You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
The plan tells us a lot about where the White House thinks it can make a deal with Republicans.
Let’s start here: The Biden administration’s federal budget proposal for fiscal-year 2024 has zero chance of becoming law. The PDFs and press releases published by the White House today — and met with acclaim from Democratic-aligned nonprofits — are basically fiscal fan fiction; to first approximation, they more closely resemble pregame trash talk than solemn policymaking.
To be clear, this is not only because the Republican Party controls the House of Representatives and wants far deeper cuts than Biden has ventured. It’s because no president’s budget proposal ever becomes law. Even during the early years of the Trump administration — when the GOP held the White House and both houses of Congress —Republican lawmakers looked at the president’s proposed 31% cuts to the Environmental Protection Agency, laughed a bit, then went back to their appropriating.
So why pay attention at all? There are two reasons. First, the proposal is the White House’s opening move in one of the year’s biggest political stories: whether Democrats and Republicans can agree on a new federal budget without shattering the debt ceiling and triggering a financial crisis. The budget, in that sense, is an argument that the government can reduce the federal deficit — and slow inflation — without the kind of drastic spending cuts that Republicans have mused about so far. Biden’s proposal contends that revenue can fill the gap, calling for about $5 trillion in new taxes on companies and the wealthy over the next decade.
The budget also shows that climate change remains a central concern for Biden’s team. Although the bipartisan infrastructure law and Inflation Reduction Act released a flood of climate-related funding, Biden officials are now asking for even more to pursue their decarbonization-related goals. And this hints at the second reason to heed today’s proposal: that if nothing else, it reveals the White House’s aspirational priorities.
Will any of the proposals outlined below make it into the final budget? It’s hard to say; a few climate-adjacent topics — especially energy security and permitting — now have such bipartisan support that Republicans may eventually opt for them in the final deal. But regardless, these climate policies are the ones you’re likely to keep hearing about from Democrats — especially as they look toward the 2024 election.
Here are some of the most interesting ideas in the proposal:
The cryptocurrency industry’s voracious use of energy has long concerned Democrats; at peak, crypto miners consumed more energy than Finland. Now the industry has sagged— and the party smells blood. Last month, Senator Elizabeth Warren of Massachusetts promised that a crackdown on crypto’s energy use is coming, and the Department of Energy and EPA have said that they have the legal authority to compel crypto miners to disclose their energy use.
Biden’s budget goes further, proposing a new and gradually rising 30% tax on crypto’s electricity use. The White House estimates it will bring in $3.5 billion over the next decade.
Biden campaigned on ending fossil-fuel subsidies and tax breaks; in his first year as president, American diplomats endorsed a United Nations pledge to end such subsidies globally.
Yet so far he’s struggled to actually make it happen. He couldn’t get Congress — and especially Senator Joe Manchin of West Virginia — to swallow the reform in the Inflation Reduction Act last year. (In fact, Biden has sometimes boosted de facto fossil-fuel subsidies: After gasoline prices spiked last year, he invoked the Defense Production Act to make sure fracking firms had the resources they needed to drill.)
Now he’s trying again, proposing reforms to fossil-fuel subsidies that the White House estimates could bring in more than $90 billion over the next decade. That said, it’s unlikely to go anywhere this time.
One of the White House’s biggest worries is that the Inflation Reduction Act’s hundreds of billions of climate funding is going to wither on the vine. If developers and energy companies can’t get new clean-energy projects sited and approved, then many tax credits might expire before firms can take advantage of them, officials fear. After Democrats rejected a Manchin-led effort to reform environmental-permitting laws last year, those concerns intensified.
Now, Biden has requested another $60 million in funding to help the National Oceanic and Atmospheric Administration build the internal capacity it needs to approve offshore wind farms. It has asked for millions more to build rural electricity infrastructure and overcome other procedural holdups. And unlike other aspects of the budget, this could actually go somewhere: House Republicans have identified permitting as one of their own priorities and approved a bill in committee on Thursday. If there’s a climate-related deal this year, it’s likely to happen on permitting.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
On a new IEA report, EV batteries, and some good news about emissions
Current conditions: Very windy conditions in the UK have sent wind power generation soaring but electricity prices plummeting • Strong storms are expected to bring heavy rain and possibly tornadoes to Nashville, Tennessee • It’s cloudy in Tokyo, where Nissan shares were up on the news that the automaker is in merger talks with Honda.
