Recap:
The US federal debt exploded last year. Between a battered economy and trillions in stimulus spending, it will take years to shrink the debt back to a manageable size. In the meantime, the Bold Centrist still wants to fix this country, focusing on six problem areas: healthcare, infrastructure, poverty, social mobility, housing, and threats to the biosphere. The challenge is how to fund the repair job without adding to the public debt or zapping economic growth.
Short answer: increase tax revenue, which has hovered around 25% of GDP for decades. Let’s increase that to 36.3% of GDP, which is a bit more than what Canada collects (33.8% of GDP) but less than Germany (38.8% of GDP). This would generate an extra $2.6 trillion a year in tax revenues (based on 2020 GDP and ignoring GDP growth and inflation for now).
Hmmm. What could I do with $2.6 trillion a year? …So far I’ve spent $324 billion a year to achieve universal healthcare, reduce poverty and increase social mobility. For details, see The Bold Centrist: A Responsible Budget for Fixing This Country, The Bold Centrist, Part VII: How to Pay for Universal Health Care on a Budget, The Bold Centrist: Why an Adult Student Basic Income is Better than Pell Grants (and What the Danes Have); The Bold Centrist: Here's How the US could fund an Adult Student Basic Income on Less than $2 a Day per Capita in New Taxes; and, The Beauty of an Adult School Basic Income. That leaves a bit more than $2.2 trillion to address housing, infrastructure and threats to the biosphere, plus I’m not yet done with poverty and social mobility.
This post will tackle climate change mitigation, with the goal of achieving net-zero CO2 emissions by 2050. First, a few thoughts on the challenges of tackling a problem that is still poorly understood, care of a bunch of smart people:
Uncertain changes in climate, technological, socio-economic and political situations, and the dynamic interaction among these changes, and between these changes and interventions, pose a challenge to planners and decision-makers. Due to these uncertainties, there is a risk of making an inappropriate decision (too little, too much, too soon, or too late). Kwakkel, J. H., M. Haasnoot, et al., 2016.
A policy prescription that overpromises on the benefits of relying on a narrower portfolio of technologies options could be counterproductive, seriously impeding the move to a cost effective decarbonized energy system. - Clack, C. T. M., S. A. Qvist, et al. 2017.
Regulatory lock-in is undesirable. If the regulation commands a specific device or technology, the lock-in effect may hinder progress on other technologies that might have been superior. Yang, C.-Y., Oppenheimer, M., 2007.
[Our approach] explicitly includes decision making over time. The essence is proactive and dynamic planning in response to how the future actually unfolds. Haasnoot, M., A. Warren, et al., 2019.
… banking only on solar and wind would be a “mistake…. Given the high stakes…it would be prudent to expand and improve a wide set of clean energy resources, each of which may fill the critical niche for firm, low-carbon power should other technologies falter. If we’re really in a ‘climate crisis,’ then you go to war with your full arsenal,” Jenkins said. “You don’t hold anything back. And you don’t purposefully make this crisis harder by limiting our already limited options.” - Jessica McDonald/ FactCheck.org, 2019, quoting Jesse Jenkins, energy systems engineer and professor at Princeton University
Bottom line: putting the lion’s share of resources into just a few technologies and imposing artificial deadlines (“must be 100% renewable by 2050!”) means fewer resources would be available for exploring alternative approaches to emissions reduction. In other words, the powers that be should avoid putting all their eggs in just a few baskets, because doing so could undermine the development of better eggs. Policy-makers need to keep an open mind and stay on top of promising new developments in mitigation technology. They would be helped in this regard by reading “Net-Zero America”, recently released by Princeton’s Andlinger Center for Energy and the Environment, which outlines five distinct technological pathways for the US to decarbonize its economy by 2050.
Here’s a brief description of each pathway:
High Electrification: Nearly full electrification of transport and buildings by 2050. No land-use change for biomass supply allowed. Few other constraints on energy supply options
Less-High Electrification: Less-rapid electrification of transport and buildings. No land-use change for biomass supply allowed. Few other constraints on energy supply options.
High Biomass: Less-rapid electrification of transport and buildings. Biomass supply requires converting some agricultural land from food to energy crops. Few other constraints on energy supply options.
Renewable Constrained: Nearly full electrification of transport and buildings by 2050. Solar and wind power annual capacity additions constrained to historical maximum. No land-use change for biomass supply allowed. Few other constraints on energy supply options
100% Renewable: Nearly full electrification of transport and buildings by 2050. No fossil fuel use allowed by 2050. No land-use change for biomass supply allowed. No new nuclear power construction allowed, existing plants retired. No underground storage of CO2 allowed
Of course these five pathways don’t exhaust all possibilities. Personally I’d prefer something with more nuclear, less biomass, and lots of solar/wind - which doesn’t quite fit any of the distinct options provided by the Princeton group. But the study’s aim was more practical than encyclopedic, basically to help decision-makers implement well-informed and thoughtful climate change policies. Part of that service was to provide a strict accounting of the likely costs and savings generated by each decarbonization pathway.
According to the study’s authors, achieving net-zero emissions would require at least $2.5 trillion in additional capital investment into energy supply, industry, buildings, and vehicles over the next decade relative to a “business as usual” scenario and regardless of pathway. That translates to an average of $250 billion per year.
I’ll accept that figure for my budget, leaving me around $2 trillion a year to address housing and infrastructure, plus continue working on poverty, social mobility, and threats to the biosphere. It’s really not that much money when you think about it.
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References:
Big but affordable effort needed for America to reach net-zero emissions by 2050, Princeton study shows by Molly Seltzer, Andlinger Center for Energy and the Environment. Dec. 15, 2020.
Net-Zero America, Interim Report Andlinger Center for Energy and the Environment. December 2020.