Given the toll the current pandemic is having on our families, friends, and people around the globe, it’s hard to contemplate what the world could be like after COVID-19. However, as those on the front lines of this crisis work with such strength, resolve, and self-sacrifice, those of us working on the climate challenge have the obligation to continue our work toward a better world on the other side of this tragedy.
When we eventually pivot from emergency to recovery, we will have a rare opportunity to build back better, strengthening our economy and the health of our communities and environment for the future.
Better than what? Pollution-monitoring satellites operated by NASA and the European Space Agency observed drastic decreases in air pollution over China during the two weeks in February when their quarantine was in effect. Likewise, in Northern Italy and elsewhere around the world.
Of course, the take-away here is not that the way to clean up our air and water and reduce emissions is to shut down the global economy (the very reason the Great Plains Institute’s (GPI’s) mission focuses on both economic and environmental benefits of the clean energy transformation is that people need, want, and deserve both).
No, the take-away is that when it’s time to invest in economic restoration we have an opportunity to build the 21st century infrastructure and energy technologies that will accelerate our recovery, but without the pollution and carbon risk of the “old” economy.
Public officials have asked GPI for our economic recovery recommendations. And while policies must focus first on immediate needs during the unfolding crisis, any future recovery packages should serve a triple bottom line and include market- and incentive-based clean energy policies that will bolster economic recovery, the jobs base, and environment. The ideas here reflect GPI’s portfolio approach to the needed energy transformation:
Half of all emissions in the US come from just two sectors: industry and electricity. Carbon capture is essential to achieve significant emissions reductions in these areas, especially when it comes to industries that are otherwise difficult to decarbonize and yet provide products essential to modern life and high-paying jobs (think steel and concrete):
- Congress needs to enact a multi-year extension of the current performance-based tax credit for carbon capture projects (45Q). Currently, projects need to begin construction by January 1, 2024 to qualify for the credit. This current deadline gives projects a very short time frame, especially for carbon capture projects that are capital intensive and have long lead times to develop, permit, and finance.
- Congress should implement other tax policies to increase the number of tax equity investors who can finance carbon capture projects. Tax equity markets that finance clean energy and industrial projects have been significantly impacted by the COVID-19 crisis. For example, there is significant interest among clean energy project developers to allow 45Q recipients to receive a direct cash payment in lieu of the tax credit, as well as pending legislation to reform the federal 48A tax credit, to enable power plants to retrofit with carbon capture technology.
The multi-sector national Carbon Capture Coalition, convened by GPI, is actively working on these and many other policy recommendations in our nation’s capital.
Transportation is the leading source of climate-warming greenhouse gas emissions in the US. While those emissions have recently plummeted due to the widespread economic shutdown, they will spike back up and continue growing once the economy is back up and running unless we partner with the private sector to give consumers and businesses the option of using clean electricity, home-grown biofuels, and other zero- and low-carbon fuels.
Virtually all major automakers (and many start-ups) are bringing electric vehicles to market. We can accelerate their market introduction with targeted infrastructure investments and incentives:
- extend and expand the federal tax credit on plug-in electric vehicles;
- offer cash grants at the point of sale;
- make incentives more generous for low-income consumers; and
- eliminate the per-manufacturer limit on the number of electric vehicles they can sell and still offer consumers a tax rebate.
On the infrastructure front, use cash grants and/or an investment tax credit to:
- increase electric vehicle charging infrastructure at businesses, homes, multi-family housing units, and elsewhere;
- enable the buildout of multi-state electric vehicle fast-charging corridors;
- allow state and local governments to expand the purchase of zero-emission bus fleets and associated charging infrastructure; and
- allow gas stations to retrofit with biofuel pumps that enable higher blends.
We have seen similar policies work successfully to ramp up deployment of other clean technology like wind and solar.
Our nation’s electric grid is in serious need of modernization to continue operating reliably and create a cleaner, more efficient system. Investing in a national high voltage DC transmission network as part of an overall infrastructure package would contribute to economic development through:
- construction of transmission lines,
- building more energy facilities enabled by more transmission, and
- the commerce that low-cost electricity makes possible.
While not an immediate source of economic recovery, this kind of investment could have a substantial return and support a cleaner, more resilient electricity system.
These types of investments, along with others within and outside of the energy sector, can get us back on our feet and usher in the world we want for ourselves, our families, and our communities on the other side of the COVID-19 pandemic.
First things first, let’s help one another through this crisis.
Then let’s repurpose that same global resolve and cooperation in ways that make the world permanently better for all of us.
Over the coming weeks, we will be reaching out to our network with updates on the clean energy transformation during this uncertain time as well as ways that you can help support our mission. One such opportunity is #GivingTuesdayNow which will take place on May 5, 2020. This global day of generosity aims to “unleash the power of people and organizations to transform their communities and the world.” I hope you will consider a gift to GPI, if you are able. I look forward to sharing stories of our collective success as we emerge from this crisis together and build back better energy for a better world.