Greenhouse gas emissions from U.S. federal lands peaked in 2009 and have been mostly falling ever since, according to a report from the U.S. Geological Survey. Federal lands make up nearly 30% of all the nation’s land. In 2009, annual emissions from fossil fuel extraction and use on these lands reached 1,430.9 million metric tons of CO2 equivalent, but had fallen to 1,118.9 million metric tons in 2022. Emissions saw a particularly steep drop in 2020, likely linked to the pandemic, and have been rising, but it’s not clear if the upward trend will continue. Wyoming is a major emitter: Its federal land CO2 emissions in 2022 made up 41% of the national total.
USGS
The same report also found that natural ecosystems (like soil, vegetation, and deadwood) on federal lands are offsetting just 1.4% of the annual emissions, and that “climate conditions” like drought and wildfire have “resulted in a decline in the sink strength of ecosystems on federal lands.” For context, total greenhouse gas emissions for the U.S. have been falling – in 2022 they were down 3% from 1990 levels. Carbon dioxide emissions from federal lands make up about 22% of the U.S. total.
The Department of Energy’s Loan Program Office closed a loan yesterday to fund EV battery plants in Kokomo, Indiana. The $7.54 billion goes to StarPlus Energy – a joint venture between Samsung and Stellantis – and was approved as a conditional loan in early December. At the time it wasn’t clear whether the LPO would be able to finalize it before the Trump administration takes over. The DOE estimates the Indiana projects will create 3,200 construction jobs and 2,800 operations jobs, and the finished plants will produce 67 GWh of batteries, “enough to supply approximately 670,000 vehicles annually.”
DOE/LPO
The Department of Energy on Tuesday published the results of its analysis of the economic and environmental implications of expanding U.S. exports of liquefied natural gas. Among its key findings:
The main takeaway, according to an accompanying letter penned by the Secretary of Energy Jennifer Granholm, is that “a business-as-usual approach is neither sustainable nor advisable.” In a call on Tuesday, Granholm acknowledged that the future is in the next administration’s hands. “We hope that they’ll take these facts into account to determine whether additional LNG exports are truly in the best interest of the American people and economy,” she said.
Global coal demand is set to rise to a new record this year and remain steady through 2027, according to the International Energy Agency. While the rapid rollout of renewables is encroaching on coal’s “century-long supremacy in electricity generation,” soaring power demand is counterbalancing this trend and giving coal a boost, the IEA said in its Coal 2024 report. The future of coal will depend largely on what happens in China, the largest consumer of the world’s dirtiest fuel. This year China, India, and countries in Southeast Asia are projected to account for 75% of global coal demand.
IEA
A new analysis from hundreds of researchers across the world recommends that we stop treating our most pressing global problems as being separate from one another, and instead acknowledge they’re all connected. Solving them will require a holistic approach. Climate change, biodiversity loss, water shortages, food insecurity, and health risks are all interlinked, the assessment says, and decisions to address these challenges should be coordinated to “maximize synergies and minimize trade-offs.” Right now, humanity is looking at these issues in isolation, “resulting in potential misalignment, unplanned trade-offs, and/or unintended consequences.”
Last month some of the leading voices on global climate science and policy penned an open letter calling for negotiators at future COP climate summits to consider the interconnected issues of nature loss, inequality, and poverty to ensure meaningful solutions. The new report was published by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services.
Virginia will become home to the world’s first commercial fusion power plant. The facility will be operated by Commonwealth Fusion Systems, and is expected to produce enough energy to power about 150,000 homes sometime in the early 2030s.
Five years from the emergence of the disease, the world — and the climate — is still grappling with its effects.
Five years ago this month, the novel coronavirus that would eventually become known as Covid-19 began to spread in Wuhan, China, kicking off a sequence of events that quite literally changed the world as we know it, the global climate not excepted.
The most dramatic effect of Covid on climate change wasn’t the 8% drop in annual greenhouse gas emissions caused by lockdowns and border closures in 2020, however. It wasn’t the crash in oil prices, which briefly went negative in April 2020. It wasn’t the delay of COP26 and of the United Nations Intergovernmental Panel on Climate Change’s Sixth Assessment Report. And it wasn’t, sadly, a legacy of green stimulus measures (some good efforts notwithstanding).
