House Passes the Largest Expenditure on Climate in U.S. History
WASHINGTON — The United States took a major step toward fighting climate change Friday with passage through the House of Representatives of a $1.85 trillion spending bill that includes the largest expenditures ever made by the federal government to slow global warming.
The legislation includes about $500 billion for programs that could significantly curb the fossil fuel emissions that have been heating the atmosphere, fueling deadly and record-breaking wildfires, floods, heat waves and drought. However, the bill faces an uncertain path through the Senate and negotiations between the two chambers may change its form.
On its own, the legislation isn’t enough to fulfill President Biden’s pledge that the United States will cut its emissions by half from 2005 levels by the end of this decade. But it goes well beyond any other climate policy that has come before it, in the United States and in many other countries.
It features tax incentives to cut the costs to consumers and manufacturers of electric vehicles, electric heat pumps, solar panels, wind farms and other equipment designed to power the economy without pollution.
“The science is clear, we only have a brief window left before us to raise our ambitions and to raise to meet the task that’s rapidly narrowing,” said Mr. Biden at a global climate summit earlier this month. “But ladies and gentlemen, within the growing catastrophe, I believe there’s an incredible opportunity. Not just for the United States, but for all of us. We’re standing at an inflection point in world history, we have the ability to invest in ourselves and build an equitable clean energy future.”
The House passed the bill by a vote of 220 to 213 , with one Democrat joining every Republican in opposition. Its passage follows Mr. Biden’s signing on Monday of a separate $1.2 trillion infrastructure package that included about $50 billion to help fortify communities against the impacts from global warming.
“This bill makes it happen for us in terms of preserving the planet,” House Speaker Nancy Pelosi said. “It’s a health issue: clean air, clean water for our children. It’s a jobs issue: making America pre-eminent in good-paying green jobs. It’s also a national security issue, because competition for habitat and, and resources resulting from drought and, you know, all of the challenge of natural disasters springing from the climate crisis. And, it is a moral issue, if you believe as I do that this is God’s creation and we have a moral obligation to be good stewards.”
“It’s fabulous, it’s great, it’s big, but it’s a good start,” she added. “We have more to do.”
Historically, the United States is the country that has pumped the most carbon dioxide, methane and other greenhouse gases into the atmosphere. It is currently the second biggest polluting country, behind China. A major scientific report issued in August concluded that countries must immediately shift away from burning fossil fuels to avoid a future of severe drought, intense heat waves, water shortages, devastating storms, rising seas and ecosystem collapse.
Republicans, who unanimously opposed the bill, assailed the climate provisions. “This includes payoffs for electric vehicle owners,” said Senator John Barrasso of Wyoming, the ranking Republican on the Senate Energy and Natural Resources Committee. “It includes higher taxes on American energy and higher prices for consumers.”
The measures, he said, “would raise costs for working families.”
In an eight-hour attack on the bill on the House floor that started on Thursday night and bled into Friday morning, Representative Kevin McCarthy of California, the House Republican Leader, said, “Every moment you heat your home in the winter or cool it in the summer, you will pay more. That alone is enough reason to defeat the bill — defeat the bill!”
Climate change is the single largest spending category of the new legislation, which also encapsulates the rest of Mr. Biden’s broader domestic agenda, including expansions of child care, health care and education programs. More than one-quarter of the bill — about $500 billion to be spent over the next decade — is devoted to pulling the American economy away from its 150-year-old reliance on fossil fuels and toward clean energy sources such as wind, solar and nuclear power.
By comparison, the largest amount previously spent by the federal government to combat climate change was about $80 billion, in the 2009 economic stimulus package signed into law by former President Barack Obama. Mr. Obama also put in place the nation’s first major climate change regulations, but they were later weakened or erased by the Trump administration.
Once enacted, the new legislation could prevent emissions of about one billion tons of carbon dioxide by 2030, according to an analysis by Rhodium Group, an independent research organization. That’s the equivalent of taking roughly all the cars in the United States off the road for one year. But it would bring the country only about halfway to Mr. Biden’s goal, the analysis found.
“With passage of this bill, Biden will have made an outstanding accomplishment which can get the U.S. part of the way there,” said Michael Oppenheimer, a professor of geosciences and international affairs at Princeton University.
Tax incentives, charging stations
The centerpiece of the new climate legislation is $300 billion in tax incentives for producers and buyers of wind, solar and nuclear power. Buyers of electric vehicles would receive up to $12,500 in tax credits, depending on what portion of the vehicle parts were made in America and whether they were built by union workers.
