As the future of the Clean Power Plan (CPP) hangs in the balance, so too do billions of dollars in savings. Actually, to unlock the big bucks, we’ll have to go a step further. If the US holds to the two-degree warming path – a more ambitious target than what CPP proposes – the near-term national benefits are assessed at approximately $250 billion per year by 2030. The valuation, conducted by researchers from Duke University and NASA, adds to the growing pile of literature that suggests climate change mitigation is more than just a moral obligation; it’s an economic bonanza waiting to happen.
Of course, this presumes we care about the negative externalities to the fossil fuel economy – that is, the societal and environmental costs that occur external to the market. That’s where a majority of the early savings are; and that’s why action has been so slow to materialize.
More specifically, deep transportation and energy sector emissions cuts of about 40 percent from current levels by 2030 could prevent nearly 300,000 premature deaths annually. Additionally, some 15 million lost adult work days a year would be saved and roughly 29,000 asthma-related trips to the hospital avoided. Regarding energy sector employment, a high-renewable replacement scenario could net nearly 3 million long-term jobs. The solar industry is already creating jobs at a rate 12 times faster than the rest of the economy. Longer-term – and assuming broader emissions reductions take hold globally – benefits could exceed implementation costs five- to ten-fold.
Concerning implementation costs, it’s important to distinguish CPP from the heretofore-discussed study, which assessed emissions reductions of roughly 80 percent by 2050. Speaking on the latter, implementation costs for a fairly balanced mixed generation system of renewables, nuclear, and natural gas with carbon capture and storage are on the order of 1 percent of GDP annually, though a majority of the incremental energy systems costs are borne after 2030. For comparison’s sake, one altogether different and entirely renewable zero-emission plan has an estimated price tag of $14 trillion, or roughly $400 billion per year to 2050. While robust, both are well within the technological and economic realm of possibility.
The comparatively modest CPP carries estimated costs of $7 to $9 billion per year, offset by annual public health and climate benefits in the range of $55 to $93 billion. Again, the savings are mostly external, and less tangible than some of the obstacles like supply-side employment changes. Ultimately, CPP’s particulars won’t matter, at least not for some time. The Supreme Court stay is unlikely to be resolved prior to 2017, and, while the ultimate fate of CPP will serve as a statement on the direction we want to take our energy revolution, CPP itself is attending, and not leading in that role.
Undoubtedly, the US is already well on its way toward significant change. Driven largely by progressive actions on the state level and, increasingly, purely economic considerations, renewable energy installations are beginning to outpace those of fossil fuels. Actually, more than half of all new US utility-scale solar installations in 2016 will be added above existing commitments set across 36 states’ Renewable Portfolio Standards. In the aggregate, the extensions of the Production Tax Credit and the Investment Tax Credit will bring about greater changes to utility-scale generation than CPP could’ve hoped for alone.
It doesn’t have to be CPP; it could be a revenue-neutral carbon tax. The point is, there are vast economic and public benefits to be had, but only if we accept the writing on the wall.
First published at Oilprice.com