Facts on the Ground:
Floods, extreme heat and wildfires continue world-wide. In the US, on Aug 21, more than 100,000 people in the US were under flash flood watches. National parks in southern Utah remained under elevated risk of flash flooding and at least one hiker was missing in Zion NP after being swept off her feet. Over 200 people had to be evacuated from Carlsbad Caverns in New Mexico after being stranded by floods.
Flash floods occur anywhere intense rain falls over a brief time. They occur with increasing frequency as the climate warms. Monsoonal moisture is contributing to more frequent showers and thunderstorms. A monsoon is a seasonal change in winds that can result in increasing humidity levels over land, triggering more frequent storms.
Three separate downpours in Kentucky, Missouri and Illinois over eight days this summer washed away homes, crops and caused at least 39 deaths. The heavy rainfall, broke century-old records and decimated communities. Southeastern and central Illinois recorded more rain in 36 hours over two days which is more than it normally gets for August. In eastern Kentucky and central Appalachia, rainfall from July 26 to July 30 was above 600% of normal, with more than four inches of rain an hour recorded in Kentucky. In Missouri, rainfall records were broken during a two-day downpour. “We anticipate that these type of events might become even more frequent in the future or even more extreme in the future as the earth continues to warm, which means that this is kind of a call to action that climate change is here,” said Kevin Reed, an associate professor at the School of Marine and Atmospheric Sciences at Stony Brook University in New York. “It’s not a problem for 50 years from now. It’s a problem now.”
Between July 26 and July 30, 14 to 16” of rain fell in a small strip in eastern Kentucky. The National Weather Service called it “historically unheard-of,” there was a less than 1 in 1,000 chance of that much rain falling in a given year. The Weather Service also said in east-central Missouri, 7.68” of rain fell in a six-hour period, an event with a 0.1% likelihood of occurring in a given year. A major downpour in and around St. Louis caused residents to flee their homes in inflatable boats. The heavy rainfall of July 25 and 26 was the most intense recorded in St. Louis since 1874. About 25% of the area’s normal yearly rainfall fell in about 12 hours. “We typically get a little over three inches in the month of August, and we got five to seven inches just in the first two days here of August,” said Nicole Albano, a meteorologist at the National Weather Service office in Lincoln, Ill. “That’s pretty substantial.”
Just two days after flash flooding hit the St. Louis area, the region was struck by a series of storms that caused more flooding, requiring dozens of residents to be rescued. The St. Louis Fire Department said it responded to 75 flood-related emergencies in about four hours in one afternoon. Over 60 residents required rescues or needed help getting to safety. Most of the rescued were drivers who were stuck in their vehicles after roads flooded and became impassable.
A flood hit several communities between Nashville and Memphis in August, killing 20 people including 7-month-old twins and a 60-year-old woman who was pulled by the water from her husband’s arms. People in Waverly narrated the panic and distress they felt as they helplessly watched relatives and neighbors being swept away by the flood. “Even though it’s killing me that I lost two babies,” Danielle Hall said during a funeral service for her twins, Ryan and Rileigh, “I know that at least they were together.” The grief was made worse by physical devastation resulting from the loss of all or most of their possessions. “We have an extremely long road to go,” Sheriff Chris Davis of Humphreys County, said after the floodwater disappeared, leaving behind destruction and loss in its wake.
Governor Andy Beshear of Kentucky said at least six children were killed in the floods and hundreds are without homes. The National Guard, the state police and other state agencies were assisting with search and rescue efforts. About 300 people had been rescued across the state, about 100 of whom were taken to safety by aircraft. “I wish I could tell you why we keep getting hit here in Kentucky,” the Governor said. “I wish I could tell you why areas where people may not have much continue to get hit and lose everything,” he went on. “I can’t give you the why, but I know what we do in response to it. And the answer is everything we can.”
Biden declared a major disaster for 13 counties in eastern Kentucky freeing federal funds for local governments and some nonprofit organizations. One of those rescued, Brianna Imhoff, said “Everybody’s just lost everything.” The governor said it was “one of the worst, most devastating flooding events” in the state’s history. Over 23,000 residents lost power.
