The Climate Bill is Nothing to Celebrate
Democrats claim the bill will "invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030." Even taken at their word, the bill is self-defeating.
The recently passed Inflation Reduction Act, which is being propagandized in the media and among certain climate scientists as a historic victory and the most significant progress on climate change the US has ever made, is in effect a woefully inadequate stopgap with concessions to polluting industries which will outweigh any putative benefits it might have for the precipitously ailing environment (which is already damaging the lives of millions worldwide). The image above contains some very hedged and obviously doggedly determined celebratory remarks which reveal the true position of the climate optimist: bright, triumphant declarations with vaguely noted reservations brushed neatly aside. A good summary of the ecstatic atmosphere comes from Politico, which mirrors the optimists’ nonsensically brave face and claims the bill will “supercharge” the clean energy industry:
Senate Democrats delivered a dramatic win for President Joe Biden’s effort to fight climate change on Sunday, passing a bill that will devote hundreds of billions of dollars to clean energy sources and speed the U.S. transition away from fossil fuels.
The Inflation Reduction Act, which had appeared to be dead just weeks ago and now heads to the House of Representatives, would accelerate U.S. emission cuts and put the country on a path to reduce greenhouse gases by 40 percent below 2005 levels by 2030, significantly narrowing the gap with the goal Biden set under the Paris climate agreement to cut that pollution by at least half by that date.
Others in the climate sphere were not so overjoyed. In “Cataloguing the Sixth Mass Extinction Part II” I cited one such scientist’s Twitter breakdown of the bill’s more odious provisions:
From Forbes, an analysis which calls the bill’s compromises “Faustian”:
A small, easily overlooked provision of the bill could have a big impact, though not necessarily in the way its authors might intend. Just over two pages long, Section 50265 jeopardizes the development of billions of dollars of planned offshore wind projects and renewable power projects on federal land. And it adds to the complexity and uncertainty of obtaining federal environmental permits even as both Democrats and Republicans proclaim the need to streamline the entitlement process.
Under this provision, for the next decade after the new law takes effect, no right of way could be granted for wind or solar energy development on federal lands unless a quarterly lease sale is held that results in issuance of an oil and gas lease, if any acceptable bids have been received, within the 120 days prior to the proposed wind or solar energy right of way being issued. Every time a wind or solar right of way is to be issued by the Bureau of Land Management (BLM), for each project that applies and has met the permitting requirements under the National Environmental Policy Act (NEPA) and other laws, a separate determination would be required about the status of oil and gas leases sold under BLM’s lease program. That determination would not depend on the quality, value, compliance or merit of any energy project, just on the calendar and the progress of wholly unrelated administrative actions….
In effect, over 600 million acres of federal waters must be offered (though unsold areas could be reoffered) for new oil and gas exploration and production. Failure to maintain the required annual pace of offshore oil and gas leases would block all subsequent offshore wind leases.
Senator Bernie Sanders: “In my view, if we are going to make our planet healthy and habitable for future generations, we cannot provide billions of dollars in new tax breaks to the very same fossil fuel companies that are currently destroying the planet.” With such a generous handout to polluting industries hiding in plain sight in what has been sold as a historic climate change bill, it is unsurprising that so many industry insiders are satisfied: they have been given “greenwashed” bonanza while being subjected to no significant new regulations. The CEO of Exxon was not the only one to celebrate:
The industry as a whole isn’t yet embracing the $700 billion-plus reconciliation deal, which would penalize some forms of fossil fuel pollution while making one of the largest investments in clean energy in U.S. history. But the legislation also contains what some called “Easter eggs” that would benefit oil and gas companies, including access to new swaths of federal waters in Alaska and the Gulf of Mexico.
“There are some things in there that are helpful to our business,” Rich Walsh, senior vice president and general counsel at Valero, one of the country’s largest fuel refiners, said during an earnings call Thursday with investors.
Frank Maisano, a partner at the at law firm Bracewell, said the compromise deal offers wins for both the fossil fuel and green energy industries.
“There are a lot of pieces in there that are going to be valuable to different sectors,” said Maisano, whose firm works with companies in both fields.
Maisano added that Sen. Joe Manchin (D-W.Va.), who reached the deal with Senate Majority Leader Chuck Schumer, “has been clear on where he stands — to have some mix of benefits and not lean too heavily on renewables only. That’s what he’s gotten here.”
