Geo-political turmoil and its consequent disruption of the global energy sector has made the climate challenge more complex, casting even more roadblocks in the pathway to achieving the global objectives embodied in the Paris Agreement.
Quite simply, it makes U.S. leadership on both fronts—energy and climate—even more critical. We must develop a realistic pathway for net-zero global greenhouse emissions by 2050—the target date of both the U.S. and the global Paris Agreement—which includes a sustainable energy transition.
Such a plan will both support an accelerated transition to renewable and other zero-carbon energy while also recognizing that fossil fuels remain a necessary energy source and will continue to be a part of a net-zero energy strategy that will increasingly rely on alternative technologies now under development. A realistic plan will build on the foundation of market principles, accelerate innovation, and preserve U.S. competitiveness in the global economy.
This realistic strategy has four pillars:
First, to ensure our allies’ energy security, as they are ending their use of Russian oil and gas, the U.S. (already the world’s largest exporter of liquid natural gas) must be their reliable supplier both now and during the energy transition. This will require increasing production of oil and gas in the near term, and treating U.S. fossil fuel producers as partners, not adversaries. Natural gas, which can also be paired with hydrogen in dual fuel plants, is an important fuel for the energy transition.
Second, to accelerate the parallel clean energy transition, the U.S. should use the incentives in the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act to catalyze increased research and development in nuclear, hydrogen, wind, solar, energy storage, the power grid, and carbon capture—all indispensable elements of the transition. Encouraging greater use of zero-carbon nuclear power, including through newer designs such as small modular reactors, is essential.
To spur the clean energy transition, U.S. public policy leaders, in cooperation with the private sector, should seek to develop a plan to use market incentives to promote greenhouse gas reduction, as the EU and many other jurisdictions have done. It would be based on the principles of revenue-neutrality, promoting all efforts at decarbonization, and regional coordination.
Third, promoting innovation requires smart regulatory policy, avoiding costly mandates that distort markets and harm technological innovation. These smart regulation principles should be the guardrails for regulation on climate policy, as they will ensure that we are implementing an energy transition plan that promotes innovation, leverages market forces, and promotes cost-effective and efficient permitting processes while providing important guiderails for the transition. Reforming lengthy permitting processes to build new energy infrastructure more quickly and implementing periodic regulatory review will help.
Fourth, the U.S. must provide international climate and energy leadership. Promoting global cooperation, especially with China and India (two of the world’s largest greenhouse gas emitters) is essential; their absence will sharply limit global progress towards the Paris Agreement’s goals. Advancing initiatives such as the Global Methane Pledge, which offer the promise of rapid greenhouse gas emissions reductions, must also be an important part of the pathway forward.
To ensure success, government leaders should work in close partnership, rather than in conflict, with business leaders. Both have essential roles to play, and the transition will involve every sector of the economy. No one entity can address energy security and climate change alone. The stakes are too high—for energy and national security and the climate—for government and the private sector to be in conflict. How we do so will affect the health of our planet for generations to come.