With the focus on spending to rebuild and bolster the nation, rather than on climate mandates, this approach may be more politically effective. But what is most politically effective may not be most effective for the environment. If the coming spending bills represent the Democrats’ one, best shot to change the nation’s direction on climate change, they must get it right — or as right as the politics allow.
As with everything else in Mr. Biden’s $2 trillion infrastructure plan, the headlines on climate provisions concern how much the bill would spend: $213 billion to build greener housing; $35 billion on climate technology research and development; $85 billion on public transit; $174 billion on electric vehicle manufacturing and infrastructure; $50 billion to make national infrastructure more resilient to natural disasters; $10 billion for a new “Civilian Climate Corps” and $16 billion to plug abandoned wells and mines. Signaling his intent to prioritize climate spending, the president included many of these ideas in his new budget, too.
Mr. Biden would go big on carbon capture and sequestration — technology that intercepts greenhouse emissions before they enter the atmosphere — funding 10 “pioneer facilities” and enhancing a major tax credit for the industry. He would extend and expand existing tax credits for wind and solar power. He would create a tax credit to encourage the construction of high-voltage power lines, which will be needed to transport wind and solar electricity around the country.
Though White House officials don’t dwell on this point, the centerpiece of the president’s plan is a mandate: an energy-efficiency and clean-electricity standard. This would require utilities to derive increasing percentages of their electricity from non-emitting sources such as renewables and nuclear power, or to meet ever-lower targets for the greenhouse gases they emit.
But the Biden plan contains no economywide spur to private companies and consumers to make greener choices. Much of the spending is sorely needed, particularly for research, transmission lines and plugging old wells. But the government might invest massively in projects that flop: electric vehicle-charging infrastructure that is outdated by the time it is installed, home retrofits that do not save as much energy as expected. What then?
The best answer is to price greenhouse emissions, which is most efficiently done through a carbon tax. Put a high-enough price on polluting, and massive cuts in emissions would be guaranteed, regardless of whether the federal government’s chosen investments succeeded. In fact, it would render all sorts of expensive provisions in the proposal, such as extensions of wind and solar tax credits, unnecessary. It would raise revenue to pay for clean energy research, and it would easily clear the bar for reconciliation, the parliamentary maneuver that overcomes Senate filibusters.
The Biden plan’s clean electricity standard is a decent second-best approach to ensure the electricity sector slashes emissions, but that industry is just one part of the emissions picture. If this Congress refuses to put a price on carbon, future Congresses likely will have a lot more work to do, and less time and fiscal capacity with which to do it.
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