BP America, in a statement to Yahoo Finance, said it applauds "Senate lawmakers for making progress toward a historic climate deal," adding that the company supports a strong climate measure and "supports regulatory certainty." Valero Energy (VLO) also praised the deal.
The friendliness to the energy sector was "really eye-opening for everybody," a close observer of the industry, Tortoise Portfolio Manager Rob Thummel, said in a Yahoo Finance Live interview.
Barrons reports that ExxonMobil, Chevron (CVX), Occidental Petroleum (OXY), and Equitrans Midstream (ETRN) could benefit the most from the bill’s provisions, including controversial carbon capture incentives that many climate activists say won’t help in the short-term.
Regarding these carbon credits:
Daimler Trucks, eBay, and a US energy company were among the recent buyers of carbon offsets created by projects that involved injecting carbon dioxide underground in order to extract more oil.
Three US-based extraction projects were eligible to generate credits because their processes involved the capture of CO2. But this was used as a way to extract fresh oil that would otherwise have been inaccessible, a procedure known as “enhanced oil recovery” (EOR).
The offsetting rules that the credits were created under ignored the emissions associated with the extracted oil.
Nearly 3 million credits from the three projects, which cannot generate new offsets following a rule change, have been used by buyers to compensate for carbon emissions. Each offset is supposed to represent a ton of carbon that has been permanently avoided or removed from the atmosphere.
“Offsetting emissions with these credits is complete nonsense,” said Gilles Dufrasne, policy officer at Carbon Market Watch. “If the captured carbon enables an increase in oil extraction, then obviously this must be part of the calculation and would likely negate any supposed climate benefits.”
There is an underexamined industry in the US which might be called “faux climate action.” As with any legitimate movement, greedy, cynical capitalists will emerge to exploit and undermine necessary work, to provide the illusion of progress on any given issue while stymieing and delaying the revolutionary changes are needed to save our civilization (much more than the bill’s 40% reduction of greenhouse gas emissions below 2005 levels by 2030 is needed to avoid disastrous warming already underway—scientists agree that carbon emissions must become net negative immediately). Green energy, carbon credits, clean coal, all of these buzzwords might be described as faux climate action. The media dutifully touts these non-solutions as it does the occasional minor, fluke victories for the environment as great signs of a potential turnaround, when in effect they are bumps on the road to ruin. One such example occurred recently with the “bouncing back” of the Great Barrier Reef, hailed in much of the media as a greatly encouraging sign. A more realistic view from The Guardian:
Yet this week, a report on the amount of coral across the reef showed the highest level in the 36 years of monitoring in the north and central parts….
Conditions in recent years have been relatively benign, with few cyclones, low numbers of starfish and two summers dominated by La Niña weather pattern that usually means cooler conditions.
But earlier this year was the first mass coral bleaching in a La Niña year – an event that shocked and surprised marine scientists who expect those cooler years will give corals a clear run to recover. Global heating now means even La Niña years are not safe for corals. The inevitable arrival of a warmer El Niño phase has many extremely worried.
The first ever mass bleaching was in 1998, followed by events in 2002, 2016, 2017, 2020 and 2022. One study found only 2% of all reefs have escaped bleaching since 1998.
For the most recent Aims monitoring report, about half the reefs were visited before this summer’s bleaching. While bleaching was widespread, Aims said the heat was likely not high enough to have killed many corals outright.
In the same way that the Inflation Reduction Act is technically historically significant action on climate change, the reef rebounding to its highest level in 36 years is also damning with faint praise. The key statement above is the one regarding unusually favorable conditions for coral growth—these conditions will not last, nor will the coral’s rebound. The Inflation Reduction Act is similarly unlikely, and its kind will almost certainly not be seen again, in this case largely as a result of the bill’s own passage.
There are two possible outcomes here: either the bill does some good in curbing emissions which results in tangible short term benefits (any reduction in emissions will always lead to immediate health benefits, especially for people living in economically disadvantaged, more heavily polluted areas), or its compromises counteract any benefits it would have otherwise offered and no progress of note is made. If the bill accomplishes anything noteworthy, its weak provisions will be cited as sufficient for tackling the climate crisis and the mainstream will rest easy, content to let the eventual paradigmatic shift toward right-wing electoral victories undo any provisions the heads of industry find unacceptable while placating those with a bent toward environmental optimism (ignorance). The idea that any progress is necessarily good rests on the assumption that American politics has an inertial force in which movements in either direction lead to further, more significant movement in the same direction, which has never been the case. Instead, even slight movements leftward are met with disproportionate pushback from the opposition, in a cycle which spirals ever rightward as institutions which would potentially educate and support Americans are privatized and dismantled bit by bit in an effort to stop them from creating new leftists. As is the usual case in American politics, Democrats will take one (putative) step forward and Republicans will successfully portray that single step as several great strides of government overreach, as was the case many times during previous Democratic administrations. This is the real damage of the climate change bill: that it is seen as a positive development at all is fodder for the architects of the coming backlash who will cast the bill as a result of the Biden administration and current Congress’s extremist environmentalist agenda. The Democrats will be happy enough to declare victory for electoral purposes, kicking the can down the road for the sake of little more than optics. The Republicans will have a new rallying cry and new cause to stir up anti-Chinese racism (they will successfully argue to the American public that these regulations, such as they are, will weaken the US with respect to China economically).
