Our need for energy must be balanced against the often competing interests of the economy, environment, and national security. Clean, sustainable, safe, and secure sources of energy are needed to avoid long-term harm from geopolitical risks and global climate change. Unless fully cost-competitive with fossil fuels, the adoption of clean technologies will either be limited or driven by policy. Innovation in clean energy technology is thus needed to reduce costs and maximize adoption. But how far can energy innovation go towards meeting economic, environmental, and security needs? This analysis attempts to estimate the potential impact clean energy innovation could have on the US economy and energy landscape.
The analysis assumes aggressive hypothetical cost breakthroughs (BT) in clean power generation, grid-storage, electric vehicle, and natural gas technologies and compares them to Business as Usual (BAU) scenarios modeled to 2030 and 2050. The model also compares innovation scenarios in combination with two clean energy policy paths: 1) comprehensive federal incentives and mandates called “Clean Policy” and 2) a power sector-only $30/metric ton price on CO2 called “$30/ ton Carbon Price.” Our modeling indicates that, when compared to BAU in 2030, aggressive energy innovation alone could have enormous potential to simultaneously:
- Grow the US economy by over $155 billion in GDP/year ($244 billion with Clean Policy)
- Create over 1.1 million new net jobs (1.9 million with Clean Policy)
- Save US consumers over $942/household/year ($995 with Clean Policy)
- Reduce US oil consumption by over 1.1 billion barrels/year
- Reduce US total greenhouse gas emissions (GHG) by 13% (21% with Clean Policy)
By 2050, innovation in the modeled technologies alone reduced GHG emissions 55% and 63% when combined with policy, while continuing positive economic and job growth. This analysis indicates that aggressive clean energy innovation could simultaneously help address the US’ major long-term economic, environmental, and security goals.
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