With a new administration running Washington, there has been a renewed focus on climate change and renewable energy production.
President Joe Biden has installed progressive Cabinet leaders and announced plans to restore many of the environmental regulations that were rolled back over the Trump administration. He also set out goals of creating a network of 500,000 new electric vehicle charging stations across the country, constructing 1.5 million new energy-efficient homes, and creating a “civilian climate corps” to work on climate and conservation projects.
It’s not just the federal government that is making a commitment to climate-friendly initiatives, though. Some of the private sector’s largest names have been making the investment for years now and are now making even bolder pledges.
That was underscored by the announcement late last month that General Motors would phase out production of gas-powered cars and trucks by 2035 and aim to become a carbon-neutral company by 2040. It was a stunning and ambitious announcement, likely to help convince other large automakers of making similar commitments.
Electric cars today are the fastest-growing segment of the auto industry, but they still make up a small proportion of new car sales: about 3% of the global total, the New York Times recently reported. They remain a niche product for many, but an investment in a robust national charging network would likely help hundreds of thousands, if not millions, of consumers decide to make the switch sooner.
That’s not just my opinion, but the belief of investors worldwide. The leading electric automaker Tesla has a market cap of more than $770 billion, about 10 times as much as GM, making it the world’s most valuable auto brand by far. Investors understand that renewable energy and emission-free transportation is the way of the future and getting in on the market now is like buying Apple in 1990 or Amazon in 2000.
Even without potentially lucrative returns, investors are becoming more socially conscious and seeking out companies based upon their environmental, social and governance, or ESG, performance. The thinking goes that companies with high ESG awareness will perform better with consumers and governmental regulators, therefore bringing greater economic opportunity even if accompanied by short-term cost.
Delaware’s private employers are among the leaders in the ESG movement, including DuPont, Chemours, JPMorgan Chase, Bank of America, Barclays, Citi, Amazon, Walmart, and Exelon. All of which were among 47 companies that signed onto a Center for Climate and Energy Solutions (C2ES) letter to Biden stressing the need for his administration to work with Congress “to enact ambitious, durable, and bipartisan climate policies.”
These facts present Delaware with an opportunity to be a leader in the green revolution likely to get underway in the next four years, led by a president who knows what the First State can contribute. It’s why I listened carefully to the debate in Dover in recent weeks regarding the strengthening of the state’s Renewable Portfolio Standards, the law that sets out renewable energy goals for the state’s future and the framework to get there.
The loudest voices in the debate over Senate Bill 33, signed by the governor in recent days, came from environmental groups and green energy industry associations looking to push our goals higher than the proposed 40%.
Ten states have committed to sourcing at least half of their electricity from renewable energy sources by 2030 while five states and the District of Columbia have set 100% clean energy goals. Delaware’s RPS reportedly has the second least ambitious target of East Coast states, ahead of only North Carolina, and SB33 only pushes it ahead of one other state.
The increase to a 40% mandate is laudable, but a lot has changed in the year since the framework of the bill was first proposed, including the arrival of the Biden administration. By not considering more aggressive measures to show a commitment to the green sector, Delaware risks missing out on major private sector investments for 21st century jobs.
It was not long ago that Delawareans got burned on the promise of such jobs when the Fisker fiasco wasted millions of taxpayer dollars on a project that never produced jobs or a car. With that in mind, I can sympathize with the reticence to wade too far into an emerging industry again.
We shouldn’t let the mistakes of our past prevent us from seizing upon the opportunities of tomorrow though.
The green sector is much different than it was more than a decade ago when Delaware made its investment in Fisker. Technology is getting better and cheaper, the consumer market is rapidly maturing, and infrastructure is improving annually.
Experts have presented a number of green industry opportunities to state leaders in recent years, including the possibility of a Delaware River port to serve the burgeoning wind farm industry, the production of an electric SUV, and even the processing of biogas from animal waste.
Delaware’s central geographic location, nimble state government, and stable financial outlook make it a competitor for jobs of the future despite its diminutive size. I encourage the governor and legislature to carefully examine where and how Delaware can prove its value to industry leaders to ensure we have a seat at the table well into the future.