Climate, clean energy provisions in surprise reconciliation package Democrats announcement late Thursday are well below the $555 billion in climate spending envisioned in the initial “Build Back Better” plan that President Joe Biden unveiled last year.
Yet, at a whopping $369 billion, it would be the largest investment the United States has ever made to address fossil fuel-caused climate degradation and its growing impacts.
“This will be, hands down, the biggest climate action in human history,” said Sen. Brian Schatz (D-Hawaii). said in a press release shortly after Democrats struck the deal. “The planet is on fire. Reducing emissions is the main thing. This is huge progress. Let’s do it.
Senate Majority Leader Chuck Schumer (DN.Y.) said it will be “the biggest pro-climate piece of legislation ever passed by Congress.” And in his White House remarks Thursday, Biden called it “the most important piece of legislation in history to address the climate crisis and immediately improve our energy security.”
The new deal, now dubbed the Cut Inflation Act and set to go to a vote as early as next week, would put the US on track to cut its greenhouse gas emissions by 40% by 2030, according to the one page summary the invoice’s. The package comes on the heels of a analysis without additional policy action, the United States is on track to reduce global warming emissions to 24% to 35% below 2005 levels by the end of the decade – well below the goal from 50% to 52% of Biden.
The invoice includes over 100 climate and energy provisions. Most of the spending comes in the form of clean energy tax credits, grants and loans. It provides $30 billion in incentives for companies to manufacture solar panels, wind turbines and batteries, as well as to process critical minerals. There are still $10 billion in tax credits for building new clean technology manufacturing facilities, up to $20 billion in loans for building clean vehicle manufacturing plants, and $500 million in Defense Production Act funds for heat pumps and critical mineral processing.
The package would reduce the cost of electric vehicles for low- and middle-income Americans, with tax credits of $7,500 for new electric vehicles and $4,500 for used vehicles, and invest billions to electrify low-income households.
Additionally, the bill provides $60 billion to address legacy pollution and invest in low-income and communities of color; $27 billion for a so-called “green bank” to boost clean energy and reduce emissions, with a particular focus on disadvantaged communities; $20 billion for climate-friendly agriculture; and $5 billion in grants for forest conservation.
It would also establish a charge on emissions of methane, an extremely potent greenhouse gas that is emitted from a number of sources, including oil and gas operations.
Sen. Joe Manchin (DW.Va.) shocked Democrats and Republicans on Thursday when he gave his blessing to the cut $740 billion spending package, which will raise taxes on the ultra-rich to pay for climate and healthcare investments health. The decision came just two weeks after Manchin, who has proven to be a relentless thorn in the side of the Democrats, apparently torpedoed what was widely seen as a last chance for the party to pass meaningful climate legislation.
In a long statement On Thursday and a subsequent interview Friday with West Virginia radio host Hoppy Kercheval, Manchin made it clear that his support hinged on support for fossil fuels.
“The Cut Inflation Act 2022 invests in the technologies needed to ensure that all types of fuels – from hydrogen, nuclear, renewables, fossil fuels and energy storage – are produced and used in the cleanest way possible,” he said in his statement. “It’s really all of the above, which means this bill doesn’t arbitrarily cut off our abundant fossil fuels.”
Among other things, the bill would restore oil and gas leases that the companies won at an auction in November 2021 and that a federal judge later released after concluding that the Biden Administration had not properly taken into account the climate impacts of the sale of the lease. It also ties future renewable energy projects on federal lands to ongoing oil and gas development, requiring the Department of the Interior to auction at least 2 million acres onshore and 60 million acres offshore. oil and gas interests before they can proceed with wind, solar and other renewable lease sales.
Manchin also said he received a commitment from Biden, Chief Schumer and House Speaker Nancy Pelosi (D-Calif.) to reform the federal licensing process for energy infrastructure, including pipelines.
“I’m telling you directly, without authorizing reforms, without the ability for America to do what it does best — produce — there’s no bill,” Manchin told Kercheval on Friday. “It’s totally agreed and understood.”
Even with these fossil fuel concessions, climate advocates and environmental groups widely celebrated the package. Leah Stokes, a climate policy expert at the University of California, Santa Barbara who advised Democrats during negotiations, called her a “game changer.”
“It would create clean energy jobs in America and reduce energy bills for American families,” Stokes wrote on Twitter. “That would get us 80% of the way to President Biden’s climate goal.”
But some green groups, including 350.org and the Center for Biological Diversity, couldn’t see past the oil and gas mandates.
“This is a climate suicide pact,” Brett Hartl, director of government affairs at the Center for Biological Diversity, said in a statement. “It is counterproductive to link renewable energy development to massive new oil and gas extraction. The new lease required in this bill will fan the flames of the climate disasters that are burning our country, and it is a slap in the face to communities struggling to protect themselves from dirty fossil fuels.