Overview

The United States must reach net-zero emissions economy-wide by 2050 at the latest to avoid the worst impacts of climate change, a target established by the Intergovernmental Panel on Climate Change. 

In this first report for the DeCARB America Initiative, we analyzed how close we can adhere to a net-zero pathway with current and currently imagined policy tools. This includes sector-specific performance standards, incentives to subsidize low-carbon solutions, investments in innovation, and investments in infrastructure. These policies can get us most of the way to net-zero, however, there are still gaps between what is currently imagined and what we will truly need to reach 0x50. Our analysis highlights these areas that most policy discussions leave out.

Beyond potential policy pathways, this report also outlines the infrastructure impacts of reaching net-zero emissions by 2050, including clean energy generation, transmission, zero-emission vehicle charging, carbon dioxide pipelines, hydrogen infrastructure, and more. To achieve this clean energy transition, we must build massive amounts of infrastructure at unprecedented rates across the county. While this presents a challenge that will require smart policy, it is also an enormous economic and job opportunity for every region of the country.

Key Takeaways

Potential of Currently Imagined Climate Policies

  • We need a diverse set of policy mechanisms to address the unique needs of each sector
  • The electricity sector is the building block of everything
  • We need additional policies to get all the way to net-zero

Technology Gaps That Require Additional Policies

  • We know what we need to do to reach 0x50
  • Main gaps are in industrial carbon capture and heat, direct air capture, land sinks, and non-energy emissions from agriculture and livestock
  • Policies to eliminate remaining industrial emissions must consider impact on domestic manufacturers’ competitiveness
  • Carbon pricing could be an elegant solution for these remaining emissions

Role of Innovation

  • Innovation can enable us to reach climate goals faster and at lower cost.

Transforming Our Energy Infrastructure 

  • Building new clean energy infrastructure at unprecedented rates is required to reach 0x50
  • We need to launch a lot of boats to get to this scale
  • There is opportunity in every region, especially the Mid-Continent
  • Repurposing and using existing infrastructure can contain costs
  • Widespread consumer adoption of zero-carbon technologies is required in order to reach 0x50.
  • Smart policies are needed to create an equitable transformation

Potential of Existing Climate Policy Proposals

How close do existing climate plans get us to net-zero emissions by 2050? This past year alone, we have seen some remarkably ambitious and detailed climate plans from the Select Committee on the Climate Crisis, Energy and Commerce Committee, members of Congress, presidential candidates, and President-Elect Joe Biden. These climate plans look to a diverse set of policy mechanisms to achieve emissions reductions, from tax credits and investments in innovation to performance standards and government procurement. 

We analyzed the potential of all current and currently imagined climate policies to understand just how far these proposals can get us. Often when we model what it takes to fully decarbonize, we use a linear decline of emissions till 2050. Instead, in this modeling, we looked at sector-specific policies that reflect the climate plans we see today. This is our Sectoral Policies case. Table 1 shows the policy mechanisms that can be combined to reach the emissions or clean energy achievements for each sector.

