National Academies Press: OpenBook

Accelerating Decarbonization of the U.S. Energy System (2021)

Chapter: 1 Motivation to Accelerate Deep Decarbonization

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Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
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CHAPTER ONE

Motivation to Accelerate Deep Decarbonization

INTRODUCTION

Humanity has already embarked on a transformation of the global energy system that could, upon completion, approach the scale of a second Industrial Revolution. Every year, damages from climate change become better documented and understood, as well as more widespread and severe (IPCC, 2018). Every year, public support for action becomes stronger, both globally and within the United States, as people experience the effects of climate change firsthand (Pew Research Center, 2020). Every year, millions die worldwide, including up to 200,000 Americans, because of pollution caused by producing and combusting fossil fuel (Lelieveld et al., 2019). Every year, non-emitting energy technologies become cheaper and more available (see Chapter 2 of this report). This is why so many nations, states, cities, and companies have committed to replacing our current energy system by midcentury with a system that would emit zero net anthropogenic greenhouse gases (GHGs) (CDP, 2019; U.S. Climate Alliance, 2020; We Are Still In, 2020). Tens of trillions of dollars in costs and revenues hang in the balance, as do living conditions both at home and around the globe.

Many proposals to achieve net zero in the United States have been released, primarily by advocacy groups, political campaigns, and members of Congress. These plans target net-zero rather than zero emissions because some GHG sources would be too disruptive or expensive to eliminate (i.e., some agricultural methane and N2O; see Box 1.1).1 Net-zero emissions are achieved when any CO2 or other GHG emitted is offset by an equivalent amount of CO2 removal and sequestration. Most plans would offset between 10 and 20 percent of current emissions by negative CO2 emissions (carbon sinks or carbon removal) of the same magnitude.

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1 The focus of the interim report is on reducing CO2 emissions from the energy system in the United States while recognizing that there are other GHGs that contribute to climate change and that need to be reduced. The use of carbon dioxide equivalent (CO2e) is a metric for describing the global warming potential of different GHGs in a common unit by defining the number of units of CO2 that would have the equivalent global warming impact of one unit of another GHG. While simple to describe, GHGs have different atmospheric lifetimes. Osko et al. (2017) discuss the temporal trade-offs inherent in using a single time frame for estimating CO2e and recommend reporting this metric for multiple time frames.

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

The 30-year time frame of most net-zero proposals comes from two sources. First, global anthropogenic emissions must reach net zero by approximately midcentury to limit climate change to substantially less than 2 degrees Celsius (IPCC, 2018). Second, many energy system and industrial assets discussed in Chapter 2 last for years or even decades, from personal vehicles and natural gas plants to cement facilities and industrial boilers. A transition to net zero is far cheaper if long-lived components are allowed to reach the end of their useful lives before being replaced by non-emitting alternatives, and studies have found that a 30-year horizon for a net-zero transition leverages the normal pace of asset replacement and avoids significant premature retirement of existing assets.

The National Academies of Sciences, Engineering, and Medicine were established to provide expert advice to the nation. This advice is carefully peer reviewed, financially disinterested, apolitical, and nonideological. National Academies committees are chosen to avoid financial, ideological, or political conflicts of interest. To help federal, state, and local policy makers, businesses, and other community leaders and the general public better understand what net zero would mean for the country, the National Academies convened a committee to investigate how the United States could best decarbonize its energy system.

This document offers a technical blueprint and policy manual for the first 10 years of a 30-year effort to replace the current U.S. energy system with one that has net-zero anthropogenic emissions. It begins (in Chapter 2) with an analysis of essential actions that would have to be taken over the next 10 years to make the 30-year objective feasible,

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

while preserving optionality about the mix of technologies in the 2050 energy system to allow for innovation, changes in points of view, and surprises. The committee refers to essential near-term policies that are valuable under any feasible net-zero energy system pathway as “no-regrets” policies. The report then turns (in Chapter 3) to a discussion of societal impacts of our current energy system and the transition to a net-zero system, including how inequities built into our current system could be eliminated, how communities and groups that would otherwise be damaged by the transition could be sustained, how U.S. international economic, political, and technological leadership could be enhanced, and how our domestic manufacturing sector and the high-quality jobs within it could be revitalized. The bulk of the report (Chapter 4) then describes and explains the highest-priority policies for the first 10 years of a 30-year transition. A more comprehensive report covering the full 30 years will follow in a year.

COMMITTEE’S APPROACH TO THE TASK STATEMENT

National Academies committees are bound by their statements of task; the statement of task for this committee is shown in Box 1.2. The committee interpreted “deep decarbonization” in the statement of task to mean net zero by 2050, because of this target’s widespread use. However, because this interim report focuses on actions that would be needed in the next 10 years to keep the nation on a 30-year path to net zero, its findings are also relevant to any deep decarbonization effort that would substantially reduce emissions over more than 10 years. Notably, the task statement does not pose the question ofwhether climate impacts offossilemissions justify deep decarbonization, butrather charges the committee to analyze and understand alternative decarbonization pathways.

