WASHINGTON – The coronavirus pandemic has radically changed global business, decimating some industries while giving new life to others.
And in the years ahead, few are likely to see greater benefit than the clean energy sector, as governments worldwide look to solar panels, batteries and other carbon-free energy technologies to revive their virus-damaged economies.
Among those leading that charge is President Joe Biden, whose $4 .3 trillion in proposed stimulus and infrastructure spending by some estimates includes $2 trillion in clean energy initiatives, through a combination of tax credits and direct government spending over the next eight years.
Biden is selling this spending on the premise that clean energy is a giant global industry in the making, like plastics in the 1960s or online startups in the 2000s, and the United States is falling far behind nations like China and Germany which have come to dominate the space.
“The Biden administration has quietly retired the notion of an ‘all of the above’ (energy) strategy,” Nikos Tsafos, a senior fellow at the Center for Strategic and International Studies, wrote earlier this month. “The administration sees the federal government as a primary engine for change, as a way to channel the creative dynamism of private markets.”
Biden might have changed the conversation in Washington, but he still needs to convince Congress to allocate the funding.
And so far Republicans are not playing along, ripping Biden’s American Jobs Act, in which he plans to spend $2 trillion on infrastructure over the next decade, as a liberal wish list.
Last week Sen. John Barrasso, the Republican ranking member of the Senate Energy and Natural Resources Committee, attacked Biden’s clean energy plans as “a recipe for the disaster” likely to produce failed ventures such as Solyndra, the solar manufacturing firm that filed for bankruptcy in 2011 after receiving more than $500 million in federal loans.
“The Obama administration frittered away billions of taxpayer dollars on green gambles like Solyndra, while taxpayers got fleeced. Now, President Biden wants to bet trillions more on new boondoggles,” he said. “At the same time, he has declared war on the oil and gas industry – one of the few success stories from the ‘Great Recession.’”
Overall, Obama’s late 2000s stimulus spending is credited with helping to jumpstart the clean energy boom in this country. In Texas for instance, wind and solar farms now represent almost all the new power generation installed in recent years.
But what Biden is planning coming out of the pandemic is far larger, not just funding research and development but building out an electric vehicle charging network, renovating buildings to use less energy and converting government vehicles and mass transit to zero-emissions technology – adding up to trillions of dollars in federal spending.
In doing so, Biden is embracing a growing mindset among governments worldwide that debt and deficits are not necessarily the ticking time bombs they were once thought, said Lachlan Carey, an associate fellow at CSIS.
“More than a decade of sluggish growth after the Great Recession displayed the shortcomings of fiscal austerity for all to see,” he said. “Economics is no longer the intellectual or rhetorical obstacle to climate action it once was.”
But spending will only get the U.S. government so far. If Biden is to achieve his goal of getting the United States on the path to zero emissions by 2050, he will eventually need to convince Congress to change U.S. law to limit greenhouse gas emissions, either by mandate or market-driven strategies such as a carbon tax.
His goal is to get the U.S. power grid carbon neutral in just 14 years time. And while wind and solar are being built at a fast clip through a combination of improving technology and tax incentives, it’s not nearly fast enough to meet that target.
At present, the government is limited by its reliance on “on tax breaks and credits, on tweaking arcane rules,” rather than “stricter rules and mandates, and taxes on energy,” Tsafos said.
“To succeed, in other words, the government will need to do more governing, not just spend money and write rules,” he said.
james.osborne@chron.com
Twitter.com/@osborneja
