The first major US climate law is coming not too soon. It is the country’s best and last chance to meet its goal of halving greenhouse gas emissions by 2030 and, with it, a world where net zero by mid-century is possible. After Donald Trump, Biden may reclaim the mantle of global climate leadership for the US. But the act reveals the limits of his power. The Democrats’ original $3.5 trillion plan was to expand education, fight poverty, lower health care costs and address climate change. That was reduced to a $1.75 trillion bill the House passed last year. But it got nowhere in the Senate. Mr. Manchin has refused to support Social Security programs and his centrist colleague Kyrsten Sinema has refused to support tax increases. What was left was $490 billion in climate and health investments. That deserves a little cheer from the progressives. Mr. Biden pursues a muscular policy of government intervention in the economy. The act for the first time gives the federal government the power to negotiate lower drug prices. Importantly for the climate, it represents a new US industrial policy that subsidizes zero-carbon electricity generation through tax credits. It also acknowledges that the US lags behind China in green technology – spending $152 billion less on renewable investments last year – and focuses on ways to encourage clean energy production. Politics in the US is unfortunately too much influenced by the power of vested interests. The US remains addicted to fossil fuels, which generate 61% of its electricity. Its shale gas industry is seeking to replace Russia as Europe’s main energy supplier. The result was that fossil fuel lobbyists won concessions on climate legislation. The compromise means linking renewable energy development with new oil and gas extraction for which many communities will bear the disproportionate cost. But for every one ton of emissions caused by the fossil fuel law’s provisions, the nonpartisan thinktank Energy Innovation says 24 tons of emissions are avoided by its green provisions. That should help energize Mr. Biden’s base ahead of the midterm elections. Despite Republican competition, climate action enjoys broad support in the US. A Pew Research Center poll shows that 58% of voters believe the federal government is doing too little to “reduce the effects of global climate change, compared to just 18% who say it is doing too much.” To be a truly transformative president, Mr. Biden will need to remake society. What the act shows is that he does not have the votes – yet – in his own party for such a program. Mr. Biden’s climate plans may fail because he relies on the carrot of spending rather than taxes to support an energy transition. However, the wasteful consumption of the rich should be reduced by progressive taxation to free up resources for socially useful spending. Ultimately the climate emergency needs a fundamental economic restructuring. Mr. Biden’s new environmental law is a good start, but there is a long way to go.
