Biden develops climate plan B: tax credits, regulation and state action


WASHINGTON – After losing the centerpiece of his climate agenda just a week before heading to a major global warming summit, President Biden intends to argue that the United States has a new plan that will always meet to their ambitions to greatly reduce greenhouse gases which are global warming.

The administration’s strategy now consists of a three-pronged approach of generous tax incentives for wind, solar and other clean energy, strict regulations to restrict pollution from power plants and automobile exhaust pipes , and a host of clean energy laws enacted by states.

An analysis released this week by Rhodium Group, a non-partisan analytics firm, found that the strategy could technically fulfill Mr Biden’s ambitious pledge to cut the country’s emissions by 50% from 2005 levels of by 2030. The United States is historically the greatest source of pollution that heats the planet.

But the chances of success are slim; the approach faces significant legal, logistical and political challenges. The process of drafting regulations could take years and the conservative Supreme Court could overturn them or a future president could simply set them back. And relying on states to strengthen their clean energy laws only shifts the fight to state houses for environmentalists and fossil fuel interests to fight at the local level.

“This mix of tax credits, new federal regulations and new state actions puts the goal within reach. But there are a lot of ifs, ”said John Larsen, author of Rhodium Analysis. “You need states to raise the bar on clean energy to a level they haven’t yet reached. You need the Environmental Protection Agency to put regulations in place on every power plant in America in a way that they haven’t yet. And then you have to hope that the Supreme Court doesn’t reject that. Everything must break in the right direction.

The White House backed down on the plan after its main hope for significant emissions cuts, a clean electricity program, was blocked by West Virginia Senator Joe Manchin III, a crucial vote in an equally divided Senate .

The clean electricity program would have quickly cleaned up the electricity sector by rewarding power plants that have switched from burning coal, oil and gas to wind, solar, nuclear and other clean energy, and penalizing those who do not. It was intended to push the country’s electricity sector to produce 80 percent of its electricity from clean energy sources by 2030, up from 40 percent today.

Mr. Manchin, who has financial ties to the coal industry and whose state also produces natural gas, said he was opposed to any measure that would harm coal and gas companies.

A major scientific report released in August concluded that countries must immediately stop burning fossil fuels to avoid a future of severe drought, intense heat waves, water shortages, devastating storms, rising seas and ecosystem collapse. But according to a new United Nations study, 15 major fossil fuel-producing countries, including the United States, plan to produce more oil, gas and coal through 2040, reaching levels more than double what is necessary to prevent a catastrophic increase in global temperatures. ..

Removing a clean electricity program from a massive budget bill being negotiated on Capitol Hill weakened the hand of Mr Biden, who is expected to arrive in Glasgow on November 1 for a crucial UN summit where he had hoped to restore American leadership in the fight against climate change.

Speaking at a CNN town hall on Thursday night, Mr Biden pledged that upon his arrival in Scotland, “I present a pledge to the world that we will actually achieve net zero emissions on electricity by 2035. and zero net emissions. by 2050 or before, but we have to do a lot, by 2030, to show what we’re going to do to get there.

Accompanying the president to Scotland, in addition to an important part of his cabinet, will be Mr Biden’s key climate change advisers John Kerry and Gina McCarthy, both Obama administration veterans. During this administration, Mr. Kerry and Ms. McCarthy went to several international climate talks, where Mr. Kerry pledged the United States would pass tough climate law, which they never did, and Ms. McCarthy detailed the strict pollution rules governing chimneys and power plants, which were promulgated and then rescinded by the Trump administration.

Mr Biden will likely present his Plan B to a skeptical audience in Glasgow.

“Biden has been forceful with what he says about climate change,” said Laurence Tubiana, former French climate change ambassador and now chief executive of the European Climate Foundation. “But credibility is an issue. There will always be a question mark – how can it deliver?

Yet Mr Biden appears poised to implement one of the three main carbon dioxide reduction policies.

