Red tape is holding up a greener future
The Inflation Reduction Act had little to do with inflation. It was a climate bill, and a big one: It provided $370 billion to improve energy efficiency, reduce emissions and smooth the path to a clean-power economy. It came on top of a 70% surge in private investment since 2017.
Over just six years, global clean-energy investment has gone from half the level of fossil-fuel investment to near parity. But the biggest impediment to the U.S. energy transition isn’t financing: It’s building.
A decade ago, between 25% and 30% of proposed wind and solar projects moved from the drawing boards to completion. Now, America’s dysfunctional regulation is preventing many needed projects from even breaking ground.
Take power transmission. For the IRA to achieve its full emissions-reduction potential, new transmission capacity will need to expand at roughly double its present rate. About 80% of the bill’s potential benefits will be squandered as things stand. Yet more than 900 gigawatts of potential clean-energy projects are awaiting transmission approvals, along with some 400 gigawatts of energy storage.
Those delays are just the start. Many of the clean-energy projects currently in the queue will not be built at all because of other burdensome rules, particularly those imposed by the National Environmental Policy Act and its state and local variants. This tangle of regulations has been a boon for consultants who perform environmental impact assessments, which routinely take years and cost millions to complete, and for the lawyers whose litigation makes Jarndyce v. Jarndyce look time-sensitive.
In fact, because power operators can’t bring clean energy online fast enough, they often seek to maximize the life of coal plants, even though 99% of coal plants are more expensive to run than the clean power that could replace them. A report last month showed that the construction of new wind and solar installations will likely fall behind the retirement of fossil fuel plants, thereby elevating the risk of power outages even as demand for electricity surges.
Democrats who sound the alarm on climate change suddenly go quiet when it comes time to stand up to the not-in-my-backyard activists who use the permitting process to kill projects. Last year, Sen. Joe Manchin, D-W.Va., secured a commitment from Majority Leader Chuck Schumer, D.-N.Y., to pass a permitting reform bill, but the effort fizzled amid Republican complaints that it didn’t go far enough.
The potential for a bipartisan bill remains. Leaders in both parties should work together to speed environmental reviews, shorten the statute of limitations for lawsuits and limit courts from blocking clean-energy projects already underway. They should empower a single federal regulator to oversee vitally important interstate transmission projects, and clear the path for power lines along highway and rail corridors.
By allowing these antiquated laws to stand, legislators have been blocking progress toward a greener future. The longer they do, the higher the costs will rise.