Updated: Sep 10, 2021
As 2021 gets started and we are on the cusp of a new Biden administration, our energy future will look decidedly different. President-elect Biden has broad authority to set energy policy through executive departments such as the U.S. Department of Energy (DOE), U.S. Department of Transportation (DOT) and regulatory bodies such as the Federal Energy Regulatory Commission (FERC). Biden has linked climate change to national security, naming former Secretary of State John Kerry as the first ever presidential envoy for climate.
Biden has also pledged to rejoin the 2015 Paris Agreement within the United Nations
Framework Convention on Climate Change the very first day of his administration, signaling U.S. leadership on climate change for the first time in several years. The results of the Georgia Senate race allow Vice President-elect Kamala Harris to be the tiebreaker, giving Democrats control of the House, Senate and White House for the first time since 2011. All of this means that the U.S. is much more likely to have ambitious climate legislation, much like President Obama sought when the House passed cap and trade legislation.
As the U.S. embarks on national decarbonization efforts, there are three primary levers to do this:
(1) higher efficiency products or the use of less electricity;
(2) electrification or the substitution of technologies that use fossil fuels (coal, oil, and natural gas) with technologies that use cleaner electric sources;
(3) adoption of cleaner fuels such as hydrogen.
Whereas coastal, politically “blue” states have developed policies on their own to achieve this – sometimes even working against the Federal government (think California) – we now expect the Federal government to be a catalyst for climate change mitigation. States that previously did not have any greenhouse gas reduction actions or renewable policy goals with specific policy implication may now move to take action.
What exactly does this look like? The graphic below, developed by the management consulting firm, Roland Berger, shows how states fall into three camps: laggards, followers, and leaders in their climate change efforts. Laggards refer to states without any climate change action. Followers include states that have actionable renewable policy standards or legislative discussion around vehicle electrification. Leaders include all the states that have ongoing legislative discussion about building their economy through electrification.
With national leadership, will state “laggards” move up to state “followers” and “followers” move up to state “leaders”? It remains to be seen but I bet this time next year the states in each category look decidedly different.