Rather, it was in the way the world’s governments (especially the largest and most powerful) responded to the virus, which undermined the very idea of multilateralism, climate action included. This took place along three main vectors: inertia on global financial rules, even as long-acknowledged failings turned catastrophic; a renaissance in industrial policy that may prove transformative for domestic fiscal policy; and, at the intersection of both, deterioration of what we might call geopolitics or “global solidarity.”
Evidence of this phenomenon can be found in nearly every aspect of the global order. The World Bank in October pointed to Covid as chief among a “polycrisis” of “multiple and interconnected crises occurring simultaneously, where their interactions amplify the overall impact.” Development gains have almost slowed to a halt. Extreme poverty has increased overall in low-income countries since 2014, after decades of improvement, according to the World Bank’s analysis.
None of this, however, was an inevitable effect of Covid. Poor countries got poorer, for the most part, because of norms and hard rules in global finance that they have little control over — what a group of researchers last year termed “financial subordination.”
To understand why, a brief history: Developing countries during the 2010s were seeking new avenues of finance as traditional sources like multilateral development bank loans, official development assistance, and commercial bank loans waned. Many turned to the U.S. dollar sovereign bond markets, and also to China; a few countries also turned to commodity traders like Glencore and Trafigura, taking on opaque debts to be repaid with their own oil and other commodities.
When the pandemic response shut down many kinds of economic activity in 2020, what World Bank researchers called a “fourth wave” of debt followed. After a continuous series of debt surges from 1970 to 1989, 1990 to 2001, and 2002 to 2009, global debt markets had been relatively stable for the preceding decade. What was different about this fourth wave was that it was largely in developing countries.
With Covid, the fourth wave turned into a tsunami. Countries everywhere were paralysed by the pandemic, but the poorest ones lost critical revenue from tourism, remittances, and some exports. On top of that, they suffered the same lockdowns and illness that depressed local economic activity and drained government budgets in many countries. Unlike rich countries, developing countries had limited ability to dip into reserves or raise money from the bond markets to keep their citizens safe and tide over those who lost work.
Wealthy countries and lenders did little to ameliorate this stress. A “Debt Servicing Suspension Initiative” facilitated by the G20 provided some relief for 46 countries; China participated, too, granting deferrals to some of its debtor countries. But private bondholders (who were earning returns as high as 9%) and multilateral banks did not. The debts still had to be paid, and by 2023, aggregate net capital flows were negativefor developing countries — that is, more money flowed from poorer countries to richer ones than the other way around.
Numerous governments defaulted on their debts in the wake of Covid, including Ghana, Sri Lanka, Zambia, Ethiopia, and Suriname. But perhaps just as bad, many, many more countries continued to pay their debts by slashing their health and social welfare budgets just as they were needed most. Low- and middle-income countries spent more on debt servicing in 2022 than they spent on health in 2020, during the height of the pandemic.
Tensions between the U.S. and China, meanwhile, became even more overt around Covid, helped in part by accusations and recriminations over the source of the disease. The two great powers were themselves deeply changed. China emerged from its Covid Zero measures with public discontent at a nearly unprecedented pitch and its engines of economic growth — domestic infrastructure and residential property — faltering as vast local government debts became unmanageable. The country’s central government renewed its focus on an export-led growth model, but this time instead of cheap, low-tech consumer goods, it was semiconductors, solar panels, and electric vehicles.
It quickly became clear that the Biden administration would not be much less hawkish towards China than Trump’s was. It largely focused inwards, on tackling the disenfranchisement of formerly solid Democratic working class constituencies that Trump had exploited and Covid deepened. These were largely seen as an outcome of untrammelled free trade — especially with China. But Covid lockdowns and the rush to regain normalcy in the re-opening choked complex supply chains and logistics networks, driving up prices around the world and helping to spark a global inflation crisis that has yet to meaningfully abate in many parts of the world.
When Russia invaded Ukraine, energy prices shot up, particularly in those countries reliant on imported oil and natural gas. This shook the global fossil energy economy. Exports of liquified natural gas by the United States to Europe skyrocketed, as European countries desperately sought alternatives to Russian piped gas. Those same desperate Europeans also bought LNG shipments that had been bound for countries like Bangladesh and Pakistan, outbidding the poorer countries which then endured blackouts and further hits to their financial reserves as they struggled to match the new EU price.
