by Elea Castiglione
Photo of the Tennessee Valley Authority’s Hiawassee Dam, courtesy AdobeStock
Shelley Welton, Presidential Distinguished Professor of Law and Energy Policy at Penn Carey Law and the Kleinman Center for Energy Policy, is asking a critical question: What can states do to bridge the gap between their climate commitments and current progress?
Federal policy decisions are widening the gap between current U.S. emissions and the reductions needed to prevent the worst impacts of climate change. State-level commitments are critical to filling the gap, yet many states are struggling to meet their climate targets. Shelley Welton examines why states are struggling to meet these commitments, and how publicly owned renewable energy generation could be a solution.
While many states continue to advance policies that aim to reduce emissions, other states including New York, California, Massachusetts, Maryland, Vermont, and Colorado are not currently on track to meet climate goals and mandates. “Several jurisdictions have set really aggressive climate targets and are struggling with how to make reality on the ground keep up with their law,” Shelley Welton explained.
With the repeal of Inflation Reduction Act provisions and other policies that work to enable a clean energy transition, the nationwide gap between Paris Agreement-consistent emissions reduction targets and actual projected emissions based on current policies is growing, according to the Environmental Defense Fund (EDF). In this new scenario, U.S. emissions are expected to fall 28% by 2035, far short of the 60% emissions reduction needed to meet Paris Agreement goals.
EDF’s recent analysis of the “emissions gap” between current state policy commitments and the reductions necessary to meet Paris Agreement goals is larger than previously estimated. 16 states have enacted emissions reduction legislation, while others have committed to statewide GHG reduction goals through executive action instead of statutory targets. According to EDF, the 24 states and territories in the U.S. Climate Alliance that have committed to reducing pollution represent 57% of the U.S. economy and nearly 40% of total U.S. emissions. These commitments could cut U.S. emissions by about a third, if states are actually able to meet them.
Welton’s recent work focuses on one potential way for states to meet their climate goals: public renewables. Her work explores public renewables as a novel tool of climate change governance, viewed through two case studies: New York and the United Kingdom. Both jurisdictions have legally binding climate targets that they’re struggling to meet. “There’s lots of places that just don’t have climate change as a goal. But in New York and the United Kingdom, they want to meet aggressive targets, and they’re just struggling to figure out how,” Welton (pictured left) explained. Both jurisdictions have also passed a new law creating a public company that builds renewable energy.
“This project asks: why are New York and the United Kingdom struggling to make their climate goals? And why would they think that a public renewable company will help them meet those goals,” Welton explained.
Public renewable companies would add additional clean generation capacity to the grid without changing the electricity market structure. According to Welton, “the theory here is, you still have a private market, the electricity market works the same. Private developers are still developing renewable generation. You’re just adding another entity to the generation side of the picture.” This would include the state developing, owning, and often co-owning with private companies, renewable energy resources.
One advantage of a public renewable company is that it can help navigate the complex, lengthy permitting process for developing a renewable energy project. “It’s really hard to just get enough electricity connected to the grid in both places. Both have really long lines to get interconnected. Planning has been sort of anemic in both places, so infrastructure buildout isn’t keeping up with clean energy goals,” Welton said. A public renewable company’s familiarity with the permitting system, and the fact that people have more trust in public entities, could help overcome some of the permitting barriers, according to Welton.
Additionally, “the state can be more patient with projects, which can be a real asset when you’re looking at a pretty volatile climate,” Welton said. “Bringing some public finance to the table when private finance is sort of skittish for understandable reasons, helps. Because [public renewable companies] don’t necessarily need to make the same quick return, they can be willing to take a project with a little bit more risk forward.”
Welton also pointed out that public ownership of generation resources is not a novel idea. Infrastructure like the Tennessee Valley Authority and federal dams are government-owned. “In some ways, it’s a new theory because they’re doing it for new reasons, but in some ways, we know that the federal government can administer infrastructure well when we give them the resources and the ability to do so,” Welton explained.
Welton will discuss this research in a Penn Climate seminar titled “New Experiments in Public Power,” on March 25.