstone underscores reasons to be hopeful that “some version of the CEPP” and other critical policies will proceed, including Biden’s unprecedented presidential commitment to climate action, as well as the increasingly visible “horrific, immediate implications” of climate change. Moreover, he says, the Federal Energy Regulatory Commission is signaling “a really dramatic change” in rules allowing renewable energy to compete in electricity markets. But the movement toward clean energy has to be “accelerated on a climate time frame,” he adds.

Here’s hoping climate evidence and redoubled legislative efforts make 2021 a year of win-win policy breakthroughs.

The Public Supports Clean Energy but Politics Is Preventing Win-Wins

An All-of-the-Above Approach to Climate Policy
Author
Kelly Sims Gallagher - Fletcher School, Tufts University
Fletcher School, Tufts University
Current Issue
September-October 2021
Issue
5
Parent Article
The Debate: Net-Zero by 2050: How Should We Achieve a Carbon-Free U.S. Economy?
Kelly Sims Gallagher

Tempting as it is to seek a “silver bullet” in climate policy, it doesn’t exist. Policymakers must utilize a mix of regulatory, fiscal, market-based, investment, information and disclosure, education, and innovation policies to achieve a more globally competitive, low-carbon, resilient economy by mid-century. Compared with other countries, the United States has an incoherent, often contradictory approach to climate policy, and it shows. While U.S. emissions peaked in 2007, they remain 2 percent above 1990 levels. By comparison, the United Kingdom plans to achieve a 78 percent reduction below 1990 levels by 2035.

It’s important to set forth some principles for American climate policymaking. First, American policies must be predictable and durable so that private firms and individuals can make informed decisions about their investments. This will require bipartisanship so that policies don’t sharply zigzag depending on which political party is in office. Ideally, new climate legislation will be developed and passed with Republican, independent, and Democratic support because we must stop vacillating if we are to take advantage of the genuine economic opportunity in a low-carbon transition. The United States must be a real contender in the race for low-carbon markets around the world.

The economic transition must also be taken seriously. For workers who rely on carbon-intensive industries, vague assurances of clean energy jobs are hardly reassuring. It is not so simple for a parent to pick up and move to another town or state because a new job happens to be there. Moreover, many local towns, counties, and even states rely heavily on tax revenue from certain types of industry. If the local school or hospital depends on royalties to provide its services, then new sources of revenue must be found. Planning for the transition must thus begin now, town by town, city by city, county by county, and state by state. A recent National Academy of Sciences study on accelerating decarbonization called for the establishment of a new National Transition Corporation together with a National Transition Taskforce, regional planning offices, and a net-zero transition office in every state capital.

This transition must be genuinely fair and requires a new social compact. Fairness needs to be considered, among other dimensions, in terms of race, income, age, gender, and geography. Certain communities are much more vulnerable to climate change itself and others are vulnerable to the economic transition to a low-carbon economy. Others are fortunate to live in less risky places or to already be employed in a clean, low-carbon industry. Those more fortunate must recognize that they have a responsibility to help those at risk.

We need to be disciplined in our approach to climate policy. We need to set goals, performance metrics, and budgets and stick to them. Net zero by 2050 means we have 29 years to get from the 5,769 million metric tons in 2019 to no net emissions. We need a carbon budget and we need to hold ourselves accountable to it, just as most American families live within their own household financial budgets. An independent body should be established to track progress against our goals and recommend revisions to policy as needed. Congress needs to appropriate sufficient financial resources to achieve our goals.

Let’s invest wisely and efficiently. Every public dollar invested and new policy announced should get the most bang for the buck in terms of economic gain, climate mitigation, and resiliency. Let’s stop siting new infrastructure in flood-prone areas. Let’s rebuild houses, schools, and hospitals to be energy efficient and low carbon. Integrating distributed renewables and battery storage cannot only help reduce emissions but can provide power after strong hurricanes when the grid is down. We need an American infrastructure or development bank so that we can ensure that financing is available for all communities to invest in low-carbon, resilient infrastructure.

Finally, we must recognize that climate policy is really economic, labor, and social policy. The U.S. competitive position in low-carbon technologies and industries has eroded, and American firms and workers are not economically benefiting as they should from the global energy transition. China is doing a better job than the United States in domestically deploying and exporting renewable energy technology, building new nuclear capacity, and launching a thriving electric car industry.

America must invest in innovation and construct a market-based industrial policy that supports U.S. firms and labor while holding them accountable for performance. Public and private investments in research, development, and demonstration must be greatly increased, commensurate with the scale of the challenge of climate mitigation and resilience. Just as important is investment in our human capital so that we have the people to invent the new technologies, the entrepreneurs who can bring the ideas to reality, the workforce that can manufacture advanced technologies, and the government officials who can devise and execute smart policy.

Kelly Sims Gallagher is professor and director of the Climate Policy Lab at The Fletcher School, Tufts University.

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