Great news to show that democracy can be an effective means for systemic change on climate change. With the right political party in control of the government, the right policies can be implemented.
Having secured a slim majority in the Senate with Biden-Harris in the White House and 2 seats in the runoff elections in GA, the Democrats were able to pass a $3.5 trillion social and environment bill on Wed 11 Aug. The bill passed by a slim majority on partisan lines 50-49 with Kamala Harris VP as the tie-breaker. For those who have been following along, budget reconciliation is not new law, and has limitations on scope, but the advantage is that it is immune to the threat of filibuster.
Direct spending on climate initiatives represents only $0.27 of the $3.5 trillion (over 10 years) or at least 10% of the full ambition needed. $0.27 trillion is 0.1% of GDP, in line with where other countries are spending but shy of the 1% benchmark of what is likely the full demands for the transition.
Paid for by polluters, corporations and the rich
This is only the spending side, however, on the financing side, the bill provisions for paying for the transition from raising taxes on corporations, wealthy individuals and carbon and methane pollution. So depending on the tax rate, how close it is to the benchmark of US $75/ton of CO2, how much additional revenue is raised using a carbon tax, the total financing impact could be much larger than 0.1% of GDP and thus closer to the full demands.
Wins and compromises
While it is a start, there is still much work remaining to close the emissions gap and bring the US in line with the Paris Agreement targets. Compromise is an inherent design feature of the democratic process. The legislation was not a Green New Deal wishlist however, there were some wins and some compromises in the 29 passed amendments aimed to provide more clarity on the terms and conditions of how the money could or could not be spent. While all of them are non-binding and the ultimate decision is still up to the Senate budget committee, which for now is controlled by the Democrat majority and led by Green New Deal champion Sen Bernie Sanders, the amendments can still have influence on the precedence of how the money is intended to be spent. Another consideration is that the Democrats may not always be in power over the next 10 years (5 election cycles) that the bill will be spent over. Here's some highlights of the good news and disappointments from a full Green New Deal ambition.
Wins
Carbon fee to tax methane and carbon dioxide
Renewable energy tax incentives
Expedited deployment of carbon capture technologies
Civilian Climate Corps federal jobs program
Federal clean energy standard
Failed attempt to prevent the White house from freezing drilling on public land
Compromises
Block ban on hydraulic fracking
Block DoA from limiting fossil fuel power plants access to financing
Block restrictions on regulating methane emissions from agriculture (cows)
No show stoppers
Even the hotly contested compromises such as the Barrasso and Hoeven Amendments may not have much practical impact on denting the progress to the zero carbon economy decarbonization and more of an attempt for Republicans to save face with their constituents, who may be pacified if they are seen as not giving the Democrats a blank check (sound familiar?). The Barrasso “Green New Deal '' amendment was worded strongly to prevent a Green New Deal, but by being both non-binding and vague wording in practice is aimed at a straw-man and not a real limit to actual Green New Deal policies. While the Hoeven “baseload power” amendment may upset some of the hardliner environmental activists by keeping the door open for fossil fuels, it is in line with the IPCC pathways which also acknowledge the future role of fossil fuels with carbon capture. The good news is that the “... carbon capture, as well as nuclear power” wording built the conditionality that these energy sources are clean and thus leave no wiggle room for future expansion of carbon polluting industries.
Bipartisan support - no handouts for China or the super-rich.
Despite the focus on areas of disagreements, two areas with strong bipartisan support were that the bill should not be used to help China or the super-rich. Some amendments included provisions that would limit the materials, technology procured from China or forced labor. A notable evidence of the populist shift in the Republican party was an amendment from Rep Senator Deb Fischer from Nebraska to limit the electric vehicle subsidies to low and middle income taxpayers. “The least we can do is show bipartisan support for denting taxpayer subsidies for the rich”. So for now, we may be reaching the end of the era of Gordon Gecko’s “greed is good”. In this current political environment, nobody in Congress wants to be seen as the party of the rich.
References
US 116th Congress, Accessed 2021 Aug 12 "S.Con.Res.14 - A concurrent resolution setting forth the congressional budget for the United States Government for fiscal year 2022 and setting forth the appropriate budgetary levels for fiscal years 2023 through 2031."
Koss, Geof and George Cahlink, 2021 Aug 11 E&E News "Senate OKs $3.5T budget plan after energy, enviro debates"
Wilkie, Christina 14 2021, Jul 14 CNBC, "Democrats’ $3.5 trillion budget package funds family programs, clean energy and Medicare expansion"
Farrington, Dana and Barbara Sprunt, 2021 Aug 11, NPR News "Here's What's In The Democrats' $3.5 Trillion Budget Resolution"
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