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CERAWeek: White House Climate Advisor McCarthy talks up government-industry cooperation

04 March 2021 Kevin Adler

White House National Climate Advisor Gina McCarthy presented a dual message to industrial leaders participating in the CERAWeek by IHS Market conference: the Biden administration is deeply committed to a zero-carbon future, and it sees the transition as a win-win-win proposition for public health, economic growth, and companies that are at the forefront of change.

"It has to be that whole-of-government approach," she said on 4 March.

President Joe Biden recognizes that the federal government can't do it alone -- the private sector's investment is critical, McCarthy said. The administration already has reached out to major US automakers and utilities, asking them what they need to meet US targets, but also, in the case of automakers, what they need to compete globally, she said.

"I think the first thing you have to recognize is that … we're not in a zero-sum game here. It's not, [let's] think about one [sector], and it's a detriment in terms of our ability to get excited about a full range of opportunities."

This message applies to US automakers, who are quickly shifting to electric vehicle (EV) production, she said. "I'm not asking them to take on the world. I'm asking them to tell us what they see the world looking like, and how we can work together…. I don't see anyone in the auto sector arguing against the idea that EVs appear to be clear winners, and we have to think about how we can capture that side."

US automakers "are losing to China in terms of who is manufacturing the vehicles of the future and even of today," she said. Australia and Chile also present significant competitive threats because they have direct access to lithium for batteries.

"We're losing our ability to have an edge in the US in the manufacturing sectors that are going to be important, no matter what, for everybody. It's not just zero-emission vehicles, but it's steel and it's cement. We want this to be [an] overall strategy to invest in our manufacturing sector again, and to do it smartly," she said.

Utilities

Discussions with utility companies about the energy transition have yielded a similar understanding of the opportunities unleashed, as well as the challenges. "It's really important that this not be looked upon merely as a regulatory challenge. Standards are great, but this is bigger than that," McCarthy said.

The power outages in Texas in February brought the issue of reliability to the fore, she said. "We have to think of this as a fundamental need in the United States that the federal government should be investing in," she said. "If we're asking you to achieve certain levels, what are we going to put on the table, like we're supposed to do as grown-ups, to say that the federal government is there to support you."

NDC, carbon capture, and more

Session moderator IHS Markit Senior Vice President, Global Energy Carlos Pascual asked McCarthy about the Nationally Determined Contribution (NDC) the US will bring to the November Conference of the Parties climate meeting in Glasgow, Scotland. The NDC is the voluntary target for emissions reductions by 2030 that more than 130 countries have already announced under the Paris agreement. US environmental groups are pushing for a 50% reduction from 2005 levels by 2030.

While declining to provide specifics, McCarthy said that her mandate was "to work across the whole of government to deliver a strong NDC for the United States, based on what we think we can achieve in 2030."

Some details could be forthcoming on April 22, when UN Climate Envoy John Kerry heads an Earth Day climate summit, McCarthy said.

While Kerry is tasked with international climate change issues, McCarthy's focus is on identifying domestic strategies. These include leveraging research and development spending by the Department of Energy and for EV purchases by the Department of Transportation; incorporating funds for the power grid and mass transportation in an infrastructure spending bill as it moves through Congress; and imposing regulations and standards. "I don't think it's a question of thinking we cannot do enough — it's a question of investing in everything," she said.

Regulations matter, she said, and she's confident they will withstand legal challenges. "One of the big lessons I learned is that, as time goes on, we have seen how unsuccessful the prior administration was in actually rolling back good regulations and sending messages like coal should come back," she said.

"Yes, we will use regulatory authority, that provides a level of certainty moving forward. But even with new appointees under the Trump administration as judges, we won over and over and over again — because there is a law in our country … and when you put on that black robe, you want do your job."

With the Clean Power Plan, for example, though it was held up by the courts and ultimately replaced by the Trump administration, its goal of reducing power plants' carbon emissions by 32% was met in 2019 anyway, she said. "We now know that if you do this right, if you send the proper signals to the private sector, and if it makes sense … these are efforts that will live far longer than the regulatory horizon," she said.

McCarthy shared comments on several other key areas as well:

  • Wind and solar: "In 2020, even during the pandemic year and under the prior administration, we had the biggest jump in solar and wind ever in the United States," she said. "Part of this is due to the commitment of states and cities. Part of it is that it's cheaper."
  • Carbon capture: "Science tells us direct reduction and capture also will be important. I don't think we need to rely on just mitigation ... and risk of not having a resilient and vibrant energy sector…. There's no need to do that," she said.
  • Jobs and equity: "… many communities have been left behind … and that made them more susceptible to catching and dying from COVID-19. [Biden's] commitment is not to leave workers behind during the clean energy transition, and to not lose those communities any more."

McCarthy concluded with a call to end the partisanship that has interfered with creating economywide emissions reductions. "This is the opportunity of a lifetime to reshape our economy…. We cannot miss this opportunity now to invest big in our future," she said.

Posted 04 March 2021 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit

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