After an embarrassing few months which included the overthrow of Roe vs. Wade, rising inflation, a stalled legislative agenda and Nancy Pelosi’s misguided visit to Taiwan, Biden and Democratic leaders were desperate for a victory. A small victory for the party came in the form of the so-called Inflation Reduction Act (IRA), approved by Congress on Friday and soon to be signed into law by Biden. Two years of inaction on carbon emissions – and increasingly devastating extreme weather events, such as floods in Kentucky and droughts in the western United States – have also increased the pressure to pass legislation on the climate.
The “climate-conscious” establishment — liberal corporate-owned media, environmental nonprofits, think tanks and Democratic politicians — generally hailed the deal as a saving grace. Liberal economist Paul Krugman recent New York Times editorial is pompously titled “Did the Democrats Just Save Civilization? Response to the bill has been more muted among climate activists, but many on the reformist left have accepted it as a step forward despite its problems. As Jacobinit is Branco Marcetic said, “The Biden-Manchin climate bill isn’t very good, but that’s all we have.”
But what if “all we have” keeps us on a warming trajectory above 2°C, a scenario that plunges the homes of tens of millions of people in the world’s coastal cities under water, making large parts of the Earth uninhabitable and fueling more numerous and deadlier fires, storms and droughts? What if, at the same time, “all we have” is pouring billions every year into the coffers of the same fossil fuel companies and automakers that created this disaster? What relief should we feel then?
The deal is emblematic of Democratic Party strategy: a few token concessions to the party’s multiracial, working-class base, and massive handouts to the real leaders of the party, big business and Wall Street. Although the bill stimulates the development of some renewable energy, the IRA actually promotes the expansion of fossil fuel extraction, tying any funding for non-fossil energy projects on federal lands to leases for new oil and gas projects.
Of course, one could never expect the Democratic Party to introduce a bill that would truly put the needs of the planet and its people first. This goal would necessarily contradict capitalist logic, which relies on minimal business regulations, low corporate taxes and low wages. Party leaders will try to push this bill forward as a win for business, climate and workers. But the real benefits weigh heavily on the side of business, the same actors most responsible for the climate emergency itself.
What’s in the bill and what’s not
The 700+ page IRA includes provisions related to climate, inflation, healthcare, and corporate taxes, among others. Democrats initially feared the party’s most conservative senators, Joe Manchin and Kyrsten Sinema, would overturn the bill, as the two did with Biden’s Build Back Better plan last year. But after weeks of negotiations that included new concessions to fossil fuel, pharmaceutical and private equity firms, the bill cleared its main obstacle in the Senate.
About half of the funding for the bill, or $370 billion over 10 years, roughly falls into the climate action category. The majority of this money takes the form of tax credits for corporations, small businesses and consumers to encourage the production and use of ‘green’ energy and to implement energy efficiency in homes and businesses. The funding, although hailed as “radical” and “historic” by many media outlets, represents a cut of around a third of the original Build Back Better climate funding that was boosted by Manchin last year, an amount that was already woefully inadequate.
Its measures must also be placed in the context of other federal spending. The IRA’s annual allocation is only a small fraction – around 5% – of the annual US military budget, which currently stands at around $800 billion. It should be noted that the US military is the biggest polluter in the world. How can we take this bill seriously given that?
Moreover, the bill contains few things that can significantly reduce carbon emissions. It certainly won’t be enough to keep warming “well below” 2 degrees Celsius, the stated goal of the Paris Agreement, signed by Obama in 2015 to much fanfare. It aims for a 40% reduction in greenhouse gas emissions by 2030 (below the 50% reduction agreed in 2015). But even this is not accompanied by any enforcement measures. Instead, it is expected to come from tax relief for companies that elect to move away from fossil fuels. First and foremost, the ERI aims to incentivize companies to undertake ‘green’ energy projects or replace their existing fossil fuel based infrastructure. Any reduction in emissions will be the result of a cost-benefit calculation for big business – in other words, the bill is based on the same “green capitalist” logic that has failed for decades to reduce global emissions. of carbon.
The bill includes billions in tax credits for adopting wind, solar or geothermal energy, as well as nuclear energy and biofuel projects. Not only are these last two sources far from sustainable energy modes, but in the case of biofuels, a dubious alternative to fossil fuels to reduce emissions. There are also tax incentives for consumers to buy electric vehicles, improve the energy efficiency of homes or switch to “greener” appliances. There is no doubt that new energy efficient technologies are needed. But tax credits for the purchase of electric vehicles ultimately mean making millions of new cars at enormous energy (and therefore carbon) cost.
In particular, there is no provision limiting the extraction of fossil fuels. Nor are there any deadlines imposed on utility companies or automakers to move away from fossil fuels. No penalties exist for companies that maintain their emissions at or above current levels. “All carrots, no sticks,” Paul Krugman says of the bill (approvingly). If fossil fuels remain more profitable than non-fossil fuels, companies could continue to burn them without any legal or financial repercussions. Given this, it’s hard to see how the plan will achieve its ultimate goal of reducing carbon emissions by 40% over the next eight years.
New financing for renewables, but at what cost?
write in OpenDemocracy, Aaron White notes that the Manchin-Schumer bill “promotes America’s most profligate pastimes: drilling for oil and driving big cars.” Its electric vehicle tax credits are spurring the manufacture of millions of new cars, at enormous energy cost, while doing nothing to build electric public transit and reduce the nation’s auto dependency. Measures to try to reduce carbon emissions are accompanied by provisions that encourage the expansion of fossil fuel extraction. For this reason he and others climate defenders called it “a climate deal with the devil”.
Incredibly, the IRA stipulates that any new wind or solar project on federal lands must be accompanied by major lease extensions for oil and gas drilling. Since the investments made by fossil fuel companies in these drilling projects must be recouped later, the burning of fossil fuels can be assumed for many years, even decades, into the future. The bill also authorizes new offshore drilling in the Gulf of Mexico and Alaskan waters.
These provisions are so egregious that the Climate Justice Alliance has determined that the negative environmental impact of the bill takes it away any reduction in emissions that it may bring about. The bill also provides funding for new carbon capture facilities, a program that more often than not serves as a cover for continued coal, oil and gas production. Nowhere are the more progressive elements of the Green New Deal, the supposed “framework” for Biden’s climate agenda in the 2020 election, such as a job guarantee, universal health care, or a public works program.
Biden succeeded, however, on his promise that “we won’t get rid of fossil fuels for a long time”. The IRA fails to keep fossil fuels in the ground and even promotes new extractive activities. This is not a victory for the climate or for the majority of the earth’s inhabitants. This is the contradiction of “green capitalism” to which the democrats aspire. Capitalism is an inherently unsustainable and dirty system of production. While oil, gas and even coal remain profitable commodities, there will be no significant reduction in their extraction and consumption. There are alternative solutions that can keep fossil fuels in the ground, provide universal employment and quality health care for all. But they will not come from this party that has always put the interests of polluters before people and the planet.