Two weeks ago, US senator Joe Manchin scuttled a major climate spending bill, reasoning that when gasoline and other energy costs are at record highs, it is the wrong time to talk about cutting greenhouse gas emissions. The world needs more fossil fuels today, not less, he argued.
But on July 28, Manchin agreed to back the latest version of the same bill, which includes $369 billion for climate and energy measures and would be the biggest check for clean energy the US has ever cut. Manchin’s personal reasons for the reversal aren’t entirely clear, but it may have to do with branding: The bill’s title drops any reference to climate change and calls itself the “Inflation Reduction Act of 2022,” a sign that Congress is recognizing clean energy as a key solution to inflation, not a cause of it.
Clean energy keeps prices down
Since Russia’s invasion of Ukraine, prices have shot up for all kinds of consumer goods. But fossil fuels have experienced especially extreme inflation. In the month of June in the US, the cost of energy (especially gasoline) accounted for half of all economy-wide inflation, according to the Bureau of Labor Statistics. This is unsurprising: The global oil and gas market is forever teetering on a razor’s edge between supply and demand, and any sudden disruptions on either side (a war, for example, or a cold snap or heat wave) tend to produce extreme price spikes.
Clean energy is different. Solar and wind power are technologies, not commodities, and therefore they get cheaper as they scale up. The raw materials are free and inexhaustible, so the price of an electron made from solar or wind is not subject to wide daily fluctuations. The economy-wide shift to clean energy also moves a bigger share of total energy consumption into the electricity sector, which is subject to more rigorous regulation and price control than, say, gas stations, which expose their customers more directly to volatility in wholesale prices.
The upshot is that clean energy is cheaper and more stable than fossil energy—not to mention that it lowers the economic costs of climate change impacts, for which global insurance companies paid $40 billion in the first half of 2022. If Manchin has a genuine interest in saving US households money, he should be throwing every cent he can get at renewables.