WASHINGTON — The $369 billion climate and tax package unexpectedly signed by Democrats in the Senate on Wednesday will be the most ambitious measure ever taken by the United States in an attempt to prevent catastrophic overheating of the planet.
The agreement, which Senate Democrats hope to pass as early as next week, shocked even some of those involved in the protracted climate law negotiations last year. The announcement of the deal, after many activists lost hope, almost instantly changed the role of the United States in the global climate change effort.
And it was done by Senator Joe Manchin III of West Virginia, a dissenting Democrat who was scolded by environmentalists and some of his own colleagues after he said this month he could not support a climate bill because of inflation concerns.
“By a wide margin, this legislation will be the greatest climate legislation ever passed by Congress,” Sen. Chuck Schumer, Democratic Majority Leader, said as he announced the deal with Mr. Manchin.
The bill aims to combat global warming by using billions of dollars in tax credits to boost wind, solar, geothermal, battery and other clean energy industries over the next decade. Companies will receive financial incentives to keep open nuclear plants that may have been shut down, or to capture emissions from industrial facilities and bury them underground before they can warm the planet. Car buyers with incomes below a certain level will receive a $7,500 tax credit for buying a new electric car and $4,000 for a used one. Americans will get discounts for installing heat pumps and make their homes more energy efficient.
“This is the action the American people have been waiting for,” President Biden said, applauding the bill’s “investment in our future energy security.”
Senate Democrats have calculated that the legislation would allow the United States to cut greenhouse gas emissions by 40 percent from 2005 levels by 2030, putting the country in close proximity to the aggressive climate targets set by Mr. Biden last year.
Mr. Biden wants to cut U.S. emissions by at least 50 percent from 2005 levels by the end of this decade, roughly the pace scientists think the entire world should follow to limit global warming by 1. 5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels. levels. This is the threshold beyond which, according to scientists, the likelihood of catastrophic floods, fires, hurricanes and droughts increases significantly. Over the past century, the planet has already warmed by about 1.1 degrees.
The bill “keeps us on track to fight climate change and makes it possible that executive action, state and local government policy, and private sector leadership can help us cross the finish line,” said Princeton University’s Jesse Jenkins, who simulated effects previous editions of the legislation. “Without this bill, we would be hopelessly far from our climate goals.”
Diplomats and climate experts have said they hope the deal will revitalize international efforts to combat global warming, which have faltered in recent months as the war in Ukraine and rising oil prices forced many countries to focus on bolstering fossil fuel reserves. World governments are far from hitting the 1.5 degree target, and leaders are due to meet in Egypt in November to discuss stepping up their efforts.
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“We all needed good news,” said Tina Stege, climate envoy for the Marshall Islands, which are in danger of extinction due to rising sea levels. The announcement of the climate deal “adds much-needed wind to our sails,” she said, though she warned that “we’re a long way from where we should be.”
Jonathan Pershing, who served as Biden’s deputy climate change envoy until January, said he had faced in recent weeks the fears of former African and Chinese colleagues who were acutely aware of the apparent collapse of US climate legislation.
“They said, ‘OK, you guys are not going to do this, so why should we do this,’” Mr. Pershing recalled. “I think you have a fundamentally different narrative now.”
Senator Edward J. Markey, Democrat of Massachusetts, said the legislation would restore America’s credibility in international negotiations. “You can’t preach abstinence from a bar stool, and you can’t ask China, India, Brazil or other countries to cut emissions if we don’t do it to a large extent ourselves,” he said.
Republicans in the Senate unanimously oppose the bill.
“This is nothing short of an attack on an American family,” Wyoming Republican Senator John Barrasso said in a statement. “If we want to lower inflation, lower energy costs and reduce deficits, the recipe is clear. Congress must cut spending and give free rein to US oil and natural gas production.”
The bill will affect almost every aspect of US 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 to reverse the long-standing migration of clean energy production to China and elsewhere.
