It’s not unusual for me to write something here that includes a phrase such as “this is all more complicated than it first seems”. That applies to everything from assessing social value in supplier bids to understanding whether re-forestation projects are really worthwhile.
Now we have to add the new Inflation Reduction Act of 2022, which was passed in the US senate recently after months of political struggle. The bill covers much more than its name suggests, including the largest commitment to climate investment in US history, with no less than $369 billion earmarked for climate and clean energy-related expenditure.
But as with most political initiatives, this has drawn a mixed reaction. Views range from “Joe Biden is about to crash the world economy” (the Daily Telegraph and the right wing media in the US, UK and more widely), to the bill is “flawed but essential” (the Economist). But what is perhaps more surprising is the lukewarm reaction from many climate and sustainability experts, interest groups and campaigners.
Take the Climate Justice Alliance (CJA), a growing member alliance in the US of 82 urban and rural frontline communities, organizations and supporting networks in the climate justice movement.
They say, “… Climate Justice Alliance concludes that the harms of the bill as it is currently written outweigh its benefits… We are calling on members of Congress to amend the bill to strengthen its environmental and climate justice provisions, take a stand against the expansion of fossil fuel production and the inclusion of geoengineering projects, and to reject any shady side deals that are being pushed by Senator Joe Manchin and the fossil fuel industry”.
In order to get the bill passed, compromises had to be made, which means money for fossil fuel projects such as new drilling and pipelines. There will also be investment in new technologies that may or may not work, but will certainly give big incentives and tax breaks to large corporations. For instance, as the CJA put it,
“Hydrogen is a false climate solution which contributes to pollution and enables the use of fossil fuel infrastructure in frontline communities. Hydrogen tax credits under the IRA would triple investment in hydrogen deployment by 2030”.
There are other non-climate aspects to the bill as well, some of which are progressive (reduced health costs for millions) whilst others are more cynical – such as two of the late changes to the bill, that let wealthy hedge fund managers and venture capital partners avoid paying higher taxes those changes were pushed by Democrat senators, some of whom have benefitted from contributions from the private equity industry.
Coming back to the climate aspects of the bill, I suspect the Economist view (flawed, but necessary and with some positives) will be shared by many who examine it carefully. It is better than nothing, but of course there are missed opportunities and doubtful elements to it. Scientists estimate that it should lead to net reduction in emission of some 40% by 2030 compared to 2005. It’s easy to say “it should be more” but it is a positive step, and the global political sensitivity around Ukraine, Russia, China and Taiwan probaby makes it politically sensible right now for any country to maintain or develop more self-sufficiency in energy. That will be the excuse anyway for the new “dirty energy” investments.
Meanwhile in the UK, the two candidates to be our Prime Minister have said absolutely nothing of any interest about the climate challenges facing our country and the world. Liz Truss wants to scrap the green levy on energy bills. She doesn’t like “solar panels in fields”. Richi Sunak doesn’t want onshore wind turbines. There are vague statements about energy conservation and innovation, but nothing concrete and the issue seems to be way down the priority list, well below tax cuts and the “war on woke”. So it would be hypocritical for anyone here to criticise US politics and politicians in terms of climate – or pretty much anything else - just at the moment!