By Maria Gallucci

When global leaders reached a landmark climate change deal in Paris this week, they set out to shift the world away from fossil fuels and toward carbon-free energy. But for the United States, the historic accord won’t greatly expand the clean energy sector, or drive a green jobs boom just yet. The U.S. is still lagging in the types of aggressive policies and massive technology investments needed to spur a clean economy transformation, energy experts say.

“Significant work still remains,” said Devashree Saha, an associate fellow with the Brookings Institution’s Metropolitan Policy Program in Washington. “We need very clear pathways to ‘decarbonization,’ and very deep carbon reductions.”

President Barack Obama pledged in Paris to cut America’s greenhouse gas emissions to 28 percent below 2005 levels by 2030. But under the United Nations-backed accord, the U.S. and all nations will have to shrink emissions and fossil fuel consumption to nearly zero by 2070 to keep global temperatures from rising by 2 degrees Celsius (3.6 degrees Fahrenheit) — the point at which catastrophic climate effects could take hold, including sweeping sea level rise and violent storms.

The biggest hurdle to a U.S. clean energy boom remains the cost of both developing new technologies and replacing today’s high-carbon energy systems. While the prices of solar and wind power are rapidly falling, renewable energy on the whole still isn’t cheap enough to overtake coal-fired or natural gas-fired power plants. Electric vehicles and alternative motor fuels remain too expensive, or in too short supply, to compete with petroleum-powered transportation.

The U.S. can only tackle this energy challenge with two sweeping approaches, Saha and other experts said.

The first move is to invest billions more federal dollars to develop cutting-edge energy technologies and improve existing designs, including battery storage systems that allow solar and wind power to run around the clock. The second approach is to raise the costs of extracting and burning fossil fuels, so that companies pay a premium for high-carbon energy projects.

“You’re not going to decarbonize your economy until — and unless — clean energy is cheaper than fossil fuels,” Saha said.

U.S. spending on clean energy technology research totals around $5 billion a year, the most of any country in the world. Obama pledged in Paris to double that sum by 2020. He made the commitment as part of a 20-nation initiative launched at the start of the two-week summit. The leaders said they aimed to bolster support for scientific breakthroughs that would otherwise fail to attract private investment, either because of the huge technology risks or the long time horizon needed to bring projects into the real world.

But to spur a renewables revolution, the U.S. will need to invest further in breakthroughs, by tripling or even quadrupling government spending for clean energy research, said Michael Greenstone, who directs the Energy Policy Institute at the University of Chicago in Illinois. That would boost federal spending to around $15 billion to $20 billion a year, based on current levels.

U.S. President Barack Obama delivers a speech during the “Mission Innovation: Accelerating the Clean Energy Revolution” meeting on the opening day of the U.N. climate change conference in Paris on Nov. 30, 2015.

As clean energy costs come down, the price of fossil fuels must continue to rise, he added.

One way to ensure this is to charge companies for all the carbon dioxide emissions they help create. A carbon tax, for instance, would directly penalize coal miners or oil drillers. And a cap-and-trade scheme would require polluters to pay for their existing emissions while simultaneously reducing pollution below a set limit.

The U.S. doesn’t price carbon emissions on a national scale, although California and nine Northeastern states have cap-and-trade programs for electricity providers and major energy users. Instead, the nation has only a patchwork of federal rules that on their own aren’t enough to fight climate change, Greenstone said.

“Right now, since there’s not an economy-wide carbon price, we’re picking it off piecemeal,” he said. “There are still sectors of the economy where carbon is effectively not priced.”

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Areas of Focus: Energy Markets
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Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Renewable Energy
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Renewable Energy
Lower technology costs and supportive public policies are driving an increase in renewable energy in markets around the world. EPIC research is assessing the costs, benefits, and efficiency of policies...
Climate Change
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Climate Change
Climate change is an urgent global challenge. EPIC research is helping to assess its impacts, quantify its costs, and identify an efficient set of policies to reduce emissions and adapt...
Climate Economics
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Climate Economics
Climate change will affect every sector of the economy, both locally and globally. EPIC research is quantifying these effects to help guide policymakers, businesses, and individuals working to mitigate and...