Report 1 Table 1

The policy mechanisms and achievements by sector for the Sectoral Policies case.
SectorPoliciesAchievements
Power Clean energy/electricity standard100% Clean Electricity by 2050
Power Clean energy tax credits100% Clean Electricity by 2050
PowerNational strategy for a robust national transmission grid100% Clean Electricity by 2050
Power Grants for high voltage transmission and grid modernization100% Clean Electricity by 2050
Power Funding for grid resiliency100% Clean Electricity by 2050
Transportation Zero emission vehicle standards 100% ZEV sales by 2045 for Light, Medium, and Heavy Duty Vehicles
Transportation Point of sale tax credit 100% ZEV sales by 2045 for Light, Medium, and Heavy Duty Vehicles
Transportation Rebate program to trade in gasoline-powered vehicles 100% ZEV sales by 2045 for Light, Medium, and Heavy Duty Vehicles
Transportation Enhanced Department of Energy Low Cost Loan Program 100% ZEV sales by 2045 for Light, Medium, and Heavy Duty Vehicles
TransportationFunding and tax credits for EV charging infrastructure 100% ZEV sales by 2045 for Light, Medium, and Heavy Duty Vehicles
Transportation Zero carbon fuel standards for all liquid fuels and hydrogen 10% zero-carbon fuels for each fuel type (hydrogen, diesel, gasoline, and jet fuel)
Transportation Aviation fuel efficiency standard 1.5% increase in fleet efficiency per annum consistent with economic response to rising fuel prices
IndustryElectric efficiency standards 1% electric efficiency increase per year
Industry Carbon capture tax credit 1% electric efficiency increase per year
Industry Clean energy manufacturing tax credit 1% electric efficiency increase per year
Industry Increased funding for the Advanced Technology Vehicles Manufacturing Loan Program 1% electric efficiency increase per year
Industry Buy Clean for America 1% electric efficiency increase per year
Buildings Electrification and efficiency codes and standards x% electrification by 2050 and x% increased efficiency by 2050
Buildings Increased funding for the Department of Energy Weatherization Assistance Program x% electrification by 2050 and x% increased efficiency by 2050
Buildings Improved statutory authority of the Weatherization Assistance Program x% electrification by 2050 and x% increased efficiency by 2050
Buildings Expanded use of energy saving performance contracts x% electrification by 2050 and x% increased efficiency by 2050
Buildings Incentives to retrofit residential buildings x% electrification by 2050 and x% increased efficiency by 2050
Other Methane regulations 75% reduction by 2025 and 90% reduction by 2030
Other HFCs standards 75% reduction by 2050
Other Increased federal investment in innovation

Key Takeaways:

1. We need a diverse set of policy mechanisms to address the unique needs of each sector

Eliminating emissions from the entire economy will require unique solutions for each sector. The power, transportation, building, and industrial sectors vary significantly in the near-term availability of low-carbon solutions and the pace of investment cycles and capital turnover. A combination of push and pull policies work well together to create demand for clean energy technologies and incentivize businesses and consumers to invest in them. 

In our Sectoral Policies case, the ambitious performance standards for each sector ultimately drive the deployment of clean energy technologies and emissions reductions. However, investments in infrastructure and innovation, tax credits, grants, direct subsidies and loans, and other incentives play a crucial role in jumpstarting the transition to net-zero, managing costs, and building markets for clean energy solutions. These spending-based policies work well with performance standards by bringing down the cost of compliance and ensuring widespread consumer adoption of zero-carbon technologies. These policies make it a no brainer for consumers and businesses to invest in clean energy and supportive infrastructure. This also creates a growing coalition of clean energy investors and businesses that will advocate for continued policy support and open the door for more ambitious action. 

While performance standards are the backbone of our Sectoral Policies case, it is not the only pathway to full decarbonization. It is possible to build a strategy focused solely around incentives and investments. However, for a spending-only approach to drive the same emissions reductions as performance standards, we would need much more ambitious investment- and incentive-based proposals than Congress is currently discussing. For example, the clean energy standard in our Sectoral Policies case drives $XX of investment in clean energy per year. Incentives to match that level of investment go well beyond those included the GREEN Act, Energy Sector Innovation Credit, Nuclear Powers America Act, and Clean Energy for America Act. Similarly, proposals to extend the electric vehicle tax credit, like the Driving America Forward Act, are not significant enough alone to accelerate the transition to zero emission vehicles in a timeline compatible with reaching net-zero emissions by 2050. 

2. The electricity sector is the building block of everything  

Electrification and decarbonizing electricity is foundational for any strategy to reach net-zero by 2050. Electricity demand roughly doubles as we electrify parts of industry, buildings, and transportation. As shown in Figure 1, X% of transportation becomes electrified by 2050. This includes most light duty autos and trucks, medium duty vehicles, heavy duty trucks, school and intercity buses, transit buses, and YY. We see a similar story with buildings and industry. Air conditioning, secondary heating, space heating, ZZ, and water heating are largely electrified as shown in Figure 2. Same with xx, yy, and zz from industry, shown in Figure 3.

