In the fight against climate change, 2023 will be a year unlike any other. No, the problem won’t be solved, but the range and seriousness of efforts to meet this severe challenge will enable us to make significant progress.
No one can know the future, even in the short term. That is especially true in a realm where so much is in flux–and with a European war creating unforeseen problems. Grist quizzed a wide range of experts about what lies ahead, and we are offering a dozen predictions for 2023:
A carbon border adjustment will gain momentum. European Union governments have reached a deal on the world’s first major carbon border tax, as part of an overhaul of the bloc’s flagship carbon market that aims to make its economy carbon-neutral by 2050, CNN reported. The measure will apply first to iron and steel, cement, aluminum, fertilizers, electricity production and hydrogen before being extended to other goods. How will the U.S. respond? Will Congress follow the lead of senators such as Sheldon Whitehouse (D-RI) and Mitt Romney (R-UT) and enact a carbon fee? That would make a lot of sense.
EV sales will surge–but there are obstacles that will limit that surge. The percentage of U.S. drivers who said they plan to purchase EVs is up three percentage points compared to the same point last year, a Deloitte survey found, with intent to purchase traditional ICE-powered vehicles dropping by six percentage points. Cox Automotive projects that 1 million EVs will be sold in the U.S. in 2023. Tax incentives in the Inflation Reduction Act (IRA) are helping boost demand. Obstacles to faster growth include a low supply of raw materials to make the batteries and driver skittishness about whether there will be enough charging stations.
“The real effects where these tax credits will have a big impact will be in the 2026-to-2032 period — a few years into the future — as automakers gear up and volumes increase,” said Chris Harto, a senior policy analyst for Consumer Reports magazine, told PBS.
Backers of mass transit will try to obtain a larger share of the federal funding. They maintain that U.S. car culture is a resource-intensive vision of the future, according to Politico’s Alex Daugherty. “It’s so blatant that you get tax credits for buying an electric vehicle but there’s zero dollars for buying an electric bike, zero dollars for riding public transit,” said Yonah Freemark, a researcher at the Urban Institute. “It is subsidizing car ownership more than any other mode of transportation by far.”
The trend toward electrifying American homes will ramp up sharply. Sam Calisch, head of special projects at Rewiring America, told Grist that the IRA “will provide the average American household an ‘electric bank account’ of $10,600 in incentives to electrify. This includes a first-of-its-kind electrification-rebate program with $4.5 billion to help low- and moderate-income households purchase heat pumps, induction stoves, and other electric appliances.”
Geothermal energy will lose its low profile and attract growing interest. One of the oldest forms of clean power is ready for a comeback, Politico reported. The technology that harnesses the heat beneath the Earth’s crust is drawing fresh interest from the oil drilling sector after lawmakers boosted funding flows.
Winners of November’s state and local elections will embrace efforts to counter climate change. For example, some states will move toward cap-and-trade systems like Washington’s, where the first auction of credits is scheduled for February 28. The system makes companies pay for their emissions by buying tradable permits dubbed Washington Carbon Allowances. The pool of credits will shrink every year, encouraging companies to go green. The market is much like California’s, where the price is just over $30 a ton.
Resilience will become increasingly important as we battle climate change. Reducing greenhouse gas emissions is job one, but it’s increasingly clear that progress has been too slow, so building resilience is critical, and efforts will gain momentum. Maxwell Alejandro Frost, representative-elect for Florida’s 10th District and the first member of Gen Z elected to Congress, said, “Resiliency and infrastructure are top priorities for me. In my district in Central Florida, flooding is our biggest problem. We have to make sure that homes are more resilient to flooding and manage the flow of water. These hurricanes are becoming stronger and lasting longer. The cost of not doing anything is far greater than the cost of making bold moves right Dr now.”
IRA money will generate extraordinary investment by the private sector. “The price signal is just huge,” said PJ Deschenes, a managing director at investment bank Nomura Holdings Inc. But GOP will try to throw sand in the gears of the IRA. “It’s Solyndra on steroids,” the House Energy and Commerce Committee’s likely chairwoman, Cathy McMorris Rodgers (R-WA), said in September of the $250 billion included in the new climate law for the Department of Energy’s loan guarantee program.
Carbon capture will gain support. With the UN’s Intergovernmental Panel on Climate Change (IPCC) having concluded that the world cannot hit climate change targets without this technology, the race to scale it up will intensify. The IRA contains significant incentives. Today, there are 27 carbon-capture projects operational worldwide and 14 in the U.S., according to an October report from the Global CCS Institute. Another 108 are in development worldwide in various stages of production.
More Americans will realize the financial and health costs of climate change and will want action by governments and corporations. Over the past four decades, the United States has experienced an average of 7.7 billion-dollar disasters annually. But since 2017, the average has jumped to nearly 18 each year. So more of us are aware of the threats. Six-in-ten U.S. adults say that they are concerned that global climate change will harm them personally, according to a 2021 survey by the Pew Research Center.
Wind and solar developers will devise elaborate plans to provide round-the-clock renewable power. Since two of the main renewable energy sources generate electricity only when the wind is blowing and the sun is shining, project developers, utilities, and grid operators are trying a mix of options to overcome that challenge, including building huge amounts of renewable capacity, storing excess power on batteries, and using algorithms to make project economics work.
Federal courts could slow the transition to clean energy. Energy Wire’s Niina H. Farah wrote, “From pipeline permitting to agency rulemaking, federal courts are poised to decide a suite of legal challenges in 2023 that could set the pace of the nation’s transition away from fossil fuels. The rulings could also tee up a clash between Congress and the courts.”
Are you interested in making a profit from all this activity? On Jan. 2, Goldman Sachs chief risk officer Brian Lee listed the investment bank’s “top 20 buy-rated stock ideas,” based on “quantifiable” benefits from IRA spending.