Why states are pushing ahead with clean energy despite Trump’s embrace of coal

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Alamosa Photovoltaic Plan, south-central Colorado.
Energy.gov/Flickr

Bill Ritter, Jr., Colorado State University

On Tuesday, March 28, President Trump traveled to the Environmental Protection Agency to sign an executive order rolling back a number of climate-related regulations that have taken effect over the past eight years. The president’s team claims this effort will help bring our nation closer to energy independence, and that it will begin the process of resuscitating a coal industry that has experienced serious decline in the past decade.

In reality, it will do neither. We do not import coal into the United States. There are no jobs coming back from overseas. Moreover, and somewhat ironically, the chief reason for the decline in the coal industry is not Obama-era regulations, but a rapidly changing energy market.

Any energy market analyst will tell you that advances in hydraulic fracturing and horizontal drilling have provided us with cheap, abundant, natural gas. Add to that declining price curves in wind and solar generation, and one begins to appreciate that a difficult road lies ahead for coal. These are markets that are growing with rapid technological innovation.

USEIA

The shift is underway

The fact is that the Obama administration’s Clean Power Plan codified where the utility industry was already going. With publicly announced retirements, roughly 45 percent of the existing coal capacity in the western grid will be retired by 2030. According to utility integrated resource plans, by 2026, just shy of half of the total energy in the West will be generated from zero-emitting resources.

The 11 western states that my center had been convening around implementation of the Clean Power Plan are, collectively, in compliance with the plan’s 2026 targets under business as usual. Ironically, removing the Clean Power Plan just eliminates a potential for market-based emission trading that would lower costs to consumers and provide some states with a glide path to meet their targets.

This is not to say that the regulatory rollbacks in President Trump’s order will have no impact. The international community, which crafted the landmark Paris Accord, will not have the benefit of U.S. leadership on climate change. Other nations will fill that void – while reaping the economic rewards of serving a growing global market with low-carbon technologies. One of the most troubling long-term impacts of these actions will be a declining global view of America as a source of innovation and investment.

U.S. Secretary of State John Kerry, holding his granddaughter, signs the Paris Agreement, April 22, 2016.
U.S. Department of State/Wikipedia

At home, should the Clean Power Plan expire, states that have been reticent to advance a clean energy agenda will no longer be required to plan for emissions reductions. The Clean Power Plan brought certainty to energy planning. If you talk to American utility executives and their investors, they crave certainty because it lowers the cost of capital and saves money for consumers. The executive order is a step away from stability in our energy markets and away from America’s leadership as an innovator developing the technologies that will serve a growing global market.

States, cities and businesses are moving forward

Attempts to roll back important environmental safeguards are being sold to the American people under the rubric of job creation. Let’s put this in the proper context: There were 65,971 jobs in coal mining nationwide in 2015. According to the Department of Energy, more than twice as many jobs – 133,000 – were created last year just in the energy efficiency industry. In 2016 the solar workforce grew by 25 percent to 374,000 and the wind workforce grew by 32 percent to 102,000. One in 50 new jobs in America is now in solar energy.

From 2007 to 2011, as Governor of Colorado, I signed 57 pieces of legislation intended to transition Colorado to a clean energy economy. After leaving office I founded the Center for the New Energy Economy at Colorado State University with the intention of working with governors, state legislators and utility regulators on clean and advanced energy policy. In our work at the center, my team and I have become confident that states, cities and private companies are taking the lead in the clean energy transition, even as the federal government flounders. Today 37 states, comprising two-thirds of the U.S. population, have renewable portfolio standards that require electric utilities to generate or purchase a percentage of their power from renewable energy.

Governors from both parties have led this transition. Seventeen governors have joined the Governors’ Accord for a New Energy Future, including the Republican Governors of Nevada, Iowa, Michigan, Massachusetts, New Hampshire and Vermont. In doing so, they have all committed to diversify their states’ energy generation with clean energy sources, modernizing energy infrastructure and encouraging clean transportation. In addition, 129 U.S. cities have signed the Compact of Mayors’ pledge to address climate change.

