How to get serious about climate change

The last 12 months have seen extraordinary progress in the U.S. effort to cut emissions of the pollution that causes climate change. Three new laws, including last summer’s Inflation Reduction Act, are set to mobilize about $1 trillion of new spending on clean energy and industry.

For all the good news, however, these are just the first steps in a serious program to cut emissions. That’s because showering cash on today’s industries can’t eliminate the pollution of warming gases. That kind of profound change requires much more disruptive investment in wholly new kinds of technologies and businesses. On this front, the federal government could play a much bigger role by using its power to regulate pollution, pry open markets to more competition and actively back the disruptors.

Aviation is a leading example of how this new approach to transformative innovation could unfold. While aviation accounts for just 3 percent of global warming today, its share is rising — and technologies developed for aviation such as new kinds of propulsion systems that use electricity or hydrogen can have big impacts in other industries as well.

Today’s aviation business is designed for insiders. It is tuned for a certain kind of innovation — small, marginal changes that help airlines compete and don’t cause much disruption. Aircraft and engines keep getting a bit more efficient with every new vintage of gear. The same two companies — Boeing and Airbus — have dominated the market for decades. Airlines come and go, but the airplane hasn’t profoundly changed since Boeing’s 707 made long haul travel possible in the late 1950s.

Cleaning up aviation requires a lot more disruption. That’s because ideas for radical improvements in efficiency and new fuels probably won’t just come from the insiders. On top of that, climate scientists are learning that airplanes affect the climate not just by spewing carbon dioxide, which comes from burning fossil fuels,but also by creating contrails— the wispy clouds that form behind a jetliner on some days. Those contrails, eerily beautiful as they often are, have a much bigger impact on the climate than CO2, although exactly how much of an impact and when is proving hard to pin down.

Today’s aviation industry, keen to avoid disruption, has obsessively focused on one solution: switching the fuel that makes jetliners move. The solution, they think, is “sustainable aviation fuel” (SAF). Because SAF isn’t made with petroleum it could sharply cut carbon dioxide. But that solution doesn’t much help if the bigger problem is actually contrail clouds. Rerouting aircraft might be needed or finding new kinds of SAF that burn cleaner. But those solutions, too, fail to make much of a dent in the contrail problem.

A much more diverse array of solutions will be needed, and that’s where the federal government can play a bigger role. Right now, Congress is debating reauthorization of the Federal Aviation Administration (FAA) with the goal of finalizing a new plan for the nation’s aviation regulator by September. Right now, that debate isn’t much focused on climate change. But Congress can fix that easily. And there are strong bipartisan incentives to do so since creating new, cleaner aviation businesses will benefit American innovators and American workers. Some of the most promising ideas, indeed, are emerging right here. Their problem: The cozy industry today keeps them from being put into practice.

One thing Congress could demand with the reauthorization is requiring the FAA to orchestrate airplane competitions so that diverse ideas can get traction. Instead of picking single winners — as NASA has often done — it should follow the playbook of the Pentagon and choose several rival contractors because the best approaches are unknown today. (Two FAA programs, known as CLEEN and FAA-Fast could run these competitions, with the right authorization and budget.) 

In the auto industry, a big shock that helped opened the market for electric vehicles came from the success of Tesla — a firm that survived thanks to government support in early days. Boeing and Airbus need to face their own Tesla moment.

One way to avoid contrails is to electrify aircraft and avoid fuel combustion altogether. That means lighter electric engines. (One of us, Engler, leads a company that builds those engines.) it also means onboard storage systems such as batteries or fuel cell devices that convert liquid fuels to electricity. It will, surely, require new certification and also new ground handling equipment. Still other options involve using hydrogen as a fuel — and making the hydrogen with clean methods.

A plane competition needs to start with the kinds of aircraft that are good test beds for new ideas — single-aisle short- and medium-range devices. They account for enough of the aviation market that success will matter for the climate. More importantly, once starting with those aircraft then new technologies, as they improve, can spread more widely. 

The FAA could also make it easier for successful innovators to know that new ideas can compete. That means putting a priority on certifying for flight novel technologies. The current certification system is broken because regulators don’t look widely enough at risks and opportunities. That’s why it seems Boeing’s 737Max aircraft was prematurely given the green light to fly by the FAA, only to be grounded later when risks were assessed properly. The FAA must do what the Nuclear Regulatory Commission has done for nuclear reactors and show more clearly how new designs will be certified, so that they can compete in the market. The FAA could also signal that it will award landing slots at busy airports to airplanes that are hyper-clean. That would create a credible signal that the market will demand these new planes as innovators start to supply them. 

This kind of disruption playbook — not just spending money on new ideas but using the tools of regulation, market competition  and assuring demand — will work in many other industries as well. In the steel industry, for example, innovators in Sweden have built a new mill to make clean steel because government didn’t just help them pay for it but also, with companies like Volvo, helped orchestrate the demand for clean steel once the supply was built. That same playbook can be used in cement, plastics, shipping and other industries that account for a large share of emissions and must not be left behind. 

It won’t be easy to eliminate emissions from an economy that, for more than a century, has been optimizing itself without worrying about emissions. But market forces can be redirected so long as government is fit for purpose. It’s too easy to focus on industry as it is today, rather than on the disruptions that will be needed to open space for new ideas — new firms and wholly new industries. 

David G. Victor is a professor of innovation and public policy at the School of Global Policy and Strategy at UC San Diego. He is the co-director of the campus-wide Deep Decarbonization Initiative, which focuses on real-world strategies for bringing the world to nearly zero emissions of warming gases. He is also a nonresident senior fellow at the Brookings Institution.

Jeff Engler is the CEO of Wright Electric, a startup manufacturing engines for electric airplanes.