Good morning and welcome to The Climate 202! Happy Friday. We're excited to welcome our new colleague Scott Dance, who is joining The Washington Post as a climate and weather reporter after more than 10 years at the Baltimore Sun. But first:
The analysis from ICF Climate Center, a global consulting firm, concludes that the climate law will make clean energy projects easier to finance across the country, quickening the pace of America's energy transition.
“At over 700 pages, the Inflation Reduction Act (IRA) is a dense piece of legislation,” the report says. “At the same time, its impact on the energy sector can be summarized succinctly: clean energy economics just got a whole lot better.”
The report's findings are a big deal. They're also very wonkish and technical. If you're not a climate economist or policy wonk, here's a quick explanation of the findings and why they matter for the nation and the planet:
The report's authors looked at the levelized cost of energy — the average cost of electricity generation over the lifetime of a facility — for various technologies in 2030 with and without the clean energy tax credits in the Inflation Reduction Act.
All of the technologies they analyzed would see double-digit percentage declines in their levelized costs of energy, including mature technologies such as wind and solar, whose costs have already plummeted over the last decade.
- With the climate law, wind's levelized cost of energy in 2030 could be 38 to 49 percent lower than without the climate law.
- Solar's levelized cost of energy could fall 20 to 35 percent. By 2030, solar could cost as little as $26.30 per megawatt-hour on average — down from a 2020 average of $34 per MWh, according to Energy Department research.
Emerging technologies could also see significant cost reductions, the analysis found.
- Hydrogen could see the biggest cost decline — a whopping 52 to 67 percent — of any technology. Green hydrogen facilities that take advantage of the climate law's tax credits could become cost-competitive with new natural-gas-powered facilities by 2030.
- Carbon capture and storage could become economical for the first time, with its levelized cost of energy falling 20 to 23 percent by 2030. (It's worth noting that some environmentalists oppose federal incentives for carbon capture and storage, which they view as a false climate solution because it could prolong the life of fossil fuel infrastructure.)
For context, the Biden administration on Thursday announced an effort to bring down the cost of offshore floating wind by 70 percent by 2035, to about $45 per MWh. (CNN's Ella Nilsen has more on the administration's offshore wind announcement.)
“We know the cost goal is pretty audacious,” Energy Secretary Jennifer Granholm said on a call Thursday with reporters, adding that “the Inflation Reduction Act is a significant component in reducing costs of all kinds of energy.”
Ian Bowen, a co-author of the report and energy markets analyst at ICF, said the expected cost reductions will provide “certainty” to investors in renewable energy projects.
“We think that these large declines are going to really help provide certainty to investors over a long period,” Bowen said. “Hopefully that will be able to accelerate the transition.”
Still, the report comes with a notable caveat: The authors assume that policymakers will address other thorny challenges facing clean energy projects.
- One challenge is NIMBYism, which refers to “not in my backyard” sentiments. Project siting could become increasingly difficult if these sentiments intensify and available land becomes scarce, the report says.
- Another challenge is interconnection, which refers to the process of connecting new energy sources to the electrical grid. In the PJM Interconnection region stretching from D.C. to Illinois, more than 2,000 solar, wind and battery storage projects have already waited years to connect to the grid, according to Advanced Energy Economy, an industry association.
“If the goal is to increase deployment of renewable energy, then this [law] is absolutely a major step in that direction,” said Shanthi Muthiah, another co-author of the report and managing director of ICF's energy practice.
“But,” she said, “it's one of several steps that's needed.”
On the Hill
Schumer tees up Senate vote on treaty fighting climate super-pollutants
Senate Majority Leader Charles E. Schumer (D- N.Y.) on Thursday filed cloture on the Kigali Amendment to the 1987 Montreal Protocol, setting up a vote in the Senate as soon as Tuesday.
The treaty amendment would phase down hydrofluorocarbons, or HFCs, which are planet-warming gases used in air conditioning and refrigeration that are thousands of times more potent than carbon dioxide.
While the amendment will need bipartisan support to become law, the issue has attracted bipartisan backing in recent years. After the Trump administration declined to submit the treaty to the Senate for ratification, Democrats and Republicans rallied around an agreement to slash the use of HFCs in 2020, paving the way for the Environmental Protection Agency to regulate the chemicals.
More than 120 countries are already party to the Kigali Amendment, including China and members of the European Union. President Biden submitted the treaty amendment to the Senate in November, following through on a promise he made just after taking office.
