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WASHINGTON – An unexpected deal reached by Senate Democrats would be the most ambitious action the United States has ever taken to tackle global warming and could help President Joe Biden come close to fulfilling his pledge to reduce halve greenhouse gas emissions by 2030, experts said Thursday. , as they examined a massive bill that revives action on climate change weeks after the legislation appeared dead.
The deal would spend nearly $370 billion over 10 years to boost electric vehicles, boost renewable energy like solar and wind, and develop alternative energy sources like hydrogen. The deal surprised lawmakers and activists who had given up hope that legislation could be enacted after West Virginia Sen. Joe Manchin said he could not support the measure because of inflation concerns.
While analysts were still poring over the 725-page bill, the deal announced late Wednesday includes a long-term extension of clean energy tax credits that “could plausibly put the United States on track to reduce emissions by 40% by 2030,” said Ben King. , associate director of the Rhodium Group, an independent research firm.
Additional action by the Biden administration and Democratic-controlled states could “help close the rest of the gap toward the goal of a 50 to 52 percent cut in emissions by 2030,” King said.
But passage of the bill is far from certain in a 50-50 Senate where support from all Democrats will be needed to overcome unanimous Republican opposition. Sen. Kyrsten Sinema, D-Ariz., who pushed for changes in earlier versions of the plan, declined to reveal her position Thursday.
In the closely divided House, Democrats cannot lose more than four votes and prevail on a possible party-line vote.
Still, Biden called the bill “historic” and urged its swift passage.
“We will improve our energy security and address the climate crisis by providing tax credits and investments for energy projects,” he said in a statement, adding that the bill “will create thousands of new jobs and help reduce energy costs in the future”. .”
Environmental groups and Democrats also praised the legislation.
“This is an 11th-hour snub for climate action and clean energy jobs, and America’s most important legislative moment for climate and energy policy,” said Heather Zichal, CEO of ‘America’s Clean Power, a clean energy group.
“Passing this bill sends a message to the world that America is a leader on climate and sends a message home that we will create more great jobs for Americans in this industry,” he said. add Zichal, a former energy adviser to President Barack Obama.
Tiernan Sittenfeld, senior vice president of the League of Conservation Voters, summed up their reaction in one word: “Wow!”
Sen. Tina Smith, D-Minnesota, tweeted that she was “surprised, but in a good way.”
Manchin, who chairs the Senate energy panel, insisted he had not changed his mind after telling Senate Majority Leader Chuck Schumer two weeks ago that he could not support the bill because of concerns about inflation
“There should be no surprises. I’ve never walked away from anything in my life,” he told reporters on a Zoom call from West Virginia, where he is recovering from COVID-19.
Manchin said the bill is an opportunity “to really give us an energy policy with the security that we need for our nation,” while reducing inflation and high gas prices.
The bill, which Manchin dubbed the “Inflation Reduction Act of 2022,” includes $300 billion in deficit reduction, as well as measures to lower prescription drug prices and expand subsidies for help Americans who buy health insurance on their own.
In addition to investments in renewable energy such as wind and solar power, the bill includes incentives for consumers to buy energy-efficient appliances such as heat pumps and water heaters, electric vehicles and rooftop solar panels. The bill creates a tax credit of $4,000 for purchases of used electric vehicles and up to $7,500 for new electric vehicles.
The tax credit includes income limits for buyers and limits on sticker prices for new electric vehicles: $80,000 for pickup trucks, SUVs and vans and $55,000 for smaller vehicles. A $25,000 limit would be placed on used vehicles.
Even with the restrictions, the credits should help spur already-growing electric vehicle sales, said Jessica Caldwell, senior analyst at Edmunds.com. Electric vehicles accounted for about 5% of new vehicle sales in the US in the first half of the year and are expected to reach 37% by 2030.
The bill also invests more than $60 billion in environmental justice priorities, including block grants to address the disproportionate environmental and public health harms related to pollution and climate change in poor and disadvantaged communities.
Beverly Wright, executive director of the Deep South Center for Environmental Justice, called the bill a step forward, but said she was concerned about tax credits for “polluting industries” like coal, oil and gas. “We need bolder action to achieve environmental and climate justice for ourselves and future generations,” he said.
The bill would put a tax on excess methane emissions from oil and gas producers, while providing up to $850 million in industry subsidies to control and reduce methane.
The bill’s combination of tax incentives, subsidies and other investments in clean energy, transportation, energy storage, home electrification, agriculture and manufacturing “makes this a real climate bill,” said Sen. Brian Schatz, Democrat of Hawaii. “The planet is on fire. This is a huge breakthrough. Let’s do it.”
But not all environmental groups were celebrating.
The deal includes pledges by Schumer and other Democratic leaders to pursue reforms that Manchin called “essential to unlocking domestic energy and transmission projects,” including a controversial natural gas pipeline planned in his home state of Virginia. More than 90 percent of the proposed Mountain Valley pipeline is complete, but the project has been delayed by court battles and other issues.
The pipeline should be “at the top of the heap” for federal approval, Manchin said, and is a good example of why reform is needed to speed up approvals for energy projects. Manchin, a longtime supporter of coal and other fossil fuels, said environmental reviews of such large projects should be completed within two years, rather than taking up to 10 years as under the current practice.
“Other countries around the world, the developed nations, do it very well and they do it in a very short period of time. We should be able to do the same,” he said.
While allowing reforms would be considered in separate legislation, the budget deal would require the Interior Department to offer at least 2 million acres of public lands and 60 million acres of offshore waters for oil and gas lease each year. If Interior does not provide the minimum lease amounts, the department would not be able to grant approvals for any utility-scale renewable energy projects on public lands or waters.
That requirement “is a climate suicide pact,” said Brett Hartl, director of government affairs at the Center for Biological Diversity, an environmental group.
“It is counterproductive to handcuff the development of renewable energy to massive oil and gas extraction,” Hartl said, adding that the new fossil fuel lease required by the bill “would fan the flames of climate disasters burning our country”.
But an oil industry group criticized the bill as punitive and inflationary.
“We are deeply concerned about the potential negative impact of this bill on energy prices and American competitiveness, especially amid a global energy crisis and record inflation,” said Anne Bradbury, CEO of the American Exploration and Production Council, which represents independent oil. and natural gas companies.
AP reporters Tom Krisher in Detroit and Drew Costley in Washington contributed to this story.