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Zero emissions drive would grow U.S. economy

Posted on 23 March 2021 by dana1981

This is a re-post from Yale Climate Connections

Climate models show time is running out for the world to cut emissions and avert catastrophic climate change, but a new report finds that taking the required action will actually boost economic growth and create jobs.

“Transforming the economy requires us to build and deploy A LOT of new stuff,” Robbie Orvis, author of the report, explained by email. “As a result, we see a large increase in output from U.S. industries and the associated increased value-added and GDP benefits that come with that.”

Meeting the Paris targets would require rapidly transforming every sector of the economy to run on clean technologies instead of fossil fuels. Orvis, director of energy policy design at the nonpartisan energy and environmental policy firm Energy Innovation Policy & Technology, estimates that accomplishment would generate about 340,000 new full-time jobs over the next decade as workers find new jobs with manufacturers and with developers of clean energy technologies or associated industries like computer chip manufacturing, silicon mining, and steel production. Those new workers would spend their income on food and other retail items and personal and business services, indirectly creating jobs in those sectors, further boosting the economy.

Altogether, Orvis estimates that meeting the Paris targets would boost U.S. GDP by a cumulative $6.4 trillion by 2035 and by $20 trillion through 2050. For economics wonks, those dollar figures are undiscounted, and the 340,000 jobs figure is derived from a forecast for 3.1 million new “job-years,” a term defined as one full-time job for one year, by 2030 and 5.5 million new job-years by 2050.

While there would be steep capital costs involved in deploying clean technologies, costs would be high also to continue business as usual, since power plants, vehicles, and appliances all need to be replaced at the end of their life spans. Orvis estimates that the transformation to clean technology would cost about $2.5 trillion more than business-as-usual investments by 2035 and $4 trillion more by 2050. Yet the report concludes that the benefits to the U.S. economy from this rapid transition to clean technologies would outweigh the investment costs by a factor of 2.5 by 2035 and fivefold by 2050, even before accounting for the substantial health benefits associated with cleaner air or the societal benefits of slowing global warming and curbing climate disasters.

Another analysis, by the research group Project Drawdown, concluded that direct economic benefits of meeting the Paris targets globally would exceed the initial investment costs by about fivefold. In short, meeting the Paris climate targets would significantly boost the U.S. economy, improve public health, and save lives.

Clean the grid, electrify everything

Orvis and his team used Energy Innovation Policy & Technology’s U.S. Energy Policy Simulator to evaluate how the U.S. could meet its share of greenhouse gas emissions reductions needed to achieve the Paris target of limiting global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial temperatures.

Because average global temperatures have already risen by around 1.2°C (2.2°F), limiting global warming to 1.5°C requires immediate, rapid emissions cuts in every sector of the economy, especially by wealthy developed countries. To keep that target within reach, the U.S. would need to cut its emissions about 50% below 2010 levels by the end of the decade and to net zero by 2050.

The report identifies a handful of key policies that could achieve most of the needed emissions reductions, centering on decarbonizing electricity generation and electrifying other sectors, as the chart below illustrates.

Greenhouse Gas Reductions graphic

Plans to accomplish this goal generally center on clean electricity. The new report envisions 80% carbon-free electricity in the U.S. by 2030 and 100% by 2035. Establishing a national clean electricity standard to mandate this transition is already a step that congressional Democrats are considering including in the next big budget reconciliation bill later this year.

The Energy Innovation report concludes that meeting the 1.5°C Paris target would also require that the U.S. completely phase out coal-burning electricity generation by 2030, and that the clean electricity standard alone would not spur this transition quickly enough. As a result, additional policies such as a price on carbon emissions or additional federal pollution regulations would be needed to accelerate the coal phase-out.

To tackle emissions from the transportation sector, the report suggests a federal zero-emission vehicle standard, requiring that all new sales of cars and buses be zero-emission by 2035 and trucks by 2045. California and Massachusetts have already adopted these standards, and Senator Jeff Merkley (D-OR) and Representative Mike Levin (D-CA) have introduced the Zero-Emissions Vehicles Act, which would direct the EPA to apply them nationwide.

Cutting industrial, building, and agricultural emissions

For the industry sector (manufacturing and energy production except for electricity), the Energy Innovation report suggests standards and/or carbon pricing could drive the substitution of fossil fuels with a mix of zero-carbon fuels including electricity, hydrogen, and biomass. Currently, nearly all hydrogen is generated from fossil fuels. This process must be replaced by “green hydrogen” generated by splitting water molecules via electrolysis. Regulations would be needed to slash methane leakage from fossil fuel extraction and fluorinated gases from refrigerants and cooling systems.

For the building sector, most emissions stem from burning fossil gas and oil for heat and appliances. The report suggests implementing electric building codes and appliance standards requiring all newly sold building equipment to run on electricity by 2030 and all new buildings to be fully electric and net-zero emissions by 2035. Numerous cities, including 40 in California, have already banned the use of fossil gas in new construction. One stumbling block: Republican-led state legislatures in Arizona, Tennessee, Oklahoma, and Louisiana have passed laws prohibiting local governments from enacting similar gas bans or electrification measures in those states, but these could be overcome by federal legislation.

The Energy Innovation report also suggests land and agriculture policies such as improved forest management, afforestation and reforestation efforts, and no-till agriculture to increase carbon storage in trees and soil. However, the carbon storage potential of these measures is uncertain since, for example, climate change-worsened wildfires could hinder efforts to expand forests. As a result, the report primarily focuses on decarbonizing the electric grid and electrifying the transportation, industry, and building sectors such that everything runs on clean electricity instead of fossil fuels by 2035 to 2050.

Cleaner air, healthier citizens

Replacing fossil fuels with clean technologies would also improve air quality, especially near power plants that now burn fossil fuels or heavily trafficked roads, which are disproportionately low-income and communities of color. Orvis estimates that meeting the Paris targets would add approximately 1 million American life-years by 2050 (an added life-year is an extension of one person’s life by one year). By 2050, the cleaner air would also avoid an estimated 2 million asthma attacks and 6.5 million lost workdays per year. And slowing climate change would also curb damage from heat waves, wildfires, droughts, floods, and hurricanes.

In short, the Energy Innovation report concludes that cutting emissions 50% by 2030 and to zero by 2050 would boost the U.S. economy by trillions of dollars with direct economic benefits outweighing investment costs fivefold, resulting in cleaner air, healthier children, reduced healthcare costs, more productive workers, longer lifespans, and less damaging extreme weather disasters. It’s reasonable to ask if it’s a deal that America’s leaders would be foolish not to take.

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