The companies said they were ready to respond quickly. QCells, a South Korean solar company already building a $171 million assembly plant in Dalton, Georgia, plans a multibillion-dollar supply chain expansion in the United States if the law passes, said Scott Moskowitz, head of QCells. market strategy and public relations.
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 to provide financial support for clean energy projects; and $20 billion for programs to reduce emissions in the agricultural sector.
The most immediate effect of the bill will be to accelerate growth in the production of wind turbines, solar panels and electric vehicles in the United States, energy experts say. Renewable energy production has slowed significantly this year due to pandemic-related disruptions, trade disputes and federal policy uncertainty. recent report The American Clean Energy Association, which represents wind and solar energy companies and battery manufacturers.
“The entire clean energy industry just breathed a sigh of relief,” said Heather Zichal, the association’s chief executive. “It’s an 11-hour reprieve to work on climate change and clean energy.”
For decades, the US has provided wind and solar tax credits that expire in one to two years, subjecting the industry to a boom-bust cycle until the loans are renewed. Under the new legislation, tax incentives will last up to 10 years to give companies the confidence to make long-term investment decisions.
The bill, however, does not remove one of the biggest hurdles facing renewable energy: the lack of long-distance transmission lines that help bring wind and solar energy to cities from remote rural areas. An earlier version of the bill included tax breaks for the new transfer, but this has been removed. According to Rob Gramlich, founder of Grid Strategies, without this condition, many wind and solar projects can be difficult to implement.
In the long term, the tax credits in the bill are expected to boost the development of new technologies such as carbon capture for industrial facilities such as steel and cement production, next-generation nuclear reactors, and the use of hydrogen as a low-carbon fuel. Many of these technologies are too expensive to be widely used today, but it is hoped that by creating a market for an initial round of projects, it will be possible to reduce costs – in the same way that federal tax breaks in the 2000s and 2010s helped transform wind and solar. energy. from an expensive niche technology to an affordable mainstream option.
The bill does include some support for fossil fuels, a concession many see as necessary to win the backing of Mr. Manchin, whose home state of West Virginia is rich in coal and natural gas. For example, the bill mandates new leases to drill oil wells in the Gulf of Mexico, which environmental groups have opposed, and Mr. Biden has vowed to suspend his candidacy for the White House.
“It’s really all of the above, which means this bill does not arbitrarily cut off our rich 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 also secured a commitment from Mr. Biden and California State Speaker Nancy Pelosi that Congress would approve a separate measure related to permitting energy infrastructure, potentially including natural gas pipelines, before legislation is passed. end of the financial year 30 September.
This could facilitate a project in which Mr. Manchin has taken a personal interest, the Mountain Valley Pipeline, which will transport Appalachian shale gas from West Virginia to Virginia.
But even with concessions to the fossil fuel industry, “the bill is still absolutely justifiable for climate change,” said Lea Stokes, a professor of environmental policy at the University of Santa Barbara, California, who has advised Senate Democrats.
Two weeks ago, when even Mr. Biden appeared to be writing an obituary for climate legislation, a small group of lawmakers continued to work with Mr. Manchin. Several Democrats and climate activists believe that Senator John Hickenlooper of Colorado did not close lines of communication with Mr. Manchin.
“When a lot of people said, ‘This is the end,’ and everyone wrote it off, I went to everyone I knew and said, ‘Wait, we can’t leave,'” said Mr. Hickenlooper, a former oilfield geologist. . and a gas company. “We have no satisfactory alternative.”
Many were wary of continuing negotiations because “they didn’t want to get 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 at the Wharton School of Business at the University of Pennsylvania, and that Mr. Manchin attached great importance to their findings indicating that legislation could be developed that would not exacerbate inflation.
He called Mr. Manchin an “honest broker” in the negotiations, someone who wanted to find a way to tackle climate change without putting a burden on his state’s fossil fuel workers.
“He never told me he was done, and I said that while Joe Manchin is at the table, I am at the table,” Mr. Hickenlooper said.