The statement of task also does not ask how deep decarbonization in the United States fits into a broader climate policy including adaptation, global cooperation, and perhaps solar geoengineering. An effective climate policy will need to contemplate all of these components, ensuring an appropriate and effective mix, particularly as information, action, and demands evolve over time.

The statement of task calls for interim and final reports. This interim report focuses on the electricity, transportation, industrial, and buildings sectors, which comprise most of the energy system, and CO2 emissions, the GHG with the greatest climate impact. In what follows, “energy system” is used as a shorthand for the union of the electricity, transportation, industrial, and buildings sectors. The committee understands that reaching net zero will require addressing all emissions sectors and GHGs. Its final report will include agriculture emissions, expanded treatment of technologies (e.g., hydrogen, low-carbon fuels, negative emissions technologies), and policy actors (state, local, private sector, nongovernmental organizations). It will also consider

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×
Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

discussion of wider societal trends, such as changes in economics, demographics, housing patterns, and infectious disease incidents that impact the energy system. During the development of its interim report, the committee discussed issues it sees as important for the final report, although the specific topics and structure of its final report have not been determined.

A complete transformation of the U.S. energy economy would dramatically affect most facets of society and thus have an impact on many areas of national concern, including environmental issues; public and economic health; job losses, gains, and quality; the distribution of income; the treatment of minority and indigenous people; and U.S. international leadership. As a result, net-zero policy is not about energy alone, because a host of other issues that people care deeply about would also be strongly impacted by the way in which net zero is achieved.

The committee studied how alternative policies, all of which could achieve net zero, would differentially affect other national objectives. Its membership was formulated by the National Academies to encompass a diversity of perspectives and expertise, including expertise in economics, the natural sciences, energy technology, political science, public policy, the social dimensions of technological change, labor, geography, and environmental justice. The portfolio of highest-priority policies in this report reflects this diversity of perspectives, because it attempts to find balance between alternative value propositions.

The remainder of this chapter offers four different, but not mutually exclusive, lenses that the committee brought to the net-zero problem, followed by a road map to Chapters 2 through 4. The first emphasizes cost minimization, the second equity and social justice, the third the enhanced competitive position of the United States in a net-zero world because of the country’s unique natural resources, and the fourth the opportunity to rebuild the industrial sector of our economy and enhance job quality while maintaining technological leadership. The committee views all of these lenses as critical to attain a robust and sustainable energy transition. The key is to formulate a policy portfolio that balances insights from alternative lenses, rather than to rely too heavily on any single lens.

PERSPECTIVES ON THE NET-ZERO PROBLEM

Economics

All else equal, policy should be formulated to achieve the climate and health benefits of net zero at the lowest possible cost. The classical view from economics is that the transition to net zero will be costly, and justified if the impacts avoided by reduced climate

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

change and fossil pollution outweigh added costs associated with the net-zero system. In addition to climate change, fossil emissions are responsible for the majority of air pollution, which kills millions every year globally. Annual deaths linked to fossil fuels in the United States alone have been estimated as high as 200,000 (Caizzo et al., 2013; Lelieveld et al., 2019). There are many other references on this potential co-benefit to decarbonizing the U.S. economy (e.g., Prehoda and Pearce, 2017; Dimanchev et al., 2019; Patz et al., 2020), and for other countries with extreme air quality problems, this co-benefit easily overwhelms climate benefits at least in the short term (Markandya et al., 2019). A net-zero energy system in the United States would prevent most deaths linked to fossil fuels and provide other health and environmental benefits.

The United States cannot solve the global climate problem on its own because it is responsible for only 10 percent of current emissions. The United States is, however, after China, the second largest emitter, and the largest historical emitter (Friedlingstein et al., 2019). The climate benefit of a U.S. transition to net zero is thus twofold: (1) reducing a significant share of global GHG emissions, and (2) encouraging others to do the same by driving down technology costs and leading a global coalition of nations that collectively make the transition. As noted above, there are enormous co-benefits from decarbonizing the U.S. energy system and economic opportunities for U.S. companies that lead this effort. Ultimately, all of these climate and nonclimate benefits and costs could be combined in an analysis of the net-zero goal. Such an approach would focus heavily on the social cost of carbon (EPA, 2015; NASEM, 2017), which describes, in monetary terms, the harms caused by a marginal ton of CO2e GHG emissions. The committee notes that such measures necessarily ignore some consequences that are difficult to monetize.

