Just two weeks ago, a centerpiece of US President Joe Biden’s climate agenda seemed dead in the water, due to opposition from members of Congress. But after a surprise turn of events, the US Senate is set to vote on the revived legislation – a massive spending bill that would make unprecedented investments in clean energy innovation and deployment. The researchers say the legislation, if enacted, will reinvigorate US — and the world’s — efforts to stop global warming.
The bill, reviewed by leading Democrats in the equally divided Senate, would invest an estimated US$370 billion in various low-carbon energy technologies over the next decade. This includes tax credits for companies to develop such technologies, which could reduce costs and attract more private sector investment. The spending comes on top of more than $200 billion in clean energy and climate investments that lawmakers approved in a major infrastructure bill last year.
“I think we’ll consider this a historic moment,” said Dan Lashof, who heads the US operations of the World Resources Institute, a Washington DC-based environmental think tank. “This bill will have a huge impact on innovation and cost reduction for a whole suite of clean energy solutions that the world needs to meet its climate goals.”
The agreement to move the bill forward comes just weeks after the U.S. Supreme Court dealt a blow to the Biden administration’s ability to achieve its climate goals, by slashing the agency’s power environmental protection to directly regulate greenhouse gas emissions. However, the latest deal – which focuses on incentives and investments rather than rules and regulations – seeks to leverage the size and power of the federal government to change markets and drive down the price of energy technologies. own.
Economic modeling by several energy research groups indicates the legislation could significantly reduce U.S. emissions over the next decade, bringing the country one step closer to meeting its commitment to reduce greenhouse gas emissions by the end of the day. half of 2005 levels by 2030. The bill faces united opposition. Republicans, however, and Democrats will need the support of each of their senators, as well as a decisive vote from Vice President Kamala Harris, to secure its passage.
A bill renamed
The legislation is a scaled-down version of the $2 trillion Build Back Better bill promoted by Biden last year, which included about $550 billion in energy and climate investments. That bill met with opposition from conservative Democrats, including West Virginia Coal Country Sen. Joe Manchin, whose vote was crucial to its success.
On July 27, Manchin surprised some government watchers when he agreed to a new version that would lower the overall price of the bill but maintain most of the initial energy investments – including $160 billion in tax incentives for clean electricity. and $35 billion for technologies to reduce vehicle emissions. Senate Democrats also renamed the bill as the Cut Inflation Act of 2022. The link to inflation rests in part on the argument that cutting renewable energy costs and electric vehicles will ultimately reduce consumers’ overall energy costs – a major contributor to rising inflation around the world.
Jesse Jenkins, an energy modeler at Princeton University in New Jersey who leads a consortium analyzing the impacts of the legislation, says key energy and climate provisions have been preserved in the new deal. Modeling by his group suggests the legislation could reduce US emissions by the equivalent of nearly a billion tonnes of carbon dioxide per year by 2030, or two-thirds of the reduction needed to meet the target. American climate.
Other modeling efforts predict similar trends if legislation is enacted. Modeling by Energy Innovation, a consulting firm based in San Francisco, Calif., suggests that annual U.S. emissions could fall 37-41% below 2005 levels by 2030. A third analysis by the Rhodium Group, a New York-based consultancy predicts they could fall 31-44% below 2005 levels by 2030.
Over the current decade, models show that the bulk of emission reductions are likely to be achieved in the electricity sector, largely through an expansion of wind and solar power, and in the transport, mainly due to the switch to electricity. Vehicles. Innovations in clean hydrogen and carbon capture technologies could reduce emissions in the 2030s and beyond.
Consistency between models gives confidence in the results, says John Bistline, an energy modeler at the Electric Power Research Institute, a nonprofit organization in Palo Alto, Calif. Still, the models aren’t crystal balls, he says, and uncertainties around the pace of technology innovation, commercial deployment and consumer adoption could alter trajectories.
For environmentalists, the revised spending bill contains some disappointments. To kickstart the bill, Democrats agreed to include requirements for the sale of new oil and gas leases, including in the Gulf of Mexico and on federal lands. They also agreed to work on separate legislation intended to speed up the approval process for energy projects, including fossil fuel projects in Manchin’s home state of West Virginia.
Some environmentalists have called the provisions counterproductive, but Jenkins says the move is perhaps understandable, given the rise in oil and gas prices in the wake of Russia’s war in Ukraine. His group’s modeling suggests that fossil fuel incentives have a fairly minor impact on the overall trajectory of energy and emissions trends.
“It’s the price of political compromise,” he adds.
The US Senate could vote on the legislation as early as this week. Attention has now turned to a final standout among Democrats, Kyrsten Sinema of Arizona, a senator who has opposed her party on the issue of tax increases in the past. If the bill is approved by the Senate, the House of Representatives – where Democrats have a majority – should follow suit and send the bill to Biden for signature.