Joe Biden came to power as the 46th US president expecting to spend more on green energy and clean technology. Just how much more is starting to be revealed.
Doubles down on emissions
This week Biden fulfilled a campaign promise in convening a “global climate summit” within his first 100 days in office. The two-day virtual meeting, attended by the leaders of a number of US allies and two of its adversaries — China and Russia — appears like many of these gatherings to be mostly a talking shop.
But a decision on Thursday is substantive, and therefore bears examination. The president committed the US to reducing its greenhouse gas emissions by 50 to 52% below its 2005 emissions levels by 2030, without revealing any details as to how this would be achieved.
The announcement also brings GHG reduction targets 20 years forward from what is set out in Biden’s $2.3 trillion infrastructure/ clean energy proposal unveiled in March. That plan commits to net-zero emissions by 2050 (net-zero refers to balancing the amount of emitted greenhouse gases with the equivalent emissions that are either offset or sequestered).
Though non-binding, Biden’s promise is more than double what the country agreed to at the 2015 Paris climate conference, showing that his administration is serious about taking aggressive steps to combat climate change.
Annual climate spending would rise to $5.7 billion annually, assuming he can get Congress to agree. A big IF.
Bloomberg notes the summit ended months of speculation over how Biden would bring the US back into the international fold after four years of inaction on climate policy.
The site also quotes Niklas Höhne of NewClimate Institute stating, “It’s clear the U.S. is back in the climate game, and, for the first time, is lining up to be a leader.”
Progressives revive Green New Deal
We’ve been saying, ever since Biden began stumping for president in 2020, that he is being heavily influenced by voices on the Democratic Party’s left, the so-called progressives.
So far, Biden’s environmental decisions haven’t gone as far as the “Green New Deal” proposed by left-leaning Democrats, but they are coming closer to achieving the left’s objectives.
On Tuesday this week, just before the Leaders Summit on Climate, Democratic wing-nuts, imo, Alexandria Ocasio-Cortez of New York, and Massachusetts Senator Ed Markey, revived their push for a Green New Deal mooted two years earlier.
“We’re going to transition to a 100 percent carbon free-economy, that is more unionized, more just, more dignified and guarantees more health care and housing than we ever have before,” Politico quoted AOC at a press conference overlooking the National Mall in Washington. “Do we intend on sending a message to the Biden administration that we need to go bigger and bolder? The answer is absolutely yes.”
Markey, asked whether lawmakers wanted to go beyond what Biden has already proposed, said, “Yes. We believe that this is the moment that requires us to act big, think big, have a program that matches the magnitude of the problem that we’re confronted with.”
First introduced in 2019, the 14-page Green New Deal seeks to eliminate US greenhouse gas emissions within a decade and transition the economy away from fossil fuels.
New aspects of the plan include authorizing up to $1 trillion for cities, tribes and territories to fund their own localized versions of the Green New Deal; and up to $172 billion on public housing over 10 years, more than quadruple what the Biden White House is proposing.
Re-introducing the Green New Deal is seen as a way for progressives to stake out their position, as Congress prepares to embark on a massive infrastructure spending push.
There are reportedly 103 House lawmakers who have co-sponsored the resolution.
However, converting any of the non-binding proposals into laws will be a daunting task, considering Republicans’ fierce opposition to the plan.
“The Green New Deal is a socialist super-package which will only saddle hard-working taxpayers with debt and displace millions of Americans from their jobs,” said Kentucky Republican James Comer, a member of the House Oversight Committee, in a statement. “Democrats will stop at nothing to push their progressive pet projects on the American people.”
In addition to the promise of a carbon-free economy, the first iteration of the Green New Deal called for 100% of power generation to be met by renewables, meaning the elimination of all fossil-fuel energy production and nuclear power; a phase-out of all combustion engine vehicles including trucks, planes, boats and 99% of cars; cutting carbon emissions from manufacturing and agriculture; retrofitting buildings to make them more energy-efficient; and replacing air travel with high-speed rail.
The proposal lost credibility by claiming all of the above could be accomplished within a decade.
The plan also included a number of frankly socialist items, including affordable housing for everyone, a guaranteed job with a “family-sustaining” wage, free college tuition and “high-quality [free] health care” for all Americans.
An “economic safety net” would be created for communities affected by climate change and shifting away from fossil fuel use, including guarantees of health care, jobs and training.
The Green New Deal references President Franklin D. Roosevelt’s New Deal of the 1930s, which tried to help Americans suffering from the Great Depression through government-led infrastructure projects.
The right-leaning National Review notes when AOC’s office released the Green New Deal proposal in 2019, The plan was met with so much derision that Ocasio-Cortez claimed her office had accidentally released a working draft to the public – and most of the media went along with the charade.
Two questions come out of the re-emergence of the Green New Deal. The first is whether it has fundamentally changed (it hasn’t), and the second is how much of the plan has the Biden administration adopted in legislation that could actually be drafted into law?
We can address the second question by comparing what is in Biden’s $2.3 trillion infrastructure package that is currently before Congress, to the Green New Deal which, as NPR notes, goes back at least a decade, to Obama’s financial crisis stimulus package that included around $90 billion worth of environmental initiatives.
Infrastructure plan vs New Green Deal
The first thing to notice is that, while the 2019 resolution does not break down spending line by line, the THRIVE Act does have a budget. The Thrive Act was crafted following the Green New Deal’s introduction in 2019. It is slated to be brought forward this month by a group of Democrats in Congress, to advance the goals of the resolution.
