This
week’s Fix the Planet comes on the heels of momentous news from the US.
“This legislation truly is transformative: it would be hard to
overstate what a pivotal moment this was,” says Dan Lashof at the World
Resources Institute (WRI), a US-based non-profit organisation.
He’s
referring to Sunday, when the US Senate passed the single biggest
investment to tackle climate change in the country’s history. The $369
billion allocated for climate action over 10 years in the Inflation
Reduction Act (IRA) will not only transform the US economy, but send
ripples globally via the UN climate talks and the private sector. The
legislation could pass the US House of Representatives this week.
Today’s
newsletter dives into where the money will make the biggest dent in
emissions, and why it puts the US’s carbon goals in sight – even though, at first blush, the plan falls short.
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What are the big-ticket items?
The number of technologies and products getting support is dizzying. The package includes incentives, primarily via tax credits, for wind, solar and geothermal power, next-generation nuclear plants, electric cars, clean hydrogen, carbon capture and storage, direct air capture for carbon dioxide removal, sustainable aviation fuel, energy efficiency measures for homes, heat pumps and the lifting of a moratorium on offshore windfarms in the Atlantic Ocean. The plan largely consists of carrots rather than sticks. One exception is financial penalties for methane emissions above government limits, which will rise by two thirds between 2024 and 2026.
One large slice of funding is $30 billion for renewable power schemes and battery storage projects. A further $27 billion is for a “green bank” that will fund further clean energy schemes, with a focus on those located in disadvantaged communities. And $60 billion will provide transport measures that cut air pollution for lower-income communities and people of colour. The US has a long history of environmental injustice, where polluting infrastructure disproportionately affects poorer and non-white communities . “There is, for the first time ever, a climate legislation that really is also dealing with environmental justice issues,” says Christina DeConcini at the WRI. “Of course, it’s not enough, but it’s great that there’s a start.”
How much will this cut US emissions?
Ahead of last year’s landmark COP26 climate summit, US president Joe Biden promised the country would cut emissions by 50 to 52 per cent by 2030, on 2005 levels. That elevated the US to the top rank of international climate pledges. But the difficult history of the IRA and its predecessor, the Build Back Better Act – both were repeatedly blocked by one Democratic politician, Joe Manchin – meant there were fears that Biden would fail to deliver domestically.
Three analyses, by Energy Innovation, Rhodium Group and a Princeton University team , come to roughly the same conclusion on the new climate legislation: it should cut US emissions by about 40 per cent (44 per cent at best). The energy sector should see the biggest reduction, at about 360 million tonnes of CO₂ by 2030. Transport is expected to be second, falling by about 280 million tonnes.
Sure, but that’s still not halving emissions. How will the shortfall be made up?
I asked Lashof if this makes the 52 per cent goal plausible. “I think this bill puts it within reach,” he says. “It will depend on how rapidly we can implement the measures here, how quickly we can actually build these things, which is a challenge but something that we're trying to tackle.” There are two main reasons to think the gap can be made up.
One is extra rules from the US regulator, the Environmental Protection Agency (EPA), most significantly its plans to set emissions standards for vehicles all the way from light-duty ones up to heavy-duty trucks. Electric vehicle sales are very uneven in the US today. Plug-in models commanded an 18 per cent share of new car sales for the first half of the year in California; in North Dakota, the figure was 1 per cent. Lashof sees the regulations as “raising the floor” so that take-up is spread more evenly. The EPA is also planning to advance standards for power plants, within the constraints of a recent Supreme Court ruling limiting its ability to regulate emissions.
The second reason for hope is action at the state and city scale (the $369 billion is being channelled at a federal level). Lashof says he expects some states will see economic value in going faster than others, such as California’s past leadership on clean vehicle standards. How states choose to spend the billions in last year’s infrastructure bill will also have an impact, such as whether they direct more towards roads or public transport. Finally, cities are taking matters into their own hands, such as Los Angeles, New York and, most recently, San Diego emulating Berkeley in California by banning gas connections in new buildings.
How does the ambition compare internationally?
Fairly well. The European Union’s plan is for a 55 per cent emissions cut by 2030, but against a different baseline, of 1990 levels. China, because of how fast it’s moved on clean energy and its population being four times the size of the US’s, is still doing more on energy in absolute terms. The country attracted eight times as much investment in renewables in the first half of this year as the US.
Meanwhile, some smaller economies are planning deeper cuts, such as the UK aiming for 78 per cent by 2035. However, the UK still needs more policies to meet that goal. Lashof says he wouldn’t claim the US move is the “biggest action in the world”, but it still shows leadership internationally.
What are the buts?
The worst one is the concessions given to Manchin to get the bill passed. The West Virginia senator secured several fillips for fossil fuels, including opening up oil and gas licences on federal land and easing the passage of a gas pipeline in the state.
There are also some niggles in the details of the funding. For example, there will be $7500 tax credits for buying a new electric vehicle and, for the first time, $4000 credits for used vehicles costing less than $25,000. The caveat there, as The New York Times reports, is that less than a fifth of vehicles are in that price category.
