We see this in semiconductors. We’re already seeing this in batteries. But we’re intent on trying to stem the tide. We actually have an explicit policy goal of not just having American consumers able to buy electric vehicles but to have those vehicles assembled in the United States and have as much of the innovation ecosystem as possible happen in the United States, because we believe this is going to be a growing global market. And it’s one of the great export opportunities to build in the United States and make us a leader. To do that requires strategic up-front investment. It requires laying the foundation in a way that will unlock that private capital.
Economywide pricing would have very different impacts in different sectors. So you see the stylized models of economywide pricing. That drives emissions down in the power sector much more quickly. In the transportation sector, it doesn’t. So if your goal was to try to drive down emissions in the transportation sector, you would need a very different pricing structure. I think the other, more practical answer is that it’s been true for multiple years that energy efficiency upgrades in commercial buildings should just happen, and they’re not. And so the other thing that we’re trying to do is to look across and say, “What are the practical barriers where, strategically, public investment or the public sector can play a catalytic role?” A lot of these are market failures or barriers that are not just solvable by a price in unlocking the private sector. The reason why we don’t have transmission build-out sufficient to support the increased build-out for renewable energy is a complicated mix of politics and economics and jurisdictional issues that, actually, the federal government intervening with a combination of incentives and requirements could really help unlock.
And so our view certainly is more nuanced than “Let’s just set a course, and the private sector will sort it out.” I think that that’s borne out both by the urgency of needing to act and also the practicality of, in a number of these places, the barrier is not just a pricing barrier. The barrier is trying to overcome something else.
This is a change in theory over the past, say, 15 years in climate politics. And the idea is you can’t just walk up to people and ask them for sacrifice. You can’t say, “We’re going to do this by making energy more expensive, and certain things are not going to be available anymore.” You want to do this in a way that feels positive-sum to people — better technologies, new jobs. You’re getting something out of it and being taken along in it, not “You get less in order for the future to get more.”
I want to double down on that and say it’s not just a messaging and narrative imperative. It has to be that Americans see and experience that the investments in building out a more resilient power grid actually improve their lives and create job opportunities for them or their neighbors or otherwise.
And that an investment agenda along the lines of what the president has put forward actually is among the best opportunities we have to create a next generation of good-paying jobs all across America. That actually has to become true in practice. And that in a sense, we’re better positioned now than we ever have, because in so many of these areas, the global market is moving toward cleaner and lower-carbon sources of energy. So these investments actually can unlock more private investment, but doing that in a way where people feel as if the government policy is actually enabling that in a way that will make it better for their lives.
To your point, electric vehicles are coming. Most car companies in the world are saying they’re going to electric vehicles. That’s an inevitability. The question is, “Can we do that in a way that’s going to be really good for our economy and for American workers and American consumers?” Part of what we’re trying to answer is the policy levers that will make sure that that’s the case.
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