U.S. President-elect Joe Biden talks about the recent massive cyber attack on the United States and other goals of the Biden administration in Wilmington, Delaware, on December 22, 2020.
Leah Millis | Reuters
As we enter the third decade of the 21st century, we are at the peak 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 commit to 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 fully than any other administration, Biden’s presidency could mark a turning point in government policy. federal and usher in a new era for clean energy.
And Biden’s recently announced environmental team will find a receptive business community to cooperate with. In recent years, efforts to address climate change in the United States have not been led by the federal government and federal policies, although many states and cities have continued to act on their own, but for businesses and financial markets. .
The private sector has increasingly focused on sustainability and climate risk, not only as a result of increased awareness of climate change and accountability to stakeholders, but also as a result of innovations. dramatic changes that have substantially lowered the price of clean energy, catalyzing change in markets, creating financial incentives and motivating companies and institutional investors to capitalize on these trends.
In fact, renewable energy is now cheaper than conventional power generation for more than two-thirds of the planet. Just last year, electricity generation from renewable sources surpassed coal in the U.S. for the first time in the modern era.
This has also been a pivotal year for corporate climate announcements, with a growing number of companies setting targets for zero net emissions with clear deadlines and actions.
Meanwhile, an increasing number of investors are refusing to invest in conventional energy sources as the economy becomes less attractive and focuses on clean technologies. The value of private equity investments in renewable energy projects has doubled over the past year, and over the past year and a half, risk finance for climate technology companies has risen to $ 16.1 billion , from 418 million in 2013.
This has also been a pivotal year for corporate climate announcements, with a growing number of companies setting targets for zero net emissions with clear actions and deadlines. A number of technology companies announced significant decarbonisation targets, including Google, which pledged to offset all the carbon it has ever emitted and to supply 100% renewable energy by 2030.
In the transportation industry, JetBlue became the first U.S. airline to achieve carbon neutrality on all domestic flights. In the telecommunications industry, AT&T is committed to neutralizing net carbon by 2035, launching a new climate change analysis tool to quantify climate risks across the network. It should be noted that several major oil and gas companies also pledged to substantially decarbonize their businesses this year, including BP, Shell and, just last month, Equinor.
According to a recent report that analyzes the progress made under the Paris Agreement, and notes a major boost from the private sector, more than 1,500 companies representing $ 12.5 trillion in combined revenue have now set net targets for zero emissions.
Throughout modern history, there have been several turning points in the energy sector that have led to transformative changes: the Industrial Revolution of the 1750s and the 1760s, which led to the rise of the coal energy and the use of steam; the invention of the first incandescent light bulb widely applicable in the 1870s, which extended the working day and improved the quality of life; and the rise of oil, which surpassed coal as the world’s main source of energy in 1964 and ushered in a new era of mass production and global transportation.
Today we are at another turning point in continuing the path to a world with clean energy. But we need to pick up the pace, acting more quickly and comprehensively to address the existential risks and costs of climate change.
By 2020, the private sector has led the way, but the federal government still has opportunities to get involved again. The upcoming Biden administration should establish a working group on sustainable recovery of business and labor leaders that can provide a private sector perspective on climate and economic policies, as well as convene a Building Back Better summit during the first 100 days, bringing together representatives of the private sector to move forward on a detailed climate agenda.
We believe 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 chair of the president’s Board of Economic Advisers during the Clinton administration, is a professor at the Haas School of Business at the University of California, Berkeley and a board member of Angeleno Group, LLC. investment company in energy and climate solutions. Daniel Weiss is co-founder and managing partner of the Angeleno group.