House Passes the Largest Expenditure on Climate in U.S. History – The New York Times
WASHINGTON — The United States took a major step toward fighting climate change Friday with passage through the House of Representatives of a $2.2 trillion spending bill that includes the largest expenditures ever made by the federal government to slow global warming.
The legislation provides $555 billion for programs that could significantly curb the fossil fuel emissions that have been heating the atmosphere, fueling deadly and record-breaking wildfires, floods, heat waves and drought. However, the bill faces an uncertain path through the Senate and negotiations between the two chambers may change its form.
On its own, the legislation isn’t enough to fulfill President Biden’s pledge that the United States will cut its emissions by half from 2005 levels by the end of this decade. But it goes well beyond any other climate policy that has come before it, in the United States and in most other countries.
It features tax incentives to cut the costs to consumers and manufacturers of electric vehicles, electric heat pumps, solar panels, wind farms and other equipment designed to power the economy without pollution.
“The science is clear, we only have a brief window left before us to raise our ambitions and to raise to meet the task that’s rapidly narrowing,” said Mr. Biden at a global climate summit earlier this month. “But ladies and gentlemen, within the growing catastrophe, I believe there’s an incredible opportunity. Not just for the United States, but for all of us. We’re standing at an inflection point in world history, we have the ability to invest in ourselves and build an equitable clean energy future.”
Environmental groups said the legislation would begin to address a climate crisis that is no longer a distant threat.
“It’s here now,” said Abigail Dillen, president of Earthjustice. “And we need bold action from our government to deploy the clean technologies and natural solutions that will carry every community, including those that have too long borne the brunt of pollution and climate catastrophe, into a safe and vibrant future.”
But the fossil fuel industry said the policies would punish American firms while helping foreign competitors.
Erik Milito, president of the National Ocean Industries Association, which represents offshore drilling companies, called the legislation “a gift to higher emitting producers like Russia and China that wield their energy resources as a geopolitical tool.”
The House passed the bill by a vote of 220 to 213, with one Democrat joining every Republican in opposition. Its passage follows Mr. Biden’s signing on Monday of a separate $1.2 trillion infrastructure package that included about $50 billion to help fortify communities against the impacts from global warming. Last week in Glasgow, the United States joined about 200 countries in an agreement to intensify efforts to keep average global temperatures from rising more than 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, compared with preindustrial levels. Past that threshold, scientists have warned, the risk of deadly heat waves, destructive storms, water scarcity and ecosystem collapse grows immensely. The world has already warmed 1.1 degrees Celsius.
“This bill makes it happen for us in terms of preserving the planet,” House Speaker Nancy Pelosi said. “It’s a health issue: clean air, clean water for our children. It’s a jobs issue: making America pre-eminent in good-paying green jobs. It’s also a national security issue, because competition for habitat and, and resources resulting from drought and, you know, all of the challenge of natural disasters springing from the climate crisis. And, it is a moral issue, if you believe as I do that this is God’s creation and we have a moral obligation to be good stewards.”
Historically, the United States is the country that has pumped the most carbon dioxide, methane and other greenhouse gases into the atmosphere. It is currently the second biggest polluting country, behind China. A major scientific report issued in August concluded that countries must immediately shift away from burning fossil fuels to avoid a harrowing future.
Republicans assailed the climate provisions. “This includes payoffs for electric vehicle owners,” said Senator John Barrasso of Wyoming, the ranking Republican on the Senate Energy and Natural Resources Committee. “It includes higher taxes on American energy and higher prices for consumers.”
In an eight-hour attack on the bill on the House floor, Representative Kevin McCarthy of California, the House Republican Leader, said, “Every moment you heat your home in the winter or cool it in the summer, you will pay more. That alone is enough reason to defeat the bill — defeat the bill!”
Climate change is the single largest spending category of the new legislation, which also encapsulates the rest of Mr. Biden’s broader domestic agenda. One-quarter of the bill — $555 billion to be spent over the next decade — is devoted to pulling the American economy away from its 150-year-old reliance on fossil fuels and toward clean energy sources.
By comparison, the largest amount previously spent by the federal government to combat climate change was about $80 billion, in the 2009 economic stimulus package signed into law by former President Barack Obama. Mr. Obama also put in place the nation’s first major climate change regulations, but they were later weakened or erased by the Trump administration.
