Sat, Jan 25, 2025 page7

• Swinging the climate policy pendulum back

  • By Gernot Wagner
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  It is tough to be optimistic about the climate these days. While the costs of extreme weather events like the Los Angeles wildfires pile up, the US federal policy pendulum is swinging away from facts, reason and basic human decency. Nonetheless, even as the US government moves in the wrong direction, trends in science, economics and increasingly local politics indicate that the pendulum would swing back in due course.

  After all, no one can argue with the physics of today’s clean energy technologies. Heat pumps, induction stoves and electric vehicles (EVs) — to name just three — are fundamentally better technologies than what came before. The best gas furnaces might reach 95 percent efficiency, meaning they are converting 95 percent of the energy they use into heat; but most heat pumps easily top 200 percent, with some reaching 400 percent or more. Similar comparisons could be made between induction and gas stoves, and between EVs and gasoline or diesel-powered vehicles. By and large, we know what technologies we should be using to eliminate greenhouse-gas emissions; and in cases where we do not, we know what kinds of things to try.

  This knowledge extends well beyond EVs and heat pumps to entire industrial sectors like cement or iron and steel. Here, former US president Joe Biden’s administration made an important contribution with the US Department of Energy’s Liftoff Reports, which chart pathways to commercialization for a broad selection of low-carbon technologies.

  Consider cement, which accounts for some 8 percent of annual global greenhouse-gas emissions. Ordinary Portland cement, patented 200 years ago, has dominated the sector for decades. While measures like clinker substitution and efficiency improvements could abate up to 40 percent of emissions, getting to zero would require additional steps. These generally fall into two categories: Cutting emissions from producing Portland cement or switching away from it altogether. Promising US start-ups like Brimstone and Sublime Systems are racing to demonstrate that either path is commercially viable.

  One key ingredient is public subsidies to help firms climb the learning curve and slide down the cost curve toward faster commercialization. Brimstone and Sublime Systems received early research and development funding from the US Advanced Research Projects Agency-Energy (ARPA-E) and have now advanced to the deployment stage, receiving up to US$190 and US$90 million respectively to build their first commercial plants. All told, the Bipartisan Infrastructure Law and the Inflation Reduction Act (IRA) allocated around US$100 billion for such purposes, with public funding contingent on matching private investments.

  Moreover, these sums are dwarfed by the department’s loan program. With just US$17 billion in taxpayer funds, the IRA authorizes the department’s Loan Programs Office to lend US$350 billion for investments in clean energy and domestic EV manufacturing. Those public funds then catalyze multiples more in private investments. While some Republicans and members of US President Donald Trump’s administration want to cut this program, doing so would only hurt US competitiveness.

  Could we restore sanity to our national policies? It might be trite to say that change begins at home, but what is trite is often true. A good place to look is New York. While the city has many problems, its climate policies are not among them. About 70 percent of New York’s direct emissions come from heating and cooling buildings, while the other 30 percent come from cars and trucks. Fortunately, Local Law 97 is already addressing the former. The law is one of the most ambitious decarbonization measures for buildings anywhere, requiring most to reduce their emissions by 40 percent this decade and by 100 percent by 2050. While New York could do only so much about vehicle emissions, its long-delayed congestion pricing program is finally being implemented. That is a good start.

  Given that New York used to be the world’s most congested city, the quality-of-life improvement from less traffic could already be felt. The same goes for another measure that took an absurdly long time to address: the lack of trash bins. Over the past year, the city has finally issued official trash, recycling and compost bins, with enforcement for residential buildings beginning this month. Cleaning up our own act — including with mandatory composting and other policies — would not save the planet, but effective government just might.

  Physics alone would not push the pendulum all the way back to where it was before. That would require policies based on sound economics. As long as Trump does not break the fulcrum and bring the entire pendulum crashing down, policies pioneered by his predecessor and by local communities would continue to be a force applying pressure in the right direction.

  Gernot Wagner is a climate economist at Columbia Business School.

  Copyright: Project Syndicate
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