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Jennifer Granholm: On clean energy, US is "putting our money where our mouth is”
This November, the US wants to present itself at the COP27 Climate Summit in Egypt as a global leader on renewables with the $370 billion worth of clean energy investment included in the recently passed Inflation Reduction Act.
Something like this has never been done before, and the figure could be double once you add private sector dollars, says Energy Secretary Jennifer Granholm.
America, she tells Ian Bremmer on GZERO World, finally has "some moral authority to say we are putting our money where our mouth is on this."
Granholm believes that Russia's war in Ukraine has aggravated the energy crisis. Making the transition to clean energy even more urgent because the West no longer wants to rely on Russia to keep the lights on.
Watch the GZERO World episode: Supercharging US clean energy & achieving net zero 2050 globally
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The US is rejoining the Paris Climate Accord. What comes next?
While the US played a major role drafting the Paris Climate Accord, a 2015 global treaty aimed at mitigating the effects of climate change, it was also the only country out of nearly 200 signatories to pull out of the landmark pact.
Now President-elect Biden says he will rejoin the accord on day one of his administration in January. But while rejoining the treaty in practice is relatively straightforward, Biden will face plenty of political challenges at home — and abroad — once the US is back in the mix.
So what comes next for the Paris Climate Agreement, and how might things change once the US is back on board?
How does the US rejoin the pact? Biden can rejoin the pact by issuing an executive order, and then sending a letter to the UN stating the US' intention to opt back in. That's the easy part.
The problems come once the US is back in the fold. First, the Biden administration will have to set new goals for reducing carbon emissions by 2030 through domestic initiatives. While these are voluntary non-binding targets, Washington will have to provide regular reports to the UN on its progress. These check-ins are not optional.
Biden's goals. The president-elect says that he will recommit the US — the second largest producer of carbon dioxide in absolute terms — to emissions reduction goals, including a $2 trillion investment in clean energy sources during his first term. Biden has also said that he'll tie the US' post-pandemic economic recovery to clean job initiatives, and that under his watch, the US will resume its global leadership role in tackling climate change.
Will domestic politics allow Biden to pull this off? While many members of the Democratic party will surely be relieved that the US has renewed its commitment to Paris, progressives like Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders have been pushing Biden to go even further. But to date, Biden's support for ambitious policy initiatives like the Ocasio-Cortez sponsored Green New Deal — which aims to revamp every building in America to be more energy-efficient and create millions of clean-energy jobs — has been inconsistent.
Biden has tried to appeal to Americans in states like Pennsylvania and Ohio who still rely on jobs in fossil fuel industries (as well as moderate Republicans), while trying not to alienate progressives within his own party. This balancing act will only get harder as the post-pandemic recovery takes center stage in 2021 — and tensions within the party will likely get worse once Biden is actually in the White House.
Additionally, after a tumultuous four years of the Trump administration, which prioritized rolling back domestic climate policy, the incoming Biden administration will have a lot of rolling back (or forward, depending on your perspective) to do of its own. While some of this can be done through executive order, Biden's goal of making the US carbon-neutral by 2050 relies on sweeping action from the US Congress — and to go deep he needs the Senate to turn blue when Georgians head to the polls next month in an election that will decide control of the chamber.
Meanwhile, on the global stage, lack of US leadership has undermined efforts to tackle climate change in recent years. With the US responsible for almost 15 percent of global emissions, any meaningful advances on decarbonization require Washington's cooperation. But climate-related innovation and diplomacy, traditionally driven in large part by the US, have stalled in recent years under the climate-skeptic Trump administration.
What's more, the abdication of US leadership on climate action has undermined relations with other nations, including both wealthy allies and developing countries that rely on US support to help them meet their own mitigation goals. (The US originally pledged $3 billion to help poor countries quit fossil fuel use, but the Trump administration slashed the budget by two thirds.)
But while the US has been missing in action, China has extended its Paris commitments, pledging to become carbon-neutral by 2060, a massive feat for the world's largest carbon emitter. "It is precisely because the Communist Party regime is bent on shaping the next century that its leader takes climate change seriously," Adam Tooze, who spoke to GZERO Media this past spring, wrote in Foreign Policy.
Meanwhile, the EU has also set a net zero carbon goal by 2050, and has made climate action a key part of its post-pandemic recovery effort. Major economies including the UK, South Korea, and Japan have made similar pledges, while India, the world's third largest emitter, has also committed to stronger climate action.
Though China and the EU are largely setting the global climate agenda, neither of them has America's economic scope or power, which is crucial to getting countries all around the world to take the threat of global warming seriously.
Looking ahead: In order to make meaningful global change on decarbonization, the US needs to be at the front of the pack. But rebuilding trust, and leadership bonafides, after taking a back seat for four years will surely take time.
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GZERO Summit on sustainability: COVID-19’s promise on ESG
The forced slowdown of global economic activity due to the coronavirus pandemic has slashed carbon emissions around the world, opening a unique opportunity to make real progress in the fight against climate change. But there is fear that it won't be enough, and the world will go back to its old ways when we get rid of COVID-19. However, even before the public health crisis, some major emitters had already taken ambitious steps to rethink how to make their own policies more sustainable.
In Canada, the prominence of oil in the economy doesn't mean that it should hide from the existential challenge of climate change. Fossil fuel profits make Canada not only more responsible but gives the nation the resources to commit to a bold climate policy, Canadian Minister of Natural Resources Seamus O'Regan said during a panel discussion on sustainability at the 2020 GZERO Summit in Japan.
Dawn Farrell, president and CEO of Transalta, Canada's largest clean electrical company, noted that we can apply many of the lessons learned from battling COVID-19 to the global struggle against climate change. The same way governments and the public sector have worked together successful vaccines, there must be equal collaboration on carbon prices, which must be set by governments and not the market alone.
Indeed, the pandemic is an opportunity to entirely transform the economy of countries like Japan, which recently committed to producing net zero carbon emissions by 2050 under new Prime Minister Yoshihide Suga.
Other nations with less muscle, though, may struggle to phase out highly polluting fossil fuels such as coal, which still powers dozens of countries across Asia. That's why rich countries should engage and help them, said Tadashi Maeda, governor of the Japan Bank for International Cooperation.
Meanwhile, countries with both the energy and financial resources to aspire to net zero in the near term should deliver on their Paris Accord climate commitments — and support businesses that are doing the right thing for their bottom line and the planet at the same time. For instance, O'Regan argued that Canada understands where the environmental, societal, and corporate governance (ESG) market is moving, for instance on liquefied natural gas.
ESG lately has become code for simply curbing emissions, but Farrell said that ESG investors want to know you can put your money where your mouth is, and show progress… without big disruption like calls for divestment. Indeed, for Maeda pulling back from all fossil fuels is only one aspect of ESG, and not even the most important right now in most emerging economies.
Beyond ESG investing, companies are also learning how to operate in more responsible way. One of them is Sony, a Japanese conglomerate which the Wall Street Journal recently ranked as the world's most sustainable managed corporation.
So, what's the key to Sony's success on sustainability? Dialogue with investors is crucial, explained Kenichiro Yoshida, the company's chairman and CEO.
With elected governments it's a bit different, but even then the way forward is changing our mindset. Farrell said that they are thinking less about who will be in power to set regulations, and more about the values of the people that put the politicians in power to come up with sustainability policies. If you know the people, you can predict how the governments they elect will act in the future.
Watch the above video to learn more insights from our panelists on COVID-19's impact on global sustainability efforts.