Jessika Trancik, Morgan Edwards, Goksin Kavlak, Magdalena Klemun, James McNerney, Marco Miotti, Zachary Needell, Goncalo Pereira, Geoffrey Supran, Wei Wei

Trancik Lab at MIT

With the announcements of states, companies, and local leaders in the US regarding their plans to meet the US pledge to the Paris Agreement, it’s reasonable to ask how far these efforts can go. Here we begin to address this question.

• Fourteen states this month wrote public letters [1,2] to the Trump Administration stating their support for the Paris Agreement and their plans to continue their efforts toward meeting it. These 14 states (CA, CO, CT, DE, HI, MA, MN, NY, OR, PA, RI, VA, VT, WA) represent 38% of U.S. economic output and 36% of U.S. population. In terms of GDP, this group of states would rank third worldwide among nations.
• Current state Renewable Portfolio Standards (RPS’s) will go about 60% of the way toward the renewables expansion previously expected under federal policy (the Clean Power Plan). The above-referenced 14 states alone represent the majority of these state clean energy commitments (66% between now and 2025; 73% of expansion between now and 2030).
• States have long driven clean energy expansion and innovation, and these efforts have created jobs and economic growth, in addition to cleaning the air and water. Historically, state Renewable Portfolio Standards (RPS’s), for example, have been estimated to contribute 59% of new renewable capacity (since 2000), and other state policies have further promoted this expansion.
• States are not just pioneers in clean electricity expansion. They also spearhead policies to decarbonize transportation. California’s Zero Emission Vehicle standard was adopted by 10 states who felt the federal standard wasn’t stringent enough. These 10 states (CA, CT, ME, MD, MA, NJ, NY, OR, RI, and VT) represent 29% of new vehicle registrations. Their actions, combined with those of countries around the world, drive vehicle manufacturers to research, develop and market cleaner cars.

Additional points:

• RPS’s and vehicle standards are just two examples of current policies, and current policies are just the start. States have signaled that they will now be bolder. Other policies and incentives are in development.
• What’s in it for these states? The benefits include jobs, a growing economy, access to and competition in expanding international markets. Where there’s a major economic sector in flux there’s often opportunity.

  Several statistics on jobs:

  Job growth in clean energy far outpaces growth rates in other sectors of the economy (economy-wide job growth was 1.4% last year).

  • Last year solar jobs grew 25%.  Wind jobs grew 32%.
  • Energy efficiency jobs grew 7%, and are expected to grow 9% in 2017.

  Clean energy employs over 3 million Americans in states across the country, including:

  • 2.2 million jobs in energy efficiency
  • 475,000 jobs in solar and wind
  • 259,000 jobs in alternative vehicles
  • 120,000 jobs in other clean generation and low-carbon technologies

  The majority of these jobs are in manufacturing and construction.  (For reference, coal supports 160,000 jobs.)

• With such great economic opportunities, why is policy needed? Government incentives jumpstart innovation in new technologies. Companies respond and compete with each other, forming a thriving marketplace. Without these incentives, investments in these new markets may look too risky to companies. New technologies and industries typically start from an idea or prototype. Clean energy companies will go where there are incentives.
• If states can act on their own, why was it important for the country to remain in the agreement? There are many reasons having to do with moral responsibility as well as self-interest. One self-interested reason to stay in the agreement is that the US federal pledge allowed the country reliable access to dynamic clean-energy markets globally. A steady signal is needed for companies to create jobs at home and stimulate technological innovation and economic competitiveness. The US exit from the Paris Agreement means that states will now have to work hard to regain access and standing. Many states have the economic power to do so, particularly if they work together.
• Why is the Paris Agreement important for climate change? We can’t measure its effectiveness based on short-term emissions pledges alone. We need to look below the surface of these pledges to see the effect they have on changing energy supply technologies and demand. Once a technology improves and companies learn how to cut costs, that knowledge sticks around, reducing the cost of cutting emissions in the future, and encouraging further emissions cuts. This virtuous cycle has started and most major economies want to stay at the forefront of it. Here’s a diagram of the virtuous cycle.