As the Democratic Party revels in retaking the House of Representatives, one of the most prominent new politicians, Alexandria Ocasio-Cortez, has become the center of attention for the media – the youngest woman ever to make it to the US Congress. Ocasio-Cortez then went on to lead the charge for the Green New Deal (GND), which could prove a huge boon to those in the smart grid and renewable energy sector.
However, Ocasio-Cortez’s fame could prove detrimental. A relative radical in the House, her electoral success has made her incredibly polarizing – for both parties. Nonetheless, the GND plan has won support from Democratic senators, and as such, will soon be voted on. Democrats are wary of it, Republicans label it as a ‘socialist manifesto,’ but the plan has a lot of merit – but perhaps too much ambition.
The GND is an economic stimulus package, harking back to the famous New Deal put forward by FDR to combat the Great Depression. It calls for “new national, social, industrial, and economic mobilization on a scale not seen since World War Two and the New Deal.” Whether the US, in its current economic and political climate, has the stomach for such plans is questionable, but for those in the utility and grid sector, the reforms could be huge business drivers. However, carbon pricing or taxation is notably absent from the GND.
The reasoning behind the GND is that climate change will prove incredibly damaging to the US. Some estimates are as high as $500bn annually in lost economic output, but given that the nation’s national debt just passed $22tn, it’s all relative to some politicians. Other justifications point to the increased threats of droughts and wildfires in the west, as well as more extreme storms in the south, with more polar vortexes expected to batter the north and mid-west. Rising sea levels could devastate the coastline in the south, as well as the east.
So, if you trust the scientific community, there is a great and growing risk to the future stability of the USA, and something needs to be done about it. For businesses, there’s both money to be made in the short term, and costs to be avoided in the long term. However, the GND’s main headline is its biggest sticking point – it calls for the decarbonization of US economy within 10 years.
That is a monumental ask of a country so reliant on carbon-based energy, never mind the carbon footprint that is associated with day-to-day life. This is not to say that the likes of Europe or APAC are not subject to the same issues, but the price of gasoline is not such a thorny and contentious issue in these areas. Similarly, the EU’s carbon-zero plan has a deadline of 2050 – some three decades extra than what the GND calls for.
The social reforms included are another prime point of contention, calling for jobs that provide ‘family-sustaining’ wages, medical leave, paid vacations, and retirement security – things that many professionals outside the USA take for granted, but which have been notably absent from US workplace culture.
These two sticking points are likely to prove the downfall of the GND on the Senate floor. It doesn’t have the support of all Democrats, and is so antithetical to the Republican narrative that breaking the party line to support it could be career suicide.
But something as American as apple pie and the Ford Mustang could prove to be a savior – corporate lobbying. Solar, storage, wind, geothermal, synthetic fuels, carbon capture technologies, hydropower, electrification – all could prove to be a venture capitalist’s dream with the backing of something like the GND.
No real discussion of financing has taken place, and given the unprecedented national debt, it seems very unlikely that the US government would be financing these colossal infrastructure projects directly. Instead, the investment community stands to make a killing, as do the entrenched and incumbent providers that latch on to these trends early enough.
Opinion polls show that climate change concerns are growing among voters, and while the GND looks more like a statement of intent rather than finished legislation, it shows that there will be hunger and support from politicians moving forward. What’s more, such polls show that this is a bipartisan issue, so at some point the Republican party is likely to budge.
So while the GND is very much likely to fail, it should lay the groundwork for new projects moving forward. In time, shareholders will begin to value a company’s eco-credentials, and if the affects of climate change are half as socially disruptive as expected, the companies themselves will have to come to the table and ensure that they take part in the process to keep things ticking along. Societal collapse is, after all, not good for business.
Nonetheless, it seems clear that there is growing political will to enable large renewable energy projects, which in turn require large investments in IoT-enabled smart grid technologies. With platforms like Amazon and Google looking at expanding from the smart home into utility demand-response partnerships, the weight of the consumer electronics and web industry could be brought to bear on the problem too. As EVs improve, the automotive industry is likely to sign up too.