Surprise deal would be America’s most ambitious climate action

WASHINGTON — The $369 billion climate and tax package forged in a surprise deal by Senate Democrats on Wednesday would be the most ambitious action the United States has ever taken to try to save the planet from catastrophic overheating to preserve.

The agreement, which Senate Democrats plan to pass next week, shocked even some involved in last year’s stuttering negotiations on climate legislation. The announcement of a deal, after many activists had given up hope, almost immediately reset the United States’ role in the global effort to tackle climate change.

And it was delivered by Senator Joe Manchin III of West Virginia, the reticent Democrat who had been berated by environmentalists and some of his own peers after saying this month he could not support a climate bill over inflation concerns.

“This bill will be by far the largest pro-climate bill ever passed by Congress,” said Senator Chuck Schumer, the Democratic Majority Leader, in announcing the deal with Mr. Manchin.

The bill aims to fight 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 be given financial incentives to keep potentially closed nuclear power plants running, or to capture emissions from industrial plants and bury them underground before they can warm the planet. Car buyers with income below a certain limit would receive a $7,500 tax credit for a new electric vehicle purchase and $4,000 for a used one. Americans would get rebates to install heat pumps and make their homes more energy efficient.

“This is the action the American people have been waiting for,” President Biden said, hailing the “bill’s investments in our energy security for the future.”

Senate Democrats estimated the legislation would allow the United States to cut greenhouse gas emissions 40 percent below 2005 levels by 2030, putting the nation within striking distance of the aggressive climate targets Mr. Biden set last year.

Mr. Biden wants US emissions to be cut to at least 50 percent below 2005 levels by the end of this decade, which is roughly the pace scientists say the whole world needs to follow to limit global warming to 1.5 degrees Celsius (2 .7 degrees Fahrenheit) above pre-industrial levels to limit levels. That’s the threshold at which scientists say the likelihood of catastrophic floods, fires, storms and droughts increases significantly. The planet has already warmed by about 1.1 degrees in the past century.

The bill “keeps us in the fight against climate and allows executive branch action, state and local government policies, and private sector leadership to get us across the finish line,” said Jesse Jenkins of Princeton University, who studied the impact of previous versions has modeled the legislation. “Without this draft law, we would be hopelessly far from our climate goals.”

Diplomats and climate experts said they hoped the deal would revive international efforts to combat global warming, which have slacked off in recent months, as the war in Ukraine and rising oil prices have prompted many countries to turn to props Concentrate on fossil fuel supplies. World governments are a long way from doing what they need to do to meet the 1.5 degree target, and leaders are due to meet in Egypt in November to step up their efforts discuss.

“We all needed good news,” said Tina Stege, the climate ambassador for the Marshall Islands, which are at risk of disappearing below sea level. The announcement of a climate deal “puts much-needed wind in our sails,” she said, although she warned that “we’re still a long way from where we need to be”.

Jonathan Pershing, who served as Mr Biden’s deputy climate chief until January, said he had, in recent weeks, raised concerns from former African and Chinese counterparts, who are acutely aware of the apparent collapse in US climate legislation.

“They said, ‘Okay, you’re not going to do that, so why should we,'” Mr Pershing recalled. “I think you have a fundamentally different narrative now.”

Senator Edward J. Markey, a Democrat from Massachusetts, said the legislation will restore American credibility in international negotiations. “You can’t preach moderation from a barstool, and you can’t ask China, India, Brazil or any other country to cut emissions if we don’t do it ourselves on a significant scale,” he said.

Senate Republicans unanimously reject the bill.

“It is nothing but an attack on the American family,” Wyoming Republican Sen. John Barrasso said in a statement. “If we want to lower inflation, lower energy costs and lower the deficit, the recipe is clear. Congress should cut spending and unleash American oil and gas production.”

The law would 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 shift of clean energy generation to China and elsewhere.

The companies have said they are ready to respond quickly. QCells, a South Korean-based 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 affairs.

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” aimed at funding clean energy projects; and $20 billion for programs to reduce emissions in the agricultural sector.

The most immediate effect of the bill, energy experts said, will be to spur growth in wind turbine, solar panel and electric vehicle manufacturing in the United States. According to a recent report from the American Clean Power Association, which represents wind and solar energy companies and battery makers, renewable energy production has slowed significantly this year due to pandemic-related disruptions, trade disputes and uncertainties over federal policy.

“The entire clean energy industry just breathed a sigh of relief,” said Heather Zichal, executive director of the association. “This is an 11-hour grace period for climate action and clean energy jobs.”

For decades, the US has given wind and solar tax credits that expire after a year or two, subjecting the industry to a boom-bust cycle until the credits are renewed. Under the new legislation, the tax credits would last up to 10 years to give companies the confidence to make long-term investment decisions.

However, the bill fails to address one of the biggest hurdles for renewable energy: the lack of transmission lines to bring wind and solar power from remote rural regions to cities. An earlier version of the bill had included tax credits for new transfers, but that has been removed. Without that provision, many wind and solar projects would be difficult to build, said Rob Gramlich, founder of Grid Strategies.

In the longer term, the tax incentives in the bill are intended to boost emerging technologies such as carbon capture for industrial assets like steel and cement, next-generation nuclear reactors and the use of hydrogen as a low-carbon fuel. Many of these technologies are too expensive for widespread adoption today, but the hope is that by creating a market for a first round of projects, costs could be reduced – much like how federal tax credits helped in the 2000s and 2010s Transforming wind and solar power from an expensive niche technology to an affordable mainstream option.

The bill includes some support for fossil fuels, a concession widely believed to be necessary to win support from Mr. Manchin, whose home state of West Virginia is rich in coal and natural gas. For example, the bill would mandate new leasehold sales for oil wells in the Gulf of Mexico, something environmental groups had campaigned against and Mr. Biden had vowed to quit as a White House nominee.

“It’s really all of the above, meaning this law will not arbitrarily shut off our abundant fossil fuels,” Mr. Manchin said in a statement. He called the package “a realistic energy and climate policy”.

As part of the deal, Mr. Manchin said he also received a commitment from both Mr. Biden and California Speaker Nancy Pelosi that Congress would authorize a separate measure to address the approval of energy infrastructure, potentially including natural gas pipelines, before Congress End of the fiscal year on September 30th.

That could pave the way for a project that Mr. Manchin is personally interested in, the Mountain Valley Pipeline, which would transport Appalachian shale gas from West Virginia to Virginia.

But even with the concessions made to the fossil fuel industry, “the climate change bill is absolutely worth it,” said Leah Stokes, a professor of environmental policy at the University of Santa Barbara, California, who served as an adviser to Senate Democrats.

When even Mr Biden appeared to be writing an obituary on climate legislation two weeks ago, a small group of lawmakers continued to work with Mr Manchin. Several Democrats and climate activists credited Colorado Senator John Hickenlooper with keeping lines of communication open with Mr. Manchin.

“When a lot of people were saying, ‘This is the end,’ and everyone was writing it off, I went to everyone I knew and said, ‘Wait a minute, we can’t stop,'” said Mr. Hickenlooper, a former geologist for an oil and gas company. “We have no satisfactory alternative.”

Many were wary of continuing negotiations because “they didn’t want to have 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 from the Wharton School of Business at the University of Pennsylvania and Mr. Manchin placed much emphasis on their data, which suggested legislation could be designed that would not worsen inflation.

He called Mr. Manchin “an honest broker” in the talks, one who wanted to find a way to address climate change without charging fossil fuel workers in his state.

“He never told me he was done, and I said as long as Joe Manchin is at the table, I’m at the table,” Mr. Hickenlooper said.

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