Throughout it all, the package hung on Manchin’s vote, and the West Virginia Democrat had a strong hand on the climate and energy provisions. Its influence is felt in some provisions that promote coal, oil and natural gas – in a package that is apparently on the verge of encouraging renewable energies like solar and wind.
But despite concessions on global-warming fossil fuels, analysis from Schumer’s office suggests the measures would cut U.S. carbon emissions by about 40% by 2030, putting President Joe Biden on track to reach its goal of halving emissions by 2030.
This package, if approved by the Senate reconciliation process and passed by both houses of Congress, would be more than a massive legislative victory for Democrats ahead of the midterm elections; it would help put the US back in a global position to lead the fight against climate change alongside the EU.
Climate groups despairing of Congress’ lack of climate action were surprised and mostly thrilled by Manchin’s turnaround on Wednesday night. Some groups are wary of Manchin’s demands on fossil fuels, including a provision that would require renting public land and water for drilling before anything could be used for renewables.
Still, climate hawks in the Senate seemed poised to vote for the bill whenever it was introduced, saying the power of electric vehicle and renewable energy incentives was too good to pass up. Schumer said he plans to introduce the bill in the Senate next week, before lawmakers return home for August recess.
Lawmakers and advocates hope the spending package can begin to turn the tide on the climate crisis.
Massive reductions in emissions that warm the planet
When Biden’s bipartisan infrastructure bill passed last year, climate experts agreed it was an appetizer for big climate action.
The bipartisan bill included money for electric vehicle charging stations and grid upgrades, but it did little to help American consumers buy electric cars or electric home heating systems. . The significance of the new agreement Schumer and Manchin reached is how it will inspire American consumers and businesses to turn to clean energy.
“Tax credits that help bring renewables into the system can also help lower the rates that consumers [have] on their electricity bill,” Ben King, a senior analyst at the nonpartisan think tank Rhodium Group, told CNN. “The transition to something like wind or solar helps mitigate future price spikes like those in which we find ourselves today.”
The agreement aims to incentivize companies to invest in electricity and energy that emit fewer emissions; the very design of tax credits is to reward those who reduce their emissions the most, according to a statement by Senate Finance Chairman Ron Wyden.
The elements of the new deal that will have the most direct impact on everyday Americans are consumption tax credits that will reduce the price of energy-efficient appliances and technologies like heat pumps, solar vehicles and electric on the roofs.
It would also extend consumer tax credits for a full decade and extend tax credits for electric vehicles. Consumers looking to buy an electric car could get up to $4,000 for a used electric vehicle and $7,500 for a new electric vehicle. However, there will be a lower income threshold for people who can use the tax credits – a key request from Manchin.
It also earmarks $60 billion for domestic clean energy manufacturing and $30 billion for a production tax credit for wind, solar and battery energy storage.
Schumer’s office estimated the package would reduce US emissions by 40% by 2030. An independent preliminary analysis by Rhodium Group seemed to agree. King told CNN that the group’s preliminary analysis showed the new deal could “plausibly” achieve that goal.
King told CNN the 10-year clean energy tax credits are the biggest punch to emissions reductions. Another important element is funding to keep the country’s aging fleet of nuclear power plants online, continuing to generate electricity with zero-emission energy.
Another key piece of the puzzle: The deal will help reduce both the cost of energy and the energy-efficient appliances Americans need to decarbonize their daily lives, King said. The bill encourages the manufacture and purchase of heat pumps, for example — home heating and cooling devices that run on electricity and can replace gas or oil furnaces and separate air conditioning units .
“All of these things can combine to help deploy more heat pumps,” King said. “A heat pump is more energy efficient than something like a furnace. The less electricity you use, the healthier you are.”
American leadership on climate change
If Manchin and Schumer’s deal passes before the August recess, it will put the United States on a more secure footing for the next round of international climate talks.
The UN’s COP27 climate summit is set to take place in Egypt in November, where the United States is expected to demonstrate progress toward Biden’s aggressive goal of halving U.S. emissions by 2030. Rhodium found that without the investments in a congressional bill, the United States was roughly on track to cut emissions by 24-35% by 2030, far less than Biden’s wish.
After years of climate boost – President Donald Trump withdrew the United States from the Paris Agreement; Biden withdrew it — congressional investments are needed to give weight to Biden’s words.
Congressional action doesn’t get Biden to his goal; it will also require increased environmental regulation by federal agencies and action by individual states. But the federal investment, if passed, is the grease that would turn the cogs toward clean energy and lower emissions.
“This could really put us on the path to avoiding the worst impacts of climate change by halving climate pollution by 2030,” said Christy Goldfuss, senior vice president for energy and environmental policy at the Center for American Progress, in a statement. “Congress seems poised to put a livable future back in reach at the last possible moment. Now they have to finish the job and make the mood.”