On Earth Day 2020, due to self-isolating public policies, we see what our environment would look like if the world shifted from fossil fuels to clean tech. Los Angles is a stunning example. A city that has been smog’s poster kid now has clear skies offering beautiful views of the San Gabriel mountains!
If it wasn’t for the Coronavirus, the major news for Earth Day 2020 would have been about how clean tech can achieve both superior economic growth and reduced emissions. For years California has been achieving world leading economic growth while also reducing its greenhouse gas emission. Now all of America has duplicated this success. In 2019 the U.S. economy grew by 2.3%. At the same time America reduced its annual greenhouse gas emissions by 2%.
The following are three steps that would allow the U.S. to keep its clear skies while also achieving superior economic success after the Coronavirus crisis has abated.
Clean Tech Electricity Energizes Decarbonized Economic Success
A massive shift away from coal fired power plants is the underlying reason why the U.S. achieved both reduced greenhouse gas emissions and increased economic growth. Coal fired power plants represented at least half of U.S. electricity generation during the 20th century. They competed with nuclear power plants as the least cost source of electricity.
Today, coal fired power plants represent about a third of U.S. power generation.No new coal fired power plants are scheduled to be built.
A loss of cost competitiveness compared to lower emissions natural gas and zero emissions renewable energy power plants is pushing coal fired power plants off the grid. The path toward a zero emissions grid is now being implemented by utilities like LADWP that are contracting for solar and battery power plants at least cost prices of around 2.5 cents per kWh. Based on superior economics and emissions, renewable energy is projected to represent approximately 70% of 2020’s new power plant additions.
Electric Vehicles Will Drive Fossil Fuels Off The Road
The reason for LA’s clear skies is there are fewer combustion engine cars on the roads due to self-isolation public policies. It is the emerging cost competitiveness of electric vehicles that will make this permanent.
Electric cars cost less than half as much to operate than gasoline cars.
Today, electricity from the grid is about 75 cents per gallon equivalent. Even with Coronavirus pump prices as low as a dollar per gallon, electric vehicles are cheaper to fuel.
Electric vehicles cost less to maintain. They do not require oil changes or scheduled maintenance like combustion engines. Electric vehicles have fewer parts to fix or replace.
Electric vehicles still have higher sticker prices due to two reasons. The first is that, except for Tesla, most auto makers are still developing their battery electric drive trains.
The second reason is that, again except for Tesla, the world’s auto makers have yet to achieve manufacturing economies of scale that will drive down sticker prices.
But at the current pace of innovation, as early as 2022 electric vehicles will win sticker price competitiveness. With that milestone, electric vehicles will cost less while delivering an extended driving range plus acceleration at the speed of electrons. Similar to what happened to coal fired power plants, they will drive fossil fuel vehicles off the road.
Green Supply Chain
Global warming is not just a U.S. problem. China is the world’s largest polluter. India is third in climate changing CO2 emissions. Russia is fourth.
World governments have tried treaties to contain climate changing emissions. They have failed.
The green supply chain contract is the solution. It removes the nationalistic jingoism tied to trade tariffs. Their focus is on the ability of a supplier to achieved audited performance metrics with authenticity and transparency. Their power comes from tying sales and profits to human and environmental health performance.
The green supply chain contract will be the new normal after the Coronavirus crisis. Businesses will demand it to protect against delivery and legal risks. Consumers, burnt by a global health failure, will demand that businesses provide authentic and transparent evidence of sustainable business practices and product designs.
Earth Day 2020
The bottom line for Earth Day 2020 is that health aspirations will be the new norm. It will be the year that consumers and businesses align on executing a triple bottom line that delivers profits plus human and environmental health benefits.