NEW
YORK, May 16, 2024 /PRNewswire/ -- The Committee
for Economic Development (CED), the public policy center of The
Conference Board, has issued a new Solutions Brief, The Role of
Markets in Reaching Net Zero. It offers recommendations to
achieve net zero by 2050 as seamlessly as possible, while ensuring
reliable, affordable access to energy for economic growth.
The Solutions Brief—the latest in CED's Sustaining Capitalism
series—comes as the world struggles to meet the goals set by the
Paris Agreement to reduce the risks and impacts of climate change.
Even if all countries fully comply with their current emissions
reductions plans, emissions will rise 9% above 2010 levels by
2030.
As the Solutions Brief emphasizes, market mechanisms and
innovation play an essential role in driving adoption of new
technologies and promoting the ultimate goal: to shift the energy
mix while driving growth and human prosperity.
"Only through greater reliance on and sensitivity to the
workings of markets will the US be able to reach net zero,
accelerate innovation, stimulate markets eager for that innovation,
and maintain US competitiveness," said John
Gardner, Vice President, Public Policy at CED.
Key Recommendations
Policymakers and the business community will need to work together
to ensure that the energy transition succeeds in a way that spurs
global and US economic growth while recognizing the social costs of
the transition. CED's recommendations include:
The power of markets and using federal funding wisely
- Generous tax credits in the Inflation Reduction Act (IRA)
cannot (and should not) remain part of the tax code forever. The
best use of the credits is to incentivize companies to make further
innovations to bring new technologies to scale and develop
compelling options that the market will eagerly take up—making
net-zero options truly economically sustainable.
- Determining whether these credits spur further development of
technologies at scale and at lower cost will require expanded
research and investment, continuous oversight of projects funded
and credits given through the IRA, and transparency of rules for
credit use.
- Regulations should be based on sound science; promote
competition; and propose practical, actionable steps clear to
regulated entities. Regulations should be as technology neutral as
possible to avoid skewing market incentives, focus on intended
outcomes rather than favored choices, and encourage all options for
decarbonization.
Fossil fuels and methane
- Natural gas is a highly effective fuel for the transition.
Simply switching from unabated coal (in which carbon is not
captured) to gas brings about at least a 30% reduction in
emissions.
- The current review of natural gas exports should permit the US
to increase exports of liquefied natural gas to promote both global
energy security and emissions reductions.
- Methane emissions in both the oil and gas and agri-food sectors
should be addressed through actions in both the public and private
sectors, such as by reducing leaks in wellheads and related
systems, and greater adoption of regenerative agriculture.
Carbon markets
- While there are many ways to design carbon markets, the basic
principles of a system for the US should include revenue neutrality
so that the system becomes self-funding; promoting net-zero carbon;
a bias for simplicity; and ensuring fairness, which includes
concepts such as a carbon border adjustment mechanism to maintain
US competitiveness.
- Other factors that will need to be considered include regional
coordination to account for differences between states that rely
heavily on energy production and those that do not, and pricing
mechanisms with sensitivity to those most impacted by higher costs
from higher prices on carbon, including the poorest and most
disadvantaged Americans.
- Policymakers should develop such a plan in coordination with
the private sector.
- Voluntary carbon markets offer an important way for business to
participate in emissions reductions. As these markets grow, it will
be essential to ensure that carbon credits are of high quality and
deliver the promised emissions reductions.
Technologies for emissions reductions
- Despite challenges, carbon capture and storage (CCS) offers
great potential—if it can be scaled—in both natural and engineered
solutions. Both public and private research efforts should
continue, including for direct air capture and for energy
storage.
- The US should support international efforts through the Carbon
Management Challenge.
- While maintaining its focus on safety, the US should remain at
the forefront of the global nuclear renaissance, promoting nuclear
power through permitting reforms and finding a solution for the
long-term storage of nuclear waste.
- Permitting reform will speed adoption of renewables by reducing
the backlog of requests for interconnection awaiting approval and
facilitating faster expansion of the power grid.
The role of business leaders
- Businesses of all sizes can take significant steps to reduce
energy consumption and improve energy efficiency in operations and
invest in research and development (R&D) related to the energy
transition; most can recognize achieving net zero as a business
imperative.
About The Conference Board
The Conference Board is the
member-driven think tank that delivers Trusted Insights for What's
Ahead.™ Founded in 1916, we are a non-partisan, not-for-profit
entity holding 501(c)(3) tax-exempt status in the United States.
ConferenceBoard.org
The Committee for Economic Development (CED) is the public
policy center of The Conference Board. The nonprofit, nonpartisan,
business-led organization delivers well-researched analysis and
reasoned solutions in the nation's interest. CED Trustees are chief
executive officers and key executives of leading US companies who
bring their unique experience to address today's pressing policy
issues. Collectively, they represent 30+ industries and over 4
million employees.
ConferenceBoard.org/us/Committee-Economic-Development
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SOURCE Committee for Economic Development of The Conference
Board (CED)