U.S. President-elect Joe Biden talks about the recent massive cyber attack on the U.S. as well as other goals of the Biden government in Wilmington, Delaware, on December 22, 2020.
Leah Millis | Reuters
As we enter the third decade of the 21st century, we are on the verge of a green industrial revolution. Now is the time for President-elect Joe Biden and his formidable team of scientific, economic and national security experts to engage with the private sector to accelerate this historic transition to a low-carbon world.
With an ambitious $ 2 trillion plan that strives to address the threat of climate change more broadly than any other government, Biden’s presidency can mark a turning point in federal government policy and usher in a new era for clean energy .
And Biden’s recently announced environmental team will find a welcoming business community to cooperate with. Over the past few years, efforts to address climate change in the United States have been led not by the federal government and federal policies – although many states and cities continue to act on their own – but by companies and financial markets.
The private sector has become increasingly focused on sustainability and climate risk, not only as a result of increased awareness of climate change and responsibility for stakeholders, but also as a result of dramatic innovations that have substantially reduced the price of clean energy , catalyzing a change in the markets, creating financial incentives and motivating companies and institutional investors to capitalize on these trends.
In fact, renewable energy is now cheaper than conventional energy generation for more than two-thirds of the planet. Last year, electricity generation from renewable sources surpassed coal in the United States for the first time in the modern era.
This was also a decisive year for corporate climate announcements, with an increasing number of companies setting zero net emissions targets with clear timelines and actions.
Meanwhile, more and more investors are refusing to invest in conventional energy sources as the economy becomes less attractive and is instead focusing on clean technologies. The value of private equity investments in renewable energy projects doubled last year and, in the last year and a half, risk finance for climate technology companies jumped to $ 16.1 billion – from $ 418 million in 2013.
This was also a watershed year for corporate climate announcements, with an increasing number of companies setting zero net emissions targets with clear timelines and actions. Several technology companies have announced significant decarbonisation goals, including Google, which has pledged to offset all the carbon it has already emitted and be 100% powered by renewable energy by 2030.
In the transportation sector, JetBlue has become the first airline in the United States to achieve carbon neutrality for all domestic flights. In the telecommunications sector, AT&T promised net carbon neutrality by 2035, launching a new climate change analytical tool to quantify climate risks across the network. Notably, several large oil and gas companies have also pledged this year to substantially decarbonize their businesses, including BP, Shell and, last month, Equinor.
According to a recent report that looks at progress under the Paris Agreement – and notes the substantial boost from the private sector – more than 1,500 companies responsible for $ 12.5 trillion of combined revenues have now set net zero emissions targets.
Throughout modern history, there have been a number of turning points in the energy sector that have brought transformative changes: the Industrial Revolution in the 1750s and 1760s, which started the emergence of coal energy and the use of steam; the invention of the first incandescent lamp widely applicable in the 1870s, which extended the workday and improved the quality of life; and the rise of oil, which overtook coal as the main global source of energy in 1964 and spurred a new era of mass production and global transport.
Today, we are at another critical point as we continue on the path towards a clean energy world. But we must accelerate the pace, acting more quickly and comprehensively to avoid the existential risks and costs of climate change.
In 2020, the private sector led the way, but the federal government still has opportunities to engage again. The next Biden administration is expected to establish a Sustainable Recovery Task Force of business and labor leaders who can provide a private sector perspective on climate and economic policies, as well as convene a Building Better summit in its first 100 days, bringing together industry representatives private sector to advance a detailed climate agenda.
We believe that this moment presents a historic opportunity for our new national leadership to join companies and institutional investors in bold climate actions to accelerate the global transition to a low carbon economy.
Laura Tyson, former president of the President’s Council of Economic Advisers during the Clinton administration, is a professor at the Haas School of Business at the University of California, Berkeley and a member of the Advisory Board of the Angeleno Group, LLC, an energy solutions investment company and climate. Daniel Weiss is a co-founder and managing partner of the Angeleno Group.