According to the National Oceanic and Atmospheric Administration, more than 4.5” of rain fell on Buchanan County, in southwestern Virginia, an area inside the Appalachian Mountains which funneled the rain and flooded roads. Homes were swept off their foundations and people were forced to struggle through waist-deep water to get to safety. The authorities said the number of people unaccounted for includes 44 children and adults. “I am deeply saddened at the devastating news of flooding in Buchanan County,” Virginia’s Governor Youngkin wrote on Twitter. He issued a state of emergency and about 20 search and rescue organizations were assisting.
Some 35 million homes, almost one-third of the nation’s housing stock, are at high risk for disasters. Most of this climate vulnerability affects the poor,
Record-breaking heat waves engulfed much of the US. Few parts of the country have escaped this summer’s extraordinary heat, which has resulted in over a dozen deaths in Oregon. Portland, Salem and Eugene, Ore., all had seven straight days of highs above 95F, a record in all three cities. Seattle had six straight days of highs above 95F, a record for the city. The Central plains had record triple-digit temperatures, even in the southern Great Lakes region and Montana. A heat emergency was declared in Boston as the temperature at Logan Airport reached 98F degrees on Aug 4 breaking a record set in 1928. Hartford, Conn., set a record high on July 24, at 96F. New York City’s electrical supplier, Con Edison, asked customers to limit energy use to reduce pressure on the power grid and prevent outages.
In Minnesota, parts of the Dakotas, Oklahoma and Arkansas millions of people were under a heat advisory or warning from the Weather Service — a routine event this summer.
Wildfires in California claimed four lives due to the McKinney Fire which has burned more than 56,000 acres, including over 580 in 24 hours, and caused evacuations of thousands of people. Gov. Newsom declared a state of emergency for Siskiyou County. The fire destroyed more than 100 structures including homes, a grocery store and a community center.
The fire is one of 60 large wildfires and fire complexes that have burned more than 1.6 million acres across the US so far this year, according to the National Interagency Fire Center.
Days of sizzling temperatures and dry conditions have been responsible for the ferocity of the fires by making vegetation drier and more likely to ignite. Analyses have shown that human-caused climate change has increased the likelihood of such extreme heat waves. Siskiyou County is in extreme drought, according to the U.S. Drought Monitor. Drought stress can kill trees, Brian Nieuwenhuis, a meteorologist, said. “You kill a tree,” he added, “and it just becomes a big piece of firewood.”
The heat from the fire resulted in a huge cloud called a pyrocumulonimbus, which has been referred to as “the fire-breathing dragon of clouds,” that essentially generated its own weather and reached more than 39,000’ into the sky. “The fire created thunderstorms, which could have caused new fires nearby,” said Brad Schaaf, a meteorologist with the Weather Service. In the foothills of the Sierra Nevada in California, the Oak fire has burned more than 19,000 acres, putting thousands of homes and businesses at risk.
The 2017 National Climate Assessment detailed the economic cost of climate change including drought, wildfires, crop failures and flood. Over the past five years the US has experienced 89 climate disasters each exceeding $1 billion in damages, costing the nation a total of $788 billion and 4,557 lives, according to the National Oceanic and Atmospheric Administration. Last summer was the hottest on record in the contiguous US, but it is on pace to be outstripped this summer.
The record-breaking summer heat has been everywhere, from Boston to Texas to Alaska. Newark reached 100F degrees or more a record five consecutive days. Cities from Joplin, Mo., to Reading, Pa., to Manchester, N.H. all had record highs. Austin, Tx had its hottest ever May, June and July, enduring 47 triple-digit days so far this year. After 10 o’clock, I’m inside the house,” said Paolo Pinto, 70, an Austin resident. “I have curtains, shades and fans. I don’t come out until around 7 p.m. I turn red, I get exhausted.”
The Dallas-Fort Worth area saw more than 13” of rain Aug 21-22, leading the top elected official there to declare a state of disaster in the region. Gov. Abbott directed the Texas Division of Emergency Management to mobilize resources to help residents affected by the flooding. Texas is also experiencing extreme drought conditions, 27% of the state is under the most severe category of drought warning. Scientists call a rapid shift from extreme dry to extreme wet conditions “precipitation whiplash.”
