Last Friday, Sen. Bernie Sanders (I-VT) addressed the artfully named Inflation Reduction Act. He observed, “It’s a gun to your head.”
Sanders wants more — he always wants more — but he implies that he will support the bill that will have no meaningful impact on inflation. Why is he voting for the bill? Sanders says, “What you’ve got to weigh is that the future of the Earth is at stake.”
The bill includes nearly $400 billion in climate and energy proposals. That’s a significant federal investment to address climate change — “nothing to sneeze at,” as Sanders aptly noted. Not to be outdone in the climate change hyperbole department, Sen. Ron Wyden (D-OR) stated, “This is a once-in-a-lifetime opportunity.”
Really?
Well, the International Energy Agency released a report on Aug. 3 warning that global coal consumption is set to rise by 0.7% in 2022 to match the record set in 2013. This is assuming that the Chinese economy recovers as expected in the second half of the year.
Increased coal consumption is driving global carbon emissions to a new all-time high.
In 2005, U.S. net greenhouse gas emissions totaled about 6.5 billion metric tons. Today, according to the Environmental Protection Agency, U.S. annual emissions are about 5.5 billion tons. Even without the passage of the Inflation Reduction Act with its climate change subsidies, U.S. greenhouse gas emissions are on track to fall below 5 billion tons by the end of the decade. If the Inflation Reduction Act becomes law, some policy experts suggest that U.S. emissions will fall below 4 billion tons by 2030.
But what about other big polluters?
China and India are signatories to the 2015 Paris Climate Accords, a legally binding international treaty on climate change. Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, as compared to pre-industrial levels. To achieve this long-term temperature goal, countries aim to reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate-neutral world by mid-century.
As late as April 2021, India reaffirmed its commitment to the Paris Agreement. In November 2021, China also reaffirmed its commitment to Paris. Yet, despite dramatic jumps in renewable energy output, the global economy remains hooked on coal for electricity. In Asia, coal’s share of the generation mix is twice the global average — especially in surging economies such as India. More than 90% of the 195 coal plants being built around the world are in Asia. In 2020, more than 35% of the world’s power came from coal, according to the BP Statistical Review of World Energy. Roughly 25% came from natural gas, 16% from hydro dams, 10% from nuclear, and 12% from renewables such as solar and wind.
Tamil Nadu is India’s second-most industrialized state and is one of the country’s top renewable energy producers. But it is also building the most coal-fired plants in the country. “We cannot depend on just solar and wind,” a senior official at Tamil Nadu Generation and Distribution Corporation told Reuters. Of course, this will mean a lot more carbon going into the atmosphere regardless of what the United States does to reduce its own emissions.
As a result, the U.S. should focus on mitigation via economic growth. This would provide us with the resources to deal with extreme temperatures, floods, and other consequences of climate change.
Take the example offered by the Netherlands. Via its sea barriers, dikes, and water drainage technologies, the European nation demonstrates daily that wealthy countries can turn the tides. With a large amount of its landmass below sea level, the Netherlands has adopted a comprehensive climate adaptation plan. For example, its landmark Delta Works effort involves a series of construction projects, including dams, dikes, locks, and levees, serving to stop seawater from flooding up through the Dutch estuary mouths.
The Netherlands is a wealthy country with the technological skills and economy to make itself a modern-day King Canute. The U.S. can do the same. However, equally important, the U.S. should continue to invest in carbon capture technologies. In North Dakota, the under construction “Project Tundra” will be the largest carbon capture facility in the world. It is designed to capture and store 90% of the carbon generated by the Milton R. Young power plant, a coal-fired facility.
Top line: The U.S. can adapt to climate change in ways that avoid hugely damaging economic burdens. Burdens that will do little to nothing to mitigate the broader trend of coal development in Asia.
James Rogan is a former foreign service officer who later worked in finance and law for 30 years. He writes a daily note on finance and the economy, politics, sociology, and criminal justice.
