Increasing global market demand for cleaner energy and reduced carbon emissions presents our country with a once-in-a-generation chance to lead the next energy revolution. Leading in energy innovation is both good for our economy and good for restraining rising energy costs for American families and consumers.
Luckily, the private sector is leading the charge. The market has already been an unquestionably powerful tool in reducing carbon emissions here in the United States – and we should keep it that way. In a stunning statistic, the U.S. has exceeded the emission reduction targets of the 2009 Waxman-Markey cap-and-trade bill without it even being signed into law.
There’s no doubt that financing the energy transition will require massive private sector investment in new technologies. If we unleash existing federal investments appropriately – including the significant climate and clean energy investments included in the Bipartisan Infrastructure Law and Inflation Reduction Act – capital markets are ready to lead. This is yet another example of economic and environmental success going hand-in-hand.
Instead, Congress and dozens of states are focused on fighting private sector actors who are advancing American industrial dominance in clean energy. While some of the concerns are valid, disavowing or punishing Environmental, Social, and Governance (ESG) investing all together, as some red states are doing, undermines what could be very effective leadership on clean energy and reducing emissions. Even worse, this anti-ESG sentiment is actually discouraging businesses from putting down roots, often in red states, with potentially negative economic ramifications for decades to come.
It’s a mistake to allow smart climate investments that create jobs and economic growth all across our country to get caught in the culture war crosshairs. After all, businesses are investing in clean energy and emissions-reducing technology because it’s profitable and the market is increasingly pointing that way. Red states all over the country, like Georgia, are seeing the fruits of clean energy investment already. As my friends at the R Street Institute rightfully pointed out late last year, the government should leave the private sector alone, and refrain from either top-down pro-ESG or anti-ESG policy.
Just as conservatives do not want the government mandating that we move away from fossil fuel investments, we should not want companies to be discouraged from investing in clean energy or from establishing policies to help reduce emissions associated with fossil fuels. The reality is that most large banks and their investors continue to invest in both traditional and renewable energy to power our country in an affordable, reliable, and increasingly clean way. In addition, there’s an expanding market for key technologies like carbon capture and sequestration or advanced battery storage.
The main thing is that clean energy is the way the world is headed, so why fall behind? As prosperity grows, so will interest in fuel altenatives. If investors agree, legislators should agree to get out of the way.
Plus, Americans agree. Last year, the Pew Research Center found that 69% of U.S. adults wanted to prioritize the development of renewable energy. And conservative lawmakers hoping to capture the next generation of votes should note that in 2022, 75% of young voters were in favor of building more solar and wind farms.
Letting the market lead on clean energy technology creates American-led innovation that drives job growth and economic security while reducing costs for consumers. That’s a trifecta we should all be able to get behind. And if conservatives want to legislate on top of that, they should focus their efforts on clearing barriers to investment – like additional permitting reform – rather than creating new ones. Creating a cleaner and safer future is worth our investment.