In addition to the heat, plumes of smoke from wildfires darkened the skies across the West. In California, the Oak fire burned more than 18,000 acres near Yosemite NP and Northern Arizona grappled with a bout of wildfires followed by dangerous floods, which have torn apart burned-out ponderosa forests. When summer rains come, they turn into record-breaking floods, just like the flood that destroyed roads in Yellowstone NP. The storms in Missouri converted highways into canals, with at least one fatality. Those most at risk are older people, the homeless and low-income people who are unable to pay the bills to cool themselves or stay at apartments where landlords fail to keep air-conditioning in good repair. They have no refuge this summer.
A two-week heat wave in San Antonio, pummeled low-income residents in treeless sections of the urban core. Some residents black-out their windows or place cool towels around their neck. “You can’t sleep, and it’s too hot to be out and about,” said Hernan Macias, 52, of San Antonio, who has tried in vain to cope by running two industrial fans at his bedside. “It feels like this is the worst summer, the hottest summer, so far.” Climate scientists warn that a decade from now, a scorching summer like this one might seem comparatively mild.
According to an analysis from NOAA, heat waves in the US have grown hotter, longer and more frequent over the past few decades, increasing from two per year in the 1960s to six per year in the 2010s. The yearly heat wave season has more than tripled in length to 68 days, from 22, over that same period. Extreme heat is spreading to many regions that are not equipped to deal with it, like the Pacific Northwest. “This is a new normal, but don’t get used to it, because normal is going to get worse and worse until we rein in our emissions” of carbon from burning fossil fuels, said Kristina Dahl, a principal climate scientist at the Union of Concerned Scientists, an advocacy group. This year, more than 100 million Americans were under extreme heat advisories.
The heat has contributed to dryness and wildfires as well as drought. Water levels in Lake Mead have been on a 22-year downward trend, according to NASA, which has been tracking satellite imagery of the lake. As of mid-August, the lake was filled to just 28% of capacity. Lake Powell, a giant reservoir in Utah and Arizona, was filled to just 26% of capacity, its lowest point since 1967.
In France, record drought and waves of heat produced wildfires in July and August that burned over 80 square miles of bushes and forest forcing thousands of people to evacuate. “Since June, our country has been facing exceptional fires,” Prime Minister Élisabeth Borne said during a visit to Hostens, a small town in the SW region of Gironde. Ms. Borne announced new measures to “prepare for events that we know are also linked to climate change.”
Devastation caused by the wildfires in France is the latest consequence of a series of heat waves in Europe this summer, highlighting how vulnerable countries in the West are to the reality of extreme weather as it challenges cities’ climate change mitigation plans and plagues entire regions with water shortages. The temperature in Paris exceeded 40C (40.5C, or 104.9F) for only the third time in its recorded history, in early August. Britain too endured record-shattering heat this summer. Both the British and Spanish governments issued extreme heat warnings which extended to parts of Wales. Scientists say there is little doubt that heat waves around the world are becoming hotter, more frequent and longer lasting and have contributed to the intensity of fires by making vegetation drier and more likely to ignite.
The wine-growing region of Gironde lost 54 square miles of woodland to wildfires in mid-July and an additional 26 square miles of bushes and forest in August. As 1,100 firefighters were dispatched to battle resurgent fires near Landiras, a major stretch of highway between Bordeaux and Bayonne was closed and 8,000 people were forced to vacate their homes due to fire and smoke. At least 16 houses were destroyed near the town of Belin-Béliet.
Sweden and Italy sent firefighting equipment to France to help. President Macron wrote on Twitter that five more European nations, including Germany and Greece, would also aid French wildfire efforts.
In Italy, the Italian health ministry reported that “the high temperatures and heat waves that affected our country in June and in the first two weeks of July were associated with an increase in mortality.”
“It’s a real slap in the face,” said Controller General Grégory Allione, president of the French Fire Fighters Federation. “Experts were telling us that these kind of events would occur between 2030 and 2050,” he said. “Today, it’s 2022. Almost a decade earlier.” A similar thing happened in Britain, where a warning predicted for 2050 was realized this year in the temperature extremes.