Thirty-three U.S.-based companies, the likes of Coca-Cola, GM, Goldman Sachs, HP, Johnson & Johnson and Nike, have committed to a goal of using 100 percent renewable energy as part of the RE100 Initiative. Some 50 U.S. companies will need to purchase 17 gigawatts of renewable energy by 2025 – enough to power the entire state of Colorado – in order to fulfill their existing corporate targets.

True leadership requires a vision that looks to new markets, new technologies and new solutions. Unfortunately, the president’s actions on Tuesday look backward toward a fading horizon, rather than forward toward a bright and promising future.

Bill Ritter, Jr., Director, Center for the New Energy Economy, Colorado State University

This article was originally published on The Conversation. Read the original article.

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For China, climate change is no hoax – it’s a business and political opportunity

Chinese President Xi Jinping, center, U.S. President Barack Obama and U.N. Secretary-General Ban Ki-moon shake hands during a joint ratification of the Paris climate change agreement in eastern China’s Zhejiang province, Sept. 3, 2016. How Hwee Young/Pool Photo via AP
Chinese President Xi Jinping, center, U.S. President Barack Obama and U.N. Secretary-General Ban Ki-moon shake hands during a joint ratification of the Paris climate change agreement in eastern China’s Zhejiang province, Sept. 3, 2016. How Hwee Young/Pool Photo via AP

Matthew Kahn, University of Southern California – Dornsife College of Letters, Arts and Sciences

In mid-November, while Americans were preoccupied with election returns, China sent some of its clearest signals yet that it will continue to pursue an international leadership role on issues including climate. At an international climate change summit in Marrakech, the Chinese government reasserted its commitment to reduce its greenhouse gas emissions. The government announced that its aggregate emissions will peak by 2030 or earlier, and that its emissions per dollar of economic output will decline sharply.

For 25 years I have taught my economics students that climate change represents the ultimate “free rider problem.” To slow global climate change, we need to reduce aggregate global emissions. Yet each individual nation’s efforts are too small to “solve” the problem, so it has only weak incentives to take costly mitigation actions, and strong incentives to “free ride” on the benefits of emission reductions by other countries.

From this perspective, President-elect Trump’s pledges to “cancel” the Paris Agreement and dismantle President Obama’s carbon mitigation initiatives follow standard economic logic. If the United States backs out of commitments to reduce national emissions, it still benefits from other countries’ efforts.

Why, then, is China is pressing ahead with low-carbon initiatives? My research suggests several motives. Chinese leaders want to improve the quality of life in their nation’s cities by reducing air pollution; win large shares of promising export markets for green technologies; and increase China’s “soft power” in international relations. Taking aggressive action to cut carbon emissions helps China in all three areas.

Workers examine wind turbine blades at a Vestas Wind Technology factory in Tianjin, 2010.
AP Photo/Ng Han Guan, File

Reducing coal’s cruel impacts

Much of the staggering rise in China’s carbon dioxide emissions in recent decades came from burning coal to produce electricity for the nation’s industrial sector. While this growth has created millions of jobs and wealth for the nation, coal-fired power plants are major sources of greenhouse gases and conventional air pollutants that affect millions of people.

A large body of research, including joint work by U.S. and Chinese scholars, has demonstrated that air pollution in China causes thousands of premature deaths yearly. Coal also provides winter heating in China’s colder cities. Recent epidemiology research has found that coal use for heating greatly increases fine particulate air pollution, which has raised morbidity and mortality rates.

Using data from around the world, economists have found that when countries develop economically they move up an “energy ladder.” As a nation grows richer, it tends to substitute more expensive but cleaner fuels such as natural gas for cheap, high-polluting fuels like coal. A natural experiment that occurred in Turkey as natural gas pipelines were built throughout the nation between 2001 and 2014 showed as people gained access to natural gas, air quality improved and mortality rates declined.

