Austin Vernon on emissions reduction (from my email)

 [[{“value”:”Tyler, Your point about easier reductions abroad goes much further than you wrote about. In the US we have already significantly decreased coal usage so electricity generation is roughly a quarter of our greenhouse gas emissions. Electricity generation accounts for half of emissions in countries like China. Many countries haven’t even installed their first battery system, so
The post Austin Vernon on emissions reduction (from my email) appeared first on Marginal REVOLUTION.”}]] 

Tyler,

Your point about easier reductions abroad goes much further than you wrote about. In the US we have already significantly decreased coal usage so electricity generation is roughly a quarter of our greenhouse gas emissions. Electricity generation accounts for half of emissions in countries like China. Many countries haven’t even installed their first battery system, so there is extensive low hanging fruit. And for a range of reasons the installed cost of solar is much lower abroad than in the US so every dollar goes further. In general the US would be much better off with deregulation (ending tariffs, simplifying tax credits, etc.) over adding any more subsidies. I think it would be a net gain for the industry if all subsidies went away but there was also significant deregulation.

As you point out, it is difficult to move the needle in transportation because the investment required is so much larger than in the electricity sector for roughly the same amount of emissions left to abate. There are sub sectors like trucking and commercial vehicles that could go much faster, but again it is probably better to spend the effort making it easier to install high power chargers than direct subsidies. Companies can and do calculate the total cost of ownership for their vehicles and the next generation of commercial EVs and trucks will be in the green without subsidies for many applications.  Another policy/tech pairing with high leverage in the transportation space is rapidly legalizing autonomous EVs as they become available.

Industry could also transition quickly once alternative systems are in the money. Systems must be cheap and scalable which requires developing the technology and getting solar panel prices close to the global average (right now prices are 2x-3x higher in the US).

Austin

Here is the Austin Vernon Substack.

The post Austin Vernon on emissions reduction (from my email) appeared first on Marginal REVOLUTION.

 Current Affairs, Economics