Prove your humanity

Representatives from countries all across the world are meeting in Dubai this week at Cop 28, the UN’s climate conference. Many are pushing for a faster switch to clean energy. 

The Allegheny Front’s Reid Frazier wanted to know what impact clean energy incentives like President Biden’s Inflation Reduction Act are having on this transition, both in the U.S. and worldwide.

So he checked in with Akshaya Jha, an assistant professor of economics and public policy at Carnegie Mellon University, Heinz College of Information Systems and Public Policy

LISTEN to their conversation

Reid Frazier: For years, we’ve been told that to achieve our climate goals, we need to speed up this energy transition to more renewables, more electric cars, more things like electrified heating and cooling. Can you give me a snapshot of how you see this going right now?

Akshaya Jha: Right now, China and India are still building new coal-fired power plants. Their electricity mix is still quite coal heavy. So from an electricity perspective, China and India are going to be kind of two of the major players in trying to transition them away from coal towards their new renewable resources, such as wind and solar. 

In terms of EVs [electric vehicles], China is actually a leader in terms of adoption. So on the electrification of getting things – rather than burning gasoline, using electricity to transport people and goods – China is kind of on a good trajectory. But in terms of the supply side, the electricity side, I think China and India are going to be the two countries that we need to think about how to transition them away from very low-cost coal towards renewable wind and solar resources. 

Reid Frazier: And what are some ways to do that? 

Akshaya Jha: That’s actually a great transition towards the U.S. centric kind of points I had, which were, Biden’s policies have kind of focused on two prongs. One is, which is incentivizing existing wind and solar resources. But the other prong is incentivizing the development of new technologies – think advanced nuclear reactors, think carbon sequestration, equipment that you can put on smokestacks in order to actually extract the greenhouse gases from the emissions as they come through the stack. These types of technologies are not yet cost-effective. 

The thought process behind it is if we were to incentivize these technologies and we come down the cost curve, right, innovation occurs and then these technologies become cheaper. These technologies are easily exportable to China and India and can bring down their carbon emissions at quite a bit more rapid rate than the industrialization we saw in the United States. 

Reid: So here in the United States, what are some things that are working in the favor of renewables? 

Akshaya Jha: It’s quite cheap to build wind and solar technologies here in the United States and abroad as well. We’ve come down the cost curve quite a bit in the last 10 years, both in wind and in solar. The economics behind building a new wind farm versus, say, building a new natural gas plant, wind farms and solar panels are actually quite competitive here in the United States and abroad. 

Reid Frazier: We’ve heard a lot about the Inflation Reduction Act. Have we seen the Inflation Reduction Act have an impact on projects getting built already? 

Akshaya Jha: Oftentimes when I talk to developers, what they say is the incentives are right, but it’s something like land permitting, financing, things that you don’t typically think about just in terms of the pure economics of it that are kind of halting development. 

Just think about not in my backyard: ‘Oh, you know, this wind farm is great, but I don’t want it kind of obstructing my view.’ Building the transmission lines that connect the wind farm to the grid, the land use restrictions that come along with that. So those restrictions are the kind of things that have led to less wind and solar development than you might expect, just based on the incentives that are in place, the economic incentives. 

Reid Frazier: A recent international agency report found that solar capacity additions increased by nearly 50% over the last two years. And electric car sales expanded by 240%. Is there anything that gives you hope or positive feelings about this energy transition and anything that gives you worry when you look at the broader picture? 

Akshaya Jha: The hope part is that in the last ten years, wind and solar have become a lot more cost-effective. If you looked at it from the perspective of 2010, 2015 and said, you know, we’re going to have a bulk of our electricity produced via wind and solar, that would seem like a pipe dream. Now it seems [like] a potential reality given how cost-effective these wind and solar technologies are. 

Then I think about the technologies that are being talked about today, advanced nuclear, I think about carbon sequestration, electricity storage. And I think right now they’re not cost-effective. They seem a little bit like a pipe dream to be a large portion of the grid. 

Maybe we come down the cost curve there, especially with the incentives that the Biden administration has put into place. That’s that’s the hopeful perspective: Technology will save us.

The kind of cynical viewpoint is that India and China are still building coal-fired power plants to this day. Whatever incentives we put in place in the U.S. and in Europe are not necessarily going to slow down that growth in coal-fired capacity in China and India and that will lead to more carbon emissions. 

It doesn’t matter where they’re emitted, if it’s the U.S., if it’s Europe, if it’s China, if it’s India. These are called global greenhouse gas emissions. It’s going to all just the same lead to increases in climate risk. 

So figuring out a way, maybe through COP, maybe through international kind of conferences and discussions, how do we bring down global greenhouse gas emissions, recognizing that electricity and energy consumption is a key part of economic growth? 

So we don’t want to stunt the growth of countries that are developing, that are growing, that are emerging economies. At the same time, we do want to recognize that greenhouse gas emissions need to be mitigated not just in the United States, but worldwide.

Akshaya Jha is an assistant professor of economics and public policy at Carnegie Mellon University, Heinz College of Information Systems and Public Policy.