How Inflation Rocked Biden’s Climate Agenda

How Inflation Rocked Biden’s Climate Agenda

WASHINGTON — The day after what was left of its legislative agenda to fight climate change seemed to crash and burn in the SenatePresident Biden flew to Saudi Arabiapoised to pressure the region’s oil giants to pump even more crude into global markets.

Mr. Biden took office and pledged to wean the United States from fossil fuels such as oil and coal to reduce greenhouse gas emissions that are on their way to causing catastrophic global warming. He surrounded himself with experienced and aggressive advisers on international and domestic climate policy and set ambitious goals to accelerate an energy transition that would affect every corner of the US economy. He set himself up as a master negotiator who had spent nearly four decades in the Senate building coalitions on major legislation.

A 24-hour period at the end of this week showed how thoroughly frustrated Mr Biden is in that effort. Its climate goals have stalled amid democratic infighting and shifting economic priorities, fueled by soaring inflation, including the spike in gasoline prices caused by Russia’s war in Ukraine.

After more than a year of discussions, a coal state Democrat, Senator Joe Manchin III of West Virginia, told party leaders on Thursday that until he saw more encouraging inflation figures from the government, he could not support a $300 billion collection of assets. tax incentives designed to help electric utilities and other businesses move to cleaner energy sources such as wind and solar power. It was the president’s last hope for aggressive climate action ahead of November’s midterm elections, which jeopardized the prospects for the package.

Mr. Manchin had negotiated with New York Senator Chuck Schumer, the majority leader, on an energy and climate proposal that was itself a scaled-down version of the climate initiatives Biden had unsuccessfully tried to sell to Mr. Manchin last fall. In a preview of the on-and-off nature of the talks, Mr Manchin told West Virginia radio host Hoppy Kercheval on Friday that he was still involved in those negotiations and was dangling with the idea that he would pass energy legislation. can support in September, but not before.

But Mr Manchin also said he was wary, at this time, of raising taxes on corporations and high-earning individuals to offset energy and climate credits, at a time when inflation is at its fastest pace in 40 years. rises. He said he had told Mr Schumer he wanted to see the next batch of inflation figures, which will be published in August, before moving on.

“Inflation is definitely killing many, many people,” Manchin said on the radio show. “They can’t buy petrol, they find it difficult to do their shopping, everything they buy and consume for their daily lives is a burden to them. And can’t we wait to make sure we don’t add anything to that? And I can’t make that decision – actually about taxes of any kind, and also about energy and climate, because it takes taxes to pay for the clean technology investment that I’m for. But I’m not going to do anything and exaggerate that will cause more problems.”

Experts who spent months working on the climate package, which is part of a broader bill that government officials say would reduce health and electricity costs and ease inflationary pressures by cutting the federal deficit, said they were under no illusions there was more to negotiate. is with Mr. Manchin.

“This is oil and gas relief as we started to call it,” said Christy Goldfuss, senior vice president for energy and environmental policy at the Center for American Progress, a liberal think tank. Mr. Manchin, she said, ‘just won’t admit he’s been trying to block this all this time. It also diminishes his power and influence once this conversation ends.”

White House officials did not comment on the news Thursday or Friday morning, which came at a particularly inconvenient time for Mr. Biden. The president flew from Israel to Saudi Arabia on Friday, with hopes that the Saudis and their oil-rich neighbors will ramp up production and help cut gasoline prices that have helped boost Mr. Biden to hinder this year.

Leaders from some of the country’s largest environmental groups will meet at the White House Friday afternoon with two of Biden’s top aides, Steve Ricchetti and Bruce Reed.

The death of the legislation is only the latest, but arguably the worst, blow to Mr Biden’s climate agenda as his tools to tackle global warming have been stripped away one by one.

“There has been a party leadership failure to address this,” said Varshini Prakash, executive director of the Sunrise Movement, an environmental group that represents many young climate activists.

