Clearloop Bases Renewable Energy Deployment on Environment and Health Impacts

In the United States, electric power is produced in a variety of ways, from coal to hydropower to wind and solar, with each type largely differentiated by region. Because of these significant variations, the effects new renewable energy projects can have on carbon emissions and air pollution vary greatly depending on the location. 

In a recent paper, experts from the carbon solutions firm Clearloop and the climate data nonprofit WattTime examine the disparities in the U.S. electric grid and the implications for carbon accounting, decarbonization strategies and environmental justice. 

“Everyone is familiar with the idea that renewables reduce emissions, but they need to understand how,” said Henry Richardson, senior analyst at WattTime. “To put it simply, when you build a solar plant, it replaces a fossil fuel plant on the grid. If you build a solar plant in California, it might be replacing other solar or natural gas. In the Midwest, a new solar plant would probably replace coal … Exactly what renewables displace is key, and it is not equal everywhere. The effect of those megawatt hours is different, and you can get two to three times the benefit depending on where you build. How do emissions change when you make a change in the electrical grid? That is what we measure.” 

Energy accounting practices and rules are typically developed at an international level. While most countries use a national electric grid, the U.S. does not, meaning that a solar plant has a different impact depending on where it is placed. 

“The way we count emissions doesn’t reflect this,” said Winston Vaughan, head of climate policy at Clearloop. “That is a missed opportunity in how we approach decarbonization and a huge opportunity for renewables to drive even more impact for climate and health.” 

“Market-based carbon accounting treats all megawatt hours the same, but that is not actually true,” Richardson added.

Renewable energy’s human health impacts

Clearloop uses three criteria to determine where it will deploy a new renewable energy project: solar radiance, the social vulnerability of the region, and the emissions impact a project could have in any area. The company measures social vulnerability by evaluating income levels, community investments over time, job creation rates and other factors. 

“We take a different angle on renewable energy procurement by looking for places where it can drive the most good from both the climate and community impact perspectives,” Vaughan said. 

Carbon emissions are often a reliable indicator for other types of pollution that occur when burning fossil fuels, such as mercury and particulate matter, Vaughan said. Those emissions have a significant impact on human health in the communities that host fossil fuel-based power plants. 

“We already see huge health disparities from unequal exposure rates, but unless we are conscious in the way we deploy clean energy resources, there is a real risk of widening human health inequities,” he said.   

How carbon markets can reduce barriers to renewable energy deployment

One of the barriers to deploying more renewable energy projects in underserved communities is a lack of financing. That is where the voluntary carbon market (VCM) can come into play. 

“There is a reason why carbon financing dollars are flowing to certain places,” Vaughan said. “It is cheaper and easier to build renewable energy projects in some places than others, because of market obstacles.”

A fossil fuel plant requires continuous purchase of coal or natural gas. While a solar plant might be capital-intensive to build, the cost of generating electricity is almost zero because it comes from the sun. 

“It’s difficult for solar plants to be profitable in places where it isn’t clear how much money they can make from selling electricity to the grid, like in Louisiana, Mississippi and Tennessee, where there is a monopoly on utilities,” Vaughan said. “Monopoly markets make it much more difficult to make up for the investments in a solar plant, but that’s where the VCM can come in. We have buyers who are paying upfront for building a new solar project on the grid, and they can get the full lifetime of environmental attributes, whether they’re renewable energy certificates or carbon credits.” 

Carbon financing allows project developers to take a bet on riskier markets where there is more uncertainty about selling the electricity over a long period of time. 

“There has been a lot of controversy about the role of the VCM, benefits, costs on local communities and Indigenous rights," Vaughan said But he believes there is a role for the VCM to play to help bring down market barriers that prevent the development of renewable energy in a more equitable way. “There is a failure to recognize inequities in the U.S. carbon market, and because we don't recognize those disparities, we haven't deployed resources in the VCM to address that. VCM is a powerful tool to overcome these market obstacles and drive investment where it can have the biggest impact.” 

The path forward

Targeted deployment of renewable energy projects is key to smart, effective decarbonization. 

“Building more solar in California is not as beneficial as it could be elsewhere,” Richardson said. “Same with wind energy in the Great Plains. Before we start a new project, we need to ask if we are displacing fossil fuels or if we are displacing other renewables.” 

“We have to address climate change, and it is also an opportunity to not just reduce carbon emissions but build a more equitable world for the people who live here,” Vaughan added. 

Vaughan also acknowledged that the projects are in the early stages, so the data about the economic development of targeted renewable energy deployment is not fully materialized. 

“However, on a tangible basis, we can measure the tax dollars we are paying,” Vaughan said. “We buy the land we build on instead of leasing, we are there for the long haul and we have a stake in the community. That manifests in how we take care of the land, from planting native grasses to mowing with sheep flocks to partnering with local farmers. It really matters to local economic development offices and local communities.”