by Whit Fulton: With the new administration inaugurated in January, and with Secretary Jennifer Granholm confirmed last week…
those of us working to help solve the climate crisis can’t help but feel hopeful with what should be a new, aggressive approach to energy policy. As the world is facing a daunting climate crisis, and with a nearly 4-year delay in taking action to solve it in Washington, I was pleased to see that President Biden selected Governor Granholm as Energy Secretary. While so many have spoken volumes about her work resurrecting the auto industry after the 2008 financial crisis, it was her efforts on the state level shepherding aggressive renewable energy policies which helped create 125,000 green jobs in Michigan.
I was equally thrilled to see the new President appoint former EPA administrator Gina McCarthy and Ali Zaidi to the top two climate advisory positions in his administration. All three have an impressive track record of moving the country towards a sustainable future for generations to come.
Now that all three are officially in place, it’s time to get to work.
In Mr. Biden’s own words, climate change will have the urgency of a “day one” issue. Beyond re-joining the Paris Agreement in his first 100 days, Biden and Granholm will need to begin rolling out practical policy plans to make significant investments in clean energy, technology, and infrastructure to create hundreds of thousands of American jobs.
More than anything else however, and as with any industry, the renewable energy industry needs policy certainty. Wind, solar, and distributed energy resources (DERs) have all faced major policy uncertainty through shifting dynamics in Washington over the past six years. While it’s clear now that renewables are making unprecedented progress, the new administration must work to solidify policy so we can help simplify and accelerate the creation of jobs and our energy transition. Here are my thoughts.
Set Reliable Standards that Drive Interoperability
One unfortunate quirk of the US’s historic balancing act between Federalism and Republicanism is the patchwork of city, state, and regional standards that govern how clean energy can be installed and attached to the grid. Simplifying, streamlining, and normalizing on key standards would reduce transaction costs and promote safety, unlocking massive acceleration in new deployments and jobs, and all at a fraction of the cost of straight subsidy to industry (don’t get me wrong, subsidies are great too, but let’s focus on the best returns on investment out there). For example: there should be a standard one-page application for interconnection that can be filled out and filed electronically that is universal for utilities and local inspectors across the country.
So how do we do it? First, Biden’s team should empower a single national certification organization that would examine, regulate and certify compliance for stakeholders with all relevant standards for electrical systems, processes and interconnections in the new energy economy. Second, take a carrot approach: organizations that meet the standards should be rewarded with modest but meaningful tax or other incentives. Forget sticks, since many organizations may have unique circumstances that justify taking a slower approach. Best of all, there are excellent organizations working on this problem already like SEPA, NABCEP, SEIA, and EPRI, to name a few. Empowering them with the needed funding and mandate to execute their mission at a larger scale would generate outsize returns for the industry and the planet.
Promote Certified U.S.-made and Manufactured Products
Clean energy technology is only as clean as the components it’s made from. While we do depend heavily on imports, and will continue to do so, we can’t really call our infrastructure clean if it’s built using abusive labor practices and carbon-intensive energy. In this moment, there is an unprecedented opportunity to promote onshoring of renewable energy technologies to aid meaningful domestic job creation. This is where Granholm’s experience in the rust belt and with the auto industry will be vital; these areas of the country are and will continue to feel the strain of decarbonization. They need new opportunities and areas for advancement. Certified U.S. made and manufactured products earn a home field advantage not only through these job creation benefits, but because they also support the greater human rights and environmental justice mission of the U.S., and don’t offshore our carbon footprint.
The Biden Administration should realign its trade policy with China and others to quantify any tariffs not in terms of arbitrary tit-for-tat retaliation but in terms of entrained carbon and other related CO2e measures. The funds collected from the tariffs should then be allocated directly to a dedicated fund for carbon negative investments at home, thereby helping offset the cost of the tariffs, stimulating onshore cleantech industry activity, and creating a virtuous cycle to incentivize lower carbon everywhere.
Establish A Transparent Carbon Market
Markets work. At least, they work more cost-effectively than overbearing regulatory edicts. Establishing a national carbon market, a simple process that charges electric generators and other major carbon emitting industries a cost per ton of carbon, can act as a disincentive to produce power from highly-polluting means and spur clean energy deployment (read: jobs). This is a powerful motivator for the energy transition, creates new funds for beneficial uses, and is already being done regionally.
Our working model: The Regional Greenhouse Gas Initiative, RGGI (pronounced “Reggie”), is a cooperative effort among Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. RGGI works by capping and reducing CO2 emissions from the power sector. Each RGGI state’s Budget Trading Program limits emissions of carbon dioxide from electric power plants, issues CO2 allowances, and even offers a secondary market for tradable certificates, allowing generators that more effectively reduce emissions to benefit financially. Long-established U.S. emissions markets for nitrogen oxides and sulphur, bi-partisan creations, have shown enormous cost savings relative to imposed technology controls. This model should be applied to carbon and expanded nationwide.
Our Last Chance & Greatest Opportunity
The way the new administration perceives and reacts to climate change will set it apart from international peers (not to mention the outgoing administration). Avoiding a two degrees Celsius global temperature increase will require not only infrastructure investments but also a completely different way of looking at our need for and use of energy as individuals and homeowners.
At this exact moment in time, we Americans have an unprecedented opportunity to improve our energy system, one that, done right, leads to a stronger economy and a cleaner, safer planet. With resolve and clear policy, America can assume the mantle of leadership needed to carry us into the next century and beyond.