This is the problem with incrementalism and viewing the bill as flawed but ultimately beneficial: if it meant to be a stopgap, there is no indication that its passing will lead to a necessarily much more significant environmental regulatory revolution. It attempts to use capitalism (incentives, tax breaks, etc.) to fix the problems caused by capitalism, in much the same way the Obama administration attempted healthcare reform yet accomplished little with the Affordable Care Act other than gifting the insurance industry billions of dollars and forestalling single payer or universal healthcare indefinitely. The Obama administration’s healthcare reforms are especially relevant, as they amounted to little more than a negotiated concession to the insurance industry yet were touted alternately as historic progress on affordable care by the center and authoritarian death panel socialism by the right. This bill will accomplish comparably little yet be regarded as business-destroying regulation by the likely right-wing new Congress, if for no other reason than that it was authored by Democrats.
If, on the other hand, the bill accomplishes nothing, it will be cited as evidence for the ineffectiveness of climate legislation and pollution controls, yet the bill’s love letter to the oil and gas industries will go unexamined as a cause of its own uselessness. Direly needed climate legislation will be further postponed or watered down as capital casts the bill’s failure as the result of insufficiently business-friendly provisions, which drove industry out of the US to countries which lack such stringent pollution controls. Whether any of this is actually the case is immaterial.
Whatever the outcome, the bill will not spur the further necessary action to significantly impact our environmental death spiral. This bill is far too little, far too late, and its “deeply compromised” nature overwrites any good the bill may have done. Worse, that it is being seen as a victory even among some climate scientists (who are known to put on an optimistic public face while expressing deep anxieties in private) amounts to something worse than Pyrrhic: it is a victory in name only, shutting down potential further efforts which could have made a real difference. The only victory this new bill represents is one of politics as usual and of certain lucky beneficiaries’ careers. In light of the ongoing heatwaves, droughts, and other disasters brought about by climate change, these celebrations of a bill which does little if anything to address this root cause are not just misguided, they are tacky and shameful.
Addendum—here is the climate bill’s danger neatly summarized in one tweet:
Addendum II—an excellent article from The Guardian with some critical perspectives on the bill:
The bill is a watered-down version of Biden’s ambitious Build Back Better bill which was blocked by every single Republican and also conservative Democratic senators Joe Manchin and Kyrsten Sinema, who have both received significant campaign support from fossil fuel industries. West Virginia’s Manchin, in particular, is known for his close personal ties to the coal sector.
“This was a backdoor take-it-or-leave-it deal between a coal baron and Democratic leaders in which any opposition from lawmakers or frontline communities was quashed. It was an inherently unjust process, a deal which sacrifices so many communities and doesn’t get us anywhere near where we need to go, yet is being presented as a saviour legislation,” said Jean Su, energy justice program director at the Center for Biological Diversity.…
A cost-benefit analysis by the Climate Justice Alliance (CJA), which represents a wide range of urban and rural groups nationwide, concludes that the strengths of the IRA are outweighed by the bill’s weaknesses and threats posed by the expansion of fossil fuels and unproven technologies such as carbon capture and hydrogen generation – which the bill will incentivise with billions of dollars of tax credits that will mostly benefit oil and gas.
“Climate investments should not be handcuffed to corporate subsidies for fossil fuel development and unproven technologies that will poison our communities for decades,” said Juan Jhong-Chung from the Michigan Environmental Justice Coalition, a member of the CJA….
Siqiniq Maupin, executive director of Sovereign Iñupiat for a Living Arctic, said: “This new bill is genocide, there is no other way to put it. This is a life or death situation and the longer we act as though the world isn’t on fire around us, the worse our burns will be. Biden has the power to prevent this, to mitigate the damage.”