It has to pass, it has to pass, it has to pass. It has to pass! It has to pass. It has to pass. IT HAS TO PASS. Pass, it must. It. Has. To. Pass. Nothing happens if it doesn’t pass! 𝓘𝓽 𝓱𝓪𝓼 𝓽𝓸 𝓹𝓪𝓼𝓼. Senator Joe Manchin has to vote for it; Senator Kyrsten Sinema has to vote for it; all the Senate Democrats have to vote for it. That’s because … 𝖎𝖙 𝖍𝖆𝖘 𝖙𝖔 𝖕𝖆𝖘𝖘. No pass interference allowed. Like the leftmost highway lane, it’s for passing only. Two hundred eighteen House Democrats have to vote for it. It! Has! To! Pass!
In order to mean anything for climate change, President Joe Biden’s signature spending package has to pass. And, at least right now, no guarantee exists that it will. Earlier today, the White House announced a new framework “agreement” for the ambitious package, which it has been negotiating in some capacity since March 31. The framework is composed not of policies that Manchin and Simena, the Senate’s two linchpin Democratic votes, have agreed to, exactly, but of policies that they have yet to reject. Biden has seemingly announced the deal not because of a big breakthrough in negotiations, but because he needed to have something in hand before he flew to Europe to meet with Pope Francis and to speak at the United Nations climate conference in Glasgow, Scotland.
Yet if the deal resembles the final bill, it promises that whatever does pass (if anything does) might be worth celebrating. It will not mark total victory: Manchin’s cancellation of a crucial clean-electricity program, Democrats’ slim one-vote Senate majority, and the surfeit of veto points in Congress foreclosed that possibility. But it will mark a turning point in the federal government’s approach to climate change, and it will prepare the country’s physical, technological, and—surprisingly—its industrial landscape for a future closer to what the rest of the world expects.
Notable, at the very least, is its size: $555 billion for climate change. Biden, remember, initially proposed that the entire package cost $3.5 trillion; Manchin and Sinema have since whittled that down to $1.75 trillion. (The White House contends that the package officially costs nothing, since its spending will be, against the advice of economists, entirely balanced with new taxes and other revenue, but no verb yet exists in English to convey those subtleties.) But even as the bill’s overall spending has been cut in half, its amount of climate spending has barely budged, moving from $600 billion to $555 billion. The bill has lost key climate policies along the way, such as the Clean Electricity Program, and the Senate has shown itself as unable as ever to straight-up mandate reductions in carbon pollution. But the spending once allotted to those programs has been shifted to surviving climate policies and directed into new ones. To have the bill lose 50 percent of its overall spending but only 4 percent of its climate spending shows that the Democratic Party, despite significant internal constraints, has prioritized aggressive action on climate change.
Now, is that aggressive action enough? As ever with climate change, answering that question to satisfaction would require Ph.D.s in mechanical engineering, world history, and moral philosophy. The United States is responsible for a quarter of all greenhouse-gas emissions since 1751, which is slightly more than Europe and twice as much as China. It still emits more than 10 percent of global climate pollution each year, and it is the world’s largest producer of oil and natural gas. More important, it has nudged, prodded, and sometimes pile-drove the rest of the world into accepting a vision of modern affluence—of development itself—that drips with oil.
So what might be enough is for the United States to zero out its pollution within five years, leading the rest of the world to a prosperous and more sustainable future. That is the kind of action that would likely avert 1.5 degrees Celsius of global average temperature rise by 2040, the threshold beyond which experts say some devastating consequences are inevitable. But such a collapse in carbon intensity may not be physically possible without gripping poverty, and it is certainly politically impossible in our current democratic system. As such, the Biden administration has committed to cut American climate pollution in half by 2030 compared with its all-time high. To skip over some vagaries of energy modeling, suffice it to say: With luck, this bill will probably get us close to that goal. Here is how.
At the core of the package is a robust set of tax credits that will touch nearly every part of the real economy. Although tax credit is a dirty word in policy making—signaling a love for filing forms in triplicate and unnecessary complexity—these programs have been simplified by lawmakers to directly pay out cash to consumers and businesses.
