Are Democratic and Republican energy policies actually that different?

One of the biggest differences between the policies of the Democratic and Republican parties in recent years has been their approach to climate change. More specifically, the role of U.S. energy policy in carbon emissions output. Many approaches have been put forward by both parties to address this, some emphasizing the need for renewable energy generation strategies, while others highlight the need to bolster the fossil fuel industry for economic resiliency. But do these professed policy differences actually make a difference? And for how long?

In their new study, published in the journal Energy Policy, Engineering and Public Policy Professors Paul Fischbeck and Haibo Zhai, and Ph.D. student Jeffrey Anderson, along with Electricity Industry Center adjunct faculty David Rode, have found that the downstream effects of these differences in policy may actually lead to similar emissions outcomes—at least in the short term.

“Though the Trump Administration is seeking to replace Obama’s Clean Power Plan with the Affordable Clean Energy Rule,” says Fischbeck, “it seems that the US power sector will still be on track to meet its short-term CO₂ reduction goals as set by the Paris Agreement.”

Using data from the U.S. Energy Information Administration’s Annual Energy Outlook (AEO) reports, the team looked specifically at the prices of natural gas to evaluate how they affect these emissions. Their study finds that even though historically, lowering natural gas prices has resulted in a predictable lowering of CO₂ emissions, the 2017 and 2019 AEO reports challenge this assumption. 

“In more recent years, lowering the price of natural gas is expected to have a much-diminished effect on CO₂ emissions than previously,” the team writes. “While the decreasing capital cost of natural gas combined cycle plants, coupled with lower natural gas price projections are enabling factors in reductions beyond the 2030 emission target, these factors also hide the continued capital cost reductions for solar and wind generation, which have also had a huge impact.”

What’s more, the difference of emissions between Democratic and Republican positions may not actually be functionally that different, as the team discuss in their article “U.S. energy policy: Two paths diverge in a wood…does it matter which is taken?” published in Environmental Science and Technology. According to the researchers, proposed energy plans from both parties are effective in meeting 2030 power sector emissions goals, but the reasons for this are entirely different in each case.

In both cases, the tradeoffs in generation sources offset both the positive and negative effects, leading to functionally similar outcomes in emissions reductions.

Paul Fischbeck, Professor, Engineering and Public Policy

“The Republican path, focused on increasing natural gas supply, involves reductions in coal and nuclear generation,” the team writes. “The Democratic path, focused on restricting natural gas supply in favor of renewables, involves increases in coal and nuclear generation since there is no cost currently associated with CO₂ emissions in the 2020 Democratic party platform (like there was for the 2016 election). In both cases, the tradeoffs in generation sources offset both the positive and negative effects, leading to functionally similar outcomes in emissions reductions.”

While both “high supply” and “low supply” natural gas generation scenarios have set the U.S. on a path to meet the 2030 CO₂ reduction targets of the Paris Agreement, the researchers note that neither will help the U.S. achieve the more aggressive 2050 goals as they currently stand. The Biden campaign has since released the details of their own plan, following the publication of the researchers’ findings, that proposes a 2035 deadline for reaching net-zero CO₂ from electricity generation in the US. However, such a plan will require the use of several policy levers to achieve, as it still projects a 20% increase in coal-fired generation.

“Further transformation of the power sector to enable emissions reductions equaling or exceeding those of the past decade over the next 10 – 30 years will be much more challenging,” the team writes in their Energy Policy paper. “We have already picked the inexpensive, low-hanging fruit. While incremental improvements for existing technologies are projected to reduce emissions by 32%, accelerating research, development, demonstration, and deployment of breakthrough technology innovations through increased investment by government and industry is required today to meet these deeper goals for 2030 and beyond.”

In particular, the researchers assert that meeting the 2050 goals—or under the Biden plan, 2035 goals—will require both parties to work together, which under this analysis they see as exceedingly possible, as the parties share much common ground. It will require an approach that relies on policy tools such as tax credits and R&D subsidies, which use free-market forces to incentivize zero-CO₂ generation sources, including carbon capture utilization and storage. As their analysis indicates, however, effective use of free-market forces requires putting a price on CO₂, which may prove difficult to implement due to the political unpopularity of a carbon tax or expensive allowance program, especially in an economically difficult environment.