Going Where the Carbon Is: Directing Clean Energy Dollars to Fossil-Fueled Regions
The 2020 hurricane season is predicted to be one of the worst in years with five named storms already in the books. This is yet another reminder that climate change poses a serious threat to people, natural resources and infrastructure around the country—compounding stressors from the COVID-19 pandemic and raising questions about safe social distancing during disaster evacuation.
Although there are still partisan divisions about how to act on climate change, there is growing acceptance that policies can and should be deployed to quickly and decisively reduce greenhouse gas emissions and minimize risks from extreme weather. These policies must be enacted now, if we are to avoid the most calamitous impacts of climate change.
The electric power sector has started down a decarbonization path, thanks in great part to federal tax incentives for wind and solar power. But this sector must do more, as we work to rebuild our economy. To do the greatest good where there is the greatest need, clean energy incentives should increasingly ‘go where the carbon is.’
Currently, most federal clean energy tax credits provide uniform incentives in all parts of the country. The result: uneven, and some would say unfair, geographic distribution of benefits, with the highest level of clean energy investment concentrated in regions with relatively low grid carbon intensity.
A portion of federal incentives to reduce emissions, such as tax credits or stimulus spending, should be prioritized for the states with the most carbon-intensive environmental footprints.
In the case of the electric power sector, this means boosting incentives in states or regions that have the most carbon-intensive electricity grids.
Emissions must come down in all 50 states if we are to have a chance at meeting global climate goals. Certainly, all 50 states should receive a floor amount of federal incentives and support, such as through greatly needed extensions to existing tax credits—even more necessary today as nearly 600,000 workers have lost their jobs in the American renewable energy industry due to COVID-19. But new policies should consider whether an extra boost can be given where it is needed most.
"Going where the carbon is" can achieve three core objectives of climate policy.
First, it will deliver the most emissions-reducing bang for each federal buck. The emission reductions from energy efficiency and clean energy projects are greater when they are displacing high emission sources, such as coal-fired power plants, rather than lower-carbon sources, such as nuclear energy or hydropower.
Second, it will more fairly drive investment and economic opportunity in states currently lacking clean energy assets and facing more difficult transitions to a globally competitive, advanced energy economy.
Third, it will reduce the devastating health impacts from toxic air and water pollution in communities that are on the front line of energy production from fossil fuels. Boosting incentives in areas that have the heaviest fossil fuel footprints will engage these important communities and help rectify an unhealthy legacy of toxic pollution.
This is not about picking winners and losers. Rather, this is about making sure every community has a fair opportunity to win.
New federal incentives should also increasingly be technology-neutral, rewarding performance at cutting pollution across a wide range of technologies. Beyond wind and solar, this could in some cases include the use of carbon capture and storage technologies where existing fossil fuel plants capture their climate pollution and store it underground, or allow for carbon reuse in a safe, ecologically responsible manner.
The public overwhelmingly supports government incentives to speed innovation and deployment of cleaner, more efficient energy technologies—more than three-quarters of the public in every single congressional district in the country, according to polling by the Yale Program on Climate Communication.
Clean energy incentives not only reduce carbon dioxide and local air pollution like smog; they also create jobs, which will be especially important as we recover from the severe economic recession caused by the COVID-19 pandemic.
Fortunately, more data is available today than ever before to help design policies to follow the carbon.
"Going where the carbon is" is not only good policy; it is also good politics. In Congress, delegations from states with the heaviest carbon footprints have typically been the least likely to support clean energy measures. Giving these states a clearer stake in the clean energy economy could be part of a winning formula for building policy support for climate solutions.
Because if we know one thing about climate change, it is that we all stand to lose from failing to act.