Post-Paris: There is No Denying the Clean Energy Future
Written in partnership with Edward Cameron, managing director at Business for Social Responsibility (BSR).
On February 9, the U.S. Supreme Court issued a ruling to pause implementation of the Clean Power Plan while the lower court reviews the legality of the regulations. The “stay” of the rule means that the U.S. Environmental Protection Agency (EPA) may not enforce the Clean Power Plan pending the resolution of the case on the merits. That challenge is currently before the U.S. Court of Appeals for the DC Circuit, which will hear oral arguments in June and is expected to reach a decision in the fall.
The Clean Power Plan is the Obama administration’s signature environmental initiative, representing the most ambitious effort to control greenhouse gas emissions under the Clean Air Act. The Plan sets a significant emissions reduction target of 32 percent from 2005 levels by 2030, to be achieved through a series of measures that will limit carbon emissions from power plants, while increasing the share of renewable energy and encouraging new energy efficiency actions.
As the We Mean Business coalition notes, the Clean Power Plan is the foundation of a thriving, clean American economy, and the economic benefits are clear. The White House estimates the Clean Power Plan could save consumers up to US$155 billion from 2020-2030 by providing cheaper energy. It will drive innovation, create new and better job opportunities, help grow the economy, and increase the competitiveness of American businesses in the global marketplace. These benefits led 365 companies and investors to encourage governors across the country to finalize their implementation strategies when the plan was finalized in August of last year. Major companies such as Mars Inc., Nestle, Staples, Unilever, General Mills and VF Corporation were among the signatories of the letters sent to 29 governors.
While the ultimate legal outcome is unclear at this point, what is very clear is that the pace and scale of the transition to a thriving, clean economy is now undeniable, irresistible, and inevitable. For the record:
The Clean Power Plan enjoys overwhelming public support, with close to three-quarters of all Americans supporting climate action and climate policies like the plan. In fact, 61 percent of the public supports the Clean Power Plan in the very states that are suing the EPA. With water contamination in Michigan and methane leakage in California stirring public outrage across the country, the public’s tolerance for environmental pollution is low.
The mix of power-generating sources in the United States has shifted away from coal in recent years, due to the increasing cost-effectiveness of renewable energy sources such as wind and solar, the decline in natural gas prices, and the increasing stringency of regulations on conventional pollutants. While implementation of the Clean Power Plan will accelerate this trend, it will continue even if the plan is overturned.
According to The Climate Group and CDP, in 2014, half of all new power capacity was from renewable sources. Renewables now generate 22.8% of all global electricity use – and this is set to grow further still. This is in part because the cost of renewable power technologies is continuing to drop, which is strengthening the economic case for switching to renewable power. Analysis by Bloomberg New Energy Finance indicates that $8 trillion will be invested in renewable energy technologies between now and 2040. The decision to temporarily halt the CPP will not alter this pattern.
Governments across the globe are committed to climate action, demonstrated by 196 sovereign nations signing the historic Paris Agreement in December. As a signatory to the agreement, the United States will honor its commitment to holding the increase in the global average temperature to well below 2 °C above pre-industrial levels by rapidly reducing greenhouse gas emissions and achieving net zero emissions in the second half of this century. Moreover, 188 countries have developed national climate action plans with sweeping commitments to reduce emissions across all industrial sectors. The U.S. national climate action plan includes standards for heavy-duty engines and vehicles, energy efficiency standards, and economy-wide measures to reduce other greenhouse gas emissions beyond carbon dioxide. These policies are untouched by the temporary halt to the Clean Power Plan.
Business is a committed partner to climate action and ambition, with more than 2,000 global corporations joining the United Nations Lima-Paris Action Agenda, which brings state and non-state actors together to accelerate cooperative climate action. The We Mean Business campaign involves 368 companies worth almost US$8 trillion and 186 investors with assets under management in excess of US$20 trillion. Through this campaign, companies have made more than 900 commitments to reduce emissions, enhance resilience, and advocate for effective climate policies.
After many decades of failed promises and missed opportunities, global commitment to climate action is finally comprehensive and durable. Addressing climate change is truly an international story where companies, investors, cities, and citizens all play a crucial role. In a word, the transition to a low-carbon energy system is now unstoppable.