Surprise deal would be most ambitious climate action undertaken by US
By Lisa Friedman and Brad Plumer
The $369 billion climate and tax package forged in a surprise deal by Senate Democrats on Wednesday would be the most ambitious action ever taken by the United States to try to stop the planet from catastrophically overheating.
The agreement, which Senate Democrats hope to pass as early as next week, shocked even some who had been involved in the sputtering negotiations over climate legislation during the past year. The announcement of a deal, after many activists had given up hope, almost instantly reset the role of the United States in the global effort to fight climate change.
And it was delivered by Sen. Joe Manchin, D-W.Va., the holdout who had been reviled by environmentalists and some of his own colleagues after he said this month that he could not support a climate bill because of inflation concerns.
“By a wide margin, this legislation will be the greatest pro-climate legislation that has ever been passed by Congress,” Sen. Chuck Schumer, D-N.Y., the majority leader, said in announcing the deal with Manchin.
The bill aims to tackle global warming by using billions of dollars in tax incentives to ramp up wind, solar, geothermal, battery and other clean energy industries over the next decade. Companies would receive financial incentives to keep open nuclear plants that might have closed, 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 would receive a $7,500 tax credit to purchase a new electric vehicle and $4,000 for a used one. Americans would receive rebates to install heat pumps and make their homes more energy-efficient.
“This is the action the American people have been waiting for,” President Joe Biden said, hailing the bill’s “investments in our energy security for the future.”
Senate Democrats estimated that the legislation would enable the United States to cut greenhouse gas emissions to 40% below 2005 levels by 2030, putting the nation within striking distance of the aggressive climate goals laid out by Biden last year.
Biden wants to slash U.S. emissions to at least 50% below 2005 levels by the end of this decade, which is roughly the pace scientists say the whole world must follow to limit global warming to1.5 degrees Celsius (2.7 degrees Fahrenheit) above preindustrial levels. That’s the threshold beyond which scientists say the likelihood of catastrophic floods, fires, storms and drought increases significantly. The planet has already warmed by about 1.1 degrees over the past century.
The bill “keeps us in the climate fight and makes it possible that executive action, state and local government policies, and private sector leadership can get us across the finish line,” said Jesse Jenkins of Princeton University, who modeled the effects of earlier versions of the legislation. “Without this bill, we’d be hopelessly far from our climate goals.”
The bill would affect nearly every aspect of U.S. energy production. It includes $30 billion in incentives for companies to build solar panels, wind turbines and batteries and to process critical minerals in the United States, aiming to reverse the longstanding migration of clean energy manufacturing to China and elsewhere.
Companies have said they are ready to respond quickly. QCells, a South Korean-based solar company that is already building a $171 million assembly factory in Dalton, Georgia, is planning a multibillion-dollar expansion of supply chains in the United States if the bill passes, said Scott Moskowitz, QCells’ head of market strategy and public affairs.
Also included is $60 billion to address the disproportionate burden of pollution on low-income communities and communities of color; $27 billion for a “green bank” aimed at delivering financial support to clean energy projects; and $20 billion for programs to cut emissions in the agriculture sector.
The most immediate effect of the bill, energy experts said, will be to supercharge the growth of wind turbine, solar panel and electric vehicle production in the United States. Renewable energy production has slowed significantly this year, due to pandemic-related disruptions, trade disputes and uncertainty about federal policy, according to a recent report by the American Clean Power Association, which represents wind and solar energy companies and battery manufacturers.
The bill does provide some support for fossil fuels, a concession widely seen as necessary to win support from Manchin, whose home state of West Virginia is rich in coal and natural gas. For instance, the bill would mandate new lease sales for oil drilling in the Gulf of Mexico, something environmental groups had opposed and Biden had promised to halt as a candidate for the White House.
“It is truly all of the above, which means this bill does not arbitrarily shut off our abundant fossil fuels,” Manchin said in a statement. He called the package “a “realistic energy and climate policy.”
As part of the agreement, Manchin said he had also secured a commitment from both Biden and House Speaker Nancy Pelosi of California that Congress would approve a separate measure to address the permitting of energy infrastructure, potentially including natural gas pipelines, before the end of the fiscal year on Sept. 30.
That could ease the way for a project in which Manchin has taken a personal interest, the Mountain Valley Pipeline, which would transport Appalachian shale gas from West Virginia to Virginia.
But even with the concessions to the fossil-fuel industry, “the bill is still absolutely worth it for climate change,” said Leah Stokes, a professor of environmental policy at the University of Santa Barbara, California who had been advising Senate Democrats.