Climate commitments are everywhere.
Corporations and countries are constantly announcing net-zero emissions plans and other green initiatives. However, greenhouse gas concentrations continue to rise, and the planet continues getting hotter. The science is clear, we must limit global warming to 1.5 C above pre-industrial temperatures to avoid the worst impacts of climate change. To do that, we must reduce global carbon dioxide emissions to net-zero by 2050.
We are rapidly burning through our carbon budget. The UN’s Emissions Gap report indicates that the pathway to net-zero demands annual emissions reductions of nearly 8% until 2030. By contrast, the COVID-19 economic crisis only reduced emissions around 6%. Net-zero demands dramatic action from governments, companies, and societies.
Unfortunately, many climate actions have been primarily cosmetic. Since the 2015 Paris Agreement, the largest global banks have provided nearly $4 trillion in financing to coal, oil, and gas firms. The U.S. Energy Information Agency (EIA) projects that worldwide energy emissions will rise by 0.6% annually until 2050. Even emissions reductions claims may be less impressive than they seem. Although U.S. emissions have fallen annually, much of this decline is due to the switch from coal to gas, which is still a fossil fuel. In other developed nations, apparent emissions reductions have come from deindustrialization, as manufacturing (and its associated emissions) shifts to the developing world.
In America, the Biden Administration has signaled a desire to meaningfully increase the nation’s climate ambition. In the face of the climate crisis, incremental steps and half-measures are no longer enough. That said, Biden’s infrastructure plan and commitment to clean power are a good start. However, America can and should act far more assertively: mandating a path to net-zero carbon dioxide emissions by 2050. The nation can already regulate carbon dioxide under the Clean Air Act. The net-zero transition will make America a global climate leader, create well-paid green jobs, and unlock massive opportunities for American business.
A Powerful Tool
After years of post-WWII environmental degradation, poisoned air, and blighted communities, Americans took a stand against industrial pollution. Congress passed environmental regulations, most notably the updated Clean Air Act of 1970. To enforce the act, the Environmental Protection Agency (EPA) was created. This landmark act has dramatically improved air quality, spared millions from debilitating respiratory diseases, and increased American life expectancy.
The EPA has a strong track record on reducing air pollution. In the 1970s and 1980s, burning coal released huge amounts of sulfur dioxide, causing acid rain. As lakes and forests died, environmentalists demanded action. The EPA used the Clean Air Act to create limits on sulfur dioxide leading to an effective cap and trade system. In 1970, over 30 million tons of sulfur dioxide emissions were produced, by 2020 that number had fallen well below 2 million, a reduction of nearly 95%. Acid rain has also greatly decreased.
Just as the Clean Air Act tamed dangerous pollutants like sulfur dioxide, it can be applied to harmful greenhouse gases. In 2007, the Supreme Court confirmed that the act allows the EPA to regulate carbon dioxide and other greenhouse gases as pollutants. The EPA should set targets for greenhouse gas emissions to put them on a trajectory to net-zero. Climate scientists have already developed credible emissions reductions pathways that the EPA could use not only to determine overall national emissions levels, but also appropriate sector-specific targets.
The Clean Air Act has also been used to help the U.S. meet international environmental commitments. When scientists discovered that chlorofluorocarbons (CFCs) were destroying the planet’s protective ozone layer, rapid action was needed to avoid surging cases of skin cancer and blindness. In 1987, the major countries producing CFCs signed the Montreal Protocol, pledging to eliminate the use of these destructive chemicals. An amendment to the Clean Air Act created regulations around CFCs and provided a schedule for their ultimate phase out. As a result of this global action, the ozone layer is expected to recover by mid-century, preventing nearly two-million skin cancer deaths worldwide each year. A similar amendment could be added to align American emissions with the goals of the 2015 Paris Climate Agreement.
The Mother of Invention
Some have raised concerns that climate regulation will stifle economic growth or reduce American competitiveness. These concerns are unfounded. Mandating alignment to a net-zero emissions pathway would be a powerful catalyst for innovation and an opportunity for American companies to be global leaders in a sustainable future.
Government policies can provide the private sector with the certainty that markets will exist for their products. This effective public-private collaboration was seen in FDR’s transformation of the U.S. economy during WWII. He demanded that America produce 50,000 planes per year, a number that shocked allies and enemies alike. Given clear direction, American corporations then competed to meet FDR’s targets, improving technology, reducing costs, and increasing efficiency along the way. In 1944, the U.S. produced 100,000 planes. Today, requiring companies to follow net-zero pathways will spur them to identify the research, investment, and production strategies to rise to that goal.
Another benefit of a net-zero mandate is alignment with the climate policies of key trading partners. Lower domestic standards often do not benefit multinational American companies. The big automakers recognized this when opposing the Trump Administration’s emission standards rollbacks. The rollbacks put American automakers at a disadvantage in global markets. Regulatory fragmentation increases costs and reduces efficiencies for companies confronting different expectations in different markets. With Europe aiming for net-zero by 2050 and major Asian nations doing the same, the U.S. cannot afford to lag behind.
If America can become a climate leader, American business will reap the rewards. Around the world, demand is rapidly rising for decarbonization solutions and climate-adapted infrastructure. The International Finance Corporation, part of the World Bank Group, estimates that by 2030 climate investment opportunities in emerging markets will total $23 trillion. American innovation can meet these needs, creating well-paid green jobs at home while empowering a more sustainable and resilient world.
Beyond benefits to U.S. companies, all citizens will benefit from the transition to net-zero. A net-zero future will improve living standards for Americans by greatly reducing health effects from air pollution, improving mobility and transportation, and lowering long-term energy costs.
Right now, the world is seeing a flood of voluntary net-zero commitments. However, we remain well behind on critical emissions targets. Global decarbonization needs to happen far faster to avoid disastrous climate change. The Biden Administration should not just make net-zero a goal; they should use the Clean Air Act to make it a reality.