A combination of federal legislation, state targets, corporate commitments, investor pressure, and advances in clean technologies is giving new momentum to public- and private-sector efforts in the United States to moderate the effects of climate change. 1 This forward movement improves the country’s chances of significantly reducing its emissions by 2030 and coming closer to meeting its climate commitments. At the same time, powerful headwinds are present. The war in Ukraine has shattered lives and liveli hoods, disrupted energy security and affordability, and deepened geopolitical tensions. It has also exacerbated the supply chain issues and inflationary trends that arose with the pandemic and increased the threat of a global recession. An increase in US natural-gas prices of more than 50 percent in September from a year earlier led to the announce ment of delays in the retirement of some coal plants. - - 2 Supply chain challenges in the United States
have also increased the price of renewables, with reduced access to solar panels from Asia raising prices by 30 percent and causing project delays. Indeed, it seems that over the past three years, the United States, and the world, have been witnessing a confluence and mutual reinforcement of the four main systemic risks facing humanity: global-health, macroeconomic, geopolitical, and environmental risks. Yet that same confluence makes the case for action even stronger as the relationship between the risks becomes clearer. Where do we go from here? The energy transition, as it is often called, includes not only the decarbonization of the electric sector— which accounts for about 25 percent of US greenhouse-gas (GHG) emissions today 3 —but also three additional elements: the development of new
The requirements of the transition must be carefully balanced with the need to ensure a reliable, resilient, and affordable energy supply all along. The United States does not seem to have found this balance.
1 The passage of the Inflation Reduction Act (IRA), and the government’s commitments to cut greenhouse-gas (GHG) emissions by 50 to 52 percent by 2030 and to achieve a net-zero grid by 2035, represent the most ambitious climate actions by the federal government to date. For more information, see “Fact sheet: President Biden sets 2030 greenhouse gas pollution reduction target aimed at creating good-paying union jobs and securing U.S. leadership on clean energy technologies,” White House, April 22, 2021. (See sidebar “The potential impact of the Inflation Reduction Act.”) At the same time, policies put in place by the 25 states that have set economy-wide emissions-reduction targets continue to accelerate decarbonization (“U.S. state greenhouse gas emissions targets,” Center for Climate and Energy Solutions, updated August 2022). In addition, more than $30 billion in climate-focused assets are under management in the United States (“Climate funds dig deeper roots,” Morningstar, April 13, 2022), while more than 1,500 businesses have committed to setting net-zero targets (Science Based Targets home page, accessed December 18, 2022). 2 Timothy Gardner, “U.S. coal plants delay closures in hurdle for clean energy transition,” Reuters, August 10, 2022. 3 “Sources of greenhouse gas emissions,” US Environmental Protection Agency, August 5, 2022.
Accelerating the journey to net zero
12
Made with FlippingBook Online newsletter maker