In the 2016 presidential election, we are approaching a singular and momentous crossroads in our nation’s history. Will we, or will we not, make a serious effort to achieve a low-carbon future for our children and our planet? The fossil fuel magnates and the GOP say no, because we can’t or shouldn’t, but more than 75 percent of Americans want our leaders to take significant steps to fight climate change, according to a poll released in January 2015 by the New York Times, Stanford University, and Resources for the Future. Presidential candidates Hillary Clinton, Bernie Sanders, and Martin O’Malley are all saying yes, with O’Malley taking the strongest position. Just recently, President Obama upped the stakes by raising the emissions reduction and renewable sourcing targets in the finalized rule of his groundbreaking Clean Power Plan for the states. But we need to be even bolder. We need the energy system equivalent of a war economy, and we need it now, with clean power targets that will mobilize large financial and fiscal resources and rapidly accelerate investment, enterprise, and technology away from business as usual and toward renewable energy sources and a carbon-free economy.
Enter Tom Steyer, the hedge fund billionaire turned climate activist. As recently announced by his political organization NextGen Climate, Steyer is asking candidates to develop full-fledged plans to put our electrical power system on a path toward achieving 50 percent carbon-free power by 2030 and 100 percent carbon-free by 2050. According to NextGen polling, nearly 70 percent of voters in battleground states support the idea of moving toward a 100 percent carbon- free electrical power system, and at least one presidential candidate, O’Malley, has signed on.
By ratcheting up the clean power policy mandate, amid growing public demand for action, Steyer is also tacking with the growing market momentum for clean power, which you might expect from a former investor [full disclosure: a staff person for NextGen Climate serves as a member of the Demos board of trustees]. But, now, with the state compliance planning processes required by President Obama’s Clean Power Plan, we have a unique opportunity to expand that market power with transformative policy designs for a clean economy future. No wonder that, after languishing in the wake of the Great Recession, the clean power idea finally seems poised to be a defining issue in a national election.
But are we up to the task? When Bill Clinton declared that the “era of big government is over,” the nearly quadrupled public debt that he inherited from Ronald Reagan and George H. W. Bush had become a major public issue. At the time, though, our mounting climate liabilities were barely visible to the public eye. Today, on our current global warming path, the social costs of carbon alone (and not counting other major collective action challenges, such as water over-use), may soon rival federal budget deficits. Also consider that the official government measure of the social cost of carbon, currently set at about $40 per ton of carbon dioxide, is possibly far too low because it does not account for potential global warming impacts on economic growth. Stanford researchers propose a social cost rate of approximately $220 per ton, and in 2013 global emissions reached nearly 40 billion tons. By comparison, the cost curve of Medicare looks far less dangerous.
Historically, government did not shrink from our biggest challenges. Out of the Great Depression we made the New Deal and won World War II; out of World War II, we built the middle class and achieved the first manned moon landing; out of discovering the “other America,” we expanded the social safety net and reduced poverty by fifty percent. What will we build out of the climate crisis?
As Steyer and others have emphasized, the climate crisis is also a huge opportunity for the United States. In particular, the prudential and fiscal rationale of reducing the social costs and risks associated with carbon emissions is greatly amplified by the potential economic benefits of a renewable energy transformation. In this line of thinking, a good analogy is the Apollo space program, which had a first-order purpose of solving the existential crisis stemming from the Soviet Union’s initial dominance in space exploration (it would be easy, but wrong, to underestimate this concern today); at the same time, the Apollo program (along with the Minuteman missile program) mobilized what was effectively the technological Big Bang for today’s information economy, most notably by creating a public market and fixed demand for private development of solid state circuitry and the first generation of commercial microchips.
Similarly, by setting a bar of 100% carbon-free energy by 2050, we can redraw the map of technological development, investment, and enterprise to build a clean energy system that reorients the broader economy, like the information and manufacturing systems that came before it. In many ways, carbon-free power has the contours of what economic historians term a “general purpose technology,” which can be singular, like the steam engine, or systemic, like the canal, railroad, and highway systems that sequentially created the surface transport infrastructure we needed to develop regional and national production and consumer markets. Converting our electrical power system from a fossil fuel base to a renewable energy base entails a general purpose shift that will ramify throughout the economy, far beyond the electrical power sector (which, in itself, only represents about 2.5 percent of GDP and 500,000 jobs). For example, renewable energy is essential not just for clean power but for fixing the second largest source of our carbon emissions, the transportation sector (the combined electrical and transportation sectors comprise nearly 60 percent of U.S. carbon emissions). The primary pathway for reducing carbon emissions in the transportation sector—replacing gasoline-powered vehicles with electricity-powered vehicles and new or expanded electrically-powered mass-transit systems--is entirely predicated on moving to a renewables-sourced electrical power system first; otherwise, this solution will have the perverse effect of increasing demand for electricity under the current sourcing structure, thereby only intensifying the cycle of fossil fuel extraction and carbon-emitting energy production. The combined effects of expediently and simultaneously decarbonizing energy and transport could catapult us toward a 2050 national target of at least 80 percent reduction below 1990 emissions levels, which is the commonly accepted U.S. target in the international effort to prevent global temperatures from rising more than 2 degrees Celsius.
