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2 July 2020

Democrats publish progressive climate plan, refuse to omit coal

Democrats in the US House of Representatives have tabled a plan for the country to reach net-zero emissions by 2050. While this is a big step in acknowledging what is possible for the US, several of the outlined steps leave a lot of room for greenwashing and business-as-usual within the fossil fuel sector.

The 547-page Climate Crisis Action Plan was released on Tuesday from the House Select Committee on the Climate Crisis, which outlined steps for the US power sector to reach net-zero by 2040, before a wider national reduction to net zero by 2050.

However, in the knowledge that the announcement of any climate plan will be more progressive than the Republicans, there appears to have been little pressure to initiate immediate change. The plan refuses to address a ban to fracking in the country and makes no concrete moves to phasing out coal-fired power in the country. Instead, it has made some heavy gambles on carbon capture technology and nuclear power.

The policy package was put forward by Democrats alone, although the weak proposals could well be a way of moving the plan forward as a bipartisan negotiation. In essence, if Trump gets reelected then this is better than nothing, but if Democrats can gain a majority then its possible that ambition could be ramped up after November. It’s still without doubt the most comprehensive climate plan ever put forward in Congress.

Recommendations across 12 pillars are outlined to achieve four primary goals. The first being to reduce net US emissions by 37% by 2030 (against 2010 levels), before 88% in 2050, with the remaining 12% coming from hard-to-decarbonize sectors including heavy-duty transport, industry and agriculture, which the country will inevitably try to offset with some form of carbon capture. This addresses the second aim of the plan: To get the US to fall into line with limiting climate change to 1.5 degrees Celsius.

The third and fourth outcomes of the plan are more sub-textual, and potentially vital in convincing politicians across the board in the US. The Select Committee has anticipated that the outlined policies will deliver significant health benefits, avoiding 62,000 premature deaths per year by 2050, primarily by reducing fine particulate emissions. Then there’s the economic benefits from the health and climate impact, which could exceed $8 trillion by 2050, with annual benefits expected to reach $1 trillion that year.

The first pillar of policies aims to invest in infrastructure for a just, equitable and resilient clean energy economy. This will include widespread electrification in transportation, buildings and industrial sectors, which will be offset by advancement of energy efficiency standards and technology. Notably, this includes a national target to reach 100% sales of zero-emissions cars by 2035, with heavy-duty trucks to follow in 2040, while also establishing a low carbon fuel standard to reduce emissions from any remaining vehicles in aviation, long-haul trucking and shipping. Tax incentives will also be established for net-zero buildings, with the goal of all new buildings falling under that bracket from 2030. With increased monitoring of methane leaks across the globe, and several highlighted in the US itself, the plan also pledges to plug leaks from oil and gas infrastructure, and ambitious targets to reduce methane pollution in the sector by 90% by 2035, compared to 2012.

The pillar also includes an extension for the Production Tax Credit for onshore wind energy, noting that the mechanism has so far spurred $134 billion of investment in the US wind sector, reducing costs in the technology by 70%. Alongside this, the plan calls for a new investment tax credit for offshore wind energy, while extending the ITC for solar energy generation. It also calls for FERC to conduct a review to better integrate battery storage in wholesale power markets.

Pillar 2 details innovation in deep decarbonization technologies, with a ‘robust innovation policy,’ although allocation and budget weren’t explored. With offshore wind set to take off in the US over the next few years, this is likely to include research into floating wind for the country’s west coast, and could include a fast-follower position to Europe’s early investment in Green Hydrogen and the necessary alterations needed for existing gas infrastructure.

Pillar 3 aims to reestablish the US’ presence in the manufacture of clean energy technologies. This should include an acceleration of smart-grid technology and software coming out of Silicon Valley, rather than a desperate attempt to pull the US’ solar production back to competitive levels with China. It’s also possible that we could see wind turbine manufacturers grow their presence in the country if appropriately incentivized. Suggested ‘policy toplines’ include border adjustment mechanisms to protect domestic manufacture, and an insistence that the US can still become a world leader in CCUS technologies, despite very limited progress so far.

Pillar 4 is brief, but could have a huge impact on the acceleration of the US’ energy transition. It suggests that the playing field should be leveled for clean energy technologies, and that tax breaks should be repealed for large oil and gas companies. It also lays out a carbon pricing to correct the failure of the market to account for the costs of unmitigated pollution. This carbon pricing is essential if the country continues to implement floor prices for subsidized renewables projects, like the MOPR for PJM Interconnection, or BSM for NYISO.

The fifth Pillar sets out a transition for US workers into the clean energy economy, promising to provide ‘good-paying, high-quality jobs’ in the sector. It also identifies a need to respect the contributions of coal miners and other fossil fuel workers, and systemic support if these jobs are to be phased out. This will include the right to organize a union for those working in clean infrastructure, as well as an office to support workforce development through the transition.

Pillar 6 addresses environmental justice and the need to invest in communities that are disproportionately exposed to climate change and the energy transition. The rise in frequency in natural disasters, and the associated number of deaths, currently poses greater risk to poorer communities, and by association the BAME demographic. For example, a study of evacuees during Hurricane Katrina identified that of the 22% of New Orleans’ population was unable to evacuate ahead of the storm, 93% of which were black.

Pillar 7 aims to establish a greater link between public health and climate risks, developing a strategic action plan to assist communities in preparing for climate-related health risks, and identifying areas that are most exposed to potential health threats.

Pillar 8 pledges investment into agriculture, ensuring climate stewardship practices including no- and low-till farming, planting cover crops, diversified crop rotations, rotational grazing, and improved nutrient management. Farmers adopting these practices would benefit from upfront financial and technical assistance from the government.

The ninth Pillar aims to make all US communities more resilient to the impact of climate change, which will entail better land use, more robust building codes and development standards as well as a transition of activity away from areas of higher risk. This is an area where appropriate management has the potential to save the US $billions in spending. The report notes that since 2005, the federal government has spent at least $450 billion on disaster assistance – a figure which is expected to increase in tandem with climate change.

Pillar 10 aims to protect nature in the US, creating a net carbon sink from oceans, forests, grasslands and wetlands. The plan sets out a national goal to protect at least 30% of all US lands and ocean areas by 2030, up from today’s level of 12% for land and 26% for Ocean. This should also include a heavy restoration program to create “blue carbon systems.” Concerns around this pillar have already been aired by environmentalists, which claim that the heavy build out of wind and solar power, could come at detriment to these lands.

Pillar 11 aims to confront the risk to America’s national security and restore America’s leadership on the international stage, which echoes much of the conversation around the US energy sector at the moment, and probably gives reason behind the absent proposals to phase out natural gas as the country looks to export its reserves into Asia.

The final pillar aims to strengthen America’s ‘core institutions’ to help facilitate climate action. This will involve learning from individual states and organizations like BlackRock, which have been far ahead of the national attempt to go carbon-free.