Plans to overhaul American energy will come before Congress in the next few months. President Joe Biden has said that he wants fossil-fuel emissions from power generation to end by 2035 and the economy to be carbon-neutral by 2050. America is not just the world’s second-largest emitter, but also a source of climate-related policy, technology, and, potentially, leadership. What is about to unfold in Washington will set the course in America for the next decade—and quite possibly beyond.
Time is pressing. Neither Mr. Biden nor his successors may get a second chance to recast policy on such a scale. Global emissions from fossil fuels and cement production in 2019 were 16% higher than in 2009. It will be even harder to limit climate change to less than 2°C above the pre-industrial level, the global threshold from which America’s target for 2050 comes. To be carbon neutral, the world must curb emissions by 7.6% a year for a decade, a steeper decline than in 2020, when covid-19 cut demand for oil and coal. For America, delaying action to 2030 would nearly double the cost of reaching net-zero or, more likely, mean it overshoots its targets.
Yet there are grounds for hope. Although the Republican Party is against almost all action, voters are increasingly alarmed by climate change. Two-thirds of them think the federal government is doing too little about it, and that share includes plenty of younger Republicans. Although the fossil-fuel lobby remains powerful, many Republican business donors want more action—partly because asset managers are urging firms to align their strategies with the net-zero world Mr. Biden envisions.
Most encouraging of all, the costs of power from wind and solar have plunged by 70% and 90% over the past decade. Along with cheap gas, this has already helped America decarbonize at an impressive rate, despite Donald Trump’s rolling back of fossil-fuel regulations. Price has not been the only factor; more than half of the states have some sort of clean-energy mandate, a device that Mr. Biden wants to introduce on a national scale.
This involves a regulatory framework that favors renewable-energy developments and grid connections to hook them up. It will take a lot of extra investment—about $2.5trn in the coming decade, say researchers at Princeton. In a new book, Bill Gates, a billionaire philanthropist, argues that research is needed into a host of areas such as energy storage, advanced nuclear reactors to complement renewables and technologies for clean concrete-making, and other activities that are hard to decarbonize. Without these, even if a clean grid is powering electric cars and light trucks, it will displace only around half of the emissions.
For all those reasons, an ambitious climate-oriented infrastructure bill looks like Mr. Biden’s best chance of getting a new policy on climate through the Senate. Unfortunately, such a plan will be lucky to attract any Republican votes. Yet, if mustering the 60 needed to see off a Senate filibuster is improbable, a plan could be stripped of some measures, including a clean-energy standard, and passed with a simple majority through the parliamentary maneuver known as reconciliation. The bill must still be of a scale and ambition that matches America’s challenge.
Failure to act would bring big risks. For a start, it would make America less competitive in the new clean-energy economy. China is the dominant producer of solar panels and batteries; it has also invested in foreign mines to secure minerals needed for them. Europe has its own “green deal” to boost its clean-energy industries. It plans to tax imports from countries that do not pledge to lower their emissions.
America would also be deprived of global influence over climate. It has direct control over only about 10% of the world’s greenhouse-gas effluvia. If it wants the benefit of a stable climate—and with it, a stable world economy, stabler geopolitics, and much avoided suffering—it needs to influence the other 90%, too. Mr. Biden has appointed John Kerry, a former secretary of state, to spearhead that effort. America is to rejoin the Paris agreement on February 19th, making it a full participant in the UN conference to be held in Glasgow, in Scotland, in November, when countries will be able to lodge new and more ambitious pledges to cut emissions. If America tables goals and gives evidence that it will back them with domestic policy, it will gain influence. China’s two big development banks have doled out $51bn for foreign coal plants since 2008. America should be part of a push against such subsidies.
Unfortunately, America brings little credibility to action on climate. Mr. Trump took pleasure in subverting it, but his country’s poor record precedes him. George W. Bush declined to implement the Kyoto protocol. Congress has not considered serious climate legislation since 2009. Today must be different. There will never be a better chance for Mr. Biden to show real ambition. If the blackouts in Texas are any guide, it would not just be the world that would thank him, but Americans, too.