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How the Green New Deal Would Change the Energy Industry
In 2016, nearly 200 countries voluntarily signed the Paris Agreement to pledge carbon emissions reductions to keep the global average temperature increase below 2° C above pre-industrial levels. Former President Barack Obama pledged to reduce US emissions around 27% below 2005 levels by 2025. 3 years later, the US, and most of the countries that submitted plans to reduce greenhouse gases are still far off their initial targets. Early estimates from the Rhodium Group report carbons emissions in the US increasing by 3.4% in 2018 after 3 straight years of decline.
Even with the increase of coal powerplant retirement over the past few years, natural gas generation has remained the number one source keeping up with electricity demand, not wind or solar. The transportation sector that includes diesel and jet fuel, along with buildings and industrial sectors, were the other main contributors. Since the Paris Agreement was signed, the United States has averaged a 0.45% reduction in emissions overall. Historically, the US alone has emitted about 20% of overall global greenhouse gases.
Source: NY Times
House Rep. Alexandria Ocasio-Cortez, D-N.Y., and Sen. Ed Markey’s, D-Mass., proposed “Green New Deal” aims to potentially counter the current Administration’s decision to leave the Paris Agreement and tackle the issues associated with climate change. There are currently 60+ co-sponsors in the House of Representatives. Below are the energy initiatives outlined:
- Achieve net-zero greenhouse gas emissions through a fair and just transition for all communities and workers
- Meeting 100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources, including—(A) by dramatically expanding and upgrading existing renewable power sources; And (B) by deploying new capacity
- Building or upgrading to energy-efficient, distributed, and smart power grids, and working to ensure affordable access to electricity
- Upgrading all existing buildings in the United States and building new buildings to achieve maximal energy efficiency, water efficiency, safety, affordability, comfort, and durability, including through electrification
The first goal of the Green New Deal is for America to be dependent on 100% clean and renewable energy, becoming net zero on emissions by 2030. This would rely on transitioning completely off fossil fuels and the nuclear generation fleet. There would be no new investments into nuclear generation and there would be a focus on decommissioning all nuclear powerplants in that timeframe. In a 100% renewable energy system, solar would be the main source of energy during peak hours of the day, while wind turbines would generate power during the night. For the time when neither source is producing at its stated capacity, hydro, battery storage and demand management would be called upon to maintain grid stability.
Source: American Action Forum
As is currently structured, energy from nuclear facilities represent about 20% of the generation capacity in the States. Due to the zero-emission nature of nuclear energy, opponents are urging for more spending on the next generation of nuclear reactors instead of shutting them down. Research from the American Action Forum has estimated the cost to move to 100% renewable energy would be at least $5.7 trillion.
Another proposed goal to reduce greenhouse gases is to retrofit, modernize, and upgrade all existing residential, commercial and industrial buildings in the US. It is still undetermined who would be responsible for paying for these upgrades, whether it’s the government or individual home or property owners. Retrofitting both residential and commercial buildings throughout the country could potentially cost another $2 trillion, not to mention the associated grid/infrastructure costs required to fully electrify buildings.
Technical details on how each of these initiatives would be achieved have not yet been released. Additionally, it’s a nonbinding resolution, so no new programs would not be created from this resolution itself. Many individual cities and states have already pledged their commitment to reducing carbon emission in the US, with Illinois, New Mexico and Michigan recently joining the cause. New York, California, and Washington D.C. have been leading the way, with DC recently amending their Clean Energy bill to increase their RPS requirements to achieve 100% by 2032.
In summary, the Green New Deal resolution is more a collection/proposal of big (progressive) ideas, rather than substantive proposals to achieve emissions reductions (and its other goals). As mentioned above, cities and states have been leading the charge, and will likely continue doing so as we grapple with partisanship at the federal level.
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