Figure 1. Transportation modes that are electrified

Figure 2. Building sub sectors that are electrified

Figure 3: Industrial sub sectors that are electrified 

To accommodate all this electrification, the power sector will need to build out new capacity to handle a 200% increase in load growth. For comparison, the business as usual case sees less than 0.5% load growth a year. This creates significant infrastructure challenges to expand and modernize the grid while rapidly building out clean energy generation. More on this in the final section, Transforming Our Energy Infrastructure. 

Electrification is also a cost containment mechanism for all sectors. For the foreseeable future, the power sector will remain the easiest and least expensive sector to decarbonize. By electrifying other sectors, we can expand on the success from the technological progress in clean electricity generation. In other words, electrification reduces the amount of low carbon technological breakthroughs needed by allowing us to rely on established technology. Overall, electrification has a lot of potential to reduce the cost and complexity of decarbonization.

3. We need additional policies to get all the way to net-zero 

Existing policy proposals as outlined in our Sectoral Policies case can take care of 90??% of total energy and industrial CO2 emissions, as shown in Figure 4. This is no small feat and speaks to the dedication of policymakers to develop comprehensive climate plans. Fighting climate change is not all or nothing — every bit of emissions reductions makes a difference and more ambitious early action reduces cumulative emissions. Still, the goal is to reach net-zero emissions by 2050 at the latest, for the United States to play our role in keeping global warming below 1.5 degrees Celsius. Our Sectoral Policies case does not quite hit that target. The next section of this report focuses on this gap and what additional technologies and policies are required to get all the way to zero.

Figure 4. Waterfall chart from Ben showing that the Sectoral Policies case does not get all the way to zero

Technology Gaps That Require Additional Policies

The gap between our Sectoral Policies case and net-zero emissions by 2050 highlights areas where current climate technologies and policies are lacking. These areas either do not have viable zero carbon technologies on the horizon and/or are expensive beyond what current policymakers are willing to implement. This section explores challenges and solutions to chip away at these remaining emissions.

Key Takeaways:

1. We know what we need to do to reach 0x50

We know where emissions come from and we know what we need to do to eliminate them. In the power sector, we must replace coal and unabated natural gas, which still make up around 63% of electricity generation, with zero carbon resources. Transportation requires steadily replacing the 250 million gasoline-powered passenger vehicles on the road with zero emission vehicles, as well as fuel switching and developing new fuel sources for rail, shipping, aviation, and other modes of transportation. Industrial emissions from the combustion of fossil fuels (for heating furnaces, kilns, and dryers) can be tackled by replacing fossil fuels with alternative carbon-free fuel sources. Other industrial emissions from non-combustion of fossil fuels (chemical reactions that occur when raw materials are transformed into products like cement and ammonia, and the production and use of hydrofluorocarbons in refrigeration, air-conditioning, aerosols, and foams) will require carbon capture, new materials and processes, and updated equipment. Buildings can be decarbonized with a combination of electrification and improved efficiency and building materials. Agriculture will require some negative emissions, particularly to offset livestock, but significant emissions cuts can be made by improving soil, manure, and livestock management practices.

There is not a lot of mystery around what we need to accomplish and how we can get there. We are missing the full set of technologies to decarbonize every sector, but we know where to focus our innovation efforts to develop the technologies we need. All of the “gaps” between our Sectoral Policies case and net-zero by 2050 are areas that experts have already identified and discussed solutions for. Yet they are not widely adopted by climate advocates and are frequently left out of comprehensive climate plans. This is partially because solutions to address these remaining emissions are expensive and in very early stages of innovation. Instead of looking to close these gaps in our Sectoral Policies case, we held off on including them until our net-zero by 2050 case in order to shed some light on these hard to decarbonize areas.

2. Main gaps are in industrial carbon capture and heat, direct air capture, land sinks, and non-energy emissions from agriculture and livestock

Industrial carbon capture
As shown in Figure 5, the productive sector, which includes agriculture and industry, has the largest discrepancy between the Sectoral Policies and Net Zero by 2050 cases.

Figure 5. Energy and Industrial CO2 Emissions for the Reference, Sectoral Policies, and Net Zero by 2050 cases.

About This Report

Impacts on Jobs and the Economy

Decarb America Research Initiative
Key Takeaways

February 4, 2021

Lesley Jantarasami, Lindsey Walter, Conrad Schneider

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