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Sparks

Why It’s Really, Really Important for Biden to Finalize His Emissions Standards

In two charts.

A tailpipe.
Heatmap Illustration/Getty Images

The Biden administration has a busy spring ahead of it. On the to-do list: finalizing key regulations covering tailpipe and power sector emissions before they become vulnerable to a new Congress that might have, let’s say, different priorities.

A new working paper from the National Bureau of Economic Research shows (among other things) just how key those regulations are. The paper considers various future policy scenarios beginning in 2025, including one in which the Inflation Reduction Act is fully repealed and another in which the IRA stays and we get a carbon tax.

Here’s what those results look like in a chart:

The heavy black line in the middle represents the Biden administration’s current goal to reduce emissions 50% compared to 2005 levels by 2030. Although none of the scenarios quite achieves that goal, IRA-plus-carbon fee gets the closest. Notice, though, the gap in the timeline between the current policy scenario and one without those two sets of emissions rules. With them, the U.S. gets almost to a 50% cut by 2035. Without them, it takes another five years at least.

Not only that, each ton of carbon will be much more expensive to remove. With the proposed emissions standards, eliminating one metric ton of U.S. carbon emissions would cost $43 in 2023 dollars. Without them, it would cost $69.

Why do these scenarios start in 2025? Not only will the U.S. be welcoming a new Congress (and, potentially, a new President) next year, it’s also when large chunks of the 2017 Tax Cuts and Jobs Act expire. As one of the paper’s authors, University of California, Los Angeles law professor Kimberly Clausing, wrote in the Washington Post last year alongside Yale University law professor Natasha Sarin, “Since Republicans and Democrats both want to extend at least some of the expiring provisions, the tax code is likely to be reopened. That’s a forcing mechanism” — though, they add, “it also presents a serious risk.” While it might give policymakers leverage to push through desired reforms — like, say, a carbon tax — it could also “make things worse — for example, by simply extending these unaffordable tax cuts.”

A carbon price has long been economists’ favored solution to the problem of carbon emissions. But in the U.S. at least, it has also historically been a losing argument. Meanwhile, the Biden administration is expected to soften its final tailpipe emission rules, giving automakers more time to go electric in the face of (perceived, if not actual) slumping consumer demand.

As these two charts make clear, that, too, is a risk — a gamble that Biden will be able to win the support of the auto industry, hang onto the White House, and keep the U.S. on track to meet his climate goals. Regulating emissions from cars and power, it turns out, is a major part of that. Without those standards — and especially without the IRA — the emissions picture gets grim.

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Sparks

The Country’s Largest Power Markets Are Getting More Gas

Three companies are joining forces to add at least a gigawatt of new generation by 2029. The question is whether they can actually do it.

Natural gas pipelines.
Heatmap Illustration/Getty Images

Two of the biggest electricity markets in the country — the 13-state PJM Interconnection, which spans the Mid-Atlantic and the Midwest, and ERCOT, which covers nearly all of Texas — want more natural gas. Both are projecting immense increases in electricity demand thanks to data centers and electrification. And both have had bouts of market weirdness and dysfunction, with ERCOT experiencing spiky prices and even blackouts during extreme weather and PJM making enormous payouts largely to gas and coal operators to lock in their “capacity,” i.e. their ability to provide power when most needed.

Now a trio of companies, including the independent power producer NRG, the turbine manufacturer GE Vernova, and a subsidiary of the construction firm Kiewit Corporation, are teaming up with a plan to bring gas-powered plants to PJM and ERCOT, the companies announced today.

The three companies said that the new joint venture “will work to advance four projects totaling over 5 gigawatts” of natural gas combined cycle plants to the two power markets, with over a gigawatt coming by 2029. The companies said that they could eventually build 10 to 15 gigawatts “and expand to other areas across the U.S.”

So far, PJM and Texas’ call for new gas has been more widely heard than answered. The power producer Calpine said last year that it would look into developing more gas in PJM, but actual investment announcements have been scarce, although at least one gas plant scheduled to close has said it would stay open.

So far, across the country, planned new additions to the grid are still overwhelmingly solar and battery storage, according to the Energy Information Administration, whose data shows some 63 gigawatts of planned capacity scheduled to be added this year, with more than half being solar and over 80% being storage.

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An Emergency Trump-Coded Appeal to Save the Hydrogen Tax Credit

Featuring China, fossil fuels, and data centers.

The Capitol.
Heatmap Illustration/Getty Images

As Republicans in Congress go hunting for ways to slash spending to carry out President Trump’s agenda, more than 100 energy businesses, trade groups, and advocacy organizations sent a letter to key House and Senate leaders on Tuesday requesting that one particular line item be spared: the hydrogen tax credit.

The tax credit “will serve as a catalyst to propel the United States to global energy dominance,” the letter argues, “while advancing American competitiveness in energy technologies that our adversaries are actively pursuing.” The Fuel Cell and Hydrogen Energy Association organized the letter, which features signatures from the American Petroleum Institute, the U.S. Chamber of Commerce, the Clean Energy Buyers Association, and numerous hydrogen, industrial gas, and chemical companies, among many others. Three out of the seven regional clean hydrogen hubs — the Mid-Atlantic, Heartland, and Pacific Northwest hubs — are also listed.

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Why Your Car Insurance Bill Is Making Renewables More Expensive

Core inflation is up, meaning that interest rates are unlikely to go down anytime soon.

Wind turbines being built.
Heatmap Illustration/Getty Images

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Though some of those factors had already been widely reported on, the overall rise in prices exceeded analysts’ expectations. With overall inflation still elevated — reaching an annual rate of 3%, while “core” inflation, stripping out food and energy, rose to 3.3%, after an unexpectedly sharp 0.4% jump in January alone — any prospect of substantial interest rate cuts from the Federal Reserve has dwindled even further.

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