However, the committee was tasked to evaluate paths to net zero, not to decide whether a transition to net zero is justified. For this reason, “cost-effectiveness” is a more relevant economic metric than benefits minus costs. The cost-effectiveness of a policy measures how much the policy costs to achieve a given objective—in this case, in terms of what households or the government must give up, compared to the least-cost alternative that achieves the established objective (here, net-zero emissions). An economy-wide price on carbon tends to be the most cost-effective option in this narrow sense, but cannot by itself address a host of important issues that will inevitably arise, including the need to protect historically disadvantaged communities, communities adversely affected by the energy transition, and U.S. manufacturing that competes in a global transition. For example, if the United States begins the transition before some of its economic competitors without such protections in place, both domestic manufacturing and CO2 emissions may simply shift overseas.

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

Among the specific considerations not addressed by a carbon price, many relate to uncertainties. For example, government intervention may be needed in private capital markets, because essential net-zero investments early in the transition may be viewed as too risky, given uncertainties about whether the government will not follow through with the policies that would make the investments profitable. This is especially true for infrastructure. Performance standards may be required in some sectors because people often are uncertain whether they will realize a net economic gain from more efficient equipment, especially when retrofitting their homes or replacing their appliances or vehicles with those that require higher up-front costs and will provide efficiency benefits only in the future.

Cost-effectiveness analysis also ignores both benefits and, typically, how costs and benefits are distributed within an economy. Separate policies, including choices about how to use the revenue from carbon pricing, will thus be needed to meet any distributional objectives, such as those discussed below.

Last, a high carbon price would likely be required to drive the economy to net-zero emissions using carbon pricing alone. Based on existing studies, it is unclear whether competitiveness and equity concerns can be convincingly addressed at such high prices. Therefore, the committee chose to limit the carbon price and turn to other policies, with some loss of cost-effectiveness, in order to manage these concerns.

Equity and Fairness

The transition to net zero provides a unique opportunity to build an energy system that is fair to all Americans and to help redress past discrimination and build a more just society. The committee adopts a broad definition of equity and fairness in the distribution of benefits, costs, impacts, burdens, opportunities, participation, and outcomes associated with the transition to net-zero carbon emissions in the energy system. The committee is concerned both about leveraging the transition to net zero to make energy systems fairer and to reduce historical injustices as well as about ensuring that the transition itself treats all Americans fairly and equitably. Equity also includes the potential for targeted restorative investment strategies in disadvantaged communities, including but not limited to those that have confronted undue burdens associated with current or historical energy systems. The current U.S. energy system unfairly burdens low-income and BIPOC (Black, Indigenous, people of color) households and communities. These communities have disproportionately large exposure to pollution from energy infrastructure, but receive a disproportionately small share of energy revenues, and have comparatively little say in decision making that shapes local energy services and

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

infrastructure (Hajat et al., 2015; Mikati et al., 2018). Low-income and minority communities often have undependable energy services, with frequent outages (Hernández and Laird, 2019). Energy costs take a disproportionately large fraction of low incomes, which leads to a cycle of energy poverty (Drehobl and Ross, 2016; Lyubich, 2020). Location also has an impact; rural communities, in addition to having lower average income, often bear larger energy burdens than their suburban and urban counterparts (Ross et al., 2018). Any financial setback, such as a medical expense, layoff, insufficient job hours, or disability, can lead to inability to pay for energy and withdrawal of service, which both exacerbates the initial setback and impedes recovery. Moreover, low-income households receive disproportionately low benefits from improved energy technology, and public incentives that promote it, because they often do not own their homes, and if they do, they frequently lack the capital for an upgrade that would pay for itself over time, or do not meet the compliance with code necessary to accomplish an upgrade without incurring additional expenses (Hernández et al., 2016; Jessel et al., 2019). Energy poverty can result in inconsistent energy access and extreme temperatures in the home, which have been connected to negative health effects (Ross et al., 2018). This exacerbates health risks among already vulnerable communities.

A transition to a net-zero energy system is thus an opportunity to build an energy system without the injustices that permeate our current system, and for those that are marginalized today to share equally in any future benefits. Also, every technological transformation eliminates jobs tied to the old technology even as it creates new jobs, and drives critical employers in some communities out of business, while adding new employers in others. Policies during the transition must address injustice and loss simply because, in addition to ethical or religious concerns, significant opposition by any group or region of sufficient size could endanger the entire effort. With appropriate policy mechanisms, disadvantaged communities may see significant co-benefits such as high-quality jobs, economic opportunities, and improvements in air quality.

Because energy use affects so many aspects of people’s lives, a three-decade transition to net zero simply cannot be achieved without the development and maintenance of a strong social contract. This includes support for a carbon tax, clean energy standard for electricity, electrification of vehicles and buildings, and the founding of a Green Bank and National Transition Corporation. The United States will need specific policies to cultivate public support for the transition, ensure an equitable and just net-zero energy system, and facilitate the recovery of people and communities hurt by the transition. This is imperative to create and maintain the social contract and accomplish the mission. It would also help redress past injustice and help to build a more just society.

