Opinion

A Realistic Plan to Drive Economic Recovery While Protecting Our Climate

At the heart of the Biden administration’s new American Jobs Plan are provisions designed to accelerate the transition to renewable power and modernize the nation’s outdated electric grid. A long-overdue response to pleas from scientists concerned by clear evidence of climate instability, these policies can also catalyze America’s economic recovery.

The nation’s renewable energy industry has already become a formidable economic force, with more than $110 billion in domestic investment over the past two years alone. In fact, renewable energy was America’s largest source of private sector infrastructure investment in 2020. Despite the pandemic and four years of unhelpful federal policies, the renewable industry shattered records by bringing 33,600 megawatts of new wind and solar energy online last year – enough pollution-free electricity to power over 10 million American homes.

This booming growth is driven by powerful forces, starting with dramatic improvements in the cost-effectiveness of renewable power. Over the past decade, the levelized cost of wind energy declined by 70 percent, while the levelized cost of solar power has declined by an even more impressive 90 percent.  As a result, renewable energy is now the most competitive source of new electricity in much of the country.

Another important driver for growth is the increasing demand for renewable power from American businesses and residential consumers. Particularly notable, large commercial consumers are now directly purchasing their own renewable power. This trend began a few years ago here in the United States with purchases of wind and solar power by major players like Amazon, Facebook, Google and Walmart, and accelerated through the Trump years as it spread internationally. In 2020, commercial and industrial companies contracted for nearly 24,000 MW of renewable capacity – a global record.

And then, there is the crucial impact of state and local government leadership. States have a long history of adopting, achieving and then strengthening renewable energy targets. As of 2019, 29 states and the District of Columbia now have renewable or clean energy standards, and several states have gone so far as to commit to 100 percent renewable or carbon-free electricity generation, including some of the nation’s most populous states, which of course have the greatest demand for electric power.

However, to fully realize the renewable energy transition, we will need to build on this success with a comprehensive federal strategy like the Energy Efficiency and Clean Electricity Standard called for in the president’s new plan.

Although no major initiative on the scale of the American Jobs Plan will move easily in today’s polarized political climate, the long history of bipartisan support for the renewable sector should be helpful. Renewable power has brought significant investment and job growth to rural and urban areas across the country.  In fact, clean energy jobs are available in every state, regardless of geology or geography, offer good benefits, and pay 25 percent more than the national median wage. Prior to the pandemic, the U.S. Bureau of Labor Statistics named wind turbine technician and solar power installer two of the fastest-growing occupations in America.

And there are many more jobs to be created by expanding and upgrading our outdated grid infrastructure, a central element of the American Jobs Plan. Building an advanced Macro Grid to transmit this clean energy is imperative to meeting our climate targets and remaining competitive with other countries now investing in their own 21st century grids, including China, the European Union and much of the developed world. A recent study found that investing in transmission infrastructure in the eastern half of the U.S. alone will create 6 million new American jobs while saving a typical electricity consumer more than $300 a year.

A key step along the way is reform of the nation’s tax code. Our federal tax code has provided permanent tax incentives for fossil fuels for more than a century, even as the renewable sector today has dwindling and uncertain tax credits that are phasing down and, with one minor exception, out over the next two years. We need to move beyond these temporary stopgap measures and finally create a long-term, scientifically-driven tax policy that helps decarbonize the economy while putting millions of Americans back to work. The American Jobs Plan addresses this challenge with stable incentives for renewable power, energy storage and important interregional transmission.

With these policies in place, we can achieve the dramatic renewable energy growth President Joe Biden has called for, heal our economy and avoid the worst impacts of climate change. It’s time to deliver the clean energy future Americans want and deserve.

 

Gregory Wetstone is president and CEO of the American Council on Renewable Energy, a national nonprofit that unites finance, policy and technology to accelerate the transition to a renewable energy economy.

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