By Perry Bryant
On December 19th, on Fox News of all places, Senator Manchin said that he could not support moving the Build Back Better Act forward. The Build Back Better (BBB) Act is President Biden’s proposal to expand the nation’s social safety net and make historic investments in efforts to address the climate crisis.
The BBB Act would invest $550 billion over ten years to address climate change. A few of the important climate measured included in the House-passed version of the BBB Act, include:
- A 30% tax credit for installing solar, wind, geothermal or batteries. These tax credits are extended for up to ten years and are direct pay meaning if the tax credits are greater than the taxes you owe, you can receive a tax rebate from the IRS. This is a significant benefit to low- and moderate-income individuals who want to install renewable energy.
- A tax credit for electric vehicles (EVs) provided at the time of purchase. The EV tax credit starts at $7,500 but increases to $12,500 for EVs built in the United States under a collective bargaining agreement. Very high-income families do not qualify for the EV tax credit.
- $6 billion for energy efficiency measures in existing buildings. Depending on how much energy is saved, these tax credits would range from $2,000 to $4,000.
- $6 billion for “qualifying electrification projects” such as installing an electric heat pump. The tax credit for installing a heat pump would be $1,250 to $4,000 depending on how efficient the heat pump is.
- Establishing the Climate Conservation Corp. The new CCC “could hire hundreds of thousands young people to restore forests and wetlands and guard against the effects of rising global temperatures”, according to the Washington Post.
These tax credits in the BBB Act are impressive and could, if adopted, help reduce America’s greenhouse gas emissions. The UN Intergovernmental Panel on Climate Change (IPCC) has determined that global warming needs to be kept below an increase of 1.5 degrees Celsius relative to pre-industrial levels in order for the planet to avoid the worst impacts of climate change. In order to stay within this 1.5-degree goal, countries need to reduce their greenhouse gas emissions, on average, by 45% by 2030 and reach net zero by 2050. President Biden has proposed that the US reduce its emissions by 50 to 52% by 2030 and reach net zero by 2050.
In an evenly divided Senate with all Republican Senators opposed to passage of the BBB Act, Senator Manchin’s support is essential. Without his support the fate of the BBB Act is uncertain. But it’s important to understand that even with the adoption of the extensive tax credits in the BBB Act, the US is unlikely to reach the goals established by the IPCC or the Biden Administration. That is the findings of the World Resources Institute (WRI), a global research organization. The WRI report is the first that I have seen translating various climate mitigation measures into projections on national greenhouse gas emissions. Hopefully, additional reports in the near future will either confirm or refute the WRI findings.
The WRI chart below shows that under existing policies plus the Bipartisan Infrastructure Framework, which passed Congress and was signed into law by President Biden earlier this fall, the US is projected to achieve only a 39% reduction in greenhouse gas emissions by 2030. Even with the adoption of the BBB Act, the US would reduce greenhouse gas emissions by only 43% by 2030 and only 63% by 2050.
In order to achieve President Biden’s goal of a 50 to 52% reduction by 2030 and net zero by 2050, the US needs to implement the Bipartisan Infrastructure Framework, adopt the BBB Act and adopt clean energy standards along with several other reform measures, according to the WRI.
|Reform Measures||% Reduction by 2030||% Reduction by 2050|
|Add Bipartisan Infrastructure Framework||39%||50%|
|Add BBB Act||43%||63%|
|Add Clean Energy Standards||50%||100%|
The BBB Act did contain a clean energy standard. It was called the Clean Electricity Performance Program and would have provided utility companies with financial assistance for increasing the percentage of energy they generate with clean energy sources by 4% annually, and penalizing utility companies that failed to meet the 4% threshold. This clean energy standard was removed from the BBB Act at the insistence of Senator Manchin.
What does all this mean? First, the BBB Act is important to reducing greenhouse gas emissions, and should be adopted. Second, the US will likely need additional policies beyond the BBB Act that further reduces greenhouse gas emissions in order to avoid the worst impacts of climate change. This could be achieved with additional legislative initiatives. Or it could be achieved through technology breakthroughs such as the remarkable reduction in the cost of solar over the last decade. Or the public will need adopt personal responsibility measures significantly conserving energy. The gap between where we are projected to be in 2050 even with the adoption of the BBB Act and where we need to be to avoid the worst impacts of climate change is significant as the WRI graph below highlights.