The path toward decarbonizing the energy and transportation sectors is labor-intensive, and that means jobs. Thus, if we don’t do our part to rein-in global warming, we may also be missing the opportunity of a lifetime for our ailing economy. Solar energy creates eight times more jobs per project lifetime than we see in coal or natural gas production, and the U.S. solar industry already employees more people than the coal industry. Adding to the mix of jobs in solar installation, operations, maintenance, and business management in cities and regions, jobs related to new technologies and infrastructures for electrifying our auto fleets, bus systems, and cargo handling at our ports, and possibly even directly electrifying local and national road systems, could add millions to the employment rolls. According to estimates developed by the Political Economy Research Institute at the University of Massachusetts, Amherst, and the Center for American Progress, clean energy investment must ramp up to approximately $200 billion annually, which would create 4.2 million new jobs and net job growth of 2.7 million, reducing the unemployment rate by 1.5 percent. A national decarbonization effort anchored in the kind of ambitious reduction targets being called for by scientists and climate advocates could further expand such job-creation, creating a bold win-win scenario for the planet, our workforce, and future generations.
Yet, no matter how effective we may be at reaching 100 percent carbon-free power and 80 percent lower carbon emissions by 2050, another no less fundamental question belongs at the center of the U.S. climate debate: How will we ensure that a low-carbon economy is not only about sustainable growth but also about equitable growth. A particularly fraught problem in this regard is racial inequity: will the institutional racism that has manifoldly redlined communities of color into concentrated poverty, sub-standard housing, low-wage jobs or no jobs, toxic natural environments, and below-average or very poor health, be further entrenched by the policy makeup of economic decarbonization; or, will we seize this unprecedented economic development opportunity to erase the color lines on the new clean economy map?
To cite just one example, many see the transition to renewable energy as part of larger shift toward more localized micro-grid systems with distributed energy production instead of centralized, large-scale production and transmission by corporate utilities. What could distributed energy mean for communities of color? Currently, public policy in support of residential solar mainly takes the form of tax benefits for homeowners who install solar panels on their homes, as well as net metering policies in some states and cities. But less than half of black Americans and even fewer Latinos own their homes, which means that localized renewable energy for many people of color will require shared energy production or “community solar,” where community-owned installations or small neighborhood power plants serve multiple customers in a community. In contrast to the homeowners represented in the first wave of residential solarization, who can often finance their rooftop installations with tax credits, solar loans, and future energy savings, urban communities of color will often not have sufficient individual resources to pool the capital needed for a neighborhood solar power plant. This, among other things, including proposed surcharges on community energy generation, could lead to what Denise Fairchild of Emerald Cities Collaborative calls "energy ghettos," where people of color remain stuck in the old, dirty energy grid, with no opportunity for energy savings or net energy revenues and likely even facing higher energy prices as the big utilities’ customer bases in other parts of a city or region migrate off the grid.
Happily, New York State, which has one of the most aggressive distributed energy targets as part of its Reforming the Energy Vision (REV) plan, is taking steps to ensure that low-income communities can get a foothold in the new local energy economies. In July, the state’s Public Service Commission issued an order establishing a community distributed generation policy, which gives a green light to shared renewable energy projects with community net metering, and sets a benchmark of 20 percent for inclusion of low-income households in proposed projects. It also underlines the need for public assistance with financing and points to the New York State Energy Research and Development Authority’s recently established $13 million fund for low-income solar financing as a potential source of start-up capital for community solar projects. This is a very positive step in the right direction toward inclusion of low-income households and people of color in the new clean energy economy. But the benchmarks and funding are modest. In New York City alone, nearly 3.5 million people earn less than $30,000 annually. $13 million to help provide affordable, community-benefiting renewable energy to low-income New York City families, let alone statewide, is only a fraction of what is needed. Nevertheless, there is real momentum in the right direction. Aaron Bartley, director of the community advocacy organization PUSH Buffalo and a leader in the movement for community-controlled distributed energy generation in New York, calls it a fight for “energy democracy. ” “What we know from models around the world,” Bartley says, “is that the transition to renewables brought on both by climate change necessities and the growing market competitiveness of solar, wind and geothermal can literally put the power back into the hands of the people, thereby reducing the corrosive role of energy corporations on our democracy and foreign policy and helping to alleviate the outrageous wealth gap that threatens our body politic and our economy."
Bartley and other energy democracy advocates readily agree that more should be done to insure that clean economy development is racially inclusive and builds wealth in communities of color. For example, a clean energy “inclusive jobs policy,” requiring living wages, local-resident hiring, and inclusive preferences for minority-owned businesses, should be attached to all public dollars spent on contracting and procurement for community energy facilities and other community efforts such as energy efficiency projects. Racially inclusive contracting and employment standards should also be attached to all public dollars spent on larger scale installations and infrastructures in both the renewable energy and clean transportation sectors. A clean energy economy will not be a pathway for racial equity by happenstance, but only if we view it as such and put race-equity challenges and benchmarks on a level playing field with environmental goals.
Clean energy and carbon-free transportation are the leading edge of a new growth model, one that is equitable, sustainable, and full of new jobs, and we are fighting for that transition. The old capitalist growth model--resource-intensive, highly externalizing, distributionally blind (and socially inefficient)—survives, on political life-support, but climate politics is clearly coming of age, and not a minute too late. Yet, in this transition, as in previous economic transitions, there is one unchanging constant: pervasive racial inequity. We have to reverse the one constant: racial equity has to be a paramount goal and good in any new politics and any better future, which means that getting things right on climate is, at once, everything, but not enough. Carbon and the color line need to be solved together.