Surprise deal would be US’s most ambitious climate action

WASHINGTON — The $369 Billion Climate and Tax Package That Comes in a… surprise deal by Senate Democrats on Wednesday would be the most ambitious move ever taken by the United States to try to prevent the planet from catastrophically overheating.

The deal, which Senate Democrats hope to pass as early as next week, shocked even some who had been involved in the sputtering negotiations on climate legislation for the past year. The announcement of a deal, after many activists had given up hope, almost immediately changed the United States’ role in the global fight against climate change.

And it was presented by Senator Joe Manchin III of West Virginia, the tenacious Democrat who was taunted by environmentalists and some of his own colleagues after he said this month that he could not support a climate bill because of inflation concerns.

“By a wide margin, this legislation will be the largest pro-climate legislation ever passed by Congress,” Democratic majority leader Chuck Schumer said when announcing the deal with Mr. Manchin.

The bill aims to tackle global warming by using billions of dollars in tax incentives to ramp up wind, solar, geothermal, battery and other clean energy industries over the next decade. Companies would receive financial incentives to keep open nuclear plants that may be closed, or to capture emissions from industrial installations and bury them underground before they can warm the planet. Car buyers with income below a certain level would receive a tax credit of $7,500 to buy a new electric vehicle and $4,000 for a used vehicle. Americans would get discounts to install heat pumps and make their homes more energy efficient.

“This is the action the American people have been waiting for,” President Biden said, hailing the bill’s “investments in our energy security going forward.”

Senate Democrats estimate that the legislation would allow the United States to reduce greenhouse gas emissions to 40 percent below 2005 levels by 2030, putting the country a short distance from the aggressive climate goals Mr. Biden set last year. drawn up.

Biden aims to cut U.S. emissions to at least 50 percent below 2005 levels by the end of this decade, which is about the pace scientists say the entire world must follow to limit global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels. That’s the threshold above which scientists say the likelihood of catastrophic flooding, fires, storms and drought increases significantly. The planet has already warmed up with about 1.1 degrees the past century.

The bill “keeps us in the fight against climate change and allows executive action, state and local government policies, and private sector leadership to get us across the finish line,” said Jesse Jenkins of Princeton University, That modeled the effects of previous versions of the legislation. “Without this bill, we would be hopelessly far from our climate goals.”

Diplomats and climate experts said they hoped the deal would revitalize international efforts to tackle global warming, which have softened in recent months as the war in Ukraine and soaring oil prices have led many countries to target it. strengthening stocks of fossil fuels. The governments of the world are far from doing what they need to do to meet the 1.5 degree targetand leaders will meet in Egypt in November to discuss how to step up their efforts.

“We all needed some good news,” said Tina Stege, Marshall Islands Climate Envoy at the risk of disappearing under the rising sea. The announcement of a climate deal “puts much-needed wind in its sails,” she said, though she warned that “we are staying a long way from where we need to be.”

Jonathan Pershing, who was Biden’s deputy climate change envoy until January, said he had raised concerns in recent weeks from former counterparts from Africa and China who were well aware of the apparent collapse of US climate legislation.

“They were like, ‘Okay, you’re not going to do this, so why should we do it,’” recalled Mr. Pershing. “I think you have a fundamentally different story now.”

Massachusetts Democrat Senator Edward J. Markey said the legislation would restore US credibility in international negotiations. “You can’t preach moderation from a bar stool, and you can’t ask China, India, Brazil or other countries to cut emissions if we don’t do it ourselves in a significant way,” he said.

Senate Republicans are unanimously opposed to the legislation.

“It is nothing short of an attack on the American family,” Wyoming Republican Senator John Barrasso said in a statement. “If we want to cut inflation, cut energy costs and reduce the deficit, the recipe is clear. Congress should cut spending and unleash U.S. oil and natural gas production.”

The bill would affect nearly every aspect of U.S. energy production. It includes $30 billion in incentives for companies to build solar panels, wind turbines and batteries and process critical minerals in the United States, with the aim of reversing the long-term migration of clean energy production to China and elsewhere.

Companies have indicated that they can respond quickly. QCells, a South Korea-based solar energy company already building a $171 million assembly plant in Dalton, Georgia, plans a multi-billion dollar supply chain expansion in the United States if the bill is passed, said Scott Moskowitz, QCells’ head of market strategy and public affairs.

