Plans on climate could be risky for economy

WASHINGTON — President Joe Biden’s pledge to cut America’s climate warming emissions in half by 2030 is technologically feasible and, scientists say, ecologically imperative. Economically, it could be a gamble.

The speed of the president’s promised transformation to an economy far less reliant on fossil fuels risks exposing vulnerabilities in the nation’s electricity system and unsettling its transportation sector, while potentially increasing U.S. reliance on goods imported from China. Utility chiefs say they could handle the transition over a slightly longer timeline, but they warn of rolling blackouts to meet the president’s 2030 target. General Motors said it will sell only vehicles that have zero tailpipe emissions by 2035; the 2030 date has autoworkers worrying about steep job losses.

But if Biden can orchestrate the seamless transition that he is promising, the rewards could be high: lower risk of catastrophic climate change, a burst of new middle-class jobs and renewed global leadership for U.S. companies in the industries that administration officials believe will define the rest of the 21st century.

The president’s pledge, made at the start of a twoday climate summit hosted by the White House, represents perhaps the greatest bet in recent U.S. history on what economists call industrial policy, the idea that the government can steer the development of jobs and industries in the economy.

Biden and his advisers, backed by several economic analyses, believe they can spend enough federal money and sufficiently regulate the economy to vault U.S. manufacturers and research laboratories to the head of a global race to a low-emission future, while adding jobs and raising worker pay.

White House aides say the energy transition is coming and that Biden’s path is the only way to avoid the kind of economic damage U.S. workers experienced in the early 2000s, when automation and globalization claimed millions of manufacturing jobs.

On Friday, Biden’s Council of Economic Advisers argued that failing to draw down carbon emissions will leave the U.S. straggling behind China.

“As we transition to a clean energy future, we must ensure workers who have thrived in yesterday’s and today’s industries have as bright a tomorrow in the new industries,” Biden said.

Yet Biden’s timeline for the transition is aggressive, and the political prospects for his spending and regulatory goals are uncertain. The president has already won a major congressional victory on economic policy and is pressing for more, in the form of a twopart, $4 trillion agenda that he hopes to sign into law this summer. The pandemic recession and its halting worldwide recovery may actually have primed the transition by snarling global supply chains and feeding bipartisan interest in boosting U.S. manufacturing against global competitors.

“Other economies are going to move, and the citizens of those countries are going to demand clean energy and products that are not made from dirty energy,” said John Kerry, Biden’s global climate change envoy.

But many Republicans, protective of oil, gas and coal industries and concerned about rising energy prices, hope to stop the effort.

“I’m really concerned about the increased cost of electricity and energy if we rush too fast to replace the oil and gas industry,” Rep. Debbie Lesko, R-Ariz., said at a recent hearing.

A decade ago, power plants were the nation’s top source of carbon dioxide pollution. But greenhouse gas emissions from power plants dropped 36 percent between 2010 and 2020, thanks to a boom in production of natural gas, which produces half the greenhouse pollution of coal, and the rise of affordable wind and solar power, which were aided by past government spending programs and regulations.

The cleaner energy was cheaper, too: Electricity costs dropped about 14 percent in the same time, in part because the price of generating renewable power fell precipitously.

Biden’s task could be more daunting. He will need to reduce emissions amid what forecasters expect to be a rapid economic rebound as coronavirus vaccinations spread. Economists expect this year to produce the fastest annual growth in a generation — and with it, a rise in carbon pollution.

Biden has proposed spending on research and development, efficiency improvements in homes and schools, and the electric grid to better support renewable energy. As part of his infrastructure plans, he wants Congress to require electric utilities to shift toward lower-emission power sources.

Biden’s emissions target relies on electric power plants cutting their emissions sharply by 2030 and to net zero by 2035.

“Our analysis says we could get there by 2050,” said Nick Akins, CEO of American Electric Power, an Ohio-based electric utility, but not 2035.

“If we move too quickly, we could jeopardize the reliability of the grid,” he added, pointing to February’s rolling blackouts in Texas.

Akins allowed that technology breakthroughs, perhaps facilitated by federal government policies, could change that picture.

Biden’s infrastructure proposal includes $174 billion in spending to build electric vehicle charging stations, and his advisers are considering a mandate to sell only electric vehicles after 2035.

Heather McTeer Toney of the Environmental Defense Fund said she is concerned that the transition to clean energy, like past economic shifts, could leave communities of color behind unless the Biden administration looks for ways to make sure resources go to neighborhoods that need it most.

Recalling the economic boom that accompanied the rise of the internet, Toney said: “Where were the Black and brown and Indigenous communities? They weren’t part of the conversation.”