We Are Chasing a Moving Target

Continuing my effort to spotlight climate legislative initiatives, I recommend reading this November Congressional letter. It highlights the House Climate Solutions Caucus, containing 64 bipartisan members dedicated to addressing climate, energy, and environmental challenges. It’s worth a read. The letter stands out for the bipartisan spirit it embodies. In it,  the House Climate Solutions Caucus emphasizes the urgency to act due to U.N. findings that global warming may surpass 1.5 degrees Celsius by the 2030s. The crux of the letter lies in its call for "advancing permitting reform to bolster our domestic energy supply." This statement sets the stage for a crucial conversation about our national energy strategy and permitting.

Even if we spend all the funding from the Inflation Reduction Act (IRA), which the Congressional Budget Office suggests is unlikely, we might reduce U.S. net greenhouse gas emissions to 31-44% below 2005 levels by 2030. However, without improvements to the current permitting system, the pace of clean energy expansion could be slowed, hindering our ability to lower emissions and transition to a sustainable energy future.

As we explore this topic, we find ourselves navigating a critical junction: acknowledging our ever-growing energy demand and the necessity for a transition to new, low-emission energy sources. While optimizing energy use is valuable, it's not the sole solution to significantly lowering emissions. We're racing against moving targets—not only are emissions climbing, but so is our energy demand.

Representatives emphasize a critical permitting challenge: our reliance on outdated laws, some over 50 years old, initially intended to guard against potentially harmful projects. However, today, NEPA often hinders beneficial environmental projects with cumbersome permitting requirements. This is why review and adjustment of existing law is regularly required. We need to modernize our permitting processes to both protect our environment and expedite sustainable development.

Permit reform is a formidable challenge, but it's within Congress's power to address. This doesn't call for new expenditures from an already stretched budget. It requires a bold reimagining of the entire permitting landscape. This conversation is not just about policy changes. It's about setting a new direction for our nation's energy future. 

It is Achievable

The prospect of effectively structuring and allocating funds for sustainable energy initiatives may seem daunting, but it is achievable

Despite the offshore wind industry’s permitting hurdles, the U.S. is making strides in renewable energy, with final federal approvals for Dominion Energy's largest offshore wind farm, which will power up to 660,000 homes by late 2026. The farm will substantially contribute to the nation's clean energy capacity and bolster local economies by supporting over 1,000 jobs. 

This venture demonstrates the crucial role of large, well-organized, and experienced companies in driving the U.S.'s energy transition. As the energy transition presents increasing challenges, the collective capabilities of our established energy companies become indispensable. Achieving significant progress in the energy transition, while challenging, is possible with the involvement of traditional energy sectors. We must also acknowledge that it’s not as simple as throwing money at the problem. We need the existing expertise of established companies and to encourage them through the energy transition.  

As always, please forward this email to anyone interested in our work or members, and don't hesitate to contact me anytime.


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Pricing Externalities