Global energy price rises compounded the Covid supply-chain pressures and monetary policymakers decided hiking interest rates was unavoidable. While Russian troops tried to capture Kyiv in March of 2022, the U.S. Federal Reserve — perhaps the most powerful U.S. entity for the rest of the world — began hiking interest rates, taking them from just a quarter of a percent before the invasion to more than 5% by mid-2023. This strengthened the U.S. dollar, heaping more pressure on developing countries trying to pay dollar-denominated debts. Meanwhile, in rich and poor countries alike, the jump in living costs has helped drive backlashes against incumbents, and a surge in far-right populism.
Perhaps years ago, if we’d known that we’d see a spike in temperatures, droughts, and storms alongside a flood of cheap solar panels and EVs, technological breakthroughs in batteries, and a renewed interest in industrial policy, it might have seemed that more urgent climate action was assured. Instead, divisions have worsened. The agreement text from this year’s United Nations climate conference is actually slightly watered down from the last year’s statement on fossil fuel phaseout. A special conference on biodiversity Cali, Colombia, finished last month only when delegates had to catch flights home, and a desertification conference hosted by Saudi Arabia finished this month with no group statement.
Rachel Kyte, the UK special envoy for climate change, told an event hosted by the Overseas Development Institute think tank that even as it approached its 10-year anniversary, the 2015 Paris Agreement was more fragile than it had ever been. Countries like the UK, she said, had been inflicting “paper cuts” on developing countries for so long that the ill will was becoming impossible to wave away.
“[W]e’ve also cherry-picked which international laws we want to stand behind and then, which conflicts we believe the international law is important for and not,” she added. “And you sit in the climate negotiations and they know that you know that they know that you know.”
And yet a hopeful note sounding out of all of this has been the central role of clean energy in many countries’ responses to the increasingly fractious global landscape. Responses to Covid, as chaotic as they were, demonstrated that governments can take decisive action. Although the vast majority of Covid stimulus was climate-neutral at best; about a trillion dollars’ worth of investments really were green. Efforts to boost cycling gained ground in some cities, including in Paris, where bike trips now outnumber car trips in and around the city center.
Renewed interest in energy security sparked by the Ukraine invasion has been largely supportive of clean energy. Europe’s combined wind and solar generation rose 10% in the first year after the invasion as the bloc made its emissions reduction target more ambitious. Green industrial policy introduced by the Biden administration has encouraged other countries to see decarbonization as a competitive opportunity rather than an obligation. And China’s doubling down on its manufacturing of the “new three” — batteries, EVs, and solar panels — has created an oversupply that spurred rapid uptake of clean energy in many countries.
Fractures, however, are rife. Too many countries have steep tariffs on clean energy imports preventing them from taking advantage of cheap Chinese components, adding to other barriers to clean energy generation, such as the restrictive planning rules in Japan, where renewable energy generation lags; even wind power, where the country has ample potential, was virtually flat for the decade to 2022. Tariffs on imports to the U.S., while helping to build a domestic industry, also slow the rate of deployment. Globalized supply chains tend to be cheaper; a study in Nature estimated that they saved the U.S. up to $31 billion in the 12 years leading up to 2020, while China saved up to $45 billion, compared to a scenario in which domestic suppliers were prioritized. Even with its rapid expansion in clean tech manufacturing thanks to the Inflation Reduction Act, it will take years for the U.S. to catch up to China’s capabilities, while in the meantime, tariffs will slow down installations.
For those in wealthier and more powerful countries, there’s at least a chance of political shift. For countries under financial subordination, there are hard limits to what can be achieved.
Geopolitical alignment is an increasingly sensitive question for countries trying to avoid the pitfalls of appearing to be too close to either China or the U.S. Auto manufacturing has become the site of intense competition and tension, with the U.S. and EU putting punitive tariffs on Chinese EV imports to compensate for “state subsidies.” The introduction of the European carbon border adjustment mechanism this year, which penalizes high-carbon imports so they don’t undermine the continent’s carbon pricing regime, has introduced a new source of tension around trade, particularly for African countries that rely on exports to Europe and are nowhere near having their own carbon accounting scheme that is a prerequisite to avoiding the surcharges.
We may only know in retrospect, but the supply bottlenecks and inflationary surges associated with the Covid lockdowns and reopenings may have been a kind of masked transition phase into a new, more permanently supply-constrained world. Researchers at Potsdam Institute and the European Central Bank published new research in March showing that climate change impacts will raise general inflation by more than a percentage point by 2035.