Water restrictions in France, due to what the authorities called “the most severe” drought ever experienced, are in effect in almost all the country’s regions. Over half of France’s regional departments are classified as being in a “crisis” situation triggering bans on washing and watering lawns and preventing farmers from irrigating some crops, forcing many to let their fields wither.
Drinking water reserves have already dried up in over a hundred municipalities around the country. Gérardmer, a popular resort town in eastern France, intends to pump water from its lake for household use for only the fourth time in its history. “It’s worrying for the future,” Stessy Speissmann, the town’s mayor said, “because if these situations persist this early in the year, and repeat year after year, we are going to have to find other solutions.” Météo France, the national weather forecaster, said that July was the driest July in over 60 years, with just 0.38” of rainfall.
In Britain, water restrictions were imposed in two parts of the country after experiencing its driest July since 1935. In Spain, towns in Andalusia restricted water usage as well. In Germany, the survival of fish and other wildlife are threatened by the growing number of lakes and rivers that have dried up in the center of the country.
Italy has experienced its driest year since 1800, “at least until now,” said Ramona Magno, of Drought Climate Services, a research center. “The drought persists, and the situation is getting worse as months pass without rain,” she said, especially in Italy’s northwestern regions where the drought classification has fluctuated between extreme and severe and has already affected thousands of farmers. The National Research Council’s climate unit said 2022 could well be Italy’s hottest year on record. The drought conditions are so harsh that the government declared a state of emergency for much of northern Italy, and there is a growing fear in one of the country’s most fertile regions that things will never be the same.
In northeast Italy, the flow of the Po River is so diminished that saltwater from the Adriatic Sea is flowing into it, putting agriculture in the fertile Po Delta at risk. “It’s bringing agriculture to its knees,” Ms. Magno said. The drought could cost farmers about 3 billion euros, or $3.05 billion, this year, the hardest hit for the area in 70 years. A confederation of national agricultural producers, Coldiretti, said that 250,000 farms were struggling because of the drought and soaring energy costs. One farmer out of 10 might never recover. The outgoing Italian government allocated some 200 million euros, or $204 million, to assist farmers.
“We know from studies on climate change that in recent decades, the northern regions along the Alps have been increasingly dry during the winters, rain has become scarcer even in the spring, while temperatures are higher,” said Massimiliano Pasqui, a climate change expert at Italy’s National Research Council. “This year, we arrived at a situation where these three elements combined at the same time to produce this extreme drought.”
While the situation was critical in the north, there are signs that “the drought is spreading to central and southern Italy” as a result of temperatures that are consistently higher than average, said Ms. Magno.
Heat waves in Europe are increasing in frequency and intensity faster than almost any other part of the planet, according to scientists, who say that global warming and other factors including atmospheric air circulation and the oceanic currents all play a role and may be affected by global warming.
Global warming also increases the likelihood of drought, as higher temperatures dry out soils and vegetation and cause more precipitation to fall as rain than snow, which can affect water availability for agriculture. Climate change can also affect precipitation patterns around the world, making dry areas drier.
Similarly, in Germany, the Rhine, the country’s most important water transport route, was so low that some ships had to reduce their cargo loads. Uniper, a German power utility, had to reduce output from its largest coal-firing power plants because coal could not be shipped to the plant in sufficient quantities via the Rhine.
In France, which gets about 70% of its electricity from nuclear energy, heat waves have disrupted power plants as the water used to cool their reactors was too warm. Several had to reduce production during the heat waves, or to exceed normal temperature limits for the water released back into natural waterways.,
Christophe Béchu, the French minister for environmental transition, said in the Alpes-de-Haute-Provence region, that the drought was unheard-of — at least now. “Because of climate change,” he said, “we are going to have to get used to these kinds of episodes.” Water was poured on the pavement just ahead of bikers in the Tour de France to ensure the asphalt didn’t melt.