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

Energy Technology

The United States has a unique set of assets that should allow the country to transition at lower cost than many other nations and provide competitive advantage in a decarbonized world. A net-zero energy system that the United States could build over the next 30 years would have the following five components:

  • Zero-carbon electricity. Especially when the cost of avoiding CO2 is taken into account, the United States has several cost-competitive energy sources, including wind, solar, hydro, geothermal, and existing nuclear. New wind and solar now offer the cheapest levelized cost of electricity over most of earth’s surface (IRENA, 2020). Operating expenses for existing coal plants are often higher than building and operating the equivalent renewable capacity (Figure 1.1). The levelized costs of wind has declined by 70 percent and solar photovoltaics by almost 90 percent since 2009, providing an important means to supply electricity with no direct CO2 emissions (Lazard, 2019; LBNL, 2020). Hydropower, energy storage, bioenergy, geothermal, nuclear energy, and
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FIGURE 1.1 Selected renewable energy generation technologies are cost-competitive with conventional generation technologies under certain circumstances (e.g., solar can be more expensive than natural gas and coal when installed on rooftops, but is cheaper than both when it is thin film utility scale), and on a levelized cost of energy basis. SOURCE: Adapted from Lazard, Levelized Cost of Energy Analysis, Version 14.0.
Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×
  • natural gas with carbon capture and sequestration are available to compensate for the intermittency of wind and solar electricity.
  • Electrification of transportation and heat in buildings. Light- and medium-duty vehicles would transition to electric power, while residences would be heated by electric heat pumps. The cost of lithium-ion batteries dropped by 85 percent over the past 10 years (BNEF, 2019).
  • Carbon capture, utilization, and sequestration (CCUS). To address hard-to-decarbonize sources in industrial and other sectors, CCUS could provide a means to reduce emissions from industrial processes that release CO2, such as cement production, and perhaps for fossil electric power. There were 51 large-scale carbon capture and sequestration (CCS) operations around the world by 2019, demonstrating at scale virtually all practical applications of CO2 capture (Global CCS Institute, 2019).
  • Net-zero liquid and gaseous fuels for applications that require high energy density such as airliners or high-temperature industrial process heat. Options include biofuels, synthetic hydrocarbon fuels, and hydrogen from biomass gasification, electrolysis and natural gas with CCS.
  • Sinks to offset emissions that are too expensive or disruptive to mitigate (i.e., some agricultural methane and N2O). Options include forest planting, rebuilding the carbon content of agricultural soils with alternative agricultural practices, and direct air capture (DAC—machines that extract CO2 from the air), which is still expensive but coming down in price (NASEM, 2019). Although technologically feasible, CCUS coupled to hard-to-decarbonize industries including steel and cement, and net-zero fuels in the quantities needed for aviation, marine transport, fuel-cell heavy trucks, and industrial heat are not yet ready for commercial deployment. If innovation fails to bring any of these to commercial readiness in time, then additional deployment of negative emissions technologies would be needed to offset them.

The past 10 years have seen a revolutionary expansion of cost-competitive energy technologies, unlike anything in the previous 150 years. A transition to net zero would be difficult to contemplate without recent rapid cost declines in core technologies like wind, solar, and electric vehicles (EVs), and the revolution continues. Technological advances are being made in “clean firm” resources, such as advanced modular nuclear reactors, natural gas with CCS, and carbon-free fuels, which can provide a base for dependable electricity that can work in concert with renewables and energy storage to manage demand peaks and weather events. Research and development (R&D) continues to add to the portfolio of options, with new battery chemistries; multiple DAC designs; low-cost designs for electrolysis, which makes hydrogen fuel from water

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

with electricity; and new processes to use captured carbon in products, to name only a few. In this sense, the net-zero movement is as much an outgrowth of technological revolution as it is a response to climate change.

The United States is well positioned for a transition to net zero because of its unique combination of abundant sites for solar and wind, abundant natural gas for use with CCS, best-in-world geologic reservoirs for CO2 disposal, immense agricultural and forestry sectors producing waste biomass and with 40 million acres already devoted to biofuels feedstock, and a managed forest carbon sink already at 700 million metric tons of CO2 per year that could be augmented with inexpensive technology already in hand (NASEM, 2019). Because of its unique mix of resources, the United States should be able to decarbonize at lower cost than many other nations, and should have a competitive advantage in a decarbonized world.

