The environment is everything that isn’t me. ~ Albert Einstein
I began writing this blog on
Earthursday, when President Joe Biden hosted a quickly-assembled, virtual, international
“Climate Summit” as a precursor to the 2021 United Nations Climate Change
Conference (COP26). COP26 will be co-hosted by the non-bunny-hugging UK as well
as Italy in Glasgow, Scotland. Starting on Nov. 1, men in kilts and women in
tartan skirts, will be at the epicenter of climate-change
deliberations.
This Earth Day is the “golden” 50th
time it has been observed. The first Earth Day – Apr. 22, 1970 – was initiated
by then Senator Gaylord Nelson (D-WI). On that day I remember meeting with many
other folks on a grassy field at Indiana University’s Bloomington campus, where
I was a graduate student, to demand that we should better protect our Mother
Earth.
Sen. Nelson’s enduring theme that
day was, “We only have one earth, so we need to take care of her.” An estimated
20 million people attended those first Earth Day festivities. One consequence
of this broad, grassroots support was that President Nixon signed into law a
mere eight months later the Clean Air Act. Among other actions, this law authorized
the newly-formed Environmental Protection Agency to safeguard and regulate our
environment. Two years later he signed the complementary Clean Water Act.
On the 2021 Earth Day, Joe Biden stated
the obvious about preserving our environment’s health, saying it’s the
“existential crisis of our time.” He vowed “that this nation will reduce its
emissions between 50% and 52% by 2030 compared with 2005 levels” and achieve
net zero greenhouse gas emissions (GHG) by 2050. This goal is roughly twice as
large a reduction in GHG than Obama set in 2015.
Some media outlets unfairly
criticized Mr. Biden saying he has “yet to spell out” exactly how his
administration plans on meeting its new, tougher environmental target. This spelling
out will be vital, and already has been planned as part of the administration’s
up-coming submissions to Congress and COP26. Environmental groups like Climate
Action Tracker (CAT) decried that even these lower GHG limits will not keep
global temperature from rising 1.5°C. Instead, CAT recommends lowering
GHG at least 57% to 63% to avert the 1.5°C level of warming.
One recent analysis characterized
the effects of a 51% reduction in GHG by 2030 would “trigger a nearly wholesale
transformation of American society.” 2030 is a mere nine years away. My bet is
a “nearly wholesale transformation” will take a lot longer than that, despite
the president’s 2030 deadline. An even larger 63% reduction in GHG would be way
beyond “wholesale transformation,” whatever that might mean.
Mr. Biden plans to succeed in attaining
this more aggressive target “with the help of Congress and industry.” Really, Joe?
You’ve forgotten someone important. What about us 300+million US consumers, who
account for 70% of our GDP? We’re going to be absolutely necessary to “help”
meet your tighter targets. Overlooking consumers is an alarming omission. He’s
not alone in this troubling oversight, Michael Bloomberg stated at the Climate
Summit “Cities and businesses hold the key to defeating climate change.” They
may hold “a key”, but the final one is in the hands and wallets of consumers.
The president needs to realize
without active consumer support he’ll have a colossally long “last-mile”
problem. His administration is admirably tightening the overall environmental
goals to reduce the pervasive effects of climate change. His plan will in part
phase out fossil-fueled autos’ sales, exterminate coal-fired power plants, offer
$100 billion more in electric vehicle (EV) incentives, and electrify the nation
including its fleet of 480,000 school buses.
In any case, he’ll need a fair
amount of good fortune for those and his many other actions to be triumphs. Without
directly engaging consumers, the president’s nascent environmental efforts will
never soar. Unfortunately, it’s the rare politician now who directly acknowledges
these programs will necessitate big changes in individual consumer behavior. Consumers
have yet to be mentioned by the president as stakeholders in achieving improved
environmental quality. So far, it’s all about government and companies, who
will supply products and services.
