By Russell Gold and Collin Eaton
Meeting President Biden's goal of sharply reducing U.S.
greenhouse-gas emissions by 2030 would require dramatically
reshaping key sectors of the economy.
While U.S. industries are already transitioning to a
lower-carbon future, Mr. Biden's target would require companies in
industries from energy to transportation to agriculture to greatly
speed the pace of change.
Some segments of the economy appear to be ready. Others would
face extraordinary challenges. All would face significant new costs
-- exactly how much is unknown -- and it is unclear how much would
be subsidized by government tax policies or incentives, since the
Biden administration has yet to detail how it would seek to reach
the aggressive new goal.
"This is a real sea change in the degree of ambition by the U.S.
government; it is pretty monumental," said Richard Newell,
president and chief executive of Resources for the Future, a
nonpartisan think tank. "This is technically feasible but a
substantial acceleration of existing trends."
At an Earth Day climate summit this week, Mr. Biden called for
slashing U.S. greenhouse gas emissions by 50% to 52% compared with
the baseline year of 2005, as he seeks to put America at the
forefront of world-wide efforts to combat climate change.
Mr. Biden's target is a significant ratcheting up of the goal
articulated by former President Barack Obama -- a 26% to 28% cut by
2025 -- to help put the U.S. on a path to comply with the Paris
agreement, which seeks to limit average global temperature
increases to 1.5 degrees Celsius above preindustrial levels.
His actions have received support from numerous big businesses,
many of which have pledged recently to cut their own emissions. In
an open letter to Mr. Biden, dozens of companies including
McDonald's Corp., Ford Motor Co. and Alphabet Inc.'s Google said a
more ambitious climate target would "guide the U.S. government's
approach to more sustainable and resilient infrastructure,
zero-emissions vehicles and buildings, improved agricultural
practices, and durable carbon removal."
But they have also raised concerns among representatives for
some of the large industries that would be most heavily impacted,
who have called them unrealistic.
Academics, business consultants and others who study U.S.
emissions say that meeting Mr. Biden's targets would require
significant changes in two key areas: how the U.S. generates
electricity and how it powers its cars and trucks. Transportation
generates 29% of U.S. emissions, followed by electricity generation
at 25% and industry at 23%, according to the Environmental
Protection Agency's annual inventory of greenhouse-gas
In the power sector, renewable energy is already on the rise,
fueled in part by falling costs for wind and solar farms, but also
subsidies and state-level mandates. In 2020, 39.5% of U.S.
electricity came from zero-carbon emitting sources such as nuclear,
wind and solar, up from 29.9% a decade earlier, according to the
federal Energy Information Administration.
Still, reaching Mr. Biden's goal would require more substantial
change. Nathan Hultman, director of the Center for Global
Sustainability at the University of Maryland, led a study examining
how to halve emissions as Mr. Biden has now pledged. It concluded
the easiest way to attain major reductions would be in cleaning up
the electricity sector by largely eliminating coal-fired power
plants, if they don't have a way to capture carbon emissions, and
curtailing natural-gas-fired power plants.
"We don't want to be building a lot of new gas infrastructure,"
he said. "It is not long-term viable."
Some large generators are enthusiastic about Mr. Biden's
infrastructure and tax plans to reduce emissions.
"We are excited to work with the administration on the plan that
I think is really going to accelerate the decarbonization of the
U.S. economy over the next several years," said James Robo, chief
executive of NextEra Energy Inc., the largest power company in the
U.S. by market value, on a call with analysts.
The transportation sector is also getting cleaner, thanks
largely to tightening fuel-economy standards and a growing push by
major auto makers to invest in electric vehicles. But it too would
need to speed up changes to meet Mr. Biden's target.
According to a new Boston Consulting Group report, the U.S. is
on a path to reduce light-vehicle emissions by 50% in 2035. To move
that up five years will require ongoing incentives to purchase
electric vehicles, but also the return of a cash-for-clunkers type
program, the report concluded.
"We need to have a focus on the older, high-pollution cars and
replace them with electric vehicles," said Aakash Arora, one of the
Top U.S. auto makers have already committed to raising EV
output. Ford for instance said earlier this year that it was
committing $22 billion to electric vehicles and the digital
technology involved in connecting them to the internet by 2025.
"Ford supports lowering U.S. greenhouse gas emissions 50% by
2030," said spokesman T. R. Reid. But putting more electric
vehicles on the road will require a dependable supply of batteries
and semiconductors, he added. "We're involved in real-time
discussions with the administration about long-term availability of
those key components."
Other challenges remain. The U.S. would need a huge expansion of
electric-vehicle charging stations before such cars could reach a
One of the most affected industries would be the American oil
and gas sector, which raised its output substantially over the past
decade, thanks to fracking, boosting the economies of states such
as Texas and North Dakota.
Mike Sommers, chief executive of the American Petroleum
Institute, a trade group, said cutting U.S. emissions in half by
2030 would take "a very, very significant change into how the
country gets its energy."
Increasing numbers of electric vehicles would require more
electricity, he noted, and that would likely mean more reliance on
natural gas, the fuel that currently generates 40% of U.S. power.
"It's a little bit fantastical to expect you'll have significant
turnover in the fleet without a lot of power coming from the most
reliable source out there," he added.
Agriculture contributes about 10% of annual U.S. greenhouse gas
emissions, according to the EPA, and relative to other industries
has faced fewer government mandates to reduce its carbon footprint.
Big meat and grain-processing companies have set voluntary targets
in response to consumer and investor pressure, but many farmers
remain resistant to regulations centered on farms and feedlots.
JBS SA, the world's largest meat company, believes its voluntary
efforts to curb emissions across its U.S. beef and pork operations
are aligned with the Biden administration's target, according to
Cameron Bruett, the company's U.S. chief sustainability officer.
The Brazilian company previously has made carbon commitments and
last month said it aimed to achieve net zero emissions by 2040.
JBS is shifting toward renewable power, like a recently
installed solar panel array that will help power its Beardstown,
Ill., pork processing plant. The company is also evaluating
electric vehicles and more sustainable packaging. But Mr. Bruett
said government investment will be needed to fundamentally change
the U.S. farm sector, like incentivizing farmers to retain more
carbon in their soil.
"We need more on-farm research," Mr. Bruett said.
The most difficult major category to reduce emissions may be
heavy industry. Steel, cement and petrochemical manufacturing
require large amounts of energy and emit substantial emissions. A
steel mill that burns natural gas to generate necessary heat can't
be easily switched over to operate on low-carbon electricity
without a substantial capital outlay. Manufacturing cement emits
carbon dioxide as part of cooking limestone.
Emily Grubert, an assistant professor of civil and environmental
engineering at the Georgia Institute of Technology, says reducing
industrial emissions will be costly.
"This is the place where we might actually think about doing
some really expensive things," she said, such as installing
machines to capture carbon emissions.
Exxon Mobil Corp. on Monday proposed a $100 billion plan to
capture carbon emissions along the heavily industrialized Houston
Ship Channel that could serve as a model for such efforts. But the
company noted that making it a reality would require government
Mike Ireland, president and chief executive of the Portland
Cement Association, said his members could reduce emissions -- with
federal government help to develop and lower the cost of carbon
"This stretch goal is certainly ambitious and can only be
achieved by industry, government and private partners working
together," he said. "We will need collaboration from the
administration's agencies to scale up those technologies."
Jacob Bunge contributed to this article.
Write to Russell Gold at firstname.lastname@example.org and Collin Eaton
(END) Dow Jones Newswires
April 23, 2021 09:42 ET (13:42 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.