EVEN BEFORE he released his latest climate proposals, presumptive Democratic presidential nominee Joe Biden was far ahead of President Trump, who denies the problem and has spent four years dismantling the federal government’s response to this century’s greatest environmental threat. Mr. Biden admitted the necessity to act and had a rudimentary plan.
Now, Mr. Biden has fleshed out his plan. Once again, grading on a Trump curve, Mr. Biden gets an A-plus. Grading on a more conventional curve, Mr. Biden’s proposal is serious but imperfect, the sort of plan that might in a normal election year spark a debate on cost, efficiency and the role of the private economy in decarbonizing the nation.
Mr. Biden gets many things right. He aims to eliminate net greenhouse gas emissions from the United States by 2050, the year by which scientists recommend the planet stop adding heat-trapping gases to the atmosphere. To do so, he proposes transitioning the country to emissions-free electricity sources by 2035. The former vice president includes nuclear power as a potential contributor, rejecting the irrational antinuclear sentiment among some environmentalists, but he rightly does not guarantee it a permanent place in the mix if other sources prove better. He would ramp up building and vehicle efficiency so less energy is wasted; invest in urban public transportation; upgrade the electric grid; and pump up energy research funding.
The logical centerpiece of any such plan would be a policy that puts a steadily rising price on carbon dioxide emissions, such as a carbon tax, which economists have recommended for decades. Market actors would respond by switching to cleaner fuels and investing in efficiency, on their own, without excess government spending or central planning, prioritizing the easiest cuts while giving other sectors time to prepare.
Mr. Biden nodded to carbon pricing during his primary campaign, but he proposed this past week instead a more complex web of federal spending, subsidies and mandates. For example, he would mandate that the electricity sector steadily eliminate fossil fuel burning by 2035 using a system of credits that utilities would have to obtain to certify their compliance. The market for these credits would create a price on emissions, but only in the electricity sector. Mr. Biden would then layer on top of this mandate direct financing of renewables deployment and an extension of renewable tax subsidies. The mandate alone would deliver his 2035 goal, making the other policies expensive and duplicative.
By the same token, the mandate would not be needed if a neatly designed carbon tax was driving changes across the economy and not just in the electricity sector. But, instead of an economy-wide price signal, Mr. Biden appears to favor a series of sector-by-sector federal interventions. Some of these might work well, such as promoting building efficiency improvements that are likely to pay off quickly. Others, such as investing in intercity rail infrastructure, could end up costing huge amounts for meager climate benefits. As much as possible, the government should be agnostic about how emissions are cut, leaving these decisions to private actors incentivized to avoid polluting, because they will find the most efficient ways. Mr. Biden’s plan all but gives up on that logic.
Mr. Biden’s plan would do much good, and over the right time horizon. It is not bad, just less good than it could be. That puts it miles ahead of where the nation is now.
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