December 6, 2022

FILE – In this Aug. 15, 2019, file photo, a boat navigates at night next to large icebergs in eastern Greenland. As warmer temperatures cause the ice to retreat the Arctic region is taking on new geopolitical and economic importance, and not just the United States hopes to stake a claim, with Russia, China and others all wanting in. (AP Photo/Felipe Dana, File)AP
This Thanksgiving, I’m grateful that the United States is finally putting its mighty shoulder into the fight against climate change, that the decades of dawdling have finally come to an end.
The Inflation Reduction Act does almost nothing to fight inflation, beyond containing the cost of prescription drugs. It was given that name so that Sen. Joe Manchin could pretend otherwise.
But its climate provisions are historic. The Act takes a huge fossil-heaving economy and squeezes the carbon out of it by subsidizing every green activity you can imagine – investing in solar and wind farms, building and buying electric cars, retrofitting old leaky buildings, even fixing up wasteful agriculture practices. It is a rush to higher ground on every front.
“It really is a fundamentally game-changing piece of legislation,” says Jesse Jenkins, who runs a Princeton University think-tank examining climate policy. “It’s the first time that the full financial might of the federal government is aligned behind the transition towards a cleaner energy system…We are finally in the game in a big way.”
I know, China and India are still building coal plants, with over 200 now under construction in Asia alone. If the rest of the world follows America’s gluttonous model of development, we are all doomed. And even the course correction outlined in this Act won’t get us across the goal line on domestic emissions. Much still depends on state governments and the private sector.
But please, America is no longer racing towards the abyss. And for that, we have President Biden to thank. His political strategy on climate was clever, and new, and it worked – even though he had no votes to spare.
The breakthrough idea was to use carrots, not sticks. Until now, the main green strategy was to make fossil fuels more expensive, either with a carbon tax, or a cap-and-trade program that would require businesses to purchase a credit for each ton of carbon they emit. Both tactics would drive up costs of gas, home heating oil, and any goods and services that required lots of energy.
It’s no surprise that voters didn’t jump to support that. The climate risk is abstract, and the price of gas is not.
So, Biden switched to carrots. This bill has no carbon tax, and no cap-and-trade system. Instead, it relies on vast federal subsidies to make all green activities cheaper. With the subsidies in this act, it will be cheaper to do the right thing.
Yes, we are still paying for it. These subsidies cost the U.S. Treasury money, about $400 billion over the next decade, according to an independent estimate from McKinsey & Co. consultants. That will be more than covered by a new minimum tax on profitable corporations, and other provisions that land only on top-earners. On the whole, the Act will reduce the deficit by about $90 billion, according to the Congressional Budget Office.
To the average voter, who may be concerned about climate change, but not enough to pay $1 a gallon more for gas, the carrot strategy makes the climate fight palatable. In fact, the Act makes it cheaper to insulate a home, buy an electric car, or put a solar panel on the roof.
“The more politically durable, and therefore impactful, policy is the carrot,” says Ryan Fitzpatrick, director of the Climate and Energy Program at Third Way, a center-left think tank.
So, thank you, Joe Biden. Slick move.
Biden was not able to break the second grand barrier to climate action – the stubborn refusal of the Republican Party to face reality. This was not a bipartisan effort, like the infrastructure bill.
It was not always this way. In 2008, Sen. John McCain embraced an aggressive plan to cut fossil fuels during his campaign for president, a cap-and-trade program. The party platform said “common sense dictates” that strong action be taken to fight climate change.
But in 2010, with the ascendency of the Tea Party, Republicans lost their way. And when Donald Trump got his hands on the wheel, all hope of bipartisanship was lost.
Even last week, the Wall Street Journal sneered at the idea of helping poor countries cover the cost of climate change, like Pakistan, where recent floods put one-third of the country under water. “The religion of climate chance is progressive penance for the sin of being prosperous,” it said.
It’s not a religion. It’s hard science, and it’s scary. This year, let’s be grateful that America is finally responding.
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