China has more coal than natural gas resources, but as its citizens grow wealthier, their willingness to pay to avoid pollution increases. This trend will encourage substitution toward cleaner fuels. As such, China’s political leaders will likely prioritize policies that substitute natural gas for coal, which should reduce air pollutants and greenhouse gas emissions.

Economic deceleration, industry restructuring, and new energy and environmental policies have slowed the growth of coal consumption in China and are also driving more centralized and cleaner uses of coal.
U.S. Energy Information Administration

Pursuing green and profitable export markets

China’s economic growth has been fueled by manufacturing for export. Now it faces rising competition from other lower-cost manufacturers that produce cheap goods such as sneakers and clothes. In response, China is seeking new export markets. Electric vehicles, solar panels and wind turbines represent promising markets in a world with ample demand for lower-carbon transportation products and power-generating capacity.

Trade economists have posited that there is a home market effect that drives certain large industries to concentrate in countries with large domestic markets. Firms in these industries gain experience in producing low-cost, high-quality products by selling to home markets. After they go through this process of learning by doing, they turn to exporting.

China’s Communist Party (CCP) has offered special incentives, including free land and low interest rate loans, to businesses in the green energy sector. By providing these cost advantages, the CCP hopes to give Chinese manufacturers a first mover advantage. And with the rise of China’s universities, China is now home to a huge number of engineers with the training and expertise to compete with Japan and South Korea in developing new technologies.

Over 21 million new cars were sold in China in 2015. China uses more oil than any other country except for the United States, and is projected to become the world’s top oil consumer by 2034. This outlook gives Chinese leaders a major incentive to develop green transportation.

China’s central government is offering direct subsidies to people who purchase electric cars, and many major cities are offering tax incentives for local automakers to produce and market electric and hybrid vehicles. Such policies have helped Chinese electric car and bus maker BYD become the largest electric vehicle producer in the world.

Event introducing the Yuan, the latest plug-in hybrid mini SUV from BYD, in Beijing, April 2016. In 2015 BYD sold more electric cars than Tesla, Nissan and GM combined.
AP Photo/Ng Han Guan

China is also seeking market dominance in clean energy technology. The nation’s ambient air pollution and its greenhouse gas emissions would both decline if China could produce more electricity using clean renewables rather than relying on coal. It has been the largest producer of solar photovoltaic cells in the world since 2007, and overtook Germany as the nation with the largest installed photovoltaic capacity in 2015.

U.S industrial regulators have accused China of engaging in predation and dumping low-cost solar panels that compete with U.S products. But environmentalists should cheer that potential buyers in importing nations now face lower prices – especially global companies like Wal-Mart which are pledging to shrink their carbon footprints. As the price of renewable power equipment declines, the law of demand predicts that more U.S. companies will go green.

There is a key synergy between electric vehicles and green power generation. As studies have shown, driving an electric vehicle that runs on electricity generated from coal can produce more greenhouse gas emissions than operating a conventional gasoline vehicle. If Chinese exports of electric vehicles and renewable generating technologies lead to their joint adoption by suburbanites, greenhouse gas emissions from both transportation and power generation will fall.

Investing in soft power

For decades, the world’s media have portrayed China as a bully and trade cheat abroad and a repressive power at home. In cutting carbon emissions, the Communist Party seeks to boost its own political legitimacy in the international arena as well as with the Chinese people.

By committing to pursue ambitious environmental goals, Chinese leaders hope to signal to both domestic constituents and international actors that China is an international leader and cares about its own people. A “leading nation” plays an active role in international relations, helps to keep the peace and promotes global public goods. At a time when the United States appears to be stepping back from its leadership role, the CCP may see a chance to fill the vacuum, and make money in the process.

The Conversation

Matthew Kahn, Professor of Economics, University of Southern California – Dornsife College of Letters, Arts and Sciences

This article was originally published on The Conversation. Read the original article.