Republicans absent, President Biden's Climate Plan languishes; held hostage by a one coal state democrat

Meanwhile, hundreds of billions in private investment in a clean energy economy are mostly on hold awaiting Federal action.

Hundreds of billions in private investment in a clean energy economy are mostly on hold awaiting Federal action and Democratic lawmakers to enact clean energy tax credits proposed as part of the President Biden’s Build Back Better bill. According some economists the bill’s tax credit provisions pushes the economics of many projects over the hump.

The proposed bill, backed by President Biden, would pump about $550 billion into the clean energy and climate business, according to the Joint Committee on Taxation, about $311 billion of it in the form of tax credits and incentives.

“Investors are waiting in the wings to deploy capital for clean energy, with this industry poised to be the major engine of 21st-century prosperity,” said Leah Stokes, an associate professor of political science at the University of California at Santa Barbara. “Without these government incentives, that capital won’t get deployed. With them, we are poised to have a prosperous clean energy economy.”

Industry groups, as well as climate activists, have been frustrated by the delays. More than 260 clean energy companies wrote to congressional leaders in January saying that each month of delay to the Build Back Better (BBB) tax incentives costs the U.S. economy as much as $2 billion in economic activity.

The letter cited an analysis by the American Clean Power Association that found the legislation would more than double clean energy investment to $750 billion over the next 10 years creating hundreds of thousands of new and good paying American jobs, while advancing America’s transition to a clean energy economy.

The same analysis projected that the credits would cut carbon emissions from the U.S. power sector by roughly 70 percent below 2005 levels — the equivalent of powering 175 million American homes with reliable and climate resilient clean energy.

Are EV’s in Trouble if BBB fails?

On average, the cost of a new electric vehicle, whether all-electric (BEV), and even plug-in hybrids (PHEV) are higher than that of a conventional gas powered car. In the case of 100% battery-electric vehicles (BEV’s) beyond drive off costs, when combined with lifetime owner maintenance costs altogether is cheaper than owing a gas or diesel powered car or truck. There are a number of federal & state electric car tax credits, many with complicated formulas to determine a BEV’s price tag, alos with hidden benefits of fuel savings that lower the upfront cost to potential BEV buyers, but often are apparent without first doing ones’ true cost ownership homework and looking beyond the vehicle’s price tag.

The President Biden’s BBB bill calls for expanding tax credits for Electric Vehicle purchases to as much as $12,500 (legacy Federal and state EV tax credits, some still in effect, offer significantly less financially benefits to BEV buyers on select qualifying models). In the meantime, Detroit and other automakers are (or preparing to) invest billions into new plants to produce EVs. Without Federal EV purchase credits, middle and lower income buyers will have difficult with current electric vehicle price tags, slowing the transition to zero emissions, this is especially true for many of Hawaii’s residents.

This tax credit has a “phase out” built into the program that is dependent on the manufacturer of the car. The phase out will kick in at the beginning of the second calendar quarter after a manufacturer has sold 200,000 eligible BEVs and/or PHEVs. Today, most electric cars brands remain eligible for this EV tax credit, excluding Tesla and GM. The phase out of the current EV purchase tax credit will not be occurring anytime soon, as a whole, the auto industry (other than Tesla) remains in the nascent stages of producing and selling BEV’s at scale.

BBB Passage, Democrats’ remain hopeful…

Democrats, in fact, remain optimistic that the EV and clean energy tax credits will be approved in one form or another.

Democratic Sens. Joe Manchin III (W.Va.) and Kyrsten Sinema (Ariz.) — whose opposition has stymied the bill — have expressed support for some of its key climate provisions, including most of the clean energy tax incentives. But Manchin has flipped flopped before on his stated bill commitments, and has also made clear this month that he does not want to approve an economic package right away and is focused on other legislative priorities.

For a large sector of American’s emerging clean energy economy, time is the enemy, both in terms of global competitiveness and global heating.

Without any Republican support in the Senate for meaningful climate solutions, Democrats’ will be forced to go it alone in what is presently an evenly politically divided Senate. If the worse case scenario plays in the 2022 election cycle, and Republicans re-take control of the Senate, and-or possible the House, time-essential climate legislation will be once again off the table.