Reshaping the two biggest carbon-emitting sectors to meet new US climate targets

On Earth Day, President Biden pledged to cut 50 to 52 percent of U.S. carbon emissions from 2005 levels by 2030. A prerequisite for rejoining the Paris Agreement, this commitment reflects scientific assessments of the reductions needed to avoid the worst impacts of climate change.

The new emissions pledge is just one piece of a longer-term U.S. strategy to achieve net-zero emissions by 2050. Reaching that goal will require substantial action across all energy-producing and using sectors like power, fuels, buildings, transportation and industry. However, not all sectors are equally primed for decarbonization — in order to reach targets in the near and long term, policy and program solutions must prioritize deep reductions that are possible this decade. Fortunately, the two heaviest-emitting sectors in the U.S. — transportation and power — are the best candidates for the rapid, large scale action we need.

Transportation 

The transportation sector generates the largest share of U.S. greenhouse gas emissions (GHGs), primarily from fueling our cars, trucks, ships, trains and planes. Over 90 percent of the fuel used for transportation is petroleum based, making this sector a primary target for emissions reductions. 

There are two main routes to transportation emissions reductions under existing law:

1) There is a state route, using California’s authority under the Clean Air Act and federal fuel economy standards.

In the last few days, the Environmental Protection Agency (EPA) announced it will restore California’s Clean Air Act option to set tougher tailpipe emissions requirements for cars and SUVs. Some 15 states and D.C. have signed on to California’s standards, representing more than one-third of the American auto market — and more are considering this route.

2) EPA’s action runs in parallel with a Department of Transportation move — offering a federal route. Based on an early Biden executive order, these agencies are likely to act soon under their separate authority to increase federal fuel economy standards, which would affect the whole U.S. market.  

Whether through the state route or a federal fuel economy standard, stringent rules like these could drive electrification for passenger vehicle fleets. Domestic automakers are already planning electric-focused investments in their product lines, as witnessed by GM’s pledge to manufacture only electric passenger vehicles as soon as 2035. 

Furthermore, the U.S. vehicle fleet turns over quickly — more than half the vehicles on the road today will be replaced by 2030, creating opportunities to make a major contribution to the administration’s announced 2030 target. At the same time, the economics of electric vehicles (EVs) are improving dramatically, such that a tipping point may be reached in this decade where a typical EV is less expensive to buy than an internal combustion vehicle. 

Even with this momentum, other transportation sector efforts will be needed. For example, the government will need to accelerate research and deployment of EV batteries and charging stations, plus low-carbon fuels for the heavier vehicles that are harder to electrify. To that end, Biden’s proposed $2.2 trillion American Jobs Plan includes $174 billion to ramp up EV production and economics — including money to retool factories and boost domestic supply of materials, tax incentives for EV buyers, and grant and incentive programs for charging infrastructure.  

Power 

Electricity production generates the second largest share of greenhouse gas emissions. Approximately 62 percent of our electricity comes from burning fossil fuels, mostly coal and natural gas. 

Biden’s Jobs Plan proposes an Energy Efficiency and Clean Electricity standard as part of an overall effort to reduce emissions from power generation 100 percent by 2035.

A group of electricity industry companies has proposed a Clean Energy Standard, similar in concept but with a goal of 80 percent emission reductions below 2005 levels by 2030. That goal is well within reach: state policies such as renewable and energy efficiency electricity standards and GHG cap and trade systems — such as the Regional Greenhouse Gas Initiative of 10 Northeast states — have driven power plant emissions down 38 percent from 2005 to 2020. Congress will need to institute a national standard; however, regulating power plant CO2 emissions under EPA’s current Clean Air Act authority has proven difficult, making prospects for future regulations in that area unclear.  

As power-born emissions are due in large part to total power demand and grid carbon intensity, standardizing demand-side grid improvements will be equally essential to bringing those emissions down. Leveraging mandatory standards enabled under the National Appliance Energy Conservation Act (NAECA) is the most efficient path forward. Voluntary programs, such as ENERGY STAR, could also help drive efficiencies beyond NAECA minimums. Voluntary programs can expand tax incentives for demand-side technologies, and support advances in energy codes for new construction through national bodies such as the American Society of Heating, Refrigerating, and Air-conditioning Engineers (ASHRAE) and the International Code Council. 

Finally, state legislatures and utility commissions can advance investments in demand-side technologies, and state and local governments can drive adoption and enforcement of more aggressive energy codes. Unified effort at all levels of government will make the demand side of the grid more efficient, smart, and flexible to accommodate the variability of renewable resources, keep energy affordable and make our energy systems resilient.

Moving Forward

The transportation and power sectors stand to yield the most impactful emissions reductions within this decade; more importantly, their progress will form the foundation for advancement elsewhere. As the grid becomes cleaner and as solutions emerge in harder-to-electrify sectors like heavier vehicles, old buildings, and industrial processes, electrification will become an increasingly integral part of climate change strategies, both domestic and abroad. 

Biden explained that halving U.S. emissions by the next decade is “what we can do, if we take action to build an economy that’s not only more prosperous, but healthier, fairer, and cleaner for the entire planet.” His whole-of-government approach to climate change is needed to meet this defining challenge of our time. Every American business, organization and government must do its part to meet the climate challenge, to build a sustainable and more resilient world. 

Bill Prindle is vice president of sustainable energy and climate, and Climate Center senior fellow at ICF, a global consultancy and digital services provider.