Frontloading Clean Industry Scale-Up

Image of clean energy prosperity from the House Select Committee

Last Tuesday, the House Select Committee on the Climate Crisis released its policy report. The plan is a huge step forward for Democratic lawmakers’ climate change thinking. However, it suffers from the same problem as most US climate change discourse: it is too focused on decarbonizing the US.

Don’t get me wrong, the US must decarbonize, and this plan covers the bases to get there by 2050. But climate change impacts are driven by global levels of greenhouse gases in the atmosphere. This report largely ignores whether and how the US should help get the world on track to reach net-zero emissions by 2050.

Clean equipment is currently expensive — mostly because it has not yet been manufactured at mass scale. (Sometimes reducing cost will also require basic invention of new technologies or components.) And two thirds of current emissions come from developing countries, whose economies physically will not be able to afford most clean equipment until a wealthy country such as the US scales up its manufacturing (and funds certain research and demonstration projects) to bring down its cost.

The Select Committee’s plan would achieve this. As the US decarbonizes, it will drive such a scale-up and such technology development projects. At some point along the way, each type of equipment will pass the relevant cost threshold and become affordable worldwide.

Here’s the problem: only at that point will the physical transition start in developing countries in a major way. And not all equipment will be replaced at once. Most people will buy an electric car, for example, when they would otherwise be buying a new gasoline car. Given the timeframe it takes to fully replace energy systems — cars are used for 15+ years, furnaces for 15–25+, and some industrial equipment even longer — most clean equipment must become affordable at least 15–25 years ahead of 2050 to have a chance of fully replacing fossil fuels in time worldwide.

The Select Committee report implies a transition that will start slowly and grow to full scale by 2040 or 2050, depending on the sector. That makes it highly unlikely that every type of clean equipment will cross the line into global affordability in time. For example, the report says “Congress should require new federal buildings to achieve net-zero emissions by 2030.” Why wait until 2030 to start buying clean electricity and equipment for all new federal buildings? Electric heating, efficient insulation, and zero-carbon electricity all exist today, often at a similar cost to fossil fuel systems for a new building. By making all new buildings net-zero energy as soon as the law goes into effect, the federal government could help drive a sharp scale-up in manufacturing of these technologies — thus bringing their costs down to the point that they are always the cheapest option.

Imagine the report’s pathway as a linear or exponentially growing graph of deployment. A better approach would be the opposite: a sharp jump in deployment immediately, with an incredibly fast ramp-up of manufacturing (from 2021 to either 2025, 2030, or 2035 depending on the technology), followed by a more gradual slope to replace the remaining fossil equipment by 2040 or 2050. The initial jump needn’t reach full deployment — it need only reach large enough scale that it drives the cost of each technology down to globally-affordable levels. Then the rest of the world can begin its transition and have time to complete it by 2050 alongside the US.

Especially amid a major recession, it seems obvious that Congress and the President in 2021 should frontload as much federal purchasing and as many incentives for initial scale-up as possible. We need to put people back to work now. We also need jobs that last, and by growing annual manufacturing output faster in the short term, we’ll capture more of the global market and be able to continue exporting clean equipment once our deployment side slows down.

We’re too focused on decarbonizing the US. The big question for the world is not when the US reaches full deployment of clean systems. It’s when we reach mid-scale deployment sufficient to make costs globally affordable. That must happen in the next 5–15 years — not by 2040 or later — if we want to have a chance of the entire world decarbonizing by 2050. When Congress writes exact policies in 2021, and when Administration officials implement them alongside other Presidential initiatives, they should prioritize those that drive a sharp jump to mid-scale deployment of clean equipment. If done right, US domestic action can spur most of the global transformation we need — and usher in a new era of sustainable prosperity for the US.

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