The climate-related investments in the Inflation Reduction Act of 2022, as agreed to Wednesday by Senators Manchin and Schumer, simply do not transform it into a climate bill.
Does the Act amount to “the greatest pro-climate legislation that has ever been passed by Congress,” as Senator Majority Leader Chuck Schumer proclaimed? Or else, is it “a climate suicide pact,” in the view of Brett Hartl, government affairs director at the Center for Biological Diversity.
Former Treasury Secretary Larry Summers may have been right to describe the Act as “an important step forward on [fighting] inflation” since it substantially trims the budget deficit by raising twice the amount it spends in new revenues. How does it do that? By imposing “a 15% corporate minimum tax and enhanced tax enforcement efforts” at the IRS “as well as projected savings from allowing Medicare to negotiate some prescription-drug prices,” according to Wall Street Journal reporting. Of course, teasing out the measure’s inflation dampening role will not be easy – particularly given the Federal Reserve’s substantial federal funds rate hike (also on Wednesday) and the already-significant decline in US gasoline prices from their mid-June high.
But a number of the Act’s provisions demonstrate impressive irresponsibility, in patent disregard of UN Secretary General Antonio Guterres’ recent warning that “[n]ew funding for fossil fuel exploration and production infrastructure is delusional,” as it “will only further feed the scourge of war, pollution and climate catastrophe.”
How so? In several ways, according to Politico reporting, including putting in place “a 10-year window in which a lease for offshore wind development cannot be issued unless an oil and gas lease sale has also been held in the year prior” that is not less than 60 million acres; reinstating “an offshore oil and gas lease sale conducted in the Gulf of Mexico last year that had [been] vacated by a federal judge due to insufficient environmental review”; and requiring the Administration “to conduct two more lease sales in the Gulf and another in Alaska’s Cook Inlet that Biden had canceled in May.” Moreover, the Act serves to increase the amount of logging on public lands, consistent with similar attempts in the 2021 infrastructure and reconciliation bills that were revealed in an independent report issued last September. Also, in yet another sweetener for Manchin, President Biden and Democratic leaders apparently agreed “to streamline the permitting of energy infrastructure,” in part to “ease the way for a shale gas pipeline project in West Virginia in which Mr. Manchin has taken a personal interest.”
On the other hand, according to a NY Times account, the Act includes substantial clean energy investment, including “$30 billion in incentives for companies to build solar panels, wind turbines and batteries” and to “process critical minerals in the United States”; “$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”; “$20 billion for programs to cut emissions in the agriculture sector”; a crackdown on leaks of methane . . . from oil and gas wells, pipelines and other infrastructure” including imposition of a fee, rising by 2026 to “$1,500 per ton of methane that escape[s] into the atmosphere in excess of federal limits.”
So, does the Act amount to “the greatest pro-climate legislation that has ever been passed by Congress,” as Senator Majority Leader Chuck Schumer proclaimed. Or else, is it “a climate suicide pact,” in the view of Brett Hartl, government affairs director at the Center for Biological Diversity.
It all depends, and a considered answer requires review of reasonable projections of the Act’s impact on emissions within our present context of a deepening climate crisis.
As to the first, a preliminary analysis by the widely-cited Rhodium Group indicates that the Act “can cut US net greenhouse gas emissions down to 31% to 44% below 2005 levels in 2030 compared to 24% to 35% under current policy. The range reflects uncertainty around future fossil fuel prices, economic growth, and technology costs.”
Rhodium’s analysis implies that the Act — again, as compared to current policy — at best is likely to marginally accelerate the altogether too slow long-term US GHG emissions reduction trend.
Regrettably, however, Rhodium’s methodology is not explained. In particular, I’d like to learn whether the group (a) properly estimated total acreages that would be involved in fossil fuel leases on public lands (including for offshore oil/gas drilling); (b) relied on dubious industry presumptions regarding the efficacy of carbon capture and storage (CCS) and biomass energy with carbon capture and storage (BECCS); and (c) adequately accounted for carbon emission increases that would result from the $2 billion in new logging subsidies in the bill.
Further, even if the Rhodium analysis is sound (as I hope) still, in no way can the Act be deemed an adequate national response to the climate crisis. Fifteen months ago, the Biden team laid out a far-more comprehensive response, committing the nation to “reduce net GHG emissions by 50-52 percent below 2005 levels by 2030; to achieve “100 percent carbon pollution-free electricity” by 2035; and “to exceed a straight-line path to achieve net-zero emissions, economy-wide, by no later than 2050.” The Act simply does not get us there.
Granted, the Democrats’ announcement on Wednesday may be the best that a divided Congress can do at present to both satisfy Senator Manchin (and his fossil fuel patrons) and secure additional investment in renewables, advanced nuclear, other clean energy, carbon removal R&D, and the like.
But it is decidedly not the best that the President can do, and so not “the action the American people have been waiting for.” Much, much more is required.
Let us suppose, then, that the federal Environmental Protection Agency retained clear authority to act, consistent with the priorities established by President Biden and his talented climate team, to devise and implement a plan to move us from catastrophe to safety – including the imposition of restrictions, even to the point of prohibition, on continuing and legacy GHG pollution.
Suppose further that a determined group of committed citizens laid it all out there for the President and the Agency, in a Petition demanding that EPA take the straightforward, initial step, by determining that GHG pollution “presents an unreasonable risk of injury to health or the environment.” Rational rulemaking, including with the involvement of highly impacted communities and others, would follow. The President and his team would thereby galvanize the nation and, by our example, the world, into real action undergirded by bedrock federal law.
We will see, soon, if they take this up, in just 47 days and counting.