Pennsylvania should embrace the new-energy economy
Coal states will have to change
December 30, 2014 12:00 AM
By Rob McCord
Last summer, the Environmental Protection Agency unveiled its Clean Power Plan. Both controversial and comprehensive, the EPA proposal is the most aggressive public effort ever to reduce carbon emissions and combat threats from global climate change.
As an investor, first in the private sector and now in the public sector, I believe this plan would not only reduce unacceptable risks from carbon emissions but also would create tremendous new economic opportunities.
The EPA regulations would provide real flexibility to reach a 30 percent-reduction target efficiently. Each state can chart its own innovative approach to meet the objective. The plan prompts us to use more renewable sources like wind, solar and hydro while rethinking the ways we produce, transmit and use energy. That’s the good news.
The bad news is that, while the old pattern of energy consumption hurts future generations, it benefits many Pennsylvanians today. Pennsylvania has immense and valuable coal reserves, and many workers, families and businesses still depend on coal for their livelihoods. That means the EPA plan could prove tough to embrace.
Tough, but right.
While there may be short-term costs to local economies, we should weigh the countervailing large risks and costs of doing nothing.
To get a good sense of where those risks lie, look at the insurance industry. There are regions and properties around the world that profit-maximizing insurance companies no longer cover because of tangible, measurable threats posed by climate change. It has nothing to do with political ideology.
While the risks and costs posed by climate change are profound, efforts to address them also create large opportunities. Making our infrastructure more resilient and building an energy system for the 21st century will expand some businesses and help create many new ones.
Pennsylvania already has made remarkable progress in cutting greenhouse gas emissions. Since 2005, a combination of investments in renewable energy and energy efficiency — along with the replacement of coal with cleaner-burning natural gas for much of our electricity — has reduced our emissions by 17 percent while increasing profits and creating jobs. Green industries and the natural gas sector employ hundreds of thousands of Pennsylvanians. The coal industry now provides jobs for about 7,500.
Businesses in Pennsylvania — including major companies such as Aqua America, Crayola, IKEA and Kohl’s — use solar power for many of their facilities here, reducing their emissions and lowering their energy costs. With such work, Pennsylvania has shown that efforts to reduce climate change can benefit our economy.
Leaders should draw inspiration from Pittsburgh’s recent history. The Pittsburgh region revitalized itself after much of the steel industry collapsed. Rather than longing for a return to the good old days, leaders recognized the world was changing. Acting with courage rather than fear, Pittsburgh leveraged its world-class universities and transformed itself into a high-tech magnet, attracting companies like Aquion Energy, which manufactures state-of-the-art batteries for storing renewable energy, and Carnegie Robotics, which designs and builds robotic sensors. Technology companies such as Apple, Google and Intel have opened facilities that employ more than 30,000 people in the Pittsburgh area.
Technology helped us to move beyond steel 30 years ago. Today, it can help us lead the new energy economy. It can help us use our immense coal reserves in a cleaner, more efficient manner, protecting jobs that rely on the industry.
Our core goal must be to cut the costs we impose on future generations — with innovation and investment, technology and regulation. To do that, we must achieve real and measurable emission reductions that are consistent with the EPA’s proposed new rules.
As an older state with great coal resources, Pennsylvania will face tough challenges. But political leaders should embrace, not deny, them. Pennsylvania is poised to benefit hugely from these changes if we adapt efficiently and behave wisely.
Rob McCord is serving his second term as treasurer of Pennsylvania.
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