When Barack Obama pumped $ 90 billion into wind turbines, solar panels and batteries as part of his efforts to revitalize the US economy after the 2008 crash, his administration boasted of the “largest single clean energy investment in history”.
Joe Biden, then vice president, wants to shadow his former boss’s legacy. The president on Wednesday announced a proposal to inject nearly ten times that figure into clean energy as he uses a $ 2tn infrastructure drive to deliver on his promise to put America on the path to a greener future.
“The US Jobs Plan will lead to transformational progress in our efforts to tackle climate change,” said Biden. “There is no plan to tinker around the edges.”
The package would provide unprecedented government support for everything from electric vehicles to renewables, and would also set national targets to wean utilities from carbon-emitting energy sources. Analysts said it would give investors the long-term confidence needed to pull much more private capital into the sector.
“As a result, the entire clean energy transition is now turning into hyperdrive,” said Paul Bledsoe, strategic advisor at the Progressive Policy Institute and former climate advisor at Clinton White House. “What it does, I think for the first time really, is to provide complete security for clean energy business investments.”
Biden’s plan would mean an infusion of more than $ 350 billion directly into clean energy – powering the electric vehicle infrastructure, reviving the power grid, and boosting research and development – plus an estimated $ 400 billion to extend and expand tax credits for the generation and storage of clean energy. It would also set a “clean energy standard” that requires utilities to produce zero-carbon energy by 2035.
In particular, the proposals for tax credits have received enthusiastic support from the industry. The package extends the 10-year production and investment credits claimed by renewable energy producers.
Congress has repeatedly extended solar and wind credits over the past two decades, often at the eleventh hour or even after they have already expired. The latest extension came in a year-end release, and the Covid-19 aid package was adopted in December.
“Predictability will make it a lot easier to get the investment we need to secure the growth needed to tackle climate change,” said Gregory Wetstone, CEO of the American Council on Renewable Energy.
New tax breaks would become available for energy storage technologies, such as grid-tied batteries, and for at least 20 gigawatts of power lines that can connect remote solar and wind farms to more populated areas.
Larry Gasteiger, executive director of Wires, a transmission trading group, said tax breaks would lower costs for electricity consumers, although acceptance by utilities – who make a regulated return on the amount of money they invest in their infrastructure – was less certain. “Every utility company is going to make that tradeoff on its own,” he said.
Biden has identified climate change as one of the top priorities for his administration and has already issued a number of executive orders, re-joining the Paris Agreement, scrapping the Keystone XL oil pipeline and suspending new oil and gas leases on public land.
With these latest plans, he hopes to launch election promises to spur the US towards total decarbonization of its energy sector by 2035 and zero net emissions across the economy by 2050.
Some analysts have questioned whether pushing major climate proposals into a broader infrastructure plan is the best way to pursue the president’s lofty green goals. But the White House is reluctant to rely too heavily on regulations that could be held in the courts, while a standalone climate law would have a hard time getting the ten Republican votes it takes to get the Senate fight.
“So if you can’t do it through specific climate laws and you can’t do it through regulations, then it might make sense to try it through something like an infrastructure law,” said Robert Stavins, an energy and economics professor.
“The upside is that infrastructure can be twofold, partly because there are widespread concerns about infrastructure, but also because an infrastructure account by its very nature will bring benefits,” he added. And politicians, regardless of party, love to give benefits. “
But many in the progressive wing of the Democratic Party think the proposals are too small. “This is nowhere near enough,” tweeted Alexandria Ocasio-Cortez, a supporter of the Green New Deal, as details of the plan emerged. “Must be much bigger.”
Ben Beachy, a director at the Sierra Club, agreed. He called for a tripling of proposed Biden spending levels to $ 1 trillion a year over the next decade, in line with proposals unveiled by progressive Democrats earlier this week. “It’s a very welcome start, but Congress needs to step it up now,” he said.
On the other hand, Republicans have accused the Biden proposals as too wasteful. John Barrasso, the top Republican on the Senate Committee on Energy and Natural Resources, dismissed them as “a socialist spending attempt that got out of hand.”
The president has indicated a preference for working with Republicans to achieve bipartisan support for the package. But there is an expectation that the Democrats will only do it by using the reconciliation mechanism to force it through the Senate by a simple majority.
“We will have those talks,” said Gina McCarthy, Biden’s climate tsar. But rest assured, the president put a number there that he thought was not only defensible but needed to comply at the moment. We don’t just want to reach the future, we want to win it. “
Additional reporting by Gregory Meyer in New York