Princeton Study: A Net-Zero Greenhouse Gas Emissions Economy is a Job Creator
In recent years, goals for net-zero emission of greenhouse gases have been adopted by a number of energy companies, including Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, The Netherlands), BP plc (NYSE:BP) (London, England) and Occidental Petroleum Corporation (NYSE:OXY) (Los Angeles, California). A growing number of utilities also have signed on, including Southern Company (NYSE:SO) (Atlanta, Georgia), Xcel Energy Incorporated (NASDAQ:XEL) (Minneapolis, Minnesota), Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia) and FirstEnergy Corporation (NYSE:FE) (Akron, Ohio). Materials companies and airlines have also climbed on board the bandwagon to decarbonize the U.S. economy over the next three decades.
Numerous studies have been issued assessing how steps to decarbonize the economy could affect businesses, regions and consumers. Many of those studies focus on who could win and who could lose during the transition. That scorecard is then used by participants to justify supporting or opposing a transition to a net-zero emissions economy.
President-elect Joe Biden campaigned on transitioning to a net-zero greenhouse gas emissions economy by 2050. Fighting climate change, along with defeating the COVID-19 pandemic, are expected to be among the primary goals of the incoming administration.
Into the expected mosh pit of policy options and corporate actions comes a dense, lengthy study two years in the making that was financially backed by BP and Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas), among other organizations. Princeton University's Net-Zero America: Potential Pathways, Infrastructure and Impacts, released December 15, said there are "five distinct technological pathways, all of which achieve the 2050 goal and involve spending on energy in line with historical spending as a share of economic activity, or between 4% and 6% of gross domestic product (GDP). We are agnostic as to which of these pathways is 'best,' and the final path the nation takes will no doubt differ from all of these."
The study's authors say it "provides granular guidance on what getting to net-zero really requires, and on actions needed to translate these pledges into tangible progress." A lot of space is devoted to "mapping, sector-by-sector, the timing and spatial distribution of changes in energy infrastructure, capital investment, employment, air pollution, land use and other key outcomes at a state and local level."
The study continued: Each of the five pathways to net-zero "results in a net increase in energy-sector employment and delivers significant reductions in air pollution, leading to public health benefits that begin immediately in the first decade of the transition."
Rather than conduct a scenario analysis of different possible futures, with varying assumptions, the researchers, led by Princeton professors Eric Larson, Jesse Jenkins and Chris Greig, looked at six pillars of a net-zero emissions economy: energy efficiency and electrification across various sectors; clean electricity; bioenergy and other zero-carbon fuels and feedstocks; carbon dioxide capture, transport, usage and storage; reduced non-CO2 emissions; and enhanced land sinks.
"Building a net-zero America will require immediate, large-scale mobilization of capital, policy and societal commitment, including at least $2.5 trillion in additional capital investment into energy supply, industry, buildings and vehicles over the next decade, relative to business as usual," the authors write. Consumers will reap the benefits of these investments over decades, they continue, which would make the transition affordable. Total annualized U.S. energy expenditures would increase by less than 3% over 2021-2030, but time is of the essence: major investment decisions must start in the 2020s, with levels of investments ramping up throughout the transition.
The study uses the 2019 Annual Energy Outlook from the U.S. Energy Information Administration (EIA) (Washington, D.C.) as its starting point. It does not advocate any specific policies, but provides "actionable details for policy- and decision-making."
The six pillars represent a "to do" list of targeted energy project development over the next three decades.
The "Efficiency & Electrification" pillar focuses on changing consumer energy investment and energy-use behaviors, including putting 300 million personal electric vehicles (EVs) on the road and equipping 130 million residences with heat-pump heating. Various industrial efficiency gains also are detailed.
The "Clean Electricity" pillar includes rapidly siting tens to hundreds of gigawatts (GW) of wind and solar power per decade; tripling to quintupling current investments in transmission; building up to 250 one-GW nuclear power plants (or up to 3,800 small modular reactors); constructing more than 300 roughly 750-megawatt (MW) natural gas-fired, combined-cycle generators equipped with CCS; and deploying between 50 and 180 GW of six-hour battery energy storage systems (BESS).
The "CO2 Capture & Storage" pillar envisions geologic storage of between 0.9 and 1.7 gigatons of CO2 per year at more than 1,000 facilities. Enabling this storage would be construction of a network of up to 25,000 kilometers of interstate CO2 trunk pipeline, coupled with building 85,000 kilometers of CO2 pipeline spurs. Thousands of injection wells will need to be constructed.
Who wins and who loses? According to the study, a rapid embrace of decarbonization policies in the U.S. will produce a net gain of between 500,000 and 1 million energy jobs each year during the current decade. For the 2020s, the study projects employment in most states will be somewhere between rising 15% and falling 15%, compared with a 2021 baseline. But in the 2030s, as investments made in the 2020s begin to pay off, nearly all states are expected to see jobs grow 15% or more compared to that 2021 baseline. And in the 2040s, many, though not all, states are expected to see job gains exceeding 15%, compared with a 2021 baseline.
Only one state--West Virginia--is projected to lose 15% or more of its jobs during the 2020s, but employment in that state is forecast to rise steadily through the 2030s and 2040s as its economy is realigned. Louisiana employment will be either 15% more or 15% less than its expected 2021 employment during the 2020s and 2030s, but in the last decade, its employment is projected to decline more than 15%.
Job trends in other energy-producing states like Texas, Oklahoma, West Virginia, Pennsylvania, Kentucky, North Dakota, Wyoming and Colorado are expected to spend most of the next three decades ranging between growing 15% and shrinking 15%, compared with a 2021 estimated employment baseline.
In his foreword to the report, Harvard University professor John Holdren wrote that global temperatures have increased about 1 degree Celsius over what they were 120 years ago. That has caused the world to experience "increases in the frequency and intensity of deadly heat waves in many regions; increases in torrential downpours and flooding in many others; large expansions in the annual area burned in regions prone to wildfires (and expansion of wildfires into regions not previously prone to them); an increase in the power of the strongest tropical storms; expanded impacts of pests and pathogens across large parts of the globe; disruptive changes in monsoons; other alterations in atmospheric and oceanic circulation patterns that, together with other impacts, are affecting agriculture and ocean fisheries; an accelerating pace of global sea-level rise; and ocean acidification arising from absorption of some of the excess carbon dioxide in the atmosphere."
That's why, Holdren continued, it is so urgent that the world's economies take meaningful steps to rapidly decarbonize: "Observations of actual harm from climate change and a continuing flow of bad news from climate science about likely future impacts has increased the sense of urgency in the knowledgeable community, while continuing advances in energy technology have engendered a degree of optimism about what emission reductions might be possible and affordable."