Britain reached an all-time high when it exceeded 40C (104F) in July for the first time, breaking through a barrier that once seemed unimaginable for a temperate, northern island. Then, in early August, the U.K. Health Security Agency issued a Level 3 heat-health alert for southern and central England, advising more vulnerable populations to stay hydrated and to take the necessary steps to prevent their homes from overheating, which was challenging as most homes in Britain lack air-conditioning. Wales, Scotland and Northern Ireland also experienced unusually warm temperatures.
July was the driest July in England since 1935, as the country received only 35% of its average monthly rainfall, according to the Met Office. The dryness, combined with Britain’s excessive heat, produced raging wildfires with lives lost and homes evacuated across a Europe frighteningly ill-equipped to cope with the new reality of extreme weather. The heat reached from Greece to Scotland, and wildfires burned in Spain, Italy and Greece with the greatest fire damage in France.
Candidates running to replace Prime Minister Boris Johnson barely discus climate change. They offer qualified support for Britain sticking to its goal of reaching “net zero” GHG emissions by 2050. “What it reveals is the gap between politicians and the public,” said Tom Burke, the chairman of E3G, an environmental think tank, and a former government adviser. “The recent sequence of weather events has confirmed the science in the public mind, but politicians, especially on the right, don’t get that.”
In Greece, wildfires led to orders forcing thousands of residents to evacuate their homes in the Mount Penteli area, northeast of Athens.
In the Netherlands, the heat prompted workers to spray water on mechanical metal drawbridges over Amsterdam’s canals to prevent them from expanding, jamming and blocking marine traffic.
In South Asia, more than a billion people endured several months of almost uninterrupted temperatures above 100F. Monsoon rains then affected over 7.2 million people in Bangladesh, submerged over 2,000 villages in India and caused more than 300 deaths in Pakistan. Over 9,000 homes were destroyed in the province of Balochistan, Pakistan.
Experts say that huge investments and new thinking are necessary to offset the effects of climate change, with measures that include the construction of lakes and reservoirs, surveillance of fields by satellite, and something as simple as improved water infrastructure. Concerning climate change, Ms. Magno said “We have to change our approach to the problem, change our mentality to deal with it face on,” she said.
Or not. The State Financial Officers Foundation, a little-known nonprofit organization based in Shawnee, Kan., is orchestrating nearly two dozen Republican state treasurers around the country to thwart climate action on state and federal levels. It opposes regulations that would make clear the economic risks posed by a warming world, lobbying against climate-minded nominees to key federal posts and using the tax dollars they control to punish companies that seek to reduce GHG gas emissions.
Riley Moore, the treasurer of West Virginia, announced that major banks, including Goldman Sachs, JPMorgan and Wells Fargo, would be barred from government contracts with his state because they are reducing their investments in coal, the dirtiest fossil fuel.
Mr. Moore and the treasurers of Louisiana and Arkansas withdrew over $700 million from their accounts with BlackRock, the world’s largest investment manager, due to their opposition to the firm’s concerns about climate change. The treasurers of Utah and Idaho are pressuring the private firms they work with to drop climate concerns and other causes they label as “woke.”
Treasurers from Pennsylvania, Arizona and Oklahoma joined in opposition to thwart the nominations of federal regulators who sought to require that banks, funds and companies disclose the financial risks posed by global warming.
When Biden declared his climate goals, the foundation began pushing Republican state treasurers to use their financial power to promote oil and gas interests and to thwart Biden’s climate agenda. The State Financial Officers Foundation has been working closely with the Heritage Foundation, the Heartland Institute and the American Petroleum Institute, all of which have close ties to the fossil fuel industry. They frame emissions reduction as a threat to employment and revenue and continue to make climate science raw meat for the culture wars.
“This is a departure from their traditional roles,” said Robert Butkin, the former Oklahoma treasurer and a professor at the University of Tulsa. “There used to be a strong nonpartisan and bipartisan ethic among treasurers, but you’ve seen a lot of that erode over the past several years.”
In November, world leaders met in Glasgow along with major banks and corporations and vowed to address the world’s most dire threat. At the same time, Republican state treasurers were meeting at a SFOF conference in Orlando, Fla., talking about ways to stop them. The group’s chief executive, Derek Kreifels, praised a new law that had been signed by Gov. Abbott of Texas, which prohibited state agencies from investing in businesses that had cut ties with fossil fuel companies.
