![](images/Logos/Bloomberg.png)
How the Senate’s Big Climate Bill Eliminates 4 Billion
Tons of Emissions
August 4, 2022
The Inflation Reduction Act
would avoid 24 tons of climate emissions for every new ton it creates,
say researchers who have analyzed the legislation.
![](images/images_08_05_2022/pic1.jpg)
A pipe for carbon dioxide captured from the emissions of a generating
station in Thompsons, Texas.
Photographer: Luke Sharrett/Bloomberg
By
Zahra Hirji
A week
after US Senate Majority Leader Chuck Schumer and Senator Joe Manchin
stunned the world by announcing they’d finally struck a deal on
a climate, energy and health package, the implications for greenhouse
gas emissions are starting to come into view.
The
Democratic senators initially said the Inflation Reduction Act of 2022
would cut US emissions about 40% below 2005 levels by 2030, and expert
climate policy modelers said
reaching that target was plausible. Now three preliminary
climate models of the IRA — by researchers at Princeton University,
the think tank Energy Innovation, and the research firm Rhodium
Group — offer more details on how exactly the US could get there:
through changes in the electric power sector, the use of
carbon-capture technologies and more.
France's Going Through Its Most Severe Drought Ever, PM Says
Democrats Say They've Reached Agreement on Economic Package
London Is Teetering Toward Water Rationing If Drought Persists
Biden Bill Compels Barra to Put GM Before Business Roundtable
With news on Thursday
that Senator
Kyrsten Sinema of Arizona had agreed to support the legislation,
passage through the Senate’s slim Democratic majority became more
likely. Here are five takeaways on how climate researchers gauge some
of the potential impacts of the bill.
1. The new bill brings the US much closer to meeting its climate
goals.
A few months into President Joe Biden’s administration, he set a bold
US climate goal pledging to cut the country’s economy-wide
emissions by 50 to 52% by 2030. Under current policies, the US is on
track to cut its emissions between 24% and 35%, depending on the
analysis. The new legislation gets the country much closer to where it
needs to be.
According to an
analysis released Thursday by the REPEAT Project at Princeton, the
$370 billion of climate spending in the new bill would cut US
emissions roughly
42% below 2005 levels by 2030, or by 3.8 billion metric
tons of carbon dioxide equivalent.
This is roughly in
line with other models: Energy Innovation concluded
this week that the bill would cut emissions between 37 and
41% below 2005 levels. The
Rhodium Group finds that the legislation could cut
emissions between 31 and 44% below 2005 levels, with a central
estimate of 40%.
2. Most of the emissions reductions will come from the power and
transportation sectors.
Looking at the deep cuts needed to hit Biden’s climate goal by the end
of decade, REPEAT estimates the new bill provides two-thirds of the
needed reductions compared to current U.S. policies.
Closer to the
2030 Goal of Halving Emissions
The IRA would
get the US 66% of the way to Biden's target
Source: REPEAT
Project, Princeton University
While better than
business as usual, there remains an emissions gap equal to about 34%
of Biden’s initial goal. That's a larger gap than what would have been
delivered by the abandoned House package known as Build Back Better,
according to REPEAT’s modeling.
But Not As
Close As 'Build Back Better'
The House
reconciliation bill left a smaller gap to close
Source: REPEAT
Project, Princeton University
In the IRA, 24% of
emissions reductions come from the power sector, 19%
from transportation and 9% from other industries, with smaller shares
attributable to other areas. “The Inflation Reduction Act cuts US
emissions primarily by accelerating deployment of clean electricity
and vehicles,” REPEAT researchers wrote in a presentation summarizing
their findings.
A big way this will
happen is through a lot more wind and solar power. REPEAT predicts an
average of 39 gigawatts of new wind and 49 gigawatts of new solar a
year, starting in 2024 and ramping up toward the end of the decade.
For comparison, in 2020, the US added 15 gigawatts of wind and 10
gigawatts of utility-scale solar photovoltaic.
“The biggest single
area of emissions reductions [in the IRA] is the electric power
sector,” in large part due to the tax credits for wind, solar and
battery technologies, said Rhodium partner John Larsen. “This is the
area where you’ve got 10 years of full-value renewable energy tax
credits.”
What on Earth?
The Bloomberg Green newsletter is your guide to the latest in climate
news, zero-emission tech and green finance.
Sign up to this newsletter
A couple of other
provisions would also work to drive down power sector emissions,
Larsen said. For one, there’s a new nuclear credit that helps keep
more existing nuclear online than might have been preserved otherwise.
“We project 10 to 20 gigawatts of nuclear will be saved by 2030,
because of that tax credit, that would otherwise leave the market, and
that has big emissions benefits,” he said. “And the last one is the
extension and enhancement of the 45Q carbon capture tax credits.” (45Q
is shorthand for the existing
tax credit for certain types of carbon capture and
sequestration projects.)
3. Use of carbon capture would go up 13-fold.
The new bill is projected to increase the use of carbon capture and
storage technologies by a multiplier of 13 by 2030, according to the
Princeton researchers. The incentives included in the bill would “make
carbon capture a viable economic option for the most heavily emitting
technologies,” including steel, cement, coal and natural gas plants,
they found. REPEAT estimates the total volume of captured carbon
dioxide for transport and storage underground could hit 200 million
tons per year by the end of this decade.
4. The bill would lead to more emissions reductions than added
emissions.
The three models all agree this bill would do more to tackle the
climate crisis than add to the problem, even though it would
greenlight new oil and gas drilling, a provision criticized by some
environmental advocates and by Vermont
Senator Bernie Sanders.
Energy Innovation
estimates the climate portions of the bill, such as the investments in
wind and solar and the electric vehicle tax credits, would cut
emissions between 870 to 1,150 million metric tons of carbon dioxide
equivalent in 2030. Meanwhile, the provisions to expand oil and gas
production could increase emissions up to 50 million metric tons.
In other words, for
every ton of emissions added, 24 tons of emissions would be avoided.
These estimates
represent a “conservative” or worst-case scenario, said Robbie Orvis,
senior director of energy policy design at Energy Innovation. REPEAT’s
estimate of oil and gas emissions spurred by the bill was slightly
smaller, up to 40 million metric tons.
5. The bill would bring health benefits.
By using EPA’s benefit-per-ton estimates, Energy Innovation’s modelers
translated the drop in carbon and other air pollution emissions to
impacts on human health. They found the bill, if implemented, could
avoid up to 3,900 deaths, up to 100,000 asthma attacks, and up to
417,000 lost work days by 2030.
(Updates
third paragraph with news that Senator Kyrsten Sinema will support the
climate bill.)
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
509 995 1879 cell, Pacific.
exactrix@exactrix.com
|