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5 policies for Biden’s next climate bill
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5 policies for Biden’s next climate bill


President Joe Biden’s new climate strategy, announced after his original planUnder crumbled oppositionIf passed, it will be a historic investment for clean energy technology and infrastructure. But it is still not likely to be enough to meet the administration’s emissions reduction goals for 2030.

As director of the Fletcher School’s Climate Policy LabTufts University is where I study the ways governments can address climate change.

As the new planTogether, the administration will consider future steps. Here are five types policies that could help the United States get on track to achieving its climate targets. They would assure the world that the United States is able to honor its climate commitments and help prevent the negative effects of climate change. carbon border taxPlanned in Europe; and, when designed right, position U.S. firms and workers for the low-carbon economy.

Industrial policy

The United States’ ability to compete in low-carbon and resilience technologies such as energy storage has eroded over the past two decades.

Washington’s political impasse over climate and clean energy is a key reason for the problem. The political whims and policies of Congress and the White House have shaped the course of regulations, tax credits, loan guarantees, and other regulatory measures over the past 20 years. U.S. businesses have gone bankrupt while waiting for markets to materialize.

European companies, supported by their development banks and Chinese companies, have been able to move ahead with their home markets, using their local markets to demonstrate new technologies as well as build industries. Wind turbines are an excellent example. European companies, led by Denmark’s Vestas, controlled 43% of the wind turbine market globallyChina accounted for 30% of the global market in 2018. Contrary, the United States was responsible for only 10%.

The United States needs to decide where it has a comparative advantage. Only then can the federal government chart a clear path forward to develop those industries, and compete in global markets. Will it be electric cars? Storage of electricity? Technology for adaptation, such as flood control, sea wall construction, and wildfire management. The administration and Congress could receive independent advice, possibly from the National Academies of Science. If that happens, Congress could authorize an investment plan conditionally supporting these industries.

Public dollars are not available, as tempting as it may be to support all technologies. Subvention recipients must be held accountable for meeting performance requirements and taxpayers should receive a return if those companies succeed.

Two men standing on a slanted roof preparing to install a solar panel
Workers install solar panels at a Virginia church.
Andrew Caballero-Reynolds/AFP via Getty Images

Officials must also acknowledge that certain workers, states, cities, and towns are closely linked to fossil fuels as part of their industrial policy. vulnerable in the transition to cleaner energy.

A panel of experts convened by National Academies of Science and recent studyMy colleagues and I suggested that the government create a national transition corporation to offer support and opportunities to displaced workers and those in affected communities. These communities will need diversification of their economies and tax bases. Regional planning grants, loans, or other investments can help them shift their economies to more climate-friendly industries. These investments could be funded by establishing a U.S. green bank or infrastructure bank to finance low-emissions projects and resilience projects.

It is equally important to invest in the workforce necessary for a low carbon economy. To support this economy, the government can provide scholarships for students and subsidize programs at colleges and universities.

Fiscal tools

Other policies can also generate the revenue required to support the transition into a clean economy.

It is obvious that removing subsidies for fossil fuel industries would be a significant step forward. One analysis found that the U.S. provided approximately 23% of the world’s fossil fuels. about US$20 billion a year in direct subsidiesto the fossil fuel industries. Estimates of indirect subsidies are much higher.

Tax reform could also be beneficial, such as replacing income taxes for individuals and corporations with a carbon tax. This policy tool would tax the carbon found in fuels, which would encourage consumers and businesses to reduce their use of fuels that have the most impact on the environment. To avoid burdening low-income households, the government can reduce income taxes or provide a subsidy. dividend check.

American companies can use tax credits, loan guarantee, government procurement rules, and investments in innovation to shape markets. These fiscal policy tools shouldn’t be permanent and should be phased back as technology costs drop.

Investing in markets and innovation

The government has the ability to both “push” and “pull” climate technologies into the marketplace. Government investments in research and human capital are “push”-type policies, because supporting research ensures that smart people will keep moving into the field.

The government can also “pull” in technologies by creating vibrant markets for them, which will provide further incentives to innovation and spur widespread deployment. Carbon taxes emissions trading systems can create predictable markets for industry because they provide long-term market signals that let companies know what to expect for years ahead, and they at least partially account for a product’s damage to the environment.

An electric vehicle charging next to an EVs-only parking space
Electric vehicles are one example of a new market.
Drew Angerer/Getty Images

While the United States is investing in clean-energy research, development and demonstration, it has been less successful than China or Europe – both of which have emissions trading systems – in developing predictable, durable markets.


The use of performance standards is a tried and true U.S. policy tool. These standards limit greenhouse gas emissions per unit. They include fuel economy standards for motor vehicles, greenhouse gas standards for automobiles, energy efficiency standards in appliances and industrial equipment, as well as building efficiency standards at the state and local level. Since 1975, fuel economy standards for automobiles have saved approximately 2 trillion gallons and reduced greenhouse gas emissions. by about 14 gigatons, roughly three times the country’s annual emissions from energy in 2020.

Performance standards allow companies to adapt to the requirements of the market and can be used to drive innovation. The Biden administration could develop new performance standards in each major emitting sector – vehicles, power plants and buildings. Federally imposed building codesIt would be difficult for politicians to lift the restrictions, which are both at the state level and at the local level.

The laws that established the government’s authority to set standards, such as the Clean Air Act and Energy Policy Act, have some ambiguities that can leave standards vulnerable to court challenge, however. There has been a zigzag of regulations in certain sectors, most notably in the power sector, due to legal challenges.

Solutions based on nature and state legislation

The last area that policy is required is for nature-based strategies. These could be fiscal incentives to restore forests or protect existing lands from development. Or they could be regulations.

State laws and regulations can also have a tremendous impact on the trajectory of U.S. emission.

Biden’s Plan B

The centerpiece of Biden’s original climate plan was a program designed to reward and pressure utilities to shift electricity production away from fossil fuels faster. West Virginia is now a Democrat with the Senate evenly divided between Republicans and Democrats. Joe Manchin’s opposition sank the plan.

The Biden administration’s new Plan BThere are many ways to get involved. heroic assumptionsIt heavily relies on fiscal and regulatory tools as well as lots of state-level action.

Plan B does not include an emphasis on innovation or industrial policy. These could have a greater impact than the plan’s other components. The United States needs a climate legislation that sets its targets for reducing U.S. emissions by 2030/2050 and gives the appropriate government agencies authority to make policies and address workforce and industrial needs.

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