The Biden Administration’s climate plan targets multiple sectors. The top three are transportation, power plants and methane emission from Oil&Gas operation. The first two are more familiar than the third.
Let us talk about methane with the aid of a new visualization tool called En-Roads (beta) https://en-roads.climateinteractive.org/. En-Roads visualizes the climate impact of different clean-energy policies. The tool was recently published by MIT and Climate Interactive.
Open En-Roads and you will have a dashboard that look like this:
The planet is on a path to a 3.6 C (6.5 F) warming by 2100.
To see the potential impact of electrifying the transport sector — slide the Transport/Electrification slider all the way to the right:
The potential impact of electrifying the entire transportation fleet to electric — including cars, trucks, buses and trains is reducing global temperature by 0.1 C by 2100 (from 3.6 C warming to 3.5 C). How disappointing!
This means that the aggregate climate impact of Tesla (>$800bn when I write this). Tens of billions of dollars invested in SPACs and other vehicles is very small — an estimated Trillion Dollars of ESG capital earmarked to electrifying the transportation sector — will only account for 0.1 degree by 2100.
Now, slide the methane slider to the left to estimate the potential impact of the sector:
Half a degree. A significantly larger impact than transportation.
The methane abatement sector can achieve a significantly larger impact than electric transportation. Given the modest investments in this sector, it is easy to see that the difference in capital efficiency in terms of GHG mitigation exceeds three orders of magnitude.
Don’t get me wrong — electrifying the transportation fleet is very important and I wholeheartedly support it. But for those interested in deploying capital for mitigating GHG emissions, methane abatement is where climate return on capital is the highest.