The sudden drop in carbon emissions in countries that shut down this spring initially seemed like a slight silver lining on an otherwise pitch-black cloud. On reflection, it instead reminds us just how far we have to go.
Even at a historic standstill because of the coronavirus, China was generating 75 percent of its pre-crisis emissions. Worldwide, global emissions are expected to decline only slightly — perhaps by 5 percent or even less. This tells us that solving the climate problem requires deep structural changes beyond shifts in individual behavior.
The pandemic and accompanying sharp economic downturn are forcing much reflection on how we’ve built our society, and how we will manage and rebuild it after COVID-19 is gone. But one thing that hasn’t changed is the need to protect ourselves from an even stronger latent threat: global climate change. Although the current crisis is creating setbacks in the long effort to counter this threat, it also heralds a giant opportunity to put our country on a path to substantially reduced greenhouse emissions.
ASIDE FROM AGRICULTURE, the pre-crisis consensus among clean-energy experts was that mitigating climate change involved four big steps. First, decarbonize transportation — the largest carbon-emitting sector in the United States and Europe — by converting most vehicles to electricity. Second, reduce emissions from buildings through efficiency improvements and conversion to clean heating and cooling. Third, reduce industrial emissions by converting to cleaner processes, many using electricity in place of fuels. And fourth, since all these measures work only if there is abundant, affordable clean power, expand and decarbonize our electric power grid.
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Each of these steps involves many challenges and opportunities and will take decades to complete. Encouragingly, though, we now have a pretty clear line of sight to an affordable, carbon-free electric power sector by 2050 or sooner. Efficient buildings now routinely manage their own power using artificial intelligence and generate more energy than they use. Wind or solar power is now the cheapest source of raw electricity nearly everywhere in the world; in 2018, about three-quarters of all new power-generation facilities were carbon-free. About one-third of electric utilities in the United States have committed to net zero carbon by 2050. One utility, Xcel Energy, has already reduced carbon emissions by 44 percent since 2005; its CEO, Ben Fowke, notes that “we have the technology today” to achieve 80 percent reductions.
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Nonetheless, eliminating carbon emissions from an entire industry is a daunting task. The US electrical grids include 10,000 large power plants and 2 million small generators sending power over 6 million miles of power lines to billions of gizmos and gadgets. Ownership and management of these systems is divided between hundreds of federally regulated generation companies, over 100 regional grid operators, and almost 3,000 distribution utilities, some regulated by their states and others owned by the public. Thousands of other firms that provide energy efficiency, manage demand, and offer other services work with or through utilities to make the system go.
Transitioning this complex mosaic to carbon-free production requires change well beyond simply building more wind and solar plants — though this is clearly one pillar of the solution. It’s a real-life Rubik’s Cube in which customer demands must be balanced instantaneously with supply. Nothing in the electric grid operates on its own; it influences, and is influenced by, everything else on the system. And then, even as it operates continuously in real time, the entire enterprise must be planned, simulated, financed, and built years into the future.
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Overhauling this system rapidly, reliably, and affordably will require a number of important changes. A strong and stable national climate policy, ideally with a price on carbon, would help enormously. Increasing efficiency is the most cost-effective method of cleaning up our energy system, and a new generation of tech-enabled products like smart thermostats offer even larger gains. However, we’ll properly tap this potential only with the help of well-targeted federal and state programs that increase the incentives for efficiency. The industry also needs much more energy storage to facilitate wind and solar power, and more research and development for alternative forms of clean electricity generation beyond wind and solar.
The pandemic has hindered some progress in clean energy. With sales flatlining, many energy-efficiency and residential solar firms have endured large layoffs. About 2.5 million people work in energy efficiency, where work has almost ground to a halt, while the Solar Energy Industry Association says that up to 250,000 jobs in its industry are at risk. Many large projects have been halted or deferred as developers, utilities, and large buyers of renewable energy cope with supply chain disruptions and other more pressing concerns. Purchases of electric vehicles, a crucial part of the transition, have cratered alongside all other car sales. Some governments have relaxed or waived many important environmental rules, including the Trump administration’s disastrous rollback of auto efficiency standards.
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The crisis has also magnified geopolitical risks that have long slowed global climate progress. Low oil prices destabilize the economies of oil-producing states, stiffening their resistance to the clean energy transition. They also reduce the financial value of halting construction on new fossil fuel plants, especially in emerging economies where the vast majority of these plants are now being planned. China might revive dirtier industries as part of its own stimulus program, as it did after the 2008 recession. The pandemic has postponed important global climate negotiations that were to take place in December. And other aspects of the “new normal” could deal serious blows to good climate policies. What happens to emissions, for example, if fewer people are willing to take mass transit for fear of getting infected, or if people stop moving into dense, walkable communities?
BUT THERE ALSO are signs of hope in the post-crisis outlook for clean energy and climate progress. The long-term trend of increasing support for clean energy and transportation among voters, businesses, and the investment community remains unchanged. States and utilities that have made climate commitments haven’t wavered. Many renewable energy projects are continuing during the crisis, and a few new ones have even broken ground. Most forecasters see clean energy markets returning to their long-term upward trend as soon as the crisis abates. In the global market for energy storage — which is essential for the expansion of intermittent sources like wind and solar — forecaster GTM sees a 20 percent decline this year, but it still expects a 13-fold increase by 2025.
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After the Great Recession of 2008, electricity use in the United States flattened out for a decade even when economic growth picked up. No one had ever seen this before. The recession changed the relationship between economic activity and power demand in some fundamental way. There is a fair chance that this crisis will also put travel and its emissions on a permanently lower trajectory, shifting energy use from airplane fuel to more virtual meetings.
Most importantly, the need to restart the global economy provides a momentous opportunity to create millions of jobs, transforming our infrastructure and insulating it from the worst effects of future crises. This goes well beyond the idea of short-term stimulus. This is the perfect time for a sustained national effort to invest in a clean energy system.
Harvard Business School economist Rebecca Henderson observes that this crisis has reminded her community of the need for an effective government, possibly translating into more business pressure for a strong climate policy. In Europe, dozens of private and public-sector groups have just created a European Alliance for a Green Recovery and urged that the coronavirus response include massive investments to protect the climate and biodiversity. In the United States, former Energy Secretary Ernest Moniz captured widely held sentiment when he called for a national Energy Jobs Coalition, an industry-led version of the New Deal’s Works Progress Administration. Moniz reminds us that, in the recovery from the 2008 financial crisis, the economy added clean energy jobs twice as fast as the average sector.
On April 3, during a week when the United States reported 270,000 COVID-19 cases and all Michiganders were subject to a stay-at-home order, the city of Ann Arbor released its long-term climate action plan. “This is a moment, at least for me, of deep reflection about what it means to create a resilient community,” said Missy Stults, the city’s sustainability officer. If a city on lockdown, yet to face the peak of an oncoming pandemic, can choose to move forward, surely the rest of us can make clean energy a core long-term part of our recovery and rebuilding. The tools and the technologies to conquer climate change are within reach, but only if we have the will to harness the current tragedy for long-term good.
Peter Fox-Penner is a professor in Boston University’s Questrom School of Business and director of BU’s Institute for Sustainable Energy. He is also chief strategy officer at Energy Impact Partners, an investment firm. His new book “Power After Carbon: Building a Clean, Resilient Grid,” will be published in May.