Build-out of solar and wind power coupled with energy efficiency could help stabilize climate — study

Source: Daniel Cusick, E&E reporter • Posted: Monday, September 8, 2014

Far from breaking the backs of U.S. businesses and taxpayers, the United States can cut energy-sector carbon pollution by 40 percent from 2005 levels and create 2.7 million jobs over the next 20 years by aggressively investing in clean energy technologies and energy efficiency, a new economic analysis has found.

The findings, from the liberal Center for American Progress and the Political Economy Research Institute at the University of Massachusetts-Amherst, suggest that annual investment of $200 billion, from both the public and private sectors, would sufficiently tip the scales toward climate stabilization while actually growing the U.S. economy.

More than half of that $200 billion — an amount equal to 1.2 percent of current U.S. gross domestic product — would come from the large-scale build-out of new solar arrays, wind farms and other clean energy technologies that would replace aging fossil fuel plants. The analysis also calls for $90 billion in annual investment in high-efficiency buildings and other energy-efficient infrastructure.

“Our work shows that the fundamental imperative of climate stabilization is not an outlandish fantasy but is truly within reach,” co-author Robert Pollin, a University of Massachusetts economist and co-director of the Political Economy Research Institute, said in a statement.

But it would require a radical shift in U.S. energy policy and effectively dismantle an energy economy built around coal, oil and natural gas to meet fundamental needs like electricity and transportation.

To achieve climate goals laid out by the CAP-PERI researchers, U.S. coal consumption would need to drop by 60 percent, while oil and natural gas consumption would have to fall by 40 and 30 percent, respectively.

Overall, U.S. energy consumption would also need to fall 30 percent from current levels, something the authors believe can be achieved with efficiency gains.

“The PERI-CAP case may face political challenges. It is not without cost,” the authors write. “However, it is also a necessary and feasible way to stabilize the climate. In aggregate it will provide strong net benefits to the U.S. economy.”

Blueprint from Las Vegas summit

The authors state that the $200 billion spending goal can be met using four key policy levers: direct public spending, market-shaping rules, private investment incentives and support for communities undergoing economic transformation.

The new analysis was released in conjunction with the opening of the seventh National Clean Energy Summit being hosted this week in Las Vegas by Senate Majority Leader Harry Reid (D). The Center for American Progress is a co-sponsor of the event, which is expected to draw politicians, business leaders, investors and energy sector experts.

The analysis projects that more than one-fourth of the $200 billion in annual spending, $55 billion, should be met by government, a figure that roughly aligns with current federal spending on clean energy projects. The remaining $145 billion would come from private-sector sources, although the implementation of a carbon cap or tax could boost government revenues by as much as $200 billion per year.

The analysis relies on findings from the Intergovernmental Panel on Climate Change that the world’s governments must reduce greenhouse gas levels by 40 percent from 2005 levels by 2035 to avoid harmful and potentially permanent changes to the global climate.

Bracken Hendricks, a senior fellow with the Washington, D.C.-based Center for American Progress, said in a statement that the report’s findings make clear “that business as usual will drive our nation’s economy to overshoot emissions goals, making climate catastrophe an absolute certainty.”

However, he added, “Green growth also articulates another — better — way forward.

“Our research demonstrates that it is technologically and economically feasible today to create more jobs and growth, while using 40 percent less fossil fuel, improving energy efficiency 30 percent, and powering communities with four times more clean and renewable energy,” Hendricks said. “This is a story of hope and opportunity, but the window for action is small and narrowing.”

Moreover, the analysis found a lack of action by the government and private sector could lead to deep economic pain. The authors point to a recent White House Council of Economic Advisers report that found a temperature increase of 3 degrees Celsius above preindustrial levels would result in economic damage of $150 billion, year after year, in perpetuity.