Once enacted, the new legislation could prevent emissions of about one billion tons of carbon dioxide by 2030, according to an analysis by Rhodium Group, an independent research organization. That’s the equivalent of taking roughly all the cars in the United States off the road for one year. But it would bring the country only about halfway to Mr. Biden’s goal, the analysis found.
“With passage of this bill, Biden will have made an outstanding accomplishment which can get the U.S. part of the way there,” said Michael Oppenheimer, a professor of geosciences and international affairs at Princeton University.
Tax incentives, charging stations
The centerpiece of the new climate legislation is $320 billion in tax incentives for producers and buyers of wind, solar and nuclear power. Buyers of electric vehicles would receive up to $12,500 in tax credits, depending on what portion of the vehicle parts were made in America and whether they were built by union workers.
The legislation provides funds to create charging stations for electric vehicles and update the electric grid to accommodate transmission of wind and solar power, as well as money for climate-friendly farming and forestry programs.
The bill would ban new oil and gas leases off the Atlantic and Pacific coasts and off the Eastern Gulf of Mexico, and repeal the fossil fuel leasing program in the Arctic National Wildlife Refuge, while authorizing wind farms in federal waters in the Atlantic Ocean and Eastern Gulf of Mexico. It would increase the royalties paid by oil companies that drill on federal lands, while reinstating a tax on imported petroleum products. It would also create a fee on leaks of methane, a powerful greenhouse gas that frequently escapes from oil and gas wells.
And it includes a suite of programs designed to help low income and minority communities that are disproportionately harmed by environmental problems, from $15 billion to finance clean energy projects to $2.83 billion to plant trees in poor neighborhoods that can be 10 degrees hotter than leafier sections of a city.
Analysts agreed that of all the climate provisions, the tax credits would be the most impactful in terms of lowering emissions.
“This is a fundamental shift in tax policy,” said Ron Wyden, the Oregon Democrat who chairs the Senate Finance Committee, and the chief author of the tax provisions. “What makes this landmark legislation is that, for the first time, you would have, in the tax arena, a clear statement that the bigger your carbon reduction, the bigger your tax incentives.”
Most of the incentives are 10-year extensions of existing tax credits. In the past, those credits have expired after one to five years, and they often lapse before they are renewed.
“Some of them had a shelf life barely longer than a carton of eggs,” Mr. Wyden said. Extending them for a decade, he added “provides certainty and predictability to the clean energy producers.”
The decision by Democratic leaders to use the tax code as their primary weapon to fight climate change was determined by both political necessity and economic research.
With Republicans unanimously opposed to the broader spending bill, Democrats are pushing the measure through Congress under a special process known as reconciliation, which would enable Democrats to pass the legislation in the Senate on a simple majority vote, without any Republican support.
To meet the rules of reconciliation, any new climate program needed to take the form of a budget or tax policy.
Economists say the most effective way to cut emissions is to tax them, essentially driving up costs for polluters. Another way, though less efficient, is to create incentives for using less-polluting sources of energy, essentially a reward for choosing wind, solar or nuclear energy.
Democrats had hoped to combine both methods in a carrot-and-stick approach: penalties for burning fossil fuels and incentives for clean energy.
In writing the legislation, Democrats abandoned what experts said would be one of the most powerful tools to cut emissions: a program that would have rewarded utilities that drew an increasing share of electricity from clean energy sources, and penalized those that did not.
That plan hit a roadblock in the form of Senator Joe Manchin III, Democrat of West Virginia, whose home state is a major producer of coal and gas, and whose vote is essential to passage of the legislation in the Senate. Mr. Manchin’s state produces coal and natural gas and he has personal financial ties to the coal industry. He has forcefully objected to any program that would hurt fossil fuels.
Mr. Manchin has opposed other climate provisions in the legislation, including the fee on methane, and the tax incentives for purchasing union-made electric vehicles.
Environmental activists are focused on Mr. Manchin ahead of the Senate negotiations. This month, about 100 people gathered outside the houseboat where Mr. Manchin stays when in Washington. As the senator exited the adjacent yacht club, demonstrators trailed him to his car, chanting, “We want to live! We want to live!”
“The fight is definitely not over,” said Audrey Lin, a 20-year-old protester from Watertown, Mass. “We’re definitely going to be keeping up the pressure on Manchin and Biden and making sure the Democratic Party delivers the promises that we elected them on.”
Lisa Friedman contributed reporting.