Also included is $60 billion to address the disproportionate burden of pollution on low-income and communities of color; $27 billion for a “green bank” focused on providing financial support to clean energy projects; and $20 billion for programs to reduce emissions in the agricultural sector.

The bill’s most direct effect, energy experts say, will be to boost the growth of production of wind turbines, solar panels and electric vehicles in the United States. Renewable energy production has slowed significantly this year due to pandemic disruptions, trade disputes and uncertainty over federal policy, according to a recent report by the American Clean Power Association, which represents wind and solar companies and battery manufacturers.

“The entire clean energy industry breathed a huge sigh of relief,” said Heather Zichal, the association’s chief executive. “This is an 11-hour reprieve for climate action and clean energy jobs.”

For decades, the US has provided tax credits for wind and solar that expire in one to two years, putting the industry in a boom-bust cycle until the credits are renewed. Under the new legislation, the tax credits would last up to 10 years, to give companies the confidence to make long-term investment decisions.

However, the bill fails to address one of the biggest hurdles to renewable energy: a lack of long-distance cables to bring wind and solar power to cities from remote rural areas. An earlier version of the bill included tax credits for new transmissions, but these have been removed. Without that facility, many wind and solar projects would struggle to get built, said Rob Gramlich, founder of Grid Strategies.

In the longer term, the tax incentives in the bill are expected to boost emerging technologies such as carbon capture for industrial facilities such as steel and cement, next-generation nuclear reactors and the use of hydrogen as a low-carbon fuel. Many of these technologies are too expensive for widespread use today, but the hope is that by creating a market for a first round of projects, costs can be cut – just as federal tax credits in the 2000s and 2010s contributed to the transformation of wind and solar energy from an expensive niche technology to an affordable mainstream option.

The bill provides some support for fossil fuels, a concession widely seen as necessary to gain support from Mr. Manchin, whose home state of West Virginia is rich in coal and natural gas. For example, the bill would mandate new lease sales for oil drilling in the Gulf of Mexico, something environmental groups opposed and Mr Biden had promised to stop running as a White House candidate.

“It’s really all of the above, meaning this bill isn’t arbitrarily shutting down our abundant fossil fuels,” Mr Manchin said in a statement. He called the package ‘a ‘realistic energy and climate policy’.

As part of the agreement, Mr. Manchin said he had also received a commitment from both Mr. Biden and California Chair Nancy Pelosi that Congress would pass a separate measure to address the licensing of energy infrastructure, potentially including natural gas pipelines. before the end of the fiscal year on September 30.

That could pave the way for a project Mr. Manchin is personally interested in, the Mountain Valley Pipeline, which would transport Appalachian shale gas from West Virginia to Virginia.

But even with the concessions to the fossil fuel industry, “the bill is still totally worth it for climate change,” said Leah Stokes, a professor of environmental policy at the University of Santa Barbara, California, who had advised Senate Democrats.

Two weeks ago, when even Mr. Biden appeared to be writing an obituary for climate law, a small group of lawmakers continued to work with Mr. Manchin. Several Democrats and climate activists have credited Colorado Senator John Hickenlooper for keeping lines of communication open with Mr. Manchin.

“When a lot of people said, ‘That’s the end,’ and everyone wrote it off, I went to everyone I knew and said, ‘Wait a minute, we can’t stop,’ said Mr Hickenlooper, a one-time geologist for an oil exploration company. industry and gas company “We have no satisfactory alternative.”

Many were wary of continuing negotiations because “they didn’t want their hearts broken again,” Mr Hickenlooper said. But, he said, Mr. Manchin insisted he was still open to a deal.

Mr. Hickenlooper said the group worked closely with experts from the Wharton School of Business at the University of Pennsylvania, and that Mr. Manchin attached great importance to their data to indicate that legislation could be designed that would not exacerbate inflation.

He called Mr Manchin “an honest broker” in the talks, someone who wanted to find a way to tackle climate change without taxing the fossil fuel workers in his state.

“He never told me he was ready, and I said, as long as Joe Manchin is at the table, I’m at the table,” Mr. Hickenlooper said.