Breaking down the scale of Capitol Hill's climate and energy deal
The COVID-19 relief and spending deal is Capitol Hill's "most significant action on climate and energy in over a decade," according to analysis from the Rhodium Group, an emissions research firm.
Why it matters: The package now heading for President Trump's signature would phase down a potent greenhouse gases called hydrofluorocarbons (HFCs) used in air conditioning and refrigeration.
Catch up fast: Other provisions in the wide-ranging energy deal include extended eligibility for tax credits for renewable power and carbon sequestration projects. It also:
- Authorizes over $35 billion over a decade for a suite of Energy Department R&D and technology demonstration efforts.
- Alters and expands the focus of those programs to better address areas that include advanced energy storage, advancements in renewables tech, direct air capture of CO2 and more.
The big picture: The 85% U.S. cut in production and consumption of HFCs over 15 years would cumulatively reduce emissions by roughly 900 million metric tons of CO2-equivalent, per Rhodium.
- For a sense of scale, that's more than the annual emissions of Germany, according to the analysis, which describes the provision as the "biggest prize" in the deal.
- The two-year extension (through 2025) to start building projects eligible for an existing program that provides 12 years of CO2 sequestration credits is a big deal too, Rhodium says.
- "Extending the deadline by two years provides a lot more time for projects in a wide variety of applications to get off the ground," Rhodium notes.
- That program, depending on capture costs, might cumulatively curb emissions by another 585 million metric tons over 15 years — which is more than Australia's annual emissions, Rhodium concludes.
The intrigue: Rhodium estimates the cumulative 15-year effect of the HFC and CO2 sequestration credits would more than counteract the impact of two big Trump-era decisions: weakening vehicle emissions standards and rolling back methane rules for the oil-and-gas sector.
What they're saying: The research firm ClearView Energy Partners said the support for carbon capture and storage in both the tax and Energy Department innovation sections "appears to underscore its role as a source of bipartisan climate consensus."
What we're watching: A lot more would have to happen around vehicles, zero-carbon power, industrial decarbonization and more to put the U.S. on a path to the steep emissions cuts envisioned under President-elect Joe Biden's plan.
- Biden's platform includes both reversing Trump administration policies and going further than Obama-era efforts. "A lot more needs to be done and there is little time to do it," Rhodium notes.
- Sam Ricketts, co-founder of the environmental group Evergreen Action, said the COVID-19 relief and climate provisions fall short of what the "economic and climate crises demand."
- "[T]his legislation is a down payment on the clean energy economic recovery that President-elect Biden will realize in full, starting next year," Ricketts said in a statement.
Yes, but: Sweeping, aggressive climate and energy bills will face immense hurdles in the closely divided Senate. Biden's agenda is expected to rest heavily on executive actions that are certain to face legal challenges.