Unbelievable, really. In Paris last December, 189 countries put commitments on the table to take action on climate. Then, last month on Earth Day, 175 of those countries came to New York to sign the Paris Agreement, including U.S., China and India. The Earth Day signing ceremony exceeded our expectations. With the support of these large greenhouse gas emitters, the agreement may well have sufficient commitments to enter into force by the end of the year.
All this progress stands in stark contrast to the U.S. domestic situation. Just a few months ago, I was sitting in a room in Mexico City, surrounded by representatives of Latin American countries who were discussing their ambitious plans to fight global warming, when I heard the news that the Supreme Court had put the Environmental Protection Agency’s (EPA) modest rule to limit carbon pollution from power plants in the United States on hold. It could not have been more ironic.
CCAP had convened the meeting to allow Latin American countries to share their plans for converting the pledges they submitted as part of the landmark Paris climate accord into action. Representatives from Chile talked about the country’s goal of reaching 20 percent renewable power by 2025. Mexico discussed energy reforms, including a new renewable energy requirement of 25 percent by 2020 and 35 percent by 2024. Costa Rica, which has already decarbonized its energy sector, is now focused on reaching carbon neutrality by 2021.
So while our political national discourse may not reflect this reality, the world is moving forward to fight climate change — with speed and ambition.
And this is not just a game for the world’s governments. The private sector knows that cleaner and more efficient operations equal less risk and more profits. Rapid changes in the global energy market are creating enormous opportunities for companies that offer low carbon solutions. During the Paris negotiations last December, 181 major companies and investor groups committed to addressing economic risks and seizing opportunities associated with climate change. More than 50 international companies have committed to moving to 100% renewable power. Worldwide renewable energy investments in 2015 are estimated to be more than $286 billion, and are still growing in 2016.
The technology revolution is spreading to transportation, energy production, and office buildings. Before arriving to lead CCAP early this year, I spent several years looking at disruptive energy technologies for a large US utility. I have seen the future and it is distributed, clean, smart, and—not surprisingly—cheaper than digging minerals out of the ground and burning them to boil water. I was on the board of a small solar company with an entrepreneur who started his first solar company in the early 1980s, when a watt of solar power cost more than $1,000. Today, solar panels are selling for as low as 50 cents a watt. We are now seeing energy storage follow a similar trajectory. With smarter buildings and grid controls, you can shape and shift energy consumption patterns to smooth solar production, reduce overall and peak demand, and even temporarily shed load and sell the so-called “negawatts” back into the energy market.
So the world is moving forward. Low-carbon technology solutions are available and are being implemented. Businesses are developing them, selling them, and demanding their suppliers use them. Many of the owners of the power plants affected by the stayed EPA program are still moving forward with compliance planning, as they know that their shareholders expect them to deal with this risk and not bet on the outcome of the litigation.
I have no doubt that the Clean Power Plan will survive the legal challenges. But I also have no doubt that there will be progress made, both in the US and internationally, as the EPA rule makes its way through the courts. The risks are too big and the opportunities too great to sit on the sidelines and wait. Investors understand that. Companies understand that. Most governments of the world understand that. We may face more bumps, but the march towards reducing greenhouse gasses, driven by both willing governments and market forces, is inevitable.