New climate bill: Look on the bright side, and (almost) everyone’s a winner

After more than a year of wheeling and dealing with resistant holdouts, the Senate Democrats finally passed a package of climate legislation on Sunday under the umbrella of the Inflation Reduction Act. The bill, if it passes the House as expected and is signed into law by President Biden, will be the country’s first major climate law.

The package earmarks $369 billion for energy security and climate change programs over the next 10 years, including: $44 billion in tax credits for wind, solar, and other renewable power sources like hydrogen and another $30 billion for investing in renewable energy technologies, including solar panels and wind turbines; $30 billion for nuclear power companies, to discourage existing power plants from shutting down; $9 billion to encourage investments in efficient heating and cooling systems; and $36 billion to encourage individuals to buy new or used electric vehicles.

The bill also includes some boons for the fossil fuel industry, making it easier to build fossil fuel pipelines and providing tax credits for carbon capture. It also mandates that the Interior Department auction off oil and gas leases before permitting new wind and solar projects on federal land, although whether industry will even want those drilling leases remains to be seen.

A preliminary assessment of the bill by the Rhodium Group, a think tank, estimates the bill’s provisions could reduce US greenhouse gas emissions from 31 percent to 44 percent below 2005 levels by 2030, which is lower than the goal of a 50 percent reduction in that time frame, but still significant.

“Congress finally resisted the temptation to make the perfect be the enemy of excellent,” Susan Solomon, a member of the Bulletin of the Atomic Scientists’ Science and Security Board, wrote in an emailed statement. “They are passing legislation that will push forward the many solutions to climate change in a practical way. The bill should reduce US emissions of greenhouse gases by 40 percent by 2030 relative to 2005, not as much as the 50 percent initially targeted but still enough to make the US a credible leader in the global push to prevent climate change from getting even more out of hand. It’s not everything we need, but it’s a great step that should advance electric vehicles, promote alternative energy, and cap unnecessary methane emissions.”

Many other climate experts have echoed Solomon’s takeaway: The bill is not enough on its own, but it is a significant step in the right direction.

“I thought it was great,” Andrew Dessler, a climate scientist and professor at Texas A&M University, when asked for his first impressions. “It’s easy to find things in a bill like that, that you don’t like. But I was very positive about it and think it’s a step in the right direction. And certainly, it’s better than doing nothing, which was the alternative.”

“You know, if you talk to an economist, they would tell you that the right way to approach the problem of climate change is to tax bad things,” Dessler said. “And it turns out that politically, that’s really hard. People don’t want to tax fossil fuels. So the second-best thing, which is in many ways economically equivalent, is you subsidize good things. In both cases, they shift the economics. It’s a lot harder to do a good subsidy than it is to do a good tax. And subsidies require you to do things like pick winners and losers, that taxes don’t really force you to do. But still, I think that this kind of emphasizes the idea that the road to climate solutions might be paved with subsidies rather than carbon taxes.”

As Dessler and others have noted, the Inflation Reduction Act is almost all carrots, hardly any sticks—with some exceptions, like the $900 penalty per metric ton of leaked methane over an annual threshold, which will increase to $1,500 per metric ton in 2026. It required a lot of compromises, and more than a few concessions to the fossil fuel industry and Democratic Senators Joe Manchin and Kyrsten Sinema.

In the days leading up to the passage of the bill, a group called United for Clean Power latched onto perceived shortcomings in the bill and ran an intensive campaign on the premise that the climate bill doesn’t go far enough, Judd Legum and Kyle Tharp report for Popular Information. Fortunately, Dessler said, this bill passed before the influence campaign or other misinformation could derail its passage in the senate.

“I think that a key part to legislating these days is you don’t give the forces opposed to you time to try to spread misinformation. So I actually don’t think misinformation had much of an effect on this,” Dessler said. “The people that are going to vote no and the people that don’t like it already came in primed that way, and there was no opportunity to build up widespread public opposition. There just wasn’t time.”

Some environmental groups, including the Climate Justice Alliance, have argued that the bill could end up doing more harm than good based on their analysis.

“There’s a lot of gnashing of teeth, about the payout to Manchin with fossil fuel leasing,” Dessler acknowledged. “And I just say to those people, would you rather have nothing? I mean, because that is the choice. Nobody says, this bill has no flaws. Everybody kind of understands the limitations.”

“But I mean, you’ve got to take the victories where they come or else you’re gonna have a very long and miserable life,” Dessler added. “And so I just encourage people to look on the bright side.”