The damage could be seen in the recent COP29 in Azerbaijan. Trust was close to an all-time low over negotiations for a new target for finance flows from wealthy to poor countries. After it ended with a controversially low $300 billion target, Fiona Harvey of the Guardian called it the second worst COP of the 18 she’s attended, surpassed only by the disastrous 2009 COP15 in Copenhagen, which ended with no agreement at all. It can also be seen in the rebound in emissions since 2021.
While some hopeful shifts have emerged from the Covid era, the increasingly febrile global atmosphere risks endangering our already slim chances of protecting the habitable atmosphere. As climate impacts worsen, pushing back on that axiom will be more difficult, but more urgent. Combating climate change is such a monumental undertaking that collaboration – in technology, manufacturing, knowledge, and diplomacy – will be vital.
Rob sits down in New York with the outgoing head of America’s energy apparatus.
Jennifer Granholm has long been one of the most interesting figures in the Democratic Party. A former federal prosecutor, she was the governor of Michigan from 2003 to 2011, leading the state during the Great Recession and subsequent auto bailout. Since 2021, she has been the 16th U.S. Secretary of Energy. While there, she has overseen the department’s transformation from an R&D-focused agency to an aspiring engine of industrial strategy.
On this week’s episode of Shift Key, Rob sits down with Secretary Granholm in person in New York to conduct an exit interview, of sorts. What climate policies is she most proud of — and what does she hope Democrats do better next time? What does she wish that Democrats understood about fossil fuels? And what does she think the outlook for clean energy is in the years to come?
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is off this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: And so one big question I have is like, are we going to learn in the next few years whether these are actual concerns to these folks and they want to preserve these programs? Because it turns out, this is how you would try to create an EV industry in the U.S. Or do they really just care about oil and gas and their concerns with supply chains, with mineral supply chains, are just kind of a tissue to cover up larger oil and gas concerns?
Jennifer Granholm: I mean, obviously they’re very pro fossil fuels. We know that. But I will say all of the rhetoric has been about all of the above, an all of the above strategy. I mean everybody from Doug Burgum — I mean, all of these Republicans on the Energy Committee, they’ve all said that. So it just would be strange to turn your back on everything that you have said all of this time.
And I don’t even think, honestly, I can — This is what I would say: I think that the Trump administration, it seems, what do I know? I haven’t talked to them personally, but I, it seems from all I can, they want to reshore manufacturing. So if it’s not, if you eliminate the Inflation Reduction Act, you got to replace it with something that’s going to attract all of that investment. There has to be some industrial strategy. Otherwise you’re just ceding the territory to China, which is the thing you’re complaining about. So if you don’t like an incentive-based strategy, which is really what the Inflation Reduction Act is, I see he wants to put in a tariff-based strategy, if you just want to do all sticks. I’m not sure that’s good for the economy overall, but a blend of carrots and sticks, I’m sure most people would say are important. And so, you know, maybe you call it something else, but you got to get in a game, because otherwise our economic competitors are only too happy to see that happen. Can I tell you a quick story?
Meyer: Yes, we have a little bit of time. This is what this is for.
Granholm: So when I was finished being governor, I went to China to see what China was doing in this clean energy space, because they were cornering the market on a lot of these technologies, solar in particular. At the time, I went with Securing America’s Future Energy, an organization that is focused on competitiveness in this clean space. And we went to a presentation by a bunch of mayors in China, mayors of provinces. And as we were standing there watching the presentation, one of the mayors stands next to me, and he says, “So when do you think the United States is going to get a national clean energy strategy?” And I said, “Oh, I don’t know … Congress …” And he looks at me, and he gets a big grin on his face, and he says, “Take your time.”
Because of course, they see our passivity as their opportunity, right? So this is why what we’ve done, what these laws have done, what the president has done, is so amazing. So I get that you may have to put a different spin on whatever the new administration wants to do, but ultimately, you have to have policies like these if we’re going to be successful in reshoring manufacturing.
You can find a full transcript of the episode here.
This episode of Shift Key is sponsored by …
Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
As a global leader in PV and ESS solutions, Sungrow invests heavily in research and development, constantly pushing the boundaries of solar and battery inverter technology. Discover why Sungrow is the essential component of the clean energy transition by visiting sungrowpower.com.
Music for Shift Key is by Adam Kromelow.