The fate of the climate rests largely on one man: Joe Manchin, US senator for West Virginia. On Dec. 19, Manchin told Fox News he will not support president Joe Biden‘s Build Back Better bill, a $1.75 trillion spending package of which one-third is earmarked for renewable energy and low-carbon transportation.
In November, Biden signed a separate infrastructure bill that included a few pared-back climate initiatives. But Build Back Better was meant to be the heart of Biden’s climate legacy, and the main avenue through which the US would reach his goal to cut economy-wide emissions in half, and electricity emissions all the way to zero, by 2030.
In the absence of federal spending, the Biden administration’s best chance at tackling emissions is through regulation, and it is currently pursuing new limits on methane and other greenhouse gases. But regulation is slow-moving and highly vulnerable to reversal by future presidents. The likely death of the bill—which featured a broad menu of tax incentives for homeowners and companies to invest in solar panels, electric vehicles, energy efficiency, and other climate priorities—is a major and potentially fatal blow to the odds of limiting global warming to 1.5 degrees Celsius above pre-industrial levels.
In a statement, Manchin said the bill would “risk the reliability of our electric grid,” and that reducing emissions “at a rate that is faster than technology or the markets allow will have catastrophic consequences for the American people like we have seen in both Texas and California in the last two years” (referring to blackouts in those states that were often misleadingly attributed to renewable energy).
The idea that climate spending will be harmful to the economy is an age-old refrain amongst politicians who, for their own reasons, are averse to addressing the problem. Manchin, for one, continues to earn about twice as much from his family’s investments in coal mining than he does from his Senate salary (the bill, by the way, also includes support for sick coal miners).
But his argument is hollow for several reasons.
First, “the markets,” especially in the energy sector, have never existed in a government-free vacuum. The US currently subsidizes oil and gas production to the tune of about $20 billion per year, which gives those fuels an advantage over renewables that then need tax incentives. Although the US, as Manchin mentions in his statement, has a history of innovation in clean energy tech, it has surrendered its competitive advantage to China on emerging industries like the manufacturing of batteries and solar panels largely because of its unwillingness to sufficiently subsidize domestic production facilities.
Second, the bill directs much of its support toward the very technologies—utility-scale energy storage and improved grid transmission lines—that are needed to improve the “reliability of our electric grid” and to mitigate the risk of future blackouts as renewables become more widespread.
Finally, the most important flaw in Manchin’s reasoning is that it propagates a false choice about climate action: Either spend money on climate, or do nothing and save money. In reality, maintaining the status quo—in other words, plowing headlong into climate catastrophe—is by far the costlier option and more damaging to the US economy.
After Manchin’s announcement, Goldman Sachs $GS lowered its GDP forecast for the US in 2022.