Over 10 years, the THRIVE Act would spend about $9.5 trillion, nearly four times more than Biden’s $2.3 trillion American Jobs Plan (aka the infrastructure bill) proposes.
Moreover, THRIVE would spend about 10 times more on clean energy, and adds $1.6 trillion to support carbon-reduced farming. Although the recently passed stimulus law provides about $5.6 billion in aid to farmers and rural communities, there are no funds dedicated to “green” farming.
“The American Jobs Plan is similar in intent to the THRIVE Act, but far narrower in scope and scale,” The Austin-American Statesman quotes Ryan Schleeter, a spokesman for Greenpeace USA, in an article that fact-checks Republican claims that Biden’s infrastructure plan is the Green New Deal. It finds the claim to be “mostly false”.
The publication summarizes the plan as a blend of money for traditional brick-and-mortar infrastructure — roads, water supplies, broadband, etc. — clean energy and improved manufacturing, and social service infrastructure, meaning caregivers for seniors and the disabled.
One of the main differences is the fact that Biden’s $2.3T infrastructure bill does not contain any of the social-spending directions outlined in the Green New Deal such as a living wage, free college education and universal health care.
Another key distinction is the carbon-neutrality targets. Whereas the Green New Deal aims for net-zero carbon emissions by 2030, thought to be way too soon, the American Jobs Plan stretches net-zero out to a more realistic 2050.
Progressive politicians and climate groups have criticized Biden’s plan as falling short of enough money necessary to head off the negative impacts of climate change.
A 2018 report by the Intergovernmental Panel on Climate Change (IPCC) warned there is only a dozen years left for global warming to be kept to 1.5 degrees Celsius — the tipping point after which the risk of droughts, floods and extreme heat could considerably worsen.
President Biden is clearly pushing forward on climate-oriented programs that distance himself from his predecessor and are a nod to the Democratic left that supported his bid for president.
Pro-environment actions so far include re-joining the Paris climate agreement (so far the US has only fulfilled $1 billion of a $3 billion pledge to support developing nation’s efforts to address climate change); canceling the Keystone XL pipeline from Alberta to US Gulf Coast refineries; the $2.3T American Jobs Plan which, as explained, contains some elements of the Green New Deal but whose total budget is about a quarter less; and Biden’s commitment to the Leaders Climate Summit, cutting in half US emissions below 2005 levels by 2030.
What comes next is a very interesting question.
Biden obviously needs the support of both the House and the Senate to pass his infrastructure bill, which contains many climate-focused proposals. The Dems currently have majorities in both chambers — barely. Vice President Kamala Harris is needed to break a tie in the Senate.
Sen. Bernie Sanders, who chairs the Senate Budget Committee, has vowed to use the Democrats’ razor-thin majority to pass legislation, including trillions in new spending favoring the party’s progressive-left agenda, by simple majority — a tactic known as reconciliation.
If Sanders (and Patrick Leahy, another Democratic senator, who heads the Senate Committee on Appropriations) decide to make the THRIVE Act a reconciliation bill, it would almost certainly pass, meaning a quadrupling of climate-related spending beyond what Biden has already committed to.
The fact that Biden has just doubled down on the amount of emissions the US plans to reduce in the next nine years, is proof that he is listening to the eco-conscious wing of his party. How far is he willing to go to push through his climate change mitigation agenda?
That has yet to be decided but we do know that even without THRIVE, Biden has committed the United States to a path of big government, big spending on decarbonization and electrification.
“The adage of ‘if it can’t be grown it must be mined’ serves as a reminder that electric vehicles, transitional energy, and a green economy start with metals.
Can the United States and the other major economic powerhouses, who are also pledging to reduce their carbon footprints, find enough raw materials to carry out their plans? Finding the metal is one thing, but how much would it cost?
We will tackle these questions in a follow-up article.
Ahead of the Herd newsletter, aheadoftheherd.com, hereafter known as AOTH.
Please read the entire Disclaimer carefully before you use this website or read the newsletter. If you do not agree to all the AOTH/Richard Mills Disclaimer, do not access/read this website/newsletter/article, or any of its pages. By reading/using this AOTH/Richard Mills website/newsletter/article, and whether you actually read this Disclaimer, you are deemed to have accepted it.
Any AOTH/Richard Mills document is not, and should not be, construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.
AOTH/Richard Mills has based this document on information obtained from sources he believes to be reliable, but which has not been independently verified.
AOTH/Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness.
Expressions of opinion are those of AOTH/Richard Mills only and are subject to change without notice.
AOTH/Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.
Furthermore, AOTH/Richard Mills assumes no liability for any direct or indirect loss or damage for lost profit, which you may incur as a result of the use and existence of the information provided within this AOTH/Richard Mills Report.
You agree that by reading AOTH/Richard Mills articles, you are acting at your OWN RISK. In no event should AOTH/Richard Mills liable for any direct or indirect trading losses caused by any information contained in AOTH/Richard Mills articles. Information in AOTH/Richard Mills articles is not an offer to sell or a solicitation of an offer to buy any security. AOTH/Richard Mills is not suggesting the transacting of any financial instruments.
Our publications are not a recommendation to buy or sell a security – no information posted on this site is to be considered investment advice or a recommendation to do anything involving finance or money aside from performing your own due diligence and consulting with your personal registered broker/financial advisor.
AOTH/Richard Mills recommends that before investing in any securities, you consult with a professional financial planner or advisor, and that you should conduct a complete and independent investigation before investing in any security after prudent consideration of all pertinent risks. Ahead of the Herd is not a registered broker, dealer, analyst, or advisor. We hold no investment licenses and may not sell, offer to sell, or offer to buy any security.