There was also good news in the COVID-19 relief bill on climate change. Here are a few of the most important provisions.
The most important emissions-cutting measure in the bill is the phasing out of hydrofluorocarbons (HFCs), very potent greenhouse gases that heat the atmosphere thousands of times greater than carbon dioxide. HFCs are used primarily in refrigerators and air conditioners, and when these gases escape, they very effectively heat the atmosphere.
The bill requires the United States Environmental Protection Agency to reduce HFCs by 85% by 2035, and that will have monumental climate benefits. This reduction will avert the equivalent of more CO₂ emissions than Germany emits in a year. It may be “the single most effective emission reduction measure taken by Congress in over a decade,” according to the Rhodium Group, an energy-analysis firm. When combined with other action phasing out HFCs worldwide, it could avoid one-fifth to one-half a degree Celsius of warming by 2100. Under the Paris Climate Agreement, the world committed to staying “well below” 2 degrees Celsius of warming by the end of the century. A global phaseout of HFCs gets us 10 percent of the way there. That’s meaningful progress.
One of the other climate related provisions in the COVID-19 bill is the extension of 45Q tax credits for two years. 45Q is named for a section of IRS code, and is tax credits for carbon capture. Currently, there’s a $50 tax credit for every ton of CO2 that is permanently captured and stored underground (or at least one hopes that it will be permanent); and a $35 per ton tax credit for capturing and using CO2 — generally for enhanced oil recovery. These tax credits were set to expire in 2023, but are extended to 2025 under the COVID-19 relief bill. These tax credits are controversial among some in the environmental community, although they enjoy broad, bipartisan support in Congress.
Between the phasing out of hydrofluorocarbons and the extension of the 45Q tax credits, the Rhodium Group projects that by 2035 the emission reduction from these two provisions will offset two of President Trump’s largest environmental rollbacks: the reduction in fuel efficiency standards and relaxing methane emission standards.
There are tax credits extensions for renewable energy too. According to Inside Climate News:
- “The solar investment tax credit got a two-year extension. This up-front credit will continue at its 2020 level in 2021 and 2022, and then phase down after that.
- The wind production tax credit will get an extra year, meaning it will now be available for new projects that qualify before the end of 2021. This credit is based on the amount of electricity a project produces in its first 10 years.
- Offshore wind gets its own investment tax credit, which will last for five years before a phasedown, and is retroactive to 2017. Under current law, offshore wind can qualify for an investment tax credit, but it is phasing out right as the offshore wind industry is on the cusp of a building boom.”
The climate related provisions in the COVID-19 relief bill do not solve our climate crisis, but they are certainly a nice down payment on climate reform. The heavy lifting on this existential threat will begin in earnest this year. Stay tuned.