All the moves (and anxieties) of Biden between clean energy and oil
In the United States, Joe Biden is sending out mixed signals on the ecological transition: he wants to promote clean energy, but he is worried about oil price increases. The Financial Times article
Everyone talks about the weather, they say, but nobody does anything. Joe Biden presented himself as the long-awaited deviation from the democratic trend of talking about global warming but actually doing nothing. Biden would finally take meaningful action. In practice, it is sending radically conflicting signals. Jen Psaki, the White House spokesman, said Tuesday that Biden was " looking into every means we have to lower gas [petrol ] prices," including pressure on OPEC to increase its oil production. Two weeks earlier, the US president had described global warming as " code red – the nation and the world are in danger ". These statements cancel each other out. Says the Financial Times .
Which of them Biden really means is the $ 64 million question. The answer – which agrees with both – is maddeningly ambivalent. Biden's anxiety about the price of oil is simple. At over $ 80 a barrel, oil is at a multi-year high. This fuels high pump prices, which contribute to rising inflation in the United States, and wipes out much of the wage growth that the American middle class should enjoy. This, in turn, could jeopardize the Democrats' chances of holding Congress in next year's midterm elections, which would sink Biden's entire agenda, including his plans to combat global warming.
Such a trade off puts Biden in particular – and US politics in general – in a recurring dilemma. The addict who begs for a little more dose to help with rehabilitation rarely makes it to the clinic. There is no doubt that Biden wants to do the right thing. But he continues to find reasons to postpone the showdown. The best example is his refusal of a carbon tax. Biden pledged in campaign not to raise taxes on Americans who earn less than $ 400,000 a year. If that promise were limited to income, it would cover more than 99 percent of Americans – a broad exclusion given the cost of Biden's ambitions.
But he interpreted it much more extensively – to include any kind of tax, which would rule out Americans from paying higher excise duties to fill their gas tanks. Giving up a higher carbon price deprives Biden of obvious revenue to finance the large investments in his two "build better" bills. It is also giving up on by far the most effective tool for cutting emissions – the market price incentive. Republicans hate the carbon tax because they reject all taxes and because they don't take global warming seriously. The left is wary of a carbon tax because it relies on the market. Also because they fear it would cause a backlash.
As a result, Biden's legislation is full of the kind of micro-regulation that would have made the Soviet Union's Gosplan proud. The details – tax breaks for clean energy, expenses for a network of electric vehicle charging stations, clean energy targets for utility companies – matter less than the method. It is as if the addict insisted on trying homeopathy before undergoing other treatments.
Biden is betting on regulations rather than incentives. The political history of the United States tells us that this is not the best way. But even if these measures pass, which is hotly debated, they would not bring the United States close to meeting the president's goal of halving emissions (from 2005 levels) by the end of this decade. " At best, they would take America about a third of the way," said a senior climate negotiator.
Where would the rest come from? The answer involves two heroic hypotheses. The first is to hope that America finally reaches a point where the majority concedes a price to carbon. The closest time would be after Biden's re-election in 2024. But it's a gamble. America is the only major democracy where one of the two big parties refuses to admit man-made global warming. If it were Biden against Donald Trump, the Democratic candidate of 2024 would have a hard time fighting an opponent who labels a carbon tax as socialism. It doesn't matter that it is the free market solution.
The second is that technology will fill in the blanks. The magic phrase " net zero emissions " is based on the implicit bet that humanity will soon find a technological breakthrough. The best way to incentivize this would be to make carbon more expensive. It goes without saying that urging Saudi Arabia to turn up the volume is a step in the wrong direction.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/biden-energie-pulite-petrolio/ on Sun, 03 Oct 2021 06:33:28 +0000.