Energy Policy

With the right policies to guide it, the transition to net zero would restore U.S. leadership in energy technology, manufacturing, and climate policy, and add high-quality jobs and improved energy access to the U.S. economy. Although the United States still leads the globe in technological innovation,2 it has not capitalized on its traditional first-mover advantage to sustain leadership in manufacturing and exports for clean energy. This is as true in low-carbon energy technology as it is in other fields such as information technology and artificial intelligence, where firms in Europe and Asia now dominate. For example, the United States was the original leader of the solar energy revolution. Bell Labs investments resulted in the creation of the first solar cell, and strong and steady procurement from the Navy and NASA allowed American solar companies Hoffman Electronics (no longer in business), Automatic Power (now Pharos Marine Automatic Power), and Solar Power Corporation (originally funded by Exxon, which shut it down in the mid-1980s) to serve that market (Nemet, 2006). U.S. labs and companies continue to routinely invent new solar cells that set world records for efficiency in converting sunlight to electricity. In wind, Scottish inventor James Blyth created the first electricity-generating wind turbine in 1886 while serving as a professor at Anderson’s College (now the University of Strathclyde—a leader in offshore wind research). American inventor Charles Brush of Cleveland, Ohio,

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2 According to the National Science Foundation (NSF) 2020 State of U.S. Science and Engineering report, “The United States continues to perform the largest share of global research and development (R&D), generate the largest share of R&D-intensive industry output globally, award the largest number of S&E doctoral degrees, and account for significant shares of S&E research articles and citations worldwide.”

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

also constructed a homemade wind turbine in his backyard, shortly after Blyth. Brush Electric Company was eventually bought by what is now General Electric (Owens, 2019). In electric vehicles, Tesla is the world’s top global producer, but it is the only American firm in the top eight producers (four are Chinese, one is Japanese, one Korean, and one French).

Since the turn of the century, however, the United States has ceded much of its original leadership in these low-carbon industries. Only one of the top-10 solar photovoltaic (PV) manufacturers, First Solar, is an American firm (eight are Chinese, one is South Korean), and U.S. companies’ share of the global solar market has dropped below 10 percent (Sonnischen, 2020). Of the top-5 lithium-ion battery producers, there is only one American firm, Tesla, and it ranks fifth behind Korean, Chinese, and Japanese producers (Benchmark Mineral Intelligence, 2019). In 2005, Denmark had the world’s largest wind turbine manufacturing capacity, closely followed by Germany and the United States. Yet, in only 15 years, China surged to become the largest manufacturer of wind turbines globally, with six times the U.S. manufacturing capacity. Denmark leads the world in wind power equipment exports, followed by Germany. Wind power equipment exports from the United States are significantly lower.

These trends are disturbing. Manufacturing is important to the U.S. economy, creates high-wage and high-skill jobs, and has a vital impact on innovation and competitiveness. The industrial sector is essential to produce the materials, components, and technology necessary for modern life. The United States should attempt to claw these industrial sectors and markets back, so that it leads the world both in innovation and in the manufacturing and commercialization of advanced clean energy technologies. Surging from behind to win the race will require an integrated national strategy, involving a mix of innovation and smart industrial policy (see Chapter 4 for details) that positions U.S. firms to compete in the highly competitive international landscape in clean energy.

A major reason why the United States has not maintained its competitiveness in clean energy industries is the inconsistency and unpredictability of market-formation policies in its domestic market and weak export promotion policies to help U.S. firms succeed in the global marketplace relative to other countries (Lewis and Wiser, 2007; Gallagher, 2014). The U.S. production tax credit for wind has been extended 12 times since it was enacted in 1992, and in 7 of those cases the credit expired before it was retroactively extended (CRS, 2020). The United States never passed a national clean energy standard (although Renewable Portfolio Standards exist in a majority of the states). It also never created a feed-in tariff for clean energy, unlike Germany, China, and Japan. In R&D investments, volatility in appropriations for the energy efficiency

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

and renewable energy programs at the U.S. Department of Energy (DOE) contributed to a lack of certainty about future funds to support innovation (Gallagher and Anadon, 2020), despite strong evidence that investments in energy research, development, and demonstration (RD&D) provide substantial financial returns (NRC, 2001; Wiser et al., 2020). The U.S. Export-Import Bank stopped lending altogether for a period in 2015 and suffered a series of starts and stops in the reauthorization of its charter in the subsequent few years.

As the U.S. clean energy economy continues to grow rapidly, a key consideration will be to ensure that U.S. workers and businesses benefit significantly and that the United States maintains a strong workforce in the energy economy. As the history of the U.S. automobile, computer, information, data analytic, and digital communications industries have demonstrated, continuous innovation both within existing technology domains and in disruptive technologies is key to long-term economic prosperity and the prospects for high-skill, high-wage jobs. Such jobs are necessary to create a robust foundation for both the U.S. economy as a whole and the economic security of individuals, households, and communities. Yet, as the decline of the U.S. automobile industry across the upper midwestern United States has illustrated since the 1980s, and recent trajectories in the gig economy in the information technologies sector also demonstrate, U.S. policies have not always managed the risks of disruptive innovation well.

