But what do the captains of industry think?
Last week, I discussed a potential route for passing a 100 percent clean energy law, given recent shifts in power in Washington. This week, I want to dig into what’s changed in the business world, and why several major industries now have good reason to support meaningful clean energy legislation. That’s a major shift from the last major climate legislation attempt in President Obama’s first term.
I’m not talking about moral compulsion to help with air pollution or climate change. That may play a role, but I find other people’s morals can be tricky to pin down. I’m analyzing structural incentives, which persist regardless of what messages a company chooses to send about a particular issue, or which individuals run the company at a given moment.
That’s what’s in store for this week’s Bright Ideas, a newsletter on the rise of clean energy written by me, L.A.-based journalist Julian Spector.
And stick around to learn how my coffee worldview was hit by a bolt from a clear sky.
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Sea change at electric utilities
Back in 2009, when cap and trade climate legislation failed in the Senate, electric utilities largely relied on coal to power the country. An effort to get rid of coal power posed a clear and unavoidable threat to how they did business.
Today, coal is a minor part of the grid and gets smaller every year as more plants shut down. And almost every major utility has pledged to eliminate carbon emissions by mid-century.
Those commitments are still challenging, because natural gas is currently the largest single power source in the U.S. And if we’re being honest, nobody is quite sure what mix of tools will finally get us to a 100 percent carbon-free world. The crucial dynamic here is that federal investment in clean energy now supports the goals power companies set for themselves, rather than being in opposition to their desires.
Carmakers going electric
Similarly, automakers have finally, at long last, decided that electric cars are happening and they need to get on board. This acceptance was punctuated by GM’s announcement last week that it will stop making gas-burning cars by 2035, the same year California will ban sales of gas burning cars.
GM, not long ago, signed onto the Trump administration’s effort to overturn California’s stricter vehicle emissions standards, so there’s every reason to verify the latest pledge. Still, electric cars are coming, and that means automakers have a vested interest in policy that invests in clean transportation.
Automakers stand to gain more from a major clean energy package than from the status quo. Tax credits for electric cars, national highway charging corridors, funding for transit agencies to buy electric buses, federal procurement of clean vehicles, all of that makes it easier to sell electric vehicles.
That’s hugely different from Obama’s first term, when no American carmakers were making a serious push to electrify. The Chevy Volt didn’t hit the market until 2010.
Also note that Jennifer Granholm, Biden’s nominee for Energy Secretary, is uniquely suited to finesse the auto industry’s role in a clean energy overhaul. As governor of Michigan, Granholm helped revive the big automakers after the Great Recession. She also led a strategic review of growth opportunities for the state’s economy and honed in on battery manufacturing as a job creation engine.
If you could charge on the government’s dime, well, why not? (Photo credit: pchow98/Flickr)
Corporations already love clean energy
Big companies consume a lot of power, so they have a stake in whatever energy policy happens in Washington. Many of the biggest corporations have already chosen to power themselves with clean energy and committed to pushing for clean energy legislation.
The tech giants led the way on this, but now more traditional entities like Walmart, Target, even Budweiser are doing it. And they want to make it easier to buy clean power without arbitrary restrictions and hurdles, something that obviously helps the grander project of building a clean energy system.
Contrast that to the olden days, when efforts to clean up power supply would have made power more expensive for big consumers, provoking their opposition.
Still not on board: Oil and gas companies
There’s an outlier from this trend of alignment behind clean energy, and that’s the oil and gas folks.
The biggest producers in the U.S. have chosen to keep doing what they do best, AKA not clean energy. Exxon, for instance, only decided it was time to create a dedicated low-carbon business yesterday. Like, literally, it did that yesterday. But even the European oil giants, who have invested in wind, solar, electric car charging and the like have a business imperative to maximize returns from their fossil portfolios while they still can.
If you’re a company that exists to pump oil, mass electrification of vehicles poses an existential threat. If you exist to pump gas, you’ll have a major role to play balancing out the rise of renewables. But legislation that zeros out power sector emissions will eventually drop the curtains on you.
Oil companies can do things to make their products relatively less carbon intensive. But their business is emitting carbon. Policies that make it hard to emit carbon will never help an oil company the way support for car chargers helps a car company.
This week in quarantine: Cheap coffeemakers
At one point in college, my housemates started a “Bouge Jar” where I had to deposit a token each time I said something that flagrantly marked me as a member of the bourgeoisie. One such offense was when a visiting friend asked for a cup of coffee, and I responded, “I can make you an espresso or a cappuccino, but I don’t know how to do just coffee.”
More recently, my home routine converged on the pour-over: dropping freshly ground beans into a Hario ceramic cone and pouring hot water into the filter through a slender-necked spout in precise increments of time and mass. I enjoy it as a sort of moving meditation: first thing in the morning, before filling my head with podcasts or emails or calls, just me and the L.A. skyline out my kitchen window.
But in the last week, I have been forced to rely on one of those dinky plastic coffeemakers, the kind with no recognizable brand associated with it, where you insert grounds and water, press a button, and it does the rest. I did not grow up with this kind of coffee. I didn’t learn it from any role model. But this is the West Coast, where we create our own futures out of plastic, and I went for it.
Turns out, once I calibrated my coffee-to-water ratios, I can brew stuff that tastes pretty indistinguishable from the painstaking concentric circle method of yore. Only, I can make a whole pot with negligible effort. And with that time, I can meditate on other things, like breakfast.
This is a vanishingly small sample size, but I suspect the case study suggests that the fancier approach is not necessarily better. I’m also considering the possibility that not everything necessarily suffers when you scale it up, which carries certain ramifications for our latter-day Gilded Age.
Small or large batch, I hope you’re sipping a tasty brew as you read this email. May it spur some thoughts of your own.