Strategies for the 2030s
We lost the Battle of 2025. But we haven’t last the fight for sustainability.
Summary
The good news is that U.S. carbon emissions will continue to fall for the next five years. The bad news is that after that, things are up for grabs. It all depends on whether natural gas or renewable energy becomes dominant. The other good news is that there are things we can do to swing the balance.
As we look ahead, recent models suggest that the pictures for the rest of this decade isn’t so bad. The big question is what happens after that.
The two recent models have some welcome news: Trump’s rollbacks and assault on the Inflation Reduction Act have not been as cataclysmic as feared. At least not yet. The models come from different sources — an MIT researcher and the Rhodium firm — using different methodologies. The models also have implications about the next steps in climate policy. Both models highlight the critical need to rip down barriers to clean energy and transmission build out.
I wrote about the MIT research report in an earlier post. Focusing on the power sector, it found that despite the policy shifts, we could expect about half the emissions cuts that they we would have had in a world where the policies of the Biden years remained in effect. There was a preexisting downward trend in emissions which remains intact and some of the acceleration Biden hoped for has taken place. Solar energy has done well even under Trump, but wind power has really suffered.
The Rhodium report is based on a more extensive modeling effort covering the entire economy, not just the power sector. Like the MIT researcher, Rhodium found that downward emission trends would continue until the early 2030s. Farther in the future, things become murky. There’s a scenario where emissions start growing again by 2040 and another where they continue to fall briskly, depending on some economic variables that are teased out in the report. Basically after 2030, there will be a war for dominance between natural gas and renewables. The question is who will win that war. That will depend in significant part on how fast we can build renewable energy and storage, get them connected to the grid, and build out transmission to carry the power to market. Like the MIT report, the lesson is that we need to Build, Build, Build.
The Rhodium report also considers other sectors. Even without tax credits, EVs are projected to become 20-40% of new car sales by 2040. Heavy duty vehicles, however, won’t see any real emissions decline without a new policy intervention. Oil and gas emissions are a walloping 50% of all industrial emissions, so a bonus of reducing their use is to cut production-related emissions. Aside from
There are several policy lessons here. First, we’re going to have to be ruthless about building out clean energy. If we’re hesitant, natural gas will fill the gap. Second, these models assume that Trump’s regulatory rollbacks remain in place. We need to reverse those and make it clear that fossil fuel plants will face continuing regulatory risk. Third, we need to drive down the cost of reliable clean energy so we can win the natural gas war. We need to invest in innovation. We also can’t afford a failure to take advantage of the innovations that are happening elsewhere, which will mean finding some way to work with China. What these modeling exercises make clear is that we have lost a major battle but not the war.