As decarbonization expands, therefore, it will be important for U.S. policy to attend carefully to both the risks of significant declines in carbon-based energy industry workforces and businesses (e.g., gasoline sales and internal combustion engine parts and repair) and the need to ensure that U.S. clean energy jobs are high quality. A high-quality job entails, at a minimum, a safe and secure working environment, family-sustaining wages3 and comprehensive benefits, regular schedules and hours, and skills-development opportunities that enable wage advancement and career development (United Way Worldwide, 2012; AFL-CIO, 2017; ILO, 2020). The United States will also need robust educational and workforce training and development programs for the clean energy sector across a wide array of diverse technology and business domains.

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3 A family-sustaining wage is how much wage-earning individuals in a household must earn to support themselves and their family, working full time (Glasmeier and MIT, 2020a,b). Some examples: In North Carolina, which sits in the middle of state rankings for cost of living, two working adults in a household with two children would need to be paid at least $15.85/hr each. If they lived in the D.C.-Arlington area, known for its high cost of living, a family-sustaining wage would be $18.06/hr each.

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
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Ultimately, the goal of decarbonization policy should be to develop a comprehensive, integrated approach to a clean energy transition that ensures that the U.S. energy workforce becomes larger, better compensated, and more secure than it is today.

ROAD MAP TO THE REST OF THE REPORT

The rest of the report is organized around a series of questions: (1) What is needed from a technological point of view to reach net zero? (2) What other goals besides GHG emissions reductions should guide the transition? (3) What suite of policies is needed in the first 10 years to embark on a transition to net zero?

Chapter 2 addresses the first question, reviews the literature on paths to net zero, and concludes that net zero by 2050 is achievable technically and economically—that is, such outcomes are potentially achievable at roughly the same level of spending (approximately 4 percent of gross domestic product [GDP]) that the nation expends on energy services today (Larson et al., 2020). In the committee’s analysis, a change in mindset is required by those who have spent years focused on the least expensive way to reduce carbon emissions on the margin in a short-term economic sense. In the committee’s view, achieving a 30-year transition to net zero at the lowest cost means investing in some of the higher marginal cost projects up-front, to take advantage of the natural turnover of long-lived capital stock, and to facilitate later phases of the transition (i.e., retrofitting power plants even if it would be immediately cheaper per ton of emissions avoided to plant trees).

Chapter 2 identifies five actions that would need to be taken in the 2020s to put a net-zero energy system within reach by 2050. These five actions represent islands of relative certainty, because any plan to achieve net zero at midcentury is constrained by the immediate need to replace long-lived emitting components as they retire and to meet any expansions in demand with non-emitting assets, and because any large-scale deployment over the next decade must necessarily rely on proven, mature technologies. Also, the list of actions recommended by the committee for the 2020s is relevant to the final make-up of the energy system in 2050. These actions would all be needed regardless of whether the final system is to be 100 percent renewable or retains substantial nuclear and non-emitting fossil fuel components. Last, the five recommended actions are also robust to uncertainty caused by a future technological breakthrough, such as low-cost DAC or electrolysis. The 30-year time horizon means that the United States cannot wait until a new breakthrough occurs (if ever), especially given that any new innovation would take years or even decades to bring to material scale. These actions are therefore designed to make immediate and necessary

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

progress, to lay the foundations to reach net zero by 2050, and to retain optionality to manage risk and uncertainty in the later portion of the transition.

The five required actions are:

  1. Electrify energy services in transportation, buildings, and industrial sectors. Examples include, by 2030, reaching half of vehicle sales (all classes combined) from zero-emissions vehicles (electric and fuel cell), and deploying heat pumps in one-quarter of residences.
  2. Improve efficiency and energy productivity in transportation, building, and industrial sectors. There are many examples of low-hanging fruit in this category, including improved efficiency of appliances and buildings, and accelerating the rate of increase of industrial energy productivity (dollars of economic output per energy consumed) from recent rates of 1 percent per year to 3 percent per year (Morrow et al., 2017).
  3. Carbon-free electricity. Roughly double the share of electricity generated by carbon-free sources from 37 percent to about 75 percent by 2030, including deployment on the order of 600 GW of wind and solar power capacity.
  4. Build critical infrastructure needed for the transition to net zero. Examples include substantial expansion of high-voltage transmission lines to move renewable power between regions, a national CO2 transportation network to move captured CO2 to geologic reservoirs (useful for decarbonizing industry and producing carbon negative fuels even in a 100 percent renewable system), and an expanded network of EV charging stations.
  5. Expand the innovation toolkit. Examples include RD&D for electrolysis to make fuels from renewable power, inexpensive DAC, which could be used to offset any GHG emissions that prove to be too difficult or disruptive to mitigate, and any innovation that would further reduce the cost of technologies that are already cost-effective.

