The cost of climate action
Climate change is often described as a “wicked problem.” That’s because there is no simple, or easy, solution. As Democrats and environmental activists celebrate the Senate’s passage of the Inflation Reduction Act, they should be realistic about the bill’s benefits and cautious regarding its effect on future climate legislation.
After passing the Senate on Sunday with a 51-50 party-line vote, the Democratic-controlled House is expected to send the Inflation Reduction Act to President Biden’s desk later this week. If signed into law, the bill’s $369 billion in climate and energy provisions would make it the largest climate investment in U.S. history. Experts believe it will more than triple clean energy production and set the U.S. on track to reduce its greenhouse gas emissions 31 percent to 44 percent below 2005 levels by 2030.
This is welcome news for the two-thirds of Americans who are concerned about climate change.
While some critics have attacked the Inflation Reduction Act as the latest iteration of the Green New Deal, it was centrist Sen. Joe Manchin (D-W.Va.), not progressives like Sen. Ed Markey (D-Mass.) or Rep. Alexandria Ocasio-Cortez, who had the greatest hand in crafting the bill. While progressive priorities — including new electric vehicle tax credits, wind and solar subsidies, as well as tens of billions of dollars for environmental justice investments — are in the bill, so are some welcome additions that run afoul of progressive climate orthodoxy. The bill contains provisions that are vital for ensuring the United States’ energy security, such as expediting offshore oil and gas lease sales, supporting the expansion of nuclear energy and promoting domestic mining of critical minerals.
On the whole, the energy sections of the Inflation Reduction Act are far more in line with the all-of-the-above energy strategy embraced by moderate Democrats and Republicans, rather than progressives’ preferred plan of rapidly eliminating the United States’ fossil fuel industry. This raises an important question, then: Why did the bill fail to gain any Republican support?
Some will argue that Republicans are unwilling to support climate legislation, but this is not the case. Last fall, the bipartisan Infrastructure Investment and Jobs Act, which included several significant climate provisions, passed 69-to-30 in the Senate. Last spring, more Republican senators voted for the Growing Climate Solutions Act than Democrats. Prior to that, the Energy Act of 2020 passed through Congress with broad bipartisan support. Republicans have been willing and capable partners on bipartisan climate legislation — when they have been invited to the table.
Unfortunately, Democrats ignored Republican concerns about the Inflation Reduction Act, and the Build Back Better Act which preceded it, instead choosing to advance climate legislation through what has become a partisan budget reconciliation process that only requires a simple majority to pass.
The concerns raised by Republicans are shared by many Americans and policy experts. Amid historic inflation, sky-high energy prices and a teetering economy, many doubt that the Inflation Reduction Act will actually reduce inflation. In fact, 82 percent of Americans expect inflation to worsen over the next year. And according to an analysis from Wharton School at the University of Pennsylvania, the Inflation Reduction Act may actually increase inflation over the next two years. Even Sen. Bernie Sanders (I-Vt.), who could hardly be accused of being a fiscal hawk, declared that the bill “will have a minimal impact on inflation.”
Another important issue is that, while the bill would deliver significant emissions reductions in the United States, it would do little to curb global emissions. Earlier this year, China and India announced that they would increase coal production by a combined 700 million tons. This alone would increase global emissions by the same amount that the U.S. decreased its emissions between 2005 and 2020. And just last week, China — the world’s largest polluter — announced that it would halt cooperation with the U.S. on climate change. In climate-conscious Europe, the outlook isn’t much brighter. In an effort to wean itself off of Russian natural gas, Germany is reopening coal plants in order to keep the lights on. These global developments could effectively erase America’s climate progress.
A final concern is the matter of permitting. Investing money in clean energy projects is one thing, while actually building them is another. Paradoxically, environmental regulations, such as the National Environmental Policy Act (NEPA), have proved to be one of greatest barriers blocking a rapid energy transition. According to the Council on Environmental Quality, the average time required to complete the NEPA process, which is required for major infrastructure projects, is 4.5 years. Fortunately, in negotiations over the Inflation Reduction Act, Manchin struck a deal with Senate Majority Leader Chuck Schumer (D-N.Y.) to address permitting reform in subsequent legislation. Without ambitious permitting reform, the Inflation Reduction Act’s ambitious climate goals will remain just that — goals.
The Inflation Reduction Act came at a high price, both financially and politically. Democrats alienated their Republican colleagues on climate change ahead of a swing midterm election, risking potential future bipartisan legislation. They also bet that Americans will feel the economic benefits of the bill more than they feel the pain of inflation.
Despite these drawbacks, the climate portions of the Inflation Reduction Act are historic. They will strengthen America’s clean energy industry, increasing the domestic production of resources like critical minerals and reshoring automotive manufacturing jobs. Soon enough, Democrats will realize the cost of bold, partisan climate action. Hopefully, as they continue the fight against climate change in the future, they will learn that working with their Republican counterparts will make beating this wicked problem just a little bit easier.
Quill Robinson is the vice president of government affairs at the American Conservation Coalition Action. Follow him on Twitter: @QuillRobinson.