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Unpacking Biden's $2 Trillion Green Energy Plan

Biden

Democratic presidential candidate Joe Biden proposed a $2 trillion clean energy and climate change package on Tuesday, a plan that would overhaul transportation, electricity, and heavy industry. Some of the highlights include making the entire electricity sector 100 percent carbon-free by 2035, retrofitting four million buildings over four years, building 500,000 EV recharging stations, and funding for researching a variety of carbon capture and storage as well as advanced nuclear power technologies.

The package is significantly more aggressive than one he proposed earlier this year during the primary, which called for $1.7 trillion over ten years, with a goal of reaching net-zero emission by 2050. This new plan calls for $2 trillion over four years, and brings the electricity component of the net-zero goal forward to 2035. Moreover, there is a lot of focus on environmental justice – indeed, an entirely additional plan – in recognition of the seismic shift in the political landscape in the wake of the George Floyd protests.

“If I have the honor of being elected president, we’re not just going to tinker around the edges. We’re going to make historic investments that will seize the opportunity, meet this moment in history,” Biden said in a speech unveiling the plan.

Achieving 100 percent clean electricity by 2035 is widely seen as aggressive and ambitious, but as E&E News notes, a growing number of utilities in all parts of the country already have net-zero targets, although most are closer to mid-century. Many regions are on their way – in the Texas electricity grid of ERCOT, wind and solar accounted for 39 percent of electricity generation in the first half of 2020, much more than coal and not far behind natural gas’ share of 44 percent.

Biden says his plan will create 1 million jobs in the auto industry, and millions of union jobs building infrastructure – roads, bridges, green spaces, water systems and electricity grids. The plan also aims to support public transit, ranging from light rail to bus and cycling options.

Biden’s plan has a nationalist bent, with “Made in America” manufacturing provisions. Seemingly in a bid to compete with Trump on a sort of “America First” agenda, Biden positions his auto manufacturing plan as both a source of union jobs and one that can confront China. In fact, Biden name-checks China quite a bit in his plan.

As others have noted, there is a peculiar bipartisan consensus regarding hawkishness towards China, and a conspicuous lack of debate. The former vice president put extra emphasis on having EVs and zero-emissions buses “Made in America.”

Biden’s plan was largely received well by his supporters and those to his left, who have been skeptical of his plan. For his part, Trump blasted the plan. The American Petroleum Institute also criticized it. “You can’t address the risks of climate change without America’s natural gas and oil industry, which continues to lead the world in emissions reductions while delivering affordable, reliable and cleaner energy to all Americans,” API CEO Mike Sommers said in a statement.

There were several notable things missing from the proposal. The plan makes no mention of curtailing oil and gas production, and when pressed recently, Biden said very explicitly that he wouldn’t touch hydraulic fracturing except for new permits on federal lands, a rather tiny portion of where drilling occurs. “Fracking is not going to be on the chopping block,” Biden said last week at an event in Pennsylvania.

Notably, the plan also lacks any details about using the EPA to regulate greenhouse gas emissions. It also says nothing about putting a price on carbon. Perhaps it is by design that Biden focuses on widely popular things (building lots of solar, wind and EVs), while skirting thorny and intractable issues (such as how to curtail oil and gas production and how to price carbon).

Related: Rethinking Mining: A $10 Trillion Opportunity

In a note to clients, ClearView Energy Partners said that “campaigning and governing are different things, and we think a ‘day one’ Executive Order from a President Biden could still set a trajectory towards some (or all) of those goals,” referring to GHG regulations, limits on drilling on federal lands, and pressing for some version of a price on carbon. The firm said that whoever wins the election will have a “recovery mandate,” meaning that there is political space for a massive green stimulus.

With an eye on a short window of opportunity before the 2022 midterms, ClearView also says it could see Biden signing a flurry of orders more or less on “Day One” to outline a bunch of priorities, such as stricter fuel economy standards, rejoining the Paris Climate Agreement, and expanding the use of the social cost of carbon calculation. Other possibilities include methane regulations and the required consideration of life-cycle GHG emissions for new infrastructure projects.

But while President Biden may be able to do quite a bit through executive order, the meat of the plan will require passage through Congress, which makes the outcome of a handful of toss-up Senate races incredibly important. As of now, Biden is outpacing Trump in the polls, and the Democrats are showing decent odds of retaking the Senate.

By Nick Cunningham of Oilprice.com

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