Why Trump Should Embrace – Not Ditch – Green Energy
Arthur van Benthem, a Wharton professor of business economics and public policy, argues in this opinion piece that the recent U.S. election should not be mistaken for a referendum on which way the country should go on the environment.
The 2016 presidential election was a vote on many issues. First and foremost, voters have told Washington that they want jobs with a future and a fair share of our nation’s growing wealth. The elections should not be mistaken for a vote on the country’s environmental agenda. It’s quite the opposite, in fact. Mr. Trump has won the votes of so many millions of Americans despite strong public support for green energy and clean air.
The Pew Research Center recently reported that almost nine-in-ten Americans favor expanding the use of solar and wind energy; a whopping 80% of Trump supporters agree. By contrast, only 45% of Americans support more offshore drilling. A Quinnipiac University poll showed that more than two-thirds of Americans would like to see the next president support policies to combat climate change. Even among Republicans, more agree than disagree (47% versus 44%). All things considered, Congress has been entirely on the wrong side of public opinion on these issues for a long time.
Americans want jobs and they want green energy. President-elect Trump has a unique opportunity to deliver on both fronts by embarking on an ambitious green infrastructure agenda that will bring desperately needed, well-paying jobs to left-behind places, and win the global green technology race at the same time. All the rhetoric about “revitalizing the coal industry” just does not make any sense. This is the wrong path for America to take, even from a pure business perspective.
First of all, power producers are already scaling back or shutting down coal-fired electricity generation. Shale gas has made coal largely uneconomic. Who wants to invest in a 50-year-lived asset that is surely going to be outcompeted by gas and renewables in the imminent future?
Second, renewable energy is getting cheaper by the day. In November, the Swedish firm Vattenfall made history by bidding only $55 per megawatt hour sold for an offshore wind development in Denmark – several times below costs 10 years ago and on a steady downward trend. A government push for increased coal production would not only ignore all market signals, but also only put off the evil hour for struggling coal miners’ families. Instead, we should be helping them to acquire new skills that will make them successful in the modern economy.
By looking inward and bringing back coal, the United States closes its eyes to a worldwide revolution in green energy technologies. The current global clean tech market is estimated at around $6 trillion and growing in the double digits year-on-year.
Our competitors understand this. China wants to dominate the clean tech race, with plans to deploy over three times more wind power and six times more solar, and a tenfold increase in electric vehicles. And all that in just five years.
Play to Our Strengths
This is a risky development for the U.S. America touts itself as the global leader in innovation and should aspire to be the front leader in clean tech, too. The U.S. is well-positioned to develop competitive battery storage solutions, manufacture and install renewable energy, and build a modern grid infrastructure. This would generate valuable patents along the way. But it requires government incentives, just as in China and the European Union, which can be phased down quickly as costs continue to drop.
China wants to dominate the clean tech race, with plans to deploy over three times more wind power and six times more solar, and a tenfold increase in electric vehicles. And all that in just five years.
The winners of this clean tech race await a big prize: an export market with almost limitless opportunities. Let’s sell high-value products to China again! The American public is not blind to this opportunity. Many states, red and blue alike, strongly support green energy investment.
The powerful coal industry-funded lobby group ALEC has been trying to roll back state-level renewable electricity mandates. They achieved minor successes in Kansas and Ohio, despite 70% of Ohioans in favor of expanding wind and solar. Yet they failed in Arizona, Montana, Missouri, North Carolina, Pennsylvania, Texas and about two dozen other states.
The general public simply does not support repealing incentives for renewable energy. It brings local manufacturing jobs in a growing sector and royalties for landowners. In most states, utilities and generators aren’t asking for repeal, either.
What this means is that an ambitious green infrastructure and employment agenda, perhaps even a federal renewable energy portfolio standard, should serve Donald Trump well along several dimensions. It would bring green jobs that last many generations, not coal jobs that are doomed to disappear. It would align with what investors actually want to invest in. It would position the U.S. to dominate one of the largest global export markets in the decades to come. It would make our air and waters cleaner, and our children healthier.
And above all, it would follow the will of a large majority of the American people, whose country Mr. Trump has promised to give back to them.