The United States is at an inflection point that could determine whether it meets its commitment to reach net-zero greenhouse-gas emissions by 2050. Fulfilling that ambition would mean achieving a more orderly energy transition in which emissions reductions rapidly put the country on a path closer to a 1.5°C global-warming scenario while balancing affordability, reliability, resilience, and security. This transformation would require new policies, market mechanisms, business models, and technologies to be developed and deployed at scale. There is considerable debate about whether it will be possible to do so by the target date.

An orderly transition would follow a natural sequencing. You would start with the decarbonization of the power sector because you need clean power to support the other sectors. Then you would take on transportation—electric vehicles (EVs) or long-haul transport—because much of the technology behind EVs is already becoming economically viable, and consumers increasingly want these vehicles.

After that, however, you get into the tougher segments, including the fossil fuels needed to heat buildings—typically natural gas in many parts of the United States. Those emissions are hard to abate because alternatives are further from economic viability. Another tougher segment is the production of cement, steel, and aluminum—energy-intensive industries that typically rely on fossil fuels to produce electricity.

Some business owners, typically in thin-margin, commoditized sectors, would have to be persuaded to make changes. Many owners may be unwilling to switch to different, more expensive technology, even if it’s carbon abating.

Then you get into sectors such as agriculture. From a technology perspective, you would push renewable-energy sources, such as wind or solar. But for that to work at scale, you would need to ensure that there are enough stable backup power resources—typically gas-fired plants—to support the variability of renewables. You would need to expand the power transmission network to accommodate more green energy. And, of course, coordinating county, city, and statewide rules for all 50 states, in addition to federal mandates, is difficult.

What’s more, all of this would have to be achieved while attending to the societal effects. You need to reduce carbon emissions in an affordable way while also paying attention to economic justice. This means that as lower-income consumers gain access to the new technologies, you are managing short-term supply chain fluctuations and maintaining energy security.

Ideally, that’s what an orderly energy transition would look like. But some near-term challenges—including the war in Ukraine, high fuel costs, oil and gas supply chain disruptions, and elevated inflation—seem poised to lead the United States toward a more disorderly energy transition in which the country either fails to meet emissions goals or delays action and then rushes to catch up at considerably greater cost.

This has sparked what I see as a healthy debate about whether the country will achieve net-zero emissions by 2050. The general view is that making it happen would be very difficult. This decade will be critical: the technologies needed to decarbonize the power, energy, and other sectors require immediate investment so that they can have a cumulative effect—and can be depreciated—over the next 20 or 30 years.

On the flip side, some people say that it’s myopic to view the transition only in terms of the challenges, citing the power of innovation, as well as declining costs. Indeed, technology innovation could help. The clean-tech industry, for example, is making improvements in the quality and efficiency of new technologies faster than forecasted. Policy resources, such as the US Department of Energy’s “Energy Earthshots,” are helping to make these learning curves even faster.

Optimists also point out that consumers are increasingly willing to pay a green premium and that carbon offsets, carbon compliance, and voluntary markets are developing. They argue that people often underestimate society’s ability to innovate quickly. And with the 2022 Inflation Reduction Act and other recent measures, the United States seems to be indicating that climate technology will be a pillar of the economy. All of this is evidence that the country could make huge progress toward its 2050 goals.

But even if you believe that unlocking innovation will indeed spur progress over the next 15 years, the United States could still be looking at a somewhat disorderly transition.

What I find encouraging is that people are less likely than they were until only quite recently to say that the transition shouldn’t happen or that a push for a 2050 deadline is a waste of resources. There has been a change in mindset, particularly in the United States. Everybody I talk to and work with, such as clients and colleagues, believes in the need to head toward a net-zero world.

So the debate is really about how fast to move. Are people willing to pay a high cost for a rapid energy transition, or are they prepared to endure extended supply chain disruptions that increase the price of solar panels, battery cells, and control technologies for carbon management? Some people would rather wait another ten years because they think the transition will be too expensive in certain areas. The discussion almost always results in the same conclusion: the United States must get to net zero, even if it doesn’t get there by 2050.

ABOUT THE AUTHOR

Humayun Tai is a senior partner and managing partner, global client capabilities, and is based in McKinsey’s New York office.

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