Fighting Climate Change Myopia

By Andrew Poreda, Sage ESG Research Analyst

What should our electricity future look like?

The February winter storm that devastated the State of Texas was damaging for a myriad of reasons. Not only did the storm cost hundreds of lives and left millions without water, heat, or electricity, but when the dust settles it is anticipated to be the most expensive disaster to ever hit Texas. Hurricane Harvey, which cost the state over $125 billion due to its devastation of the Houston area, will likely be eclipsed by the damage done by this one unseasonably freezing week of winter weather, with some estimates exceeding $200 billion¹.

In the early stages of the storm, the news cycle was dominated by fingers pointing blame at natural gas and wind turbines, questioning their reliability as power sources. While it was unfair to use either as a scapegoat, it called into question a larger issue: what should the future of electricity in the United States (as well as other parts of the world) look like?

Since the United States rejoined the Paris Agreement  this year and will likely commit to “Net Zero by 2050,” the discussion regarding various power sources and what our electricity mix should look like needs to be at the forefront of any Net Zero goal. Electricity production is responsible for 27% of greenhouse gas (GHG) emissions in the United States, and most Net Zero goals involve shifting fossil fuel energy needed by both transportation and industry onto the electrical grid, so electricity generation is the key area to address. However, any big decisions made by stakeholders (e.g., businesses and governments) will have ripple effects (both positive and negative) that will be felt across the globe. A move to the grid is further complicated by the fact that renewable energy requires storage. Finally, any measures that drastically raise prices for businesses or consumers could be quite harmful to an already fragile economy. Taking a step back and looking at the big picture will be beneficial for everyone.