If you live in West Virginia or somewhere near its border, you probably aren’t in favor of the new climate change initiative announced by President Obama this week. The actual proposal was quite modest: it would require carbon emissions from the power sector to drop by 32% from 2005 levels by 2030, up from 30% before the announcement. But that slight change equals 870 million tons of carbon dioxide pumped (or not) into the atmosphere.
Much of the decline will come from coal-based power, which is by far the biggest source of carbon emissions among all the power plant fuels. Independent analysts say that by 2030, coal’s share of U.S. electric generation will fall from 39% down to 27%. The gains will come in oil, suddenly plentiful natural gas and a retooling nuclear energy sector, but also potentially from renewable energy sources—and the President cited studies which show that innovation in the renewables sector can save consumers money in the long run.
As it happens, the political war over whether global warming is (or is not) the result of carbon pollution has held the U.S. back in renewable technologies, to the point where it is now lagging far behind other nations. As the chart shows, renewables make up just 13% of total U.S. electricity generation, and if you look at the right-hand chart, you can see that Brazil, Canada, Germany and even China and Russia are well ahead of the U.S. in the percentage of electricity that comes from renewable sources. The President’s modest initiative is likely to be challenged by Congress, and you can bet that with partisan gridlock, the U.S. is not likely to move up in the rankings any time soon.
About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years. Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site: MorningstarAdvisor.com.
Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association.