The number of technologies and products getting support is dizzying. The package includes incentives, primarily via tax credits, for wind, solar and geothermal power, next-generation nuclear plants, electric cars, clean hydrogen, carbon capture and storage, direct air capture for carbon dioxide removal, sustainable aviation fuel, energy efficiency measures for homes, heat pumps and the lifting of a moratorium on offshore windfarms in the Atlantic Ocean. The plan largely consists of carrots rather than sticks. One exception is financial penalties for methane emissions above government limits, which will rise by two thirds between 2024 and 2026.
One large slice of funding is $30 billion for renewable power schemes and battery storage projects. A further $27 billion is for a “green bank” that will fund further clean energy schemes, with a focus on those located in disadvantaged communities. And $60 billion will provide transport measures that cut air pollution for lower-income communities and people of colour. The US has a long history of environmental injustice, where polluting infrastructure disproportionately affects poorer and non-white communities . “There is, for the first time ever, a climate legislation that really is also dealing with environmental justice issues,” says Christina DeConcini at the WRI. “Of course, it’s not enough, but it’s great that there’s a start.”
How much will this cut US emissions?
Ahead of last year’s landmark COP26 climate summit, US president Joe Biden promised the country would cut emissions by 50 to 52 per cent by 2030, on 2005 levels. That elevated the US to the top rank of international climate pledges. But the difficult history of the IRA and its predecessor, the Build Back Better Act – both were repeatedly blocked by one Democratic politician, Joe Manchin – meant there were fears that Biden would fail to deliver domestically.
Three analyses, by Energy Innovation, Rhodium Group and a Princeton University team , come to roughly the same conclusion on the new climate legislation: it should cut US emissions by about 40 per cent (44 per cent at best). The energy sector should see the biggest reduction, at about 360 million tonnes of CO₂ by 2030. Transport is expected to be second, falling by about 280 million tonnes.
Sure, but that’s still not halving emissions. How will the shortfall be made up?
I asked Lashof if this makes the 52 per cent goal plausible. “I think this bill puts it within reach,” he says. “It will depend on how rapidly we can implement the measures here, how quickly we can actually build these things, which is a challenge but something that we're trying to tackle.” There are two main reasons to think the gap can be made up.
One is extra rules from the US regulator, the Environmental Protection Agency (EPA), most significantly its plans to set emissions standards for vehicles all the way from light-duty ones up to heavy-duty trucks. Electric vehicle sales are very uneven in the US today. Plug-in models commanded an 18 per cent share of new car sales for the first half of the year in California; in North Dakota, the figure was 1 per cent. Lashof sees the regulations as “raising the floor” so that take-up is spread more evenly. The EPA is also planning to advance standards for power plants, within the constraints of a recent Supreme Court ruling limiting its ability to regulate emissions.
The second reason for hope is action at the state and city scale (the $369 billion is being channelled at a federal level). Lashof says he expects some states will see economic value in going faster than others, such as California’s past leadership on clean vehicle standards. How states choose to spend the billions in last year’s infrastructure bill will also have an impact, such as whether they direct more towards roads or public transport. Finally, cities are taking matters into their own hands, such as Los Angeles, New York and, most recently, San Diego emulating Berkeley in California by banning gas connections in new buildings.
How does the ambition compare internationally?
Fairly well. The European Union’s plan is for a 55 per cent emissions cut by 2030, but against a different baseline, of 1990 levels. China, because of how fast it’s moved on clean energy and its population being four times the size of the US’s, is still doing more on energy in absolute terms. The country attracted eight times as much investment in renewables in the first half of this year as the US.
Meanwhile, some smaller economies are planning deeper cuts, such as the UK aiming for 78 per cent by 2035. However, the UK still needs more policies to meet that goal. Lashof says he wouldn’t claim the US move is the “biggest action in the world”, but it still shows leadership internationally.
What are the buts?
The worst one is the concessions given to Manchin to get the bill passed. The West Virginia senator secured several fillips for fossil fuels, including opening up oil and gas licences on federal land and easing the passage of a gas pipeline in the state.
There are also some niggles in the details of the funding. For example, there will be $7500 tax credits for buying a new electric vehicle and, for the first time, $4000 credits for used vehicles costing less than $25,000. The caveat there, as The New York Times reports, is that less than a fifth of vehicles are in that price category.
Can this all be overturned by a future president?
No. A president’s executive order can’t undo a piece of legislation, says DeConcini. One reason to think the 10-year plan will stay is that businesses including ExxonMobil and Shell have welcomed it, and companies will resist efforts to withdraw the funding. “Could another Congress undo this? The answer’s yes, [but] I’d say the likelihood is pretty slim,” says DeConcini. She gives the example of Barack Obama’s Affordable Care Act (known by some as “Obamacare”), which opponents have repeatedly threatened to overturn but have failed to do. “I don't think it's high probability [that the climate bill will be undone], which is why legislation in the United States is so preferable, but so difficult to achieve,” says DeConcini.
This looks so promising and let's hope that all other countries, especially the EU are going to do the same.
Maybe they are all on it already.
The blog song for today is: "Tell all the people" by The Doors
TTFN
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