These five actions would put the nation on a path to a net-zero energy system able to meet the nation’s projected business-as-usual demand for energy services, and would not require dramatic reductions in service demand, such as significantly reduced mobility or home size. The goals include significant increases in energy efficiency through electrification of transport and heating and changes to buildings and industry, which would reduce the demand for energy rather than the demand for energy services. The committee was not confident in its ability to design policy that would both attract public support and achieve the behavioral changes required for a significant reduction in the demand for energy services.

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

Complementary to the five critical actions, Chapter 2 describes decarbonization strategies by sector, providing requirements for buildings, transportation, industry, energy storage, fuels, electricity generation and transmission, and CCS. In addition to addressing these actions to decarbonize the U.S. energy system, the United States must also tackle non-CO2 GHGs and preserve and enhance land carbon sinks. Although the statement of task focuses on CO2, the committee briefly summarizes actions required to reduce methane, N2O, and fluorinated gas emissions in the three end-use sectors and to offset remaining emissions of these gases with forestry and agricultural carbon sinks in the Addendum on Non-CO2 Greenhouse Gases and in Box 2.1, both in Chapter 2. The final report will address the forestry and agricultural policies required to produce and sustain the needed CO2 sinks.

Chapter 3 most clearly distinguishes this report from others that characterize technological pathways. It develops four socioeconomic goals that address critical issues of national concern that are implicated in a net-zero transition:

  1. Strengthen the U.S. economy. Provide the nation with reliable, low-cost, net-zero energy, while using the transition to accelerate U.S. innovation, reestablish U.S. manufacturing, increase the nation’s global economic competitiveness, and increase the availability of high-quality jobs.
  2. Promote equity and inclusion. Benefits, risks, and costs of the transition to net zero should be equitably distributed. Historically marginalized groups should be fully integrated into decision making.
  3. Proactively support workers, businesses, and communities directly and adversely affected by the transition. Promote fair access to new long-term employment opportunities and provide financial and other support to communities that might otherwise be harmed by the transition.
  4. Maximize cost-effectiveness. Cost-effectiveness measures the material consumption given up by households in order to achieve net zero in 2050, relative to a business-as-usual counterfactual.

There are two issues of national concern that the committee did not explicitly address when evaluating net-zero policies. The first is COVID-19. The COVID-19 pandemic has affected many aspects of everyday life in 2020 and could have significant impacts on short- and long-term economic conditions and decarbonization initiatives. Ongoing and projected behavioral changes, including shifts in transportation modes (away from public transportation and toward personal vehicles, walking, or cycling), increases in telework and online purchasing, and relocation outside urban centers all influence the opportunities and strategies for a net-zero energy transition (IEA, 2020a). The decreases in travel, industrial and trade activities, and demand for electricity

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

and oil in 2020 have reduced global CO2 emissions by about 4 to 11 percent relative to 2019 levels (IEA, 2020a; Climate Action Tracker, 2020). At the same time, however, the economic fallout from the pandemic has decreased investment in and development of renewable, clean, and energy-efficient technologies, at least in the short term (IEA, 2020b). The long-term effects of these actions on future emissions reductions remain uncertain. Nonetheless, there is general agreement that economic recovery packages designed to promote clean energy policies and investments are critical for achieving deep decarbonization and also provide opportunities to increase equity and sustainability (IEA, 2020a; Climate Action Tracker, 2020). However, the committee’s recommendations focus on longer-term policies.

The second issue is related to national security, including managing materials sources and intellectual property to increasing manufacturing capabilities and training the workforce. There are also obvious national security implications of a global switch to net zero, but the committee did not include experts on national security to address these considerations. Further, climate change itself has critical national security consequences. Even a 1 to 2 degrees Celsius warming would result in more intense and frequent natural disaster events, with significant losses of life and property, and greater spending by the federal government on responding to such disasters (Guy et al., 2020; Kaplan, 2020). Impacts to military installations from severe weather, river flooding, hurricanes, and extreme rain have already cost the U.S. military $10 billion in recent years (Underwood, 2020). The Department of Defense (DoD) characterized climate change in 2014 as a “threat multiplier,” meaning that its impacts will amplify stressors like poverty, environmental degradation, political instability, and social tensions (La Shier and Stanish, 2019). With its global presence, the U.S. military will need tailored responses to climate change in each of its geographic regions, including addressing potential destabilizing events stemming from increased drought, disaster, and disease.