President Biden’s statements
about climate change suffer from misemphasized supply-side thinking. Calling
only on Congress and industry to help meet his new, aggressive GHG targets
ignores directly engaging consumers to demand and buy new,
environmentally-benign products and services. That’s a big mistake. Unless the president
engages typical consumers like José and Sofia Rodriguez and Joe and Jane Cooper
to literally buy into his build back better and greener programs,
victory will be unattainable. Such a victory will be far easier when we
consumers become an integral part of planning these programs.
Only offering larger, broader
subsidies to encourage Jane or José to buy a new electric heat pump or EV, or
start using public transit, is not likely to be sufficient.
Consumers’ increased purchasing
of such items rests on a multi-dimensional process that includes social
validation. Financial incentives are unidimensional, just dollars and cents. Despite
years of significant subsidies, EV’s dismal market share (hovering around 2%), reflects
the government’s failed attempt so far to push this environmentally-beneficial
market. Only 1% of people heat their homes now with more expensive electric
heat pumps.
Financial incentives for EVs and
heat pumps can help, but they’re not likely to be enough for the US to achieve
net zero GHG emissions by 2050. Studies show that even if EVs somehow account
for 60% of new car sales by 2050, the majority of cars being driven would still
be internal-combustion engine vehicles (ICE). Why? Improved light vehicle
manufacturing has increased their effective lifetimes – from 10 to even 20
years – which reduces turnover. Our two cars are each more than a decade old;
how old are yours? Other incentives such as ICE buy-back programs, despite
their checkered effectiveness, would likely be needed for EV technology to have
a strong effect on GHG emissions even two decades from now.
Multitudes of real-life consumers
including you and me, not those imagined in most forecasting models, will need
to change many of their ingrained, long-standing purchasing habits. New
behaviors like acquiring/using smaller EVs, heating their residences not with
natural gas but with costlier electricity (presumably from green-generated
sources) and not using the vast array of petroleum-based consumer items
including many cosmetics (like shampoo, body wash and lipstick). Without
consumers accepting and actively supporting such changes, our impending
cleaner, emission-less future on evergreen trails will be tough to hoe. Is significantly
reducing GHG emissions possible without “needing” a recession? Hopefully yes, and
consumers will be central in this enormous effort.
On a macro level GHG emissions
are influenced by many factors, including total energy use and overall level of
economic activity.
The red trendline in the above
chart illustrates the inverse (negative) relationship between the annual change
in US GHG and in the annual change in unemployment (one measure of
macroeconomic activity). As the change in unemployment worsens (moving left along
the horizontal access, meaning employment is rising), the change in GHG
emissions increases (rising on the vertical axis). As more people are working
(lowering unemployment) and the macroeconomic engine is revving up, emissions
rise. Conversely, during the 2007-09 Great Recession, when unemployment more
than doubled to 9.3%, GHG emissions dropped by 9.1%.
The same is true during the severe,
covid-induced recession which began in February 2020. No EPA emissions data are
available for 2020 yet. However, the Rhodium Group estimated GHG emissions fell
by 10.3% in 2020 using preliminary data. A few environmentalists proclaimed
this as a potential silver lining for the pandemic.[1]
This is a lining we should all hope to avoid, despite somewhat bluer skies. Predictably,
the International Energy Agency estimates that global GHG emissions will rise by
almost 5% this year, as overall economic activity grows.
Consumers must play a key, acknowledged
role in improving many facets of our environment. President Biden and his
cohorts need to quickly recognize this and seize it as an opportunity, not an
omission.
[1]
The pandemic’s understandably tiny Silver Lining Department (SLD) also includes
the emergence of tele-medicine as a potential means for doctors and other healthcare
providers to better reach struggling people. Unfortunately, this exhibit from
the SLD does not reckon that considerable numbers of “struggling people”
probably don’t have decent, enabling internet connections. Perhaps the
administration’s $100 billion plan to fix broadband internet access will help.