The massive spending bill currently before Congress includes about $ 300 billion in tax incentives for producers and buyers of wind, solar and nuclear energy, and for consumers who buy electric vehicles. The tax incentives would stay in place for a decade – a change from existing clean energy tax credit programs, which typically expire after one to five years, although they are often renewed. It also includes $ 13.5 billion to build charging stations for electric vehicles and promote the electrification of heavy vehicles. It would spend $ 9 billion to modernize the electricity grid, making it more conducive to the transmission of wind and solar power, and $ 17.5 billion to reduce carbon dioxide emissions from federal buildings and vehicles.

This package would be the single largest federal spending to promote clean energy, and Rhodium’s analysis found it could reduce pollution enough to meet one-third to one-half of Mr Biden’s emissions reduction targets, reducing carbon dioxide emissions to about 25 percent of 2005 levels by 2030.

Ron Wyden, the Oregon Democrat who chairs the Senate Finance Committee, is the lead author of this clean energy tax credit program. If the legislation is passed before the end of the Glasgow summit on November 14, Mr Wyden said he would travel to Scotland to send the message that the United States has enacted legislation that will significantly reduce its carbon dioxide emissions. carbon.

“The president will be able to say that this is the most ambitious climate bill ever passed by Congress,” Wyden said in an interview, although he acknowledged that the bar was low: United States has never passed a major climate law. change the law.

“This is the first-ever tax review that links cash incentives to effective emission reductions, and it says the more you cut emissions, the bigger your savings.” Mr Wyden said. “We believe you will have an extraordinary increase in renewable energy and clean transportation.”

Mr. Larsen, the Rhodium analyst, agreed. “The United States has never had this basis for long-term clean energy tax credits before,” he said. “It would give electric utilities, automakers and builders the certainty that they’ve never had before. “

“But they don’t bring you to the president’s target alone,” he said.

To do this, according to Rhodium’s analysis, the Environmental Protection Agency should issue a series of strict regulations targeting the country’s three main greenhouse polluters: cars, power plants, and leaking oil and gas wells. methane, a powerful heat trap. gas.

While leading the EPA under President Barack Obama, Ms. McCarthy helped craft the most ambitious climate rules the United States has ever seen, aimed at bringing these three sources of pollution under control.

Almost none of them remain in place today. The Supreme Court suspended implementation of Ms. McCarthy’s rule to reduce pollution from coal-fired power plants, and the Trump administration overturned the rest.

“There was a lot of support and confidence in the Obama administration when it passed these regulations,” said Joseph Aldy, who was one of Mr. Obama’s negotiators at a major climate summit. in 2009 in Copenhagen. “But now there will be skeptics who will say, ‘We fear the next administration will undo what has been done.’ The question is, what will be the legal and political sustainability?

Over this issue hangs the shadow of Mr. Trump, who loved to dismantle Mr. Obama’s climate policies. The fossil fuel industry would almost certainly challenge the new environmental regulations, which could end up in a Conservative-majority Supreme Court, including three judges appointed by Mr. Trump. The former president also appears to be weighing another White House candidacy in 2024.

State action, which is not dependent on the occupant of the White House, is a critical part of the national emissions strategy, Larsen said.

Already, 29 states have adopted their own versions of the clean electricity program Mr Biden had hoped to implement nationwide. Under California’s leadership, several states have updated these laws to make them more ambitious. If many or most of these states pass laws designed to produce all of their electricity from zero-carbon sources by 2035 – the same nationally set target by Mr Biden – it could significantly reduce the carbon footprint. from the country.

Mr Larsen referred to a law just passed in Illinois that would phase out coal and gas electricity by 2050.

But the continued adoption of such legislation also depends on the composition of state houses – and some of the states with the most abundant renewable resources also have strong political opposition to such policies.

“If my state, the Sunshine State, had a clean energy standard, the entire United States would be much further along in meeting our clean energy goals,” said Representative Kathy Castor, Democrat of Florida , who chairs the House Special Committee on the Climate Crisis. . “But the electric utility industry in my state is against it.”

Still, Democrats will continue to push, Ms Castor said. “We’re going to do whatever we can,” she said, “and then we’ll wake up and do more.”


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