In addition, this interim report does not include policies needed to sustain forestry and agricultural carbon sinks to offset emissions that remain too expensive or disruptive to mitigate, including some agricultural emissions of methane and N2O (see Box 2.1). All anthropogenic negative emissions are technically emissions offsets, and substantial negative emissions will be essential to achieve net zero in 2050. Fortunately, the United States has the required capacity to offset residual emissions of non-CO2 GHGs in its forestry and agricultural sectors, and the economy-wide price on carbon proposed in Chapter 4 should be sufficient to sustain needed agricultural and forestry sinks through 2050 (NASEM, 2019, Box 2.1). Although the nation already possesses a land use CO2 sink of 700 MtCO2/y, additional policies will be needed

Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×

because the sink is expected to halve by 2050 without deliberate actions to sustain it, and because policy must avoid incentivizing harmful land use change that could damage the nation’s biodiversity or production of food and fiber. These policies must also prohibit or discourage carbon credits from being used to prevent replacement of long-lived capital stock with non-emitting alternatives (e.g., a new fossil power plant with forestry offsets versus a new plant with carbon capture and sequestration), because this would increase both the total cost of the transition and the amount of sink required to complete it, given that the total sink capacity is limited (NASEM, 2019). The committee decided to defer discussion of the policies to create and manage agricultural and forestry carbon sinks to the final report, because of the complexity of the issues involved, and because the current slowly changing carbon sink will be sufficient for the near term.

Chapter 4 evaluates policies at the federal level that the nation could adopt to achieve the five technological actions in Chapter 2 while advancing the socioeconomic goals in Chapter 3. Local, state, and regional policies will be included in the final report. Collectively, the recommended federal policies would catalyze the first 10 years of a transition to net zero, and provide the associated environmental, health, and societal benefits, while controlling costs, protecting the competitiveness of the U.S. economy, and compensating for market failures. They would also increase the number of high-quality manufacturing jobs, while protecting vulnerable workers and communities, and would reestablish U.S. leadership in energy innovation, manufacturing, and commercialization, while building a more just energy system.

For each policy, the committee identified a responsible branch of government and the needed congressional appropriation, if any. The list of high-priority policies is relatively granular (summarized in Table 4.1 in Chapter 4) and is divided into four categories:

  1. Policies to establish a U.S. commitment to a rapid, just, and equitable transition to a net-zero greenhouse gas emissions economy. A partial list includes the adoption of a national GHG emissions budget; an economy-wide price on GHG emissions; a federal effort to monitor and evaluate equity impacts of net-zero policies; and a National Transition Corporation to mitigate job losses and ensure equitable access to economic opportunities during the transition.
  2. National rules and standards to accelerate the formation of markets for clean energy that work for all. A representative subset includes standards for the pace of transition to zero-emissions vehicles; manufacturing standards for net-zero appliances; a clean electricity standard for electric power generation; buy American rules, buy clean rules, and labor standards for federal agencies and companies that receive federal funds; changes in electricity wholesale
Suggested Citation:"1 Motivation to Accelerate Deep Decarbonization." National Academies of Sciences, Engineering, and Medicine. 2021. Accelerating Decarbonization of the U.S. Energy System. Washington, DC: The National Academies Press. doi: 10.17226/25932.
×
  1. market rules; and disclosure rules for climate and net-zero policy-related risks covering private companies and federal agencies.
  2. Investments in research, technology, people, and infrastructure needed for the transition to net zero. A partial list includes a tripling of the nation’s RD&D budget for clean energy; a Green Investment Bank; regulatory reform and incentives required to augment the nation’s electrical transmission network, particularly over long distances; a national CO2 transportation network, with characterization and permitting of geologic storage reservoirs; an interstate EV charging network; upgrades in the electric grid; a comprehensive education and training program ranging from the vocational to the doctoral level to prepare the needed workforce; and incentives and loan guarantees to revitalize U.S. clean energy manufacturing, which are tied to labor standards and equity and inclusion goals.
  3. Policies to support coordinated planning for the transition, with effective inclusion of diverse participants. A subset includes a national interagency working group to facilitate and coordinate the work of all federal agencies on a just transition; 10 regional centers to plan the transition at the regional level, an office in each state to coordinate federal and state action; community-based demonstration projects for programs designed to strengthen equity outcomes, and local community block grants for transition planning and to identify communities at risk, with funding tied to effective participation by historically marginalized populations.

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The world is transforming its energy system from one dominated by fossil fuel combustion to one with net-zero emissions of carbon dioxide (CO2), the primary anthropogenic greenhouse gas. This energy transition is critical to mitigating climate change, protecting human health, and revitalizing the U.S. economy. To help policymakers, businesses, communities, and the public better understand what a net-zero transition would mean for the United States, the National Academies of Sciences, Engineering and Medicine convened a committee of experts to investigate how the U.S. could best decarbonize its transportation, electricity, buildings, and industrial sectors.

This report, Accelerating Decarbonization of the United States Energy System, identifies key technological and socio-economic goals that must be achieved to put the United States on the path to reach net-zero carbon emissions by 2050. The report presents a policy blueprint outlining critical near-term actions for the first decade (2021-2030) of this 30-year effort, including ways to support communities that will be most impacted by the transition.

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