I was thrilled to see thousands of activists and celebrities marching through Manhattan Sunday calling on the United Nations and government leaders to do more on climate change. Inaction by U.S. politicians is always at the epicenter of these calls, given Washington's lack of consensus on the issue. But this overlooks the track record of this country when it comes to reducing greenhouse gas emissions.
Here's a pop quiz I give my students at Columbia Business School -- on a scale of 1 to 5, how effective is the United States at fighting climate change? Most students give the country a 1 or 2, rating it ineffective. I suspect most Americans would respond similarly. Wrong answer.
Since 2005, emissions of greenhouse gases in America have declined by 10 percent while real GDP grew 12 percent. Per capita emissions have declined even further. No other major country can match those results. To the surprise of many, the U.S. has become the world leader at fighting climate change.
How did U.S. leadership on climate come about? A blend of innovation, policy, and luck. Since 2005, the cost of renewable energy has plunged, led by solar declining by more than half. Federal and state government policies have supported renewable energy. The crazy quilt of regulations is bewildering, but the results are starkly clear -- renewable energy was the leading source of new electricity capacity in the US in 2012, 2013, and the first six months of 2014. During that same period, U.S. production of natural gas, which emits about half the CO2 of coal in the production of electricity, grew 25 percent, while prices declined.
Energy efficiency has received fewer headlines than renewables and natural gas, but has also contributed markedly towards lowering U.S. greenhouse gas emissions. Energy intensity, the relationship between energy use and GDP, has declined 15 percent in the past decade. More surprisingly, energy use per capita has declined 12 percent in the same period. All those smart phones, tablets and other technological devices have become more energy efficient almost as quickly as we have been buying them.
With this leadership on climate have come jobs. In California 47,000 people are employed in the solar industry, and as many Americans are now employed in the wind industry as in coal. The renewable energy sector created jobs in 29 states in the past quarter alone, adding 12,500 new positions. Lowering greenhouse gas emissions has not, despite dire warnings from the Chamber of Commerce, led to lower growth. Forecasts that reducing emissions would wreck our economy have been made so frequently that most people now take it as fact; it just happens to be untrue.
More good news lies ahead. Dozens of coal fired plants will be retired in the next six years, to be replaced by renewables and natural gas. Strengthened regulations on automobile fuel economy will increase the average efficiency of cars and light trucks from 21.5 mpg today to 37.2 mpg in 2040. These little noticed changes in America's electricity and transportation sectors will result in a reduction of billions of tons of greenhouse gas emissions. Deployment of low-energy products like LED lightbulbs, which generate 1/10th the emissions of incandescent lights, and smart thermostats will further support the downward trajectory in U.S. greenhouse gas emissions.
Despite this remarkable progress, we must significantly increase our efforts if we are to stop climate change. Congress must continue to incentivize renewable energy and energy efficiency. States and municipalities must support faster permitting of clean energy projects and enforce regulations to ensure environmentally safe extraction of natural gas. And the partisan debate on the science of climate change is a distraction and needs to stop. It's time for our politicians to focus attention on tackling climate change with realistic solutions.
But America can't solve climate change on it's own, an international problem requiring action by all countries. The United Nations Climate Summit taking place in New York provides an opportunity for U.S. delegates to build on our recent success to lead the discussions on international cooperation and commitment. Negotiating from a position of strength -- economic and environmental -- provides a unique opportunity for the U.S. to use the evidence of our domestic success to drive other countries to address the global challenge of climate change.
Learning from the case method at business school requires students to sort through a thicket of often confusing data to get at the facts, and then draw lessons from the case. The path to success in reducing greenhouse gas emissions and growing the economy is similar. Learn from what is working -- renewable energy, natural gas, and energy efficiency -- and do a lot more of it.
For sixteen years, beginning in 1992 when the U.S. signed the Rio Convention on Climate Change, this country displayed a remarkable lack of success at addressing climate issues -- international agreements were dismissed, domestic legislation was stalled, and greenhouse gas emissions soared. In the past six years that has changed for the better. My business school students intend to build on our recent success to be part of the climate change solution. They expect nothing less from the world leaders gathering at the UN Climate Summit today.