By Amanda Chu
The US government must create broad incentives for renewable energy, from carbon pricing to clean energy standards to market reforms, says a new report by the Aspen Economic Strategy Group.
“The problem of climate change is vexing, and not one that private markets will solve on their own,” Severin Borenstein, faculty director at UC Berkeley’s Energy Institute, and Ryan Kellogg, a University of Chicago professor, write in the report.
Rather, more government funding for the research and development of clean energy technology is needed, as well as the centralisation of federal authority over long-distance transmission, the report says. The latter would prevent states from halting construction of cross-country power infrastructure. The government should also improve the reliability of electricity markets and make retail electricity prices more transparent and affordable.
The report also emphasises the need for a just transition, recommending that licenses for clean energy technology be free to other countries and that policies address the needs of displaced workers and disadvantaged communities.
“Federal policy choices will play a leading role in determining whether, where, and when these investments will occur, how costly they will be, and who will bear those costs,” it states.
The Aspen Economic Strategy Group recommendations are timely. They come a day after Senate Democrats announced a $3.5tn spending plan that includes nearly $1tn in funding for climate change initiatives. Energy Source will be closely following the viability of the Democrats’ plan, particularly after politicians and activists’ criticism of Biden’s bipartisan infrastructure plan for failing to appropriately address climate change.