A demonstrator holds up a sign during the People’s Climate March in New York. (Photographer: Timothy Fadek/Bloomberg)

Making America Carbon Neutral Could Cost $1 Trillion a Year

(Bloomberg Businessweek) -- Democrats from Capitol Hill to the presidential campaign trail see climate change as a winning political issue, and they’re competing to outdo one another with ambitious plans to halt the rise in planet-warming greenhouse gases in the atmosphere over as small as a 10-year period.

But is that even possible?

We’ll have to stop using vehicles powered by internal combustion engines, abandon most electricity produced by coal, and retrofit buildings that use natural gas for cooking and heating. New bio-based fuels for aviation and carbon capture technology for cement factories and chemical refineries will be required. And we’ll probably be eating a lot more vegetarian hamburgers.

Nobody thinks the shift will be easy—many doubt it’s even possible—in large part because emissions are still on the rise, according to the Global Carbon Project, which collaborates with climate groups worldwide on research to quantify greenhouse gases. Global emissions were estimated to have risen 2.7% in 2018 from a year earlier, and 2.5% in the U.S., the group found.

Making America Carbon Neutral Could Cost $1 Trillion a Year

And yet, the concept of net-zero emissions—when the amount of carbon dioxide released into the environment is offset by removal of the greenhouse gas—has achieved new prominence as extreme weather events and back-to-back international scientific reports say we’ll have to get there by midcentury to avoid the worst effects of climate change.

“In some ways the most important thing is: What year are we going to start seeing emissions fall on a dramatic basis?” says Jesse Jenkins, a postdoctoral fellow at the Harvard Kennedy School and the Harvard University Center for the Environment. “Until we achieve that, getting to zero is impossible.”

Democrats have introduced a host of plans designed to make the U.S. carbon neutral. Presidential candidate Beto O’Rourke outlined a $5 trillion scheme to reach that target by 2050, and other candidates are expected to follow suit. New York Representative Alexandria Ocasio-Cortez and other backers of the Green New Deal are calling for an even more aggressive timeline: net-zero emissions by 2030. Meanwhile, Washington Governor Jay Inslee, who’s basing his run for the Democratic presidential nomination on fighting climate change, has released a “100% Clean Energy for America Plan.”

Any U.S. effort to cut net emissions to zero would “be a massive project over decades,” says Alex Trembath, deputy director of the Breakthrough Institute, an Oakland, California-based environmental research group. The goal of 2050 is “a reach, but it’s perfectly feasible in terms of technological innovation and scaling,” Trembath adds, but 2030 “is functionally impossible.”

It would also be costly. Cleaning up U.S. industries may require investments amounting to more than $1 trillion annually by 2050, according to the Deep Decarbonization Pathways Project, a global collaboration of energy research teams led by the Paris-based Institute for Sustainable Development & International Relations and the United Nations-backed Sustainable Development Solutions Network. That’s in line with an estimate by BNEF that found achieving the Green New Deal’s goals of de-carbonizing the U.S.’s energy, transport, and agriculture sectors would cost roughly $980 billion a year.

Critics say the costs would be even higher, and would unfairly penalize the U.S. economy given that China, India, and other carbon dioxide-emitting countries in the world aren’t doing their share. “Do we really believe that if we outlaw cars, cows, planes, and buildings that the rest of the world will follow?” says Representative Matt Gaetz, who earlier this year introduced a Republican climate bill that didn’t include mandatory emission reduction targets.

Of course, inaction on climate change has its costs as well. An analysis of a UN Environment Finance Initiative project found that delays in taking action to counteract things like rising carbon dioxide could cost companies $1.2 trillion during the next 15 years. And if everyone does nothing, everyone's economy will be penalized. 

To achieve net-zero emissions, we’d have to do absolutely all of the following—some of which requires technologies that haven’t yet been fully developed, tested, or deployed.

Planes and automobiles, at least, will need to be overhauled

The U.S. sector that’s the No. 1 source of greenhouse gas would need to be electrified and converted to clean energy—electric cars, trucks, and buses. Cities would need to be redesigned with denser development centered around mass transit to reduce the need for personal vehicles and encourage walking and bike riding.

The problem is, there are only about 1.2 million electric vehicles on U.S. roads now, according to BNEF data, although that doesn’t include commercial vehicles. By comparison, there were 272 million light vehicles in operation in the country in 2018, according to research and information provider IHS Markit.

Aviation, which is now responsible for about 15% of worldwide oil demand, has been testing biofuels on some commercial travel, but only five airports in Scandinavia, Australia, and Los Angeles have regular distribution, according to International Energy Agency analysts. Making fossil fuel-free synthetic jet fuel from hydrogen and carbon dioxide, possibly harvested from power plants, is technically possible. But the process “is currently prohibitively expensive and needs further development,” according to a report from the Air Transport Action Group, a global industry association for aviation and tourism.

We’ll have to clean up the power grid

The energy sector, the second-largest source of U.S. emissions, needs to transition fully away from coal and natural gas—or couple it with costly carbon capture systems, which have been used at oil refineries and other facilities but never deployed widely in electricity manufacturing. The nation’s power grid will need to double in size to accommodate more power from far-flung renewables, which will also require new battery storage. New technologies, such as advanced nuclear power generation, will need to be commercialized.

That said, the centralized, highly regulated nature of the power sector makes it a simpler beast than transportation and others, says Zeke Hausfather, a climate scientist who writes analysis for the U.K. website Carbon Brief. “Once you start getting out of the electricity sector, it becomes a lot more difficult, in part because there are a lot more actors involved,” he says. Each individual piece of infrastructure is smaller, “and each responsible for a small amount of emissions.”

Farming will have to go back to ground

Agriculture accounts for about 9% of U.S. greenhouse gas emissions—think farting cows and factory farms. Based on a U.K. plan to cut net emissions to zero by 2050, released earlier this month by the government’s Committee on Climate Change, drastic changes would be required. More people would need to eat veggie burgers and forgo beef, lamb, and dairy products. Farmers would have to undertake “transformational land use changes,” including tree planting and restoring soil and peatland. Other measures targeting livestock emissions, such as improved breeding and diets, would be needed as well, the committee found.

Even then, the report said: “It is difficult to reduce agriculture emissions to near-zero given the inherent biological processes and chemical reactions arising from crops, soils and livestock.”

We’ll have to start policing our producers

The steep slope of emission cuts needed would require carbon removal not only in the power sector, but also for industrial processes such as the manufacture of steel, cement, and other products that are heavy greenhouse gas producers.

As much as 1.85 billion metric tons of carbon dioxide would need to be removed from the air annually to help the U.S. zero out emissions by midcentury, according to a report earlier this month by the Rhodium Group, an economic policy research provider. To do that, the federal government would need to spend $181 million to $240 million per year over 10 years to research carbon capture and removal technologies, as recommended by the National Academies of Sciences, Engineering, and Medicine in an October 2018 report.

Jenkins, the Harvard postdoctoral fellow, says that to meet the net-zero emissions target by 2030, the U.S. government would have to intervene on a scale not seen since World War II, when it commandeered factories and rationed gasoline. —With Eric Roston

To contact the editor responsible for this story: Elizabeth Wasserman at ewasserman2@bloomberg.net, Jon Morgan

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