US President-elect Joe Biden speaks about the recent massive cyber attack on the US as well as other goals set by Biden’s government in Wilmington, Delaware, December 22, 2020.
Leah Millis | Reuters
As we enter the third decade of the 21st century, we are on the brink of a green industrial revolution. Now is the time for President-elect Joe Biden and his formidable team of scientific, economic and national security experts to partner with the private sector to accelerate this historic transition to a low-carbon world.
With an ambitious $ 2 trillion plan that aims to address the threat of climate change more comprehensively than that of any other government, Biden’s presidency could mark a turning point in federal government policy and usher in a new era for clean energy.
And the newly announced Biden environmental team will find a receptive business community to partner with. In recent years, efforts to tackle climate change in the US have not been led by the federal government and federal policy – although many states and cities have continued to act on their own – but by businesses and financial markets.
The private sector is increasingly focused on sustainability and climate risks, not only as a result of increased awareness of climate change and accountability to stakeholders, but also as a result of significant innovations that have significantly reduced the price of clean energy, driving a shift in markets , creating financial incentives and motivating companies and institutional investors to take advantage of these trends.
In fact, renewable energy is now cheaper than conventional power generation for more than two-thirds of the planet. Last year, electricity generation from renewable sources in the US surpassed coal for the first time in the modern era.
This also marked a turning point for business climate announcements, with a growing number of companies setting zero net emissions targets with clear timelines and actions.
Meanwhile, an ever-growing number of investors are refusing to invest in conventional energy sources as the economy is becoming less attractive, and are instead focusing on clean technologies. The value of private equity investments in renewable energy projects has doubled in the past year, and over the past year and a half, venture capital funding for climate technology companies has grown to $ 16.1 billion – from $ 418 million in 2013.
This also marked a turning point for business climate announcements, with a growing number of companies setting zero net emissions targets with clear timelines and actions. A slew of tech companies announced key targets for decarbonising the economy, including Google, which pledged to offset all the carbon it has ever emitted and to be powered 100% by renewable energy by 2030.
In the transportation industry, JetBlue became the first US airline to be carbon neutral on all domestic flights. In the telecommunications sector, AT&T has pledged to have net carbon neutrality by 2035 by launching a new climate change analytic tool to quantify network-wide climate risks. Notably, several major oil and gas companies have also pledged to substantially decarbonise their businesses this year, including BP, Shell and last month Equinor.
According to a recent report analyzing progress under the Paris Agreement – and identifying significant private sector momentum – more than 1,500 companies accounting for $ 12.5 trillion in revenue have now set zero emissions targets .
In the course of modern history, there have been a number of tipping points in the energy sector that have brought about transformative changes: the Industrial Revolution of the 1750s and 1760s, which heralded the rise of coal and the use of steam; the invention of the first widely applicable incandescent lamp in the 1870s that extended the working day and improved quality of life and the rise of oil, which overtook coal as the major global power source in 1964 and ushered in a new era of mass production and global transportation.
Today we are at another such tipping point as we continue our way to a world of clean energy. But we need to accelerate and act faster and more comprehensively to address the existential risks and costs of climate change.
In 2020, the private sector has led the way, but the federal government still has opportunities to re-engage. The new Biden administration should establish a Sustainable Recovery Task Force of business and labor leaders who can provide a private sector perspective on climate and economic policies, and convene a Building Back Better summit within the first 100 days, bringing together representatives of the private sector are brought together to prepare a detailed climate agenda in advance.
We believe this moment represents a historic opportunity for our new national leadership to work with businesses and institutional investors to take bold climate action to accelerate the global transition to a low-carbon economy.
Laura Tyson, former chairman of the President’s Council of Economic Advisers during the Clinton administration, is a professor at the Haas School of Business at the University of California, Berkeley and a member of the Board of Advisors of Angeleno Group, LLC, a clean investment company for energy and climate solutions. Daniel Weiss is co-founder and Managing Partner of Angeleno Group.