Democrats unveil $150 bn power plan that would penalise dirty energy

Department of Energy would pay utilities to switch to green energy under new plan

Josh Marcus
San Francisco
Friday 10 September 2021 22:59
Predicted Climate Change Impacts on Extreme Wildfires, Storms Are Here

Congressional Democrats have unveiled a $150 billion programme to shift America’s energy grid to renewable fuels, which scientists say will be essential if the country and the world at large is to avoid the worst effects of the climate crisis.

On Thursday, Democratic members of the House of Representatives released new details about the so-called Clean Electricity Performance Programme, a $150 billion effort that would pay utilities to switch to clean energy and penalise those that don’t. The policy is slated for potential inclusion in the $1.5 trillion reconciliation budget the party hopes to pass this year.

Legislators said switching to clean power is a vital step to lowering US emissions and stopping the climate crisis from getting worse, noting the rash of major national disasters that have occurred in recent years which are strengthened by global warming.

“Last year alone, our country experienced 22 major natural disasters costing Americans a record-shattering $95 billion in damages — figures that represent more than double the historical average, but which still don’t reflect the cost of lost jobs or the trauma of families losing their homes,” Frank Pallone, chairman of the House Energy and Commerce Committee, told The New York Times. “The climate crisis is here, and the cost of inaction is already staggering.”

Under the plan, the Department of Energy would pay utilities which are able to increase clean energy supplies by 4 per cent each year, doling out $150 for each additional megawatt hour added after that benchmark. Those that fail to update their systems, meanwhile, will owe money.

The policy would go along with other green incentives in the spending package, such as $12.5 billion to improve electrical vehicle charging infrastructure, and another $9 billion to help states modernise their electrical grids.

The Democrats are hoping to pass these policies through reconciliation, a budgeting process that only requires a simple majority in the Senate, rather than the usual, filibuster-proof 60 votes needed for full legislation. Republicans are likely to oppose the legislation.

Even with control of the Senate, however, its passage isn’t assured. Moderate Democrats like Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have said the $3.5 trillion budget is too pricey.

Mr Manchin, hailing from the coal producing state of West Virginia, has significant financial interests in coal, a form of energy which wouldn’t be deemed clean enough for payments under the proposed plan. He owns shares of a coal brokerage worth up to $5 million dollars, which paid him $491,949 in dividends last year, according to financial disclosure forms.

In May, the International Energy Agency said huge changes to major emitters’ power grids would be necessary to avert the worst consequences of the climate crisis, but most countries haven’t committed to making them.

“The sheer magnitude of changes needed to get to net zero emissions by 2050 is still not fully understood by many governments and investors,” Fatih Birol, the agency’s executive director, said at the time.

“We’re seeing more governments around the world make net-zero pledges, which is very good news,” he added. “But there’s still a huge gap between the rhetoric and the reality.”

In the next decade, the installation rate of solar panels and wind turbines needs to grow by four times to reach the goal of net zero carbon by 2050.

On a recent tour through New Jersey and New York, Mr Biden highlighted the need for climate policy as he inspected damage from Hurricane Ida.

"We’re living through it now. We don’t have any more time," he said. "Every part of the country is getting hit by extreme weather. We can’t turn it back very much, but we can prevent it from getting worse."

"The threat is here. It’s not going to get any better. The question is can it get worse? We can stop it from getting worse," Biden said. "This is everybody’s crisis."

"We’re living through it now. We don’t have any more time," Mr Biden said of the effects of climate change. "Every part of the country is getting hit by extreme weather. We can’t turn it back very much, but we can prevent it from getting worse."

The $1 trillion, bipartisan infrastructure package, separate from the larger Democratic budget proposal, passed the Senate earlier this year and contains a number of green policies. However, environmentalists said the deal had cut billions in vital climate spending from its original iteration.

“Biden and Congress can’t get distracted by this pathetic version of an infrastructure package that only waters down much needed climate priorities, like transit, even further,” the Sunrise Movement’s advocacy director, Lauren Maunus, said in a statement at the time.

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