SCOTUS decision on EPA is not the end of the story, economically

{"version":"0.3.0","atoms":[],"cards":[["images-card",{"images":[{"url":"http:\/\/res.cloudinary.com\/dpcbzfiye\/image\/upload\/v1657219029\/kifjlb3pdo6ixu5rgi47.jpg","id":"6523720"}]}]],"markups":[["em"],["i"],["b"]],"sections":[[1,"h2",[[0,[0,1],1,"Reading between the\ntrend lines with "],[0,[],1,"AIA\u2019s chief economist"]]],[1,"p",[[0,[1],1,"In\ndeciding West Virginia v. EPA, the Supreme Court held that the Environmental\nProtection Agency exceeded its authority in propagating the Obama\nAdministration\u2019s Clean Power Plan (CPP), splitting the proverbial political\naisle and narrowing the scope of the Biden Administration\u2019s plan to regulate\npower sector greenhouse gas emissions. Yet, the power sector has been\nincentivized economically to decarbonize when it comes to coal, but there is\nmore work to be done to shift the shar"],[0,[0,1],1,"es of oil and gas into renewables. \u201cLook\nat supply and demand,\u201d says Reading between the\ntrend lines with AIA\u2019s Chief Economist, "],[0,[],0,"Kermit Baker, Hon. AIA, "],[0,[1],2,"\u201c"],[0,[1],1,"In\nterms of the share of total energy consumption, in the US renewables are not\nsignificantly different from the rest of the world. We see petroleum and gas as\nbridges to move to renewables, but it\u2019s easy to mistake a bridge for a\nlingering addiction.\u201d "]]],[1,"p",[[0,[2],1,"What\ndoes West Virginia v. EPA mean for firms?"]]],[1,"p",[[0,[],0,"This decision is a good example of the broader\nissue faced by authorities in balancing political strategies and economic strategies\nto reduce carbon emissions. As a political strategy, this is based on\npresidential executive actions about what needs to be done based on a perceived\nmandate. The second part of that is congressional action\u2014this whole thing is\nbased on the Clean Air Act\u2014and political parties interpret. That\u2019s what they\ndo. "]]],[1,"p",[[0,[],0,"So, it should be no surprise that I, and\nothers, see an economic strategy as a more productive strategy to address\ncarbon emissions. Coal consumption as a share of total energy in the US has been\ndeclining for quite some time, and we don\u2019t have to rely on the EPA to say it\u2019s\na bad idea\u2014coal just isn\u2019t as economically viable any more. On the other hand,\nthe US is not really ahead of the rest of the world\u2014despite our great powers\u2014in\nrenewables. There\u2019s a difference in shares from region to region and country to\ncountry, but we aren\u2019t really doing any better or worse\u2014not really\u2014when it\ncomes to wind and solar, for instance. "]]],[1,"p",[[0,[2],1,"We seem\nto have made progress on coal, but why can\u2019t we move oil and natural gas in the\nsame direction?"]]],[1,"p",[[0,[],0,"The economics of coal don\u2019t make sense any\nmore\u2014is it more scarce, is it more difficult to mine than it used to be, is it\nnot as easy to extract and as profitable as natural gas? Probably all of the\nabove. But most of the people using coal aren\u2019t in it for the long run,\nmeanwhile our entire economy is geared toward petroleum and natural\ngas\u2014structurally speaking\u2014and the discovery of new reserves in the US have made\nus an exporter rather than a big importer as we once were. "]]],[10,0],[1,"p",[[0,[2],1,"On the\ndemand side, why aren\u2019t businesses and consumers more interested?"]]],[1,"p",[[0,[],0,"Some people think renewables are the right\nthing to do, so to speak. Others aren\u2019t even thinking about right and wrong,\nbut profit margins. When we asked what share of architecture firms\u2019 projects on\na dollar basis were designed to meet a rating system like LEED, WELL,\nEnergyStar and so on, they reported that on average about one out of every six\ndollars of billings coming into the firm is for projects designed to meet a\nrating system\u2014or between 17 and 18 percent. "]]],[1,"p",[[0,[2],1,"How\ndoes that pan out with commercial versus institutional projects?"]]],[1,"p",[[0,[],0,"\nFor commercial projects, owners and developers seem to have little interest.\nFor institutional projects, ratings systems are often mandated. But, overall,\nwhen asked, architects report that many clients don\u2019t care, they report that\nconstruction costs are going up so they need to save money where they can, or\nthey report that the owner doesn\u2019t want to pursue the certification process. "]]],[1,"p",[[0,[2],1,"Let\u2019s\nassume every firm in the country could do one thing in concert tomorrow to\ntackle this problem. What is that thing?"]]],[1,"p",[[0,[],0,"Do a better analysis of the full lifecycle\ncost of a building\u2014on every building\u2014and make a convincing case to owners. If\nyou can\u2019t make a convincing case, then go back to figure out a way before\ncoming back to the table. "]]]]}