eBusiness Weekly
Amid rising global temperatures and a looming election against an opponent who has indicated he will gut his climate policies, Joe Biden’s administration is shovelling billions of dollars into efforts it hopes will spur enduring cuts to planet-heating emissions, no matter the occupant of the White House.
In recent weeks, large tracts of funding has been announced by the administration to help overcome some of the thorniest and esoteric challenges the world faces in driving down carbon pollution, seeding the promise of everything from the advent of zero-emissions concrete to low-pollution food production, including mac and cheese and ice-cream, to driving the uptake of solar panels and electric stoves in low-income households.
“We are seeing billions of dollars going into really tricky parts of the energy transition and if there’s momentum behind this we will be measuring the impacts many years in the future,” said Melissa Lott, a professor at Columbia University’s climate school. “I would expect these investments to have knock-on impacts well outside the US’s borders.”
The spending is the most significant yet to come via the Inflation Reduction Act (IRA), Biden’s signature climate bill, and the gusher of cash has a certain urgency. By January, Donald Trump, who has called some of Biden’s climate policies “insane”, could be president and Republicans, who have already attempted to gut the IRA and have called the latest spending a “greendoggle”, could hold Congress.
“The money from the IRA needs to get out of the door due to the urgency of the climate crisis but also the politics of this year and next year,” said Lott. “If money has been already committed, it’s gone. It’s very tough for a new administration to pull back funding once it has already committed.”
But the new funding in many ways goes beyond the short-term politicking that has haunted the US’s ponderous response to the climate crisis.
Last week, $20bn was awarded under the Greenhouse Gas Reduction Fund, a mechanism set up by the IRA, to non-profit groups that will provide low-interest loans for clean energy projects, such as installing solar panels on community centres, or heat pumps and induction stoves in households that couldn’t otherwise afford them.
“For the first time in history, we are providing tens of billions of dollars directly to community lenders to finance local climate projects,” said Kamala Harris, the US vice-president, in unveiling the spending. Michael Regan, the administrator of the Environmental Protection Agency, said the funding would be “transformational”.
The aim of these new “green banks” will be to multiply this infusion — the EPA predicts that the private sector will increase the overall funding seven-fold to about $150bn, accelerating the replacement of polluting appliances with cleaner versions, greening public transit and boosting renewable energy going to the grid, particularly in low-income neighbourhoods.
Each small win will deliver new emissions cuts, culminating years beyond the next election term, as will the Biden administration’s other big recent announcement, of $6bn to drive the decarbonisation of industrial processes such as making steel, creating aluminium, pouring concrete and even producing ice-cream and pasta.
In many ways, the US is now plunging into the unglamorous guts of the vast, knotty task to rewire almost all processes undergirding modern life, in order to meet the deep yet rapid emissions cuts that scientists say are imperative if the world is to avoid unbearable global heating.
Yet more work is under way. The administration has lent $1,5bn to reopen a nuclear plant in Michigan — an energy source that doesn’t emit carbon but is still controversial among environmental groups — while new plans have been set out to rid buildings of their reliance on fossil fuels.
The administration has also poured millions into climate adaptation. Yesterday, it announced $830m in grants to boost the resilience of transportation infrastructure to climate disasters and extreme weather. And last month, it awarded $120m to Indigenous tribes to prepare for climate impacts.
“This is the work of implementation — it’s a ton of different things all at once,” said Lott. “We need to get to net zero emissions to solve climate change and it’s essential that this work starts now because replacing existing infrastructure takes decades.”
A new ‘green bank’
A long-held dream of some Democrats in Congress has been a national “green bank” that will provide financing for climate-friendly initiatives that traditional lenders overlook.
The Greenhouse Gas Reduction Fund comes close to achieving this, although via the method of distributing funds to outside groups to do the lending. A total of eight non-profits are sharing the $20bn, with the largest single grant going to a group called Climate United.
The funding presents “a once-in-a-lifetime opportunity to tackle the climate crisis while building a stronger economy for all Americans”, according to Beth Bafford, chief executive of Climate United.
The funding will allow individuals, business and community groups to undertake a range of climate projects, from the installation of electric stove tops in homes to bigger tasks, such as building new, energy-efficient housing or providing a fleet of electric school buses.
The selected applicants have vowed to back projects that collectively slash emissions by 40m tons of carbon dioxide a year, but the longer-term hope is that the emissions cuts will grow as the green bank ecosystem generates its own momentum. “$20bn is serious funding and so there’s every chance it will snowball,” said Lott.
Clean concrete, steel, aluminium and plasta
Industrial processes contribute about a quarter of all planet-heating emissions in the US but the sector has been considered difficult to green, unlike other areas, such as the electrification of cars or the adding of solar and wind to the power grid.
High-heat activities such as creating steel or concrete are still reliant on fossil fuels but the Biden administration has said this can be reversed via $6bn in new spending on cutting-edge technologies. Jennifer Granholm, the US energy secretary, has said the 33 funded projects represent “the single largest industrial decarbonization investment in American history”.
The projects include a new aluminium casting plant in West Virginia that will run on hydrogen, rather than gas — the first of its kind. Six different projects will create zero emission or low-emissions cement, the key ingredient of concrete, Kraft Heinz, the food manufacturer, will get $170.9m to install electric boilers and heat pumps at its facilities to create, among other things, pasta without fossil fuels. Unilever will get up to $20.9m to decarbonize its production of ice-cream.
“We are ready to retire the term ‘hard to abate’,” said Hilary Lewis, an expert in green steel at Industrious Labs.
“These announcements show we have solutions to get to net zero emissions in many sectors. A lot more needs to be done, but it really is possible now.” — The Guardian.
