We can grow the economy, strengthen security — and reduce emissions

Correction: An earlier version of this piece contained incorrect figures for U.S. renewable power generation. The error has been corrected.

In the Unites States’ march to transition to clean energy and reduce greenhouse gasses, resilience may be the most important word to summarize 2021. Nine months after the pandemic first upended lives and the economy, the market fundamentals for clean energy looked unstoppable. But it was not clear what further recovery would look like, nor how continued shocks would affect commitments to clean energy. Now, as we learn to live through new COVID-19 variants and economic and geopolitical challenges, the data are clear: We can grow the economy, create jobs, enhance national security and tackle climate change at the same time.

According to new data and analysis from the 2022 Sustainable Energy in America Factbook from the Business Council on Sustainable Energy, clean energy production is up. Way up. Records were broken for renewable power, battery storage and sustainable transportation. And while emissions have slightly risen, the U.S. economy is on a fundamentally cleaner and more efficient trajectory than ever before. 

In 2021, solar and wind power were built at a record pace due to surging demand by companies, households and sound economics. While the cost of building solar, wind and natural gas was higher in 2021 than 2020 — due to rising material, freight and fuel prices — new projects skyrocketed. Solar construction surged by nearly 60 percent with 24.2 gigawatts commissioned in 2021 compared to 18.7 gigawatts in 2020. Wind added 13 gigawatts of new power. The two technologies accounted for a record 13 percent of total U.S. power generated.

More than 4.1 gigawatts of predominantly battery energy storage was added to the U.S. grid too, which is more in one year than in all preceding years combined. The underlying driver is the growing need for batteries and other forms of energy storage to match the timing of renewable power supply with household demand. But the rapid pace is possible due to regulatory changes that removed barriers as well as state-level targets to encourage uptake.

Demand for U.S.-produced natural gas grew 9.4 percent — driven largely by exports. Liquid natural gas (LNG) exports jumped an astonishing 64 percent last year, providing much-needed energy security to our allies in Europe and helping Asia meet growing demand while lowering global carbon emissions at the same time.

All this new clean energy means that as the U.S. economy grew, we also improved our competitiveness. Over the course of 2021, the U.S. economy grew by 5.6 percent and energy use rebounded by only 4.4 percent. The result was that U.S. “energy productivity” — the ratio of GDP growth vs. energy growth — improved once again.

Similarly, economy-wide emissions hit 6,263 metric tons of CO2 in 2021, up 5.8 percent from 2020 but still 4.4 percent below 2019 levels. Contributing to this rise was increased energy production from coal-fired power plants due to higher natural gas prices and lower output from large hydro projects. Transportation-related emissions also rose as more Americans hit the roads compared to 2020 and air travel picked up. However, transport emissions in 2021 did not return to 2019 levels. Over the past decade, economy-wide emissions are down 15 percent from 2005 levels.

The long-term trend of the U.S. using energy more efficiently and with lower greenhouse gas emissions is beneficial not just for the planet but for U.S. exporters — particularly as global customers become more discerning about the carbon footprint associated with the products they purchase.

The writing is on the wall that more decarbonization is on the way. Actually, it’s written on the streets — Wall Street and Main Street.

Record volumes of private capital were deployed into virtually every asset class in 2021, $755 billion worldwide and $105 billion in the U.S. alone. Given that capital invested today will yield results tomorrow, the private funds raised in 2021 foreshadow considerable new build and progress on key technologies for years to come.

The federal government is also taking notice. The bipartisan Infrastructure Investment and Jobs Act that was signed into law in November allocates an unprecedented $80 billion for new energy technologies. The new law funds important direct air capture, carbon capture, hydrogen and advanced nuclear projects to demonstrate these technologies on the path to commercialization. It will also help plug abandoned oil and gas wells leaking potent greenhouse gases. It also includes much-needed funding to help decarbonize heavy-industry by focusing on research, development and deployment of new technologies, advanced energy manufacturing and recycling, and industrial emissions demonstration projects. 

Like any economic sector, global events, supply chain bottlenecks and inflation pose real threats to clean energy. But the tide is flowing toward capital investments large and small that will deliver cleaner air, cleaner water, as well as tangible reductions in greenhouse gas emissions. It will also strengthen energy security for the U.S. and our allies. And like the Americans they employ, businesses in clean energy are showing resilience and finding new ways to deliver. 

Charles Hernick is a vice president at Citizens for Responsible Energy Solutions (CRES) Forum, a nonpartisan, 501 (c)(3) nonprofit organization committed to educating the public and influencing the national conversation about clean energy.

Lisa Jacobson is the president of the Business Council for Sustainable Energy, a coalition of companies and trade associations from the energy efficiency, natural gas and renewable energy sectors.