How Does Biden’s Climate Plan Stack Up?
Image credit: Gage Skidmore
Joe Biden’s presidential campaign just released a new climate plan that could dramatically reshape the US economy if implemented. The plan calls for two trillion federal dollars to be invested in clean energy and infrastructure to put the US on a path to zero-carbon electricity generation by 2035 and a net-zero carbon economy by 2050. It also calls for four million buildings and two million homes to be retrofitted for energy efficiency, new low-carbon farming techniques, and investments in low or no carbon technologies for industries, homes, and vehicles.
The plan is big and bold and promises millions of jobs for the American worker in a post-COVID-19 world. It also puts the US back on track to meet the international goals of limiting the global temperature increase outlined in the 2015 Paris Climate Accords.
Trillions of Dollars at Stake
Spending two trillion federal dollars would have been unthinkable prior to the trillions spent to save the economy from COVID. For reference, the total 2019 federal tax receipts were $3.5 trillion, the government budget was $4.8 trillion, and the total US GDP was $20 trillion.
We estimate that $800 billion of the $2 trillion in federal spending could be needed to support the 1,200 GW+ of new solar and wind capacity needed by 2035 to replace and eliminate existing coal and natural gas electricity generation. Private capital investment would be another 2-3 times that potentially reaching $2 trillion in total spending for wind and solar alone. In addition, more than $200 billion in private investment could come out of a big push to decarbonize homes and buildings as well.
Two trillion dollars is an enormous amount of money. But remember that a single hurricane (Harvey) alone caused $125 billion in damage to Houston in 2017. No one knows how much climate change could cost if unchecked, but a recent study estimates that preventing the global temperature from rising materially could save the US $10 trillion and save hundreds of thousands of lives.
Biden’s plan follows aggressive moves by California, New York and many other states that have already pledged to go carbon neutral by 2050 and are already executing on that goal. But his plan does not mention a carbon tax, it doesn’t lay out a renewable portfolio standard and it does not specify an incentive program similar to the investment tax credit (ITC), production tax credit (PTC) or §1603 grants that have been so successful in helping deploy renewables to date. Biden’s plan simply sets emissions goals targeted for specific dates and pledges the full force of the US government to find a way to reach the targets.
Biden’s Spin on the Green New Deal
Some have noted that Biden may have adopted parts of the Green New Deal but also may owe as much to Jay Inslee’s well thought out climate plans. The plan appeals to rank and file Democrats, left-leaning Sanders progressives, and average Americans in the center and right. Also, Biden doesn’t poll well with younger voters in swing states, but climate change is an issue that can rally them. It also puts the US back in front of a powerful international global coalition of climate-wise countries that will bolster our clout geopolitically.
While the incumbent is trying to solidify his base by focusing on social divisions, Biden has been on message: “When Donald Trump thinks about climate change, the only word he can muster is ‘hoax’. When I think about climate change, the word I think of is ‘jobs.’” His plan calls for one million new jobs building electric vehicles and charging stations, rebuilding the grid, retrofitting existing buildings and constructing new ones to make the housing sector more energy efficient.
He also wants to make sure that workers and disadvantaged communities are not left behind. The immediacy of the plan and the fact that the $2 trillion is earmarked for the first four years of his administration makes it a prime post-COVID stimulus package geared at the 30-40 million American workers that have lost their jobs in this pandemic.
After three and a half years, the planet might finally be in for some good news on climate.