The administration led by US president Joe Biden launches a package for the energy transition. Among the investments, climate technologies and offshore wind stand out.
US president Joe Biden presented his America Jobs Plan in Pittsburgh — a $2 trillion package touching the infrastructure, transport and jobs sectors, with the aim of mitigating the effects of global warming. Among the measures of the plan, announced on 1 April, many concern the subject of the energy transition: the centrepiece of the entire plan is called the Clean Electricity Standard, through which Biden wants to compel publicly listed companies to increase their share of clean energy and to pay a ten-year carbon tax to be invested in the renewable energy sector. The goal is to allocate $35 billion for technological research on climate and a further $15 billion for projects ranging from energy and greenhouse gas storage to hydrogen and offshore wind.
As the recent power outages in Texas have shown, the American electricity grid is in urgent need of modernisation. A study by the Department of Energy found that power outages cost the US economy up to $70 billion a year. At present, US energy demand is met predominantly by fossil fuels: 45 per cent, in fact, depends on natural gas, followed by coal (24 per cent) and nuclear (17 per cent). Renewable sources sit at the bottom of the ranking, with a mere 12 per cent. For this reason, Joe Biden's plan requires electricity suppliers to ensure that by 2030 80 per cent of their output comes from zero-CO2-emission sources, rising to 100 per cent by 2035. These targets are consistent with the commitment to making the entire US economy carbon-free by 2050.
Another key point of the Biden plan regarding the energy transition towards renewables concerns incentives: as stated in the document presented at the White House, the president announced the elimination of billions of dollars in subsidies to fossil fuel industries. Furthermore, to accelerate investment in renewables, companies are granted the possibility of deducting up to 30 per cent of the installation cost of solar panels from their federal taxes.
Multinationals too must actively contribute to the United States' energy transition. Among the proposals is an increase in the corporate income tax rate from 21 to 28 per cent and an increase in the tax on international profits from 13 to 21 per cent. Indeed, many large US companies pay less than 21 per cent, because they have production facilities around the world and often channel profits into countries with much lower tax rates. The increased revenues would be invested in infrastructure and clean energy, but the White House plan has not been warmly received by American business leaders. Even so, Jeff Bezos, the founder of Amazon, declared himself in favour of the tax increase.
Over the next eight years, Biden aims to invest $35 billion in technological solutions that are most promising in tackling the climate crisis and that "position America as a global leader in the clean energy sector," the president states. More broadly, five billion dollars will fund research focused on climate resilience. The remainder will be divided among:
Finally, the White House dedicates an entire chapter to boosting renewable sources: specifically, the United States is banking on a source that has so far been little developed — offshore wind. The goal is to install 30 gigawatts of offshore capacity by 2030 through annual investments of $12 billion along both American coastlines. According to the plans of the new US government, investment in wind power alone will create 44,000 new direct jobs.
The new American plan, wide-ranging as it is, is not complete. The World Resources Institute, a non-profit organisation that has been working in defence of the environment since 1982, highlights the gaps in the proposal. In summary:
Finally, two suggestions: first, a grant programme could be added to support the construction of underground electricity lines that would be less vulnerable to damage caused by extreme weather conditions. And a grant plan should also be provided for retrofitting existing buildings.
Despite these limitations, the World Resources Institute acknowledges that Biden's ambitious agenda provides an excellent starting point for tackling the climate crisis with specific policies capable of creating well-paid jobs and addressing the legacy of environmental injustice. The path of this legislation is potholed, but the direction has finally been set.
