Government officials and the media often discuss the need for countries to shift to a low carbon economy (LCE). The transition to an economy where financial prosperity and minimal greenhouse gas emissions co-exist is a challenging undertaking. It requires reduced use of fossil fuels, increased use of carbon-free electricity, regulatory limits on carbon emissions, and improved energy efficiency.
Since 2008, the Obama administration has pressed the need to diversify the nation's energy portfolio and pursue new, innovative, clean technologies that can help mitigate the adverse effects of climate change. Until late 2009, it was considered likely that Congress would pass some form of comprehensive climate legislation, but the failure of the American Clean Energy & Security Act of 2009 shifted focus to the powers of the EPA. In 2007, the Supreme Court ruled that the EPA has the authority to regulate carbon dioxide as a pollutant under the Clean Air Act. Since then, the EPA has used its expanded authority to address GHGs from the largest industrial pollution sources, requiring large facilities to report their emissions. While so far the EPA's new rules have been modest, affecting only new plants or facilities that are undergoing major upgrades, the agency plans to issue regulations for nearly all sources of GHG.
Further, in early 2009 President Obama signed the American Recovery and Reinvestment Act (ARRA), which made the single largest investment in clean and renewable energy in US history. As of 2012, the administration has invested more than $90 billion of ARRA funds in clean energy. The Recovery Act allocates funds for climate and energy programs to several federal agencies, although most investment is directed to the US Department of Energy (DOE). Several offices within the DOE have received ARRA funds for projects that reduce carbon emissions and support nascent clean energy industries.
The prospect of new, green jobs is appealing. Green industries tend to be more labor intensive than other sectors. Consequently, experts believe that one billion dollars of green investment will result in many more jobs than investment in other fields. As with any structural change to the economy, the shift to a low carbon economy will produce winners and losers. Industries expected to benefit from the shift include manufacturing, electronics, and construction. Sectors that are anticipated to suffer loses include oil and gas, and chemicals.
A low carbon economy will not be good news for all businesses, but support for the change does exist among major US corporations. The United States Climate Action Partnership (USCAP) is an expanding alliance of corporations and leading environmental organizations that have united to advocate for strong national legislation to require greenhouse gas emissions reductions.
Nonetheless, US national policy remains ambiguous. According to a 2011 PEW report, the US has fallen to third in clean energy sector investment, behind China and Germany. According to the study, the major differentiating factor is national policy: China, Germany, Italy and India have national policies that support renewable energy, which is attractive to financiers.