West Virginia passed a similar bill which became law in March. Five major financial institutions, Goldman Sachs, BlackRock, Wells Fargo, JPMorgan and Morgan Stanley, are now barred from doing business with West Virginia because they are reducing their dealings with coal companies.
Kentucky, Tennessee and Oklahoma have passed similar laws this year. “Kentucky joins our growing coalition of states that have taken concrete steps to push back against the woke capitalists who are trying to destroy our energy industries,” Mr. Moore said. Republican lawmakers in more than a dozen other states, including New York, Oregon and Virginia, are pushing similar legislation.
“These officials are using the public finance market to make political statements,” said Daniel Garrett, a finance professor at the Wharton School at the University of Pennsylvania. “They can use these laws as a carrot or stick as they desire, but the costs can be potentially quite large.”
Larry Fink, the BlackRock chief executive, has stated his desire to move away from fossil fuels and toward what he considers a more sustainable, greener economy. “Every government, company, and shareholder must confront climate change,” he wrote in a public letter in 2020 in which he described the integration of climate risk into investment decisions as “a fundamental reshaping of finance.”
In response, Mr. Moore’s office withdrew $20 million of West Virginia’s operating funds from BlackRock. Other treasurers followed suit, including the Arkansas treasurer, Dennis Milligan, pulled $125 million from BlackRock, the treasurer of Louisiana, John Schroder, withdrew more than $600 million. Mr. Schroder said he had also blocked Citibank, Bank of America and JPMorgan from almost $1 billion in bond financing.
Such withdrawals represent a small percentage of BlackRock’s business, but banks and investment firms have expressed concern that the state bans could spread to pension funds, which account for nearly $4 trillion in investments across the country.
The SFOF and Treasurer actions are supported by numerous conservative groups supportive of the fossil fuel industry, and some major Wall Street firms. The Heartland Institute has amplified the treasurers’ message and connected them with influential conservative media personalities including Glenn Beck. The Heritage Foundation has supported such efforts and has long opposed action to combat climate change and is and has been supported by the oil billionaires Charles G. Koch and David H. Koch (now deceased).
The SFOF this year hired CRC Advisors, a conservative strategy firm that was founded by Leonard Leo, which has for years worked to place judges on the federal courts who oppose climate action. Mr. Leo recently received $1.6 billion from a conservative donor, Barre Seid. The SFOF also works with the American Legislative Exchange Council, or ALEC, a conservative group that also is supported by Koch brother money.
“The State Financial Officers Foundation is a key node in a network of political groups waging a coordinated attack on climate policy,” said Jesse Coleman, a senior researcher at Documented, the watchdog organization. The group is working “to weaponize state treasurers’ offices against federal appointees, regulations, and corporate policies that address climate change,” he said.
Many of the treasurers worked to successfully defeat two of Biden’s nominees including Saule Omarova, nominee for comptroller of the currency and Sarah Bloom Raskin, nominated to be the Federal Reserve’s head of bank oversight. Both nominees had expressed support for Biden’s climate goals.
The SFOF and the Heritage Foundation opposed proposals from federal agencies to reduce the threats posed by climate change including the Financial Stability Oversight Council, the Department of Labor, the Office of the Comptroller of the Currency and the Securities and Exchange Commission. The Heritage Foundation worked with dozens of state treasurers and attorneys general from Republican-led states in submitting comments such as: “This special concern for and attention to climate-related risks is irrational.”
Environmental justice applies internationally, nationally, locally and individually. Wealthy nations, states, cities and people have a larger carbon footprint than do the poor who suffer disproportionally. To achieve the goals the US committed to in the Paris Accord (keep warming to 1.5C or below and assist the most vulnerable), the switch from vehicles powered by fossil fuels to EVs must be done on every level. Currently, in the US, EVs are scarce and expensive, but the wealthy can, and must, over-come the obstacles to obtaining them. In time, like solar panels, the cost will come down and be more widely available. The new climate law, Inflation Reduction Act, is a start.
Under the bill, taxpayers can get up to $7,500 in tax credits for purchasing an EV. The bill eliminates a proposed 200,000 cap on