A quick tour of these subsidies may help bring their sheer scope into focus. Let’s start with the power sector. If someone builds a new solar, wind, geothermal, or otherwise zero-carbon power plant, they will qualify for a 30 percent investment subsidy. That is, the government will cover nearly a third of their cost.
If the materials in their new plant were made in the United States, the government will cover 40 percent of their cost.
Should a renewable developer decline that assistance, they still can access a separate subsidy of $25 for each megawatt-hour of zero-carbon electricity that their power plant generates—and that subsidy increases too for American-made plants.
Nuclear-power plants will also enjoy a new production subsidy.
These are only the beginning. The bill will establish a subsidy of up to 30 percent for new high-voltage transmission lines and grid-level energy storage, two technologies crucial for moving cheap renewable electricity around the country and saving it up throughout the day to tap during the night. (That subsidy—are you getting the hang of this?—also increases for U.S.-made products.) For the first time ever, the bill will also establish a large bounty—it could be as much as $180 a ton—for anyone who removes carbon dioxide directly from the air.
Then there are the subsidies for consumers. Electric cars, light-duty trucks, and motorcycles will qualify for a new tax credit, available at the point of sale, of up to $7,500. If the vehicle was assembled in the U.S. with an American-made battery, it can qualify for up to $12,500 of tax credits. There is a new baseline $2,000 subsidy for buyers of used electric vehicles. And a slew of appliance purchases aimed at phasing fossil fuels out of people’s homes—such as rooftop solar panels, electric water heaters, and heat pumps—will also qualify for new subsidies.
Keep reading. The new framework devotes far more money to decarbonizing the country’s industrial sector than any previous version of the legislation. Directing money this way makes a lot of sense: The industrial sector is responsible for nearly 30 percent of American greenhouse-gas pollution, but analysts expect that it will become the dirtiest part of the American economy by the mid-2020s. Industry also faces some of the biggest outstanding technical questions about decarbonization: Very few firms, for instance, have figured out how to make zero-carbon steel, cement, or concrete. Industrial decarbonization also provides the clearest opening for the United States to compete globally: It is arguably the one part of the future, zero-carbon economy that neither China nor Europe has locked down yet.
The bill tries to address these industrial problems on both the supply and demand sides. It promises to help factories retool and retrofit their processes in lower- or zero-carbon ways and to help companies calculate the embodied carbon of their products, with the aim of reducing it. It will pay power plants and industrial facilities to capture carbon dioxide from their operations—at a price, $85 a ton, now generous enough to make it advantageous for many cement facilities to try, Jesse Jenkins, an engineering professor at Princeton University, told me. It creates a new and surprisingly lucrative program for generating low-carbon green hydrogen, which is expected to be an important fossil-fuel substitute in high-temperature industrial processes such as refining and steelmaking.
Keep reading! It also devotes $5 billion to a broad program meant to establish climate-friendly industries, or remake factories that already exist, in towns and regions dependent on carbon-intense manufacturing. And it creates a new tax on oil and gas companies that penalizes them for emitting the super-pollutant methane during their drilling operations, while subsidizing the technology that will help them stay below the bill’s threshold for punishment.
And—one more!—the bill opens an entirely new $4 billion fund that will turn the government into a buyer of first resort for that low-carbon steel, concrete, and other industrial materials. Such a technique helps ensure that early-stage companies can find demand for their products before an industry fully develops; it was once used to get the American semiconductor industry off the ground.
So again: Is this enough? Of course not. The bill does not actually require emissions to decline over the next decade, as the Clean Electricity Program would have. But a $555 billion investment in climate would be—and this is somewhat faint praise—the largest investment in the energy transition that the United States has made. (A single year of the package’s spending exceeds the total energy spending from the last titleholder, the 2009 Recovery Act.) More to the point, $555 billion on the green economy would also surpass the $272 billion that the European Union committed to a green recovery from the COVID-19 recession, according to data from the Rhodium Group, an energy-analysis firm. On a per capita basis, it would even rival the roughly $650 billion investment that the EU hopes will unlock a “European Green Deal.” It is quite a bit of money, in other words, and it would do quite a bit of good, especially for the industrial workers to whom both Biden and Manchin have pledged their political career.
But first: It has to pass.