“HFCs need to be dealt with right away because they are thousands — thousands — of times more damaging to our atmosphere than carbon dioxide,” Schumer said on the Senate floor on Thursday. “So this is a very important opportunity for the Senate to make official America’s intention to phase these dangerous chemicals out of use.”
Senate Banking Committee grills SEC chair on climate rule
Gary Gensler, chair of the Securities and Exchange Commission, defended his agency's stance on requiring all public companies to disclose their greenhouse gas emissions and the risks they face from climate change during a Senate Banking, Housing and Urban Affairs Committee hearing on Thursday, Pete Schroeder and Michelle Price report for Reuters.
Sen. Patrick J. Toomey (Pa.), the top Republican on the panel, warned that the SEC should be “nervous” about legal challenges if the rule is put in place, citing the Supreme Court’s recent decision limiting the Environmental Protection Agency’s ability to curb climate pollution from power plants.
Sen. Jon Tester (D-Mont.) also expressed concern about the proposal's potential impact on small-business owners and farmers, whom he said could face significant supply chain disruptions if companies are forced to disclose their emissions.
In response, Gensler testified that the agency has the legal authority to enact rules that protect investors from significant risks, including the financial risks associated with climate change.
Oil companies are lying about climate goals, House panel alleges
Democrats on the House Oversight and Reform Committee argued that oil company executives had privately disregarded their public commitments to combat climate change during a heated hearing Thursday.
According to a report released ahead of the hearing, oil and gas companies have continued to internally dismiss evidence that burning fossil fuels is accelerating global warming, despite their own scientists warning of the link, while relying on unproven technologies to dictate their climate strategies.
During the hearing, Rep. Clay Higgins (R-La.) yelled at Raya Salter, executive director of the Energy Justice Law and Policy Center, calling her “young lady” and “boo,” our colleagues report for Post Politics Now. The confrontation began when Salter called for the world to “move away from” petrochemical plants — refineries that make chemicals from petroleum — which are often located in low-income communities of color and threaten the health of nearby residents.
“The world wouldn’t function! It’s insane!” Higgins yelled. “Do you care about the planet, good lady? From a biblical perspective … the lord gave us dominion over the planet.”
Rep. Alexandria Ocasio-Cortez (D-N.Y.) later offered an apology to Salter.
Meanwhile, environmental justice activists notched major victories in Louisiana this week by blocking two planned petrochemical plants, The Washington Post's Steven Mufson reports. The facilities would have been built in St. James Parish, home to what is commonly referred to as Louisiana's “cancer alley.”
White House directs agencies to buy low-carbon construction materials
The Biden administration on Thursday directed federal agencies to buy low-carbon types of steel, concrete, asphalt, and flat glass, which account for nearly half of carbon emissions from the U.S. manufacturing sector, Stephen Lee reports for Bloomberg Law.
The new rules will apply to federal construction projects, including ones funded through the bipartisan infrastructure law and the Inflation Reduction Act, according to a White House fact sheet.
Transportation Secretary Pete Buttigieg, General Services Administration chief Robin Carnahan and deputy national climate adviser Ali Zaidi announced the rules while touring a steel plant in Toledo. The officials said the White House also plans to convene a meeting with state governments in November to help align their clean building policies with the administration's.
Earth just experienced one of its warmest summers on record
This past summer ranks as one of the globe’s hottest summers ever, with Europe and China both recording their warmest meteorological summers, according to data from NASA and the National Oceanic and Atmospheric Administration, Zach Rosenthal and Kasha Patel report for The Washington Post.
Worldwide, June through August tied 2020 for the warmest summer in records dating back to 1880, NASA’s data showed. At the same time, data from NOAA found that the same time period tied for the fifth-hottest summer in 143 years. Researchers explained that the disparity between the two data sets stems from how each treats temperatures in the polar regions, with NASA’s including more inputs from the Arctic and Antarctic — areas that are warming faster than the rest of the globe because of climate change.
In the atmosphere
- Once nearly extinct, California condors take flight again — Alice Li, Kasha Patel and Melina Mara for The Post
- Climate change worsened Pakistan’s devastating flooding, analysis finds — Kasha Patel for The Post
- Shell's chief executive, Ben van Beurden, to step down — Stanley Reed for the New York Times
- E.U. green finance advisers walk out in protest — Simon Jessop and Kate Abnett for Reuters
Thanks for reading!