The Green New Deal, in Disguise Biden’s ‘infrastructure’ bill is really a plan to remake the economy.
https://www.wsj.com/articles/the-green-new-deal-in-disguise-11618267156?mod=opinion_lead_pos1
Candidate Joe Biden emphatically denied that he supported the Green New Deal. As with so much else, President Biden is now a convert. His $2.3 trillion infrastructure plan contains enough spending and industrial planning that it amounts to the Green New Deal in disguise.
Listen to Rep. Alexandria Ocasio-Cortez, who two weeks ago claimed maternity for the President’s plan. “As much as I think some parts of the party try to avoid saying ‘Green New Deal’ and really dance around and try to not use that term, ultimately, the framework I think has been adopted,” the progressive heroine from Queens boasted. The details prove her point.
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Mr. Biden is pitching his plan as having a big economic return on federal investment—and better roads, bridges and ports could increase productivity. But more than half of his plan is dedicated to reducing CO2, with a goal of eliminating fossil fuels with a mix of federal spending, subsidies and regulation. This is a political project with suspect returns.
• Start with $213 billion to build and retrofit two million energy-efficient homes and buildings. These putative “upgrades” would be financed by federal grants, tax credits and the economically inefficient Weatherization Assistance Program (WAP).
A 2018 study in the Quarterly Journal of Economics of the WAP in Michigan found that its upfront investment costs are about twice the actual energy savings. “Even when accounting for the broader societal benefits derived from emissions reductions, the costs still substantially outweigh the benefits; the average rate of return is approximately −7.8% annually,” the study found.
• Or take the plan’s $40 billion in spending to “mitigate imminent hazards to residents, and undertake energy efficiency measures” in public housing. The New York City Housing Authority paid unionized electricians $135 an hour including benefits to install LED lighting, which cost about $1,973 per apartment. Then it had no money to repair moldy apartments.
• Mr. Biden’s biggest climate-works project is to re-engineer the grid to banish fossil fuels. Natural gas and coal currently make up more than half of U.S. electricity generation and a larger share in the South and Midwest. Mr. Biden aims to replace them with carbon-free energy by 2035.
He’d start with an Energy Efficiency and Clean Electricity Standard, which would force states and utilities to phase out fossil fuels. He’d then accelerate their abolition by extending the renewable investment and production tax credits for 10 years. Congress began these credits decades ago to boost the infant wind and solar industries.
But renewable prices have since fallen tremendously—as climateers like to point out—and now the credits let producers turn profits even when wholesale prices go negative. Baseload fossil fuel and nuclear plants struggle to compete, and many are shutting down. This is making the grid less reliable.
Mr. Biden’s solution: Tax credits for battery storage. But batteries can’t compensate 24/7 for renewables that wax and wane. So Mr. Biden also proposes tax credits to build high-voltage transmission lines that move power from windy and sunny states to those that now rely on fossil fuels. Billionaire Phil Anschutz and others are already trying to do this.
• And herein lies an irony: The green energy tax credits would enrich large corporations and billionaires. Hedge funds and tech companies are some of the biggest green energy investors. These tax credits would become more attractive as tax rates increase. Even big oil companies would benefit from credits for investing in carbon capture and “sustainable” aviation fuels. This is one reason CEOs like Amazon’s Jeff Bezos are endorsing a corporate tax increase. They’ll make it up in subsidies.
• Companies and private investors that have bet heavily on EV and battery startups will also benefit from Mr. Biden’s plan to spend $174 billion to increase their sales. Government fuel regulations have forced auto makers to build EVs, but too few consumers buy them. So Mr. Biden plans to pay states, cities, states and schools to buy EVs.
His plan would also increase consumer rebates and build 500,000 charging stations. But the federal government didn’t need to build gas stations or subsidize purchases of Model Ts to get Americans to ditch the horse and buggy. The reality is that breakthroughs in technology will be necessary to achieve widespread EV adoption and other climate goals.
• Hence Mr. Biden also proposes to spend $52 billion on domestic manufacturing, $50 billion for the National Science Foundation and $35 billion for research in “utility-scale energy storage, carbon capture and storage, hydrogen, advanced nuclear, rare earth element separations, floating offshore wind, biofuel/bioproducts, quantum computing, and electric vehicles,” among other things.
Government investment in basic research is important, but most of this spending is largesse for “demonstration projects” such as “ten pioneer facilities” of “carbon capture retrofits for large steel, cement, and chemical production facilities.” Think Solyndra and other failures from the 2009 green-energy boondoggle.
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Mr. Biden says his plan will “create millions of good jobs,” but his anti-carbon policies will destroy many more in fossil fuels and carbon-intensive industries. That’s why he’s proposing a $40 billion Dislocated Workers Program and $10 billion Civilian Climate Corps. No wonder Ms. Ocasio-Cortez is elated. Her climate dreams are coming true, and all under the false front of “infrastructure.”
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