Want green energy? Reduce bureaucracy
As it stands, that’s unlikely. There is simply too much bureaucracy.
Take the National Environmental Policy Act. Passed in 1970, NEPA requires federal agencies to conduct environmental assessments for almost all projects the government touches. Writing an impact statement through this process now takes an average of four and a half years and can cost millions of dollars. Reviews can span hundreds of pages. Lawsuits, often brought by activist groups, can prolong the process indefinitely. Green projects are not immune to this burden: an analysis last year found that of the projects submitted for NEPA review at the Department of Energy, 42% were clean energy, transmission or environmental protection, while only 15% were related to fossil fuels.
Across the renewable energy industry, such regulation – state and federal – is hampering progress. Wind power advocates complain of “unreasonable and unnecessary costs and lengthy project delays”. Geothermal projects routinely face permit issues for seven to ten years. Renewing licenses for a hydro plant can cost $50 million and take more than a decade. Solar projects often face a maze of permitting and certification requirements. Want to build a nuclear reactor? Compliance costs alone can exceed your profit margin.
A similar story prevails with power transmission. The efficient movement of clean energy between regions is an essential component of the renewable economy; to achieve net zero emissions, that capacity needs to roughly triple by 2050. But thanks to an ungodly patchwork of nationwide rules and regulations, transmission projects can easily take a decade to get started.
Such heists are more than a nuisance. They waste taxpayers’ money, increase construction costs, retard the productivity of capital, stifle private investment and too often discourage ambitious new ideas. Worse still, by delaying the switch to cleaner alternatives, they only add to total greenhouse gas emissions. A government that sees climate change as an “existential threat” – in the president’s words – can ill tolerate such a standoff. Yet earlier this week, the Biden administration was busy adding to the quagmire of unnecessary rules.
The easy answers to this dilemma are elusive. Simply limiting the number of pages or imposing time limits on environmental reviews, for example, can actually lengthen the process – a review that is incomplete or fails to anticipate potential objections is much more likely to lead to prosecution, and therefore lead to further delays.
Congress should think bigger. For starters, it should try to reduce the number of lawsuits filed under NEPA by shortening the statute of limitations for such cases to (say) 120 days, from two years previously. Second, it should assert the power of the federal government. Passage of the SITE Act — which would empower a single federal regulator to oversee major interstate transmission projects — could eliminate decades of accumulated state and local veto points. Federal clean energy funds could be tied to state reforms, such as streamlining reviews and reducing permit fees. If need be, Congress could place limits on local ability to block green projects, as it did cell towers in the 1990s.
Finally, legislators must prioritize green energy in all areas. Start approving new nuclear reactor technologies. Take a revenue-neutral carbon tax seriously, which could avoid heaps of extra rules. For a million reasons to repeal the Jones Act, not least because it hinders the development of offshore wind.
A zero-carbon economy will not materialize by magic. It will take tremendous effort, foresight and fresh thinking. Here’s a good place to start: when it comes to green energy, bureaucracy is the enemy.
More other writers at Bloomberg Opinion:
Big Oil windfall creates dilemma for industry: Liam Denning
Geoengineering research is a risk worth taking: Clara Ferreira Marques
Your Cold Brew won’t survive a hot world: Amanda Little
The editors are members of the Bloomberg Opinion Editorial Board.
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