Wondering about the promise and peril of Biden’s climate policy

In 2010, at the signing ceremony for the Affordable Care Act, Joe Biden, the vice president at the time, could be overheard telling President Barack Obama that “this is a big something deal.” OK, that’s almost what he said. And he was right.

Now, as president, Biden has presided over three big deals. After several years during which “It’s infrastructure week!” became a punchline, he passed a major infrastructure bill. He pushed through legislation to promote U.S. production of sophisticated semiconductors. And most important, Congress enacted the Inflation Reduction Act, which despite its name is mainly a climate bill; we’re finally taking serious action to reduce greenhouse gas emissions.

Yet many observers, myself included, have wondered whether Biden’s climate policy is a big enough deal.

The media often uses hyperbolic language about any program that involves spending hundreds of billions of dollars, so Biden’s climate initiative, which the Congressional Budget Office estimates will involve roughly $400 billion in climate spending, gets described as “massive.” But that’s spending over the course of a decade. And the budget office expects cumulative gross domestic product over the next decade to be more than $300 trillion.

So we’re talking about spending only a bit more than one-tenth of 1% of GDP. Can this possibly be enough to make a real difference in facing an existential threat?

Well, there are two important reasons to believe Biden’s climate policy may be a much bigger deal than the numbers might suggest. But there are also reasons to worry that the policy may fall short, not because the spending is inadequate, but because of one crucial limiting factor: an inadequate power grid.

The first reason to believe Biden’s policy may be a big deal is that it comes at a crucial technological juncture.

There was a time, not that long ago, when it seemed as if limiting greenhouse gas emissions would require hard choices — that it would have to be achieved largely through conservation and increased energy efficiency, which in turn would require putting a substantial price on carbon, either via carbon taxes or via a cap-andtrade system in which emitters would have to purchase permits. In fact, there would still be a good case for a carbon tax, if it were politically feasible.

But huge progress in renewable energy and related technologies, notably batteries, means that it now looks almost easy to achieve a low-emission economy. We can now easily envision a society in which people drive electric vehicles and cook on induction ranges, using power generated by solar panels and wind turbines, and experience no sense of sacrifice.

The role of policy then becomes to accelerate this transition — to push us over the tipping point into a sustainable economy. And this need not involve huge amounts of public money, just enough to act as a sort of catalyst for change.

A second, somewhat related reason to think Biden’s climate policy is a big deal is that it doesn’t actually mandate $400 billion in spending. What it does, mainly, is set conditions under which consumers and businesses can receive tax credits for adopting green technology. That $400 billion is based on an estimate of how many people will actually take advantage of these tax credits — and given the spectacular rate of technological progress, that estimate may well turn out to be low.

Now for my concern. America finally has a serious climate strategy. However, it depends not just on a rapid expansion of solar and wind power, but also on linking these new energy sources to the electrical grid. But the U.S. power grid doesn’t have enough capacity.

Here’s how I think of it: A clean-energy future suddenly looks possible thanks to a technological miracle — incredible cost declines for renewable energy — and a political miracle — Democrats’ success, despite the narrowest of congressional majorities, in enacting legislation that looks even better when examined closely.

But we may need a third, bureaucratic miracle to fix the electricity grid and make this whole thing work.