Decarbonizing the U.S. Economy

The House Committee on Energy and Commerce met on July 24, 2019, to discuss pathways to decarbonize the U.S. economy. All four expert witnesses observed that while technology already exists to reduce carbon emissions, summoning the political will to invest in these carbon capture and renewable energy innovations remains a critical obstacle to decarbonization.

The committee heard testimony from four witnesses: Karl Hausker (Senior Fellow in the Climate Program at the World Resources Institute), Rachel Cleetus (Policy Director of the Climate and Energy Program at the Union of Concerned Scientists), Armond Cohen (Executive Director of the Clean Air Task Force), and Shannon Angielski (Executive Director of the Carbon Utilization Research Council).

The following is an overview of the main issues discussed during the hearing.

Economic Impacts of Decarbonization

Several committee members raised the concern that decarbonization might negatively impact the U.S. economy by increasing the cost of energy. However, Dr. Cleetus countered that “embracing a clean energy future would…be a boon for the economy.” Dr. Hausker further emphasized that national investment in a broad portfolio of decarbonization technologies would strengthen the economy by creating new industries and professional expertise that can be exported to the rest of the world. Speakers noted that economic prosperity is key to addressing climate change in a just and equitable way. According to Representative Frank Pallone (NJ), “We can use this opportunity to ensure that the economy works for everyone.”

Carbon pricing was mentioned as a valuable economic policy lever to achieve decarbonization goals. Dr. Hausker asserted that a price on carbon is a “foundational policy to shift the economy.” Carbon pricing can take different forms, such as cap and trade or carbon tax.

Carbon Capture

Carbon capture technologies remove carbon dioxide (CO2) from industrial sources, such as coal-fired power plants. Once separated, the emissions can be liquefied and stored in deep geological formations (CCS – Carbon Capture and Storage) or utilized in new products (CCUS – Carbon Capture, Utilization, and Storage). This process reduces the amount of CO2 entering the atmosphere.

Carbon capture can also describe technology that removes CO2 directly from the atmosphere. This form of capture includes enhancing natural carbon sinks, such as forests and soil, or using technology that removes CO2 directly from the air.

The panelists urged the committee to invest in research and development for carbon capture. Dr. Hausker stressed that investments should be made in this technology as soon as possible to more quickly bring down costs and increase the scale of the technology.

The hearing brought up various solutions to develop carbon capture technology. Section 45q of the tax code currently provides tax credits to power plants reducing emissions through CCS. Angielski recommended that policymakers expand this section to other energy sectors to incentivize research and development. Another proposed solution is the Utilizing Significant Emissions with Innovative Technologies (USE IT) Act, which Representatives Scott Peters (CA) and David McKinley (WV) recently introduced. The bill is a bipartisan and bicameral solution to support the development of carbon capture by allocating funds to research and development of CCUS and direct air capture technologies.

Several committee members voiced concern that even if the United States invests in climate action and achieves carbon neutrality by 2050, other large national emitters, such as China and India, might offset that progress as their standards of living improve and their energy usage increases. To address those global emissions, Representative Bill Flores (TX) suggested the United States work to develop and commercialize carbon capture technology, which could then be exported around the world.

Sector Emissions

The transportation sector is the largest single contributor of CO2 emissions in the United States. Policymakers can address this sector from three angles: vehicles, fuels, and infrastructure. Dr. Cleetus recommended electric vehicle tax incentives, fuel economy standards, and public transport improvements as policy solutions.

The panelists agreed that the Administration’s decision to roll back fuel-efficiency standards is harming the nation’s ability to reduce CO2 emissions. Representative Doris Matsui (CA) discussed the Clean and Efficient Cars Act of 2019, which would preserve these fuel-efficiency standards.

Speakers also noted that the United States should address the housing sector by improving home energy efficiency, electrifying homes, and otherwise enhancing climate resilience. According to Dr. Cleetus, most building codes and standards are set at the local and state levels. Stronger federal codes would create an incentive to both electrify buildings and make them resilient to climate impacts.

For additional details about the hearing and witness testimony, visit the committee webpage.

Author: Katie Schneer