In a letter to shareholders, JP Morgan chief executive officer Jamie Dimon recognized that the window for action to avert the costliest effects of global climate change is closing. He voiced support for nonpartisan permit reform for renewables development, one of the most immediate and addressable bottlenecks to the United States’ march toward climate disaster mitigation.
“The need to provide energy affordably and reliably for today, as well as make the necessary investments to decarbonize for tomorrow, underscores the inextricable links between economic growth, energy security and climate change. We need to do more, and we need to do so immediately,” said Dimon.
Dimon said in addition to reforming permitting, siting and interconnection issues for power generation and transmission, the U.S. may need to invoke eminent domain to site local clean energy rapidly. Eminent domain involves the seizure of, and compensation for, private lands for public purposes. Siting is a key issue to address for renewables, as distributing energy generation in places closer to the end-use point comes with efficiency and materials use benefits, particularly for transmission infrastructure.
“We simply are not getting the adequate investments fast enough for grid, solar, wind and pipeline initiatives,” he said.
Policies like the Bipartisan Infrastructure Law, Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, and the Inflation Reduction Act (IRA) hold the potential to unlock over $1 trillion in clean technology development. However, these policies must be implemented effectively to achieve climate goals, he said.
This view is evidenced from recent analysis from the Energy Information Administration (EIA). In its projections for the impact of IRA incentives on solar buildout, EIA found that the implementation of bonus credits and other ancillary programs will dictate the outcome. Low-case projections for IRA bonus content place the buildout of renewables in a similar range to a no-IRA environment, suggesting that there is still a need for guidance from authorities to evaluate the true effect of the historic legislation.
Dimon said the upside to effective implementation of policy and a robust energy transition is “undeniable.”
“Widespread investing across the private sector will aid domestic manufacturing, invigorate research and development in green innovation, help create resilient supply chains, lift up local economies and build the U.S. clean energy workforce by up to 9 million jobs over the next decade,” he said.
With the ongoing war in Ukraine and roiled trade relations across Europe and Asia, a new strategy for energy security is rising. Renewable energy and decentralized supply chains are being pursued as a matter of national security.
Among other strategies, Dimon suggested the U.S. develop a Marshall Plan for global energy and food security. The Marshall Plan was a 1948 initiative that provided aid to war-torn Western Europe. The U.S. provided about 2% of its GDP to revive European manufacturing, and in four short years, industrial production in Western Europe increased 55%, said the World Bank organization.
This kind of strategy could spur the manufacturing needed to support global solar buildout. An international consensus showed that solar capacity must grow over 7,000% to 75 TW by 2050 to stave off the worst effects on climate.
“A major risk for the next decade would be to make poor assumptions or mistakes in modeling the required growth in the PV industry, and then realize too late that we were wrong on the low side and need to ramp up manufacturing and deployment to unrealistic or unsustainable levels,” said a report from the Terawatt Conference, a coalition of 41 institutions across 15 nations.
For the United States, the JP Morgan executive warned that polarization, paralysis, and a basic lack of analysis cannot prevent the world from addressing these challenges.
“I also want to express exasperation with some of my fellow citizens who don’t pay the taxes they owe on the order of $600 billion a year, who won’t consider sensible policy measures like a carbon tax to stem climate change and who sometimes seem to only like democracy when the voters agree with them. Democracy by its nature is compromise,” he said.
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