We want to meet the world’s rising energy demand in a fiscally and socially responsible way while mitigating the negative effects of climate change.
Reliable, low-cost energy is integral to advancing human society. As nations develop and increase their energy usage, individual lifespans and quality of life dramatically improve. Thus far, the primary source for reliable, low-cost energy has been found in hydrocarbons (predominately coal, oil, and gas), which collectively have enabled the United States and every other developed nation to thrive and flourish. While the discovery and usage of fossil fuels has undoubtedly contributed to the prospering of society, it is also widely recognized that the burning of hydrocarbons leads to climate change and with that, a risk of widespread negative impacts on the planet — a cost that will mostly be borne by future generations, particularly those that are most vulnerable in society.
Addressing the risk of climate change requires two parallel strategies. First, we need to accelerate investment and adoption of innovative clean energy technologies such that they become economically competitive with traditional fossil fuels. Doing so will lower the transition costs and leverage the power of markets to drive rapid adoption. Clean energy sources must include renewables but also 24 – 7 always-on energy such as nuclear and carbon-capture and sequestration (CCS). Secondly, we need to put a price on carbon in order to internalize and account for the cost that rising emissions imposes on society and future generations.
These two strategies are mutually reinforcing. Driving down the cost of clean energy will make a price on carbon more politically palatable by minimizing the economic cost that society will bear. A price on carbon will drive market adoption of clean energy technologies and further incentivizes innovation in the sector.