“I want to make sure Biden and his administration hear this loud and clear,” Ms Prakash said. “They must create a response from all government agencies at every level over the course of the two and a half years they remain in office to do everything in their power to tackle the climate crisis or they risk a huge failure and disappointment for the American people and youth in particular.”

Ms Goldfuss said she believed it was time for an “honest talk” about how much harder it will now be to meet Mr Biden’s climate goals without congressional action.

Economists generally agree that there are two fundamental ways to reduce emissions and curb global temperature rise. One is to reduce the cost of developing and deploying low-carbon energy sources, such as wind, solar or nuclear, while improving energy efficiency. The other is making the use of fossil fuels more expensive, either by putting a price on CO2 emissions or by increasing the price of the fuels.

Mr Biden seems to have lost his best shot at further promoting clean energy, at least for now. He could pursue executive actions to regulate emissions in some sectors of the economy, although his options in that area have been narrowed by a recent Supreme Court ruling that limited the Environmental Protection Agency’s power to curb emissions from power plants, the country’s second-largest source of planet-warming pollution.

Legal experts say this decision is likely to set a precedent that could also limit the federal government’s ability to more tightly regulate other sources of heat-trapping emissions, including cars and trucks.

At the White House, Mr. Biden’s climate team is now putting together a series of smaller and less powerful tools to combat global warming, which experts say can still take away some of the country’s carbon footprint – though not sufficient to achieve the goals Mr. Biden has promised to the rest of the world. He has promised that the United States will cut its greenhouse gas emissions by about half by the end of this decade.

In the coming months, the EPA still plans to enact stricter rules to control methane, a potent greenhouse gas leaking from oil and gas wells, along with a more modest rule to cut utility emissions.

And while many economists have long urged governments to tax fossil fuels to cut emissions, Mr. Biden and his advisers have repeatedly said they want to cut, not raise, gasoline prices. The president is aware of the impact of gasoline on household budgets and the political toll the high gas prices have taken on his presidency.

Mr Biden acknowledged the contradictions of that position last fall, when gasoline prices rose but were still on average $1.50 a gallon cheaper in the United States than they are today.

“At first glance,” he told reporters at a news conference after a Group of 20 summit in Rome, “it seems ironic, but the truth is – you all knew it, everyone knows it – that the idea we will being able to switch to renewable energy overnight and not have – from this point on it is not rational not to use oil or gas or not to use hydrogen.”

When gasoline rises above $3.35 a gallon, he added, “it has a big impact on working-class families just going back and forth to work.”

The apparent collapse of climate legislation comes as Mr Biden’s top environmental advisers are headed for the exit. Mr. Biden had assembled what many called a dream team of experts, including Gina McCarthy, who had served as head of the Environmental Protection Agency under President Barack Obama, to head a climate policy office in the White House.

Ms McCarthy has indicated she plans to step down from her position this year, but had hoped to do so at a high level following the passage of climate legislation, aides said.

Biden’s top international envoy John Kerry, who served as Secretary of State in the Obama administration, is expected to leave after the next round of United Nations climate negotiations, set to take place in Egypt in November.

However, with little to see from the United States, Kerry will struggle to push other countries to reduce their climate pollution, experts say. This is critical to keep the planet stable at about 1.5 degrees Celsius of warming compared to pre-industrial levels. That is the threshold above which the likelihood of catastrophic droughts, floods, fires and heat waves increases significantly. The Earth has already warmed an average of about 1.1 degrees Celsius, or about 2 degrees Fahrenheit.

Historically the world’s largest emitter of greenhouse gases, the United States plays a special role in the fight to combat global warming. President Donald J. Trump relinquished that role, but when Mr. Biden was elected, he declared that America was “back” and would lead nations in suppressing the pollution that dangerously warms the planet.

Now the United States will “find it very hard to lead the world if we can’t even take the first steps here at home,” said Nat Keohane, the president of the Center for Climate and Energy Solutions, an environmental group. “The honeymoon is over.”

Emily Cochrane reporting contributed.