The legislation provides funds to create charging stations for electric vehicles and update the electric grid to better accommodate transmission of wind and solar power, as well as money for climate-friendly farming and forestry programs.
The clean-energy tax incentives were largely written by Senator Ron Wyden, Democrat of Oregon and chairman of the Senate Finance Committee. “This is a fundamental shift in tax policy,” he said. “What makes this landmark legislation is that, for the first time, you would have, in the tax arena, a clear statement that the bigger your carbon reduction, the bigger your tax incentives.”
Most of the incentives are 10-year extensions of existing tax credits. In the past, those credits have expired after one to five years, and they often lapse before they are renewed.
“Some of them had a shelf life barely longer than a carton of eggs,” Mr. Wyden said. Extending them for a decade, he added “provides certainty and predictability to the clean energy producers.”
‘A brief window’
Passage of the bill comes after top officials from nearly 200 countries struck a major agreement in Glasgow on Nov. 13 aimed at intensifying global efforts to keep average global temperatures from rising more than 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, compared to preindustrial levels. Past that threshold, scientists have warned, the risk of deadly heat waves, destructive storms, water scarcity and ecosystem collapse grows immensely. The world has already warmed 1.1 degrees Celsius.
Meanwhile, environmentalists have criticized the Biden administration for moving forward with plans to develop oil and gas drilling on public lands, even as it pushes for emissions reductions. On Tuesday, the Interior Department offered to sell oil and gas leases in 80 million acres in the Gulf of Mexico, one of the largest such auctions in the nation’s history.
“This administration went to Scotland and told the world that America’s climate leadership is back, and now it’s about to hand over 80 million acres of public waters in the Gulf of Mexico to fossil fuel companies,” said Representative Raul Grijalva, the Arizona Democrat who leads the House Natural Resources Committee.
The decision by Democratic leaders to use the tax code as their primary weapon to fight climate change was a strategic choice determined by both political necessity and economic research.
With Republicans unanimously opposed to the broader spending bill, Democrats are pushing the measure through Congress under a special process known as reconciliation, which would enable Democrats to pass the legislation in the Senate on a simple majority vote, without any Republican support.
To meet the rules of reconciliation, any new climate program needed to take the form of a budget or tax policy.
Economists say the most effective way to cut emissions is to tax them, essentially driving up costs for polluters. Another way, though less efficient, is to create incentives for individuals and companies to use less-polluting sources of energy, essentially a reward for choosing wind, solar or nuclear energy.
Democrats had hoped to combine both methods in a carrot-and-stick approach: penalties for burning fossil fuels and incentives for clean energy.
In writing the legislation, Democrats abandoned what experts said would be one of the most powerful tools to clean up the energy sector: a provision that would have rewarded utilities that drew an increasing share of electricity from solar, wind, or nuclear energy, and penalized those that did not.
That plan hit a roadblock in the form of Senator Joe Manchin III, Democrat of West Virginia, whose vote is essential to passage of the legislation in the Senate. Mr. Manchin’s state produces coal and natural gas and he has personal financial ties to the coal industry. He forcefully objected to any program that would hurt fossil fuels.
As the legislation stands now, it does include one significant penalty on pollution: a new fee on large oil and gas companies for leaks of methane, a potent greenhouse gas. But Mr. Manchin has objected to elements of the methane fee plan, too, and it could be stripped or weakened once the measure reaches the Senate.
Mr. Manchin is also opposed to elements of the tax credit package, particularly the provisions that create larger tax incentives for purchasing union-made electric vehicles. In an interview with Automotive News, he called the incentive for union-built cars “wrong” and said: “This can’t happen. It’s not who we are as a country.”
Environmental activists, who have spent weeks this fall staging protests and hunger strikes in front of the White House, have also been focused on Mr. Manchin. This month, about 100 people gathered outside the docked houseboat where Mr. Manchin lives when he is in Washington. As the senator exited the adjacent yacht club, demonstrators trailed him to his car, chanting, “We want to live! We want to live!”
“The fight is definitely not over,” said Audrey Lin, a 20-year-old protester from Watertown, Mass. “We’re definitely going to be keeping up the pressure on Manchin and Biden and making sure the Democratic Party delivers the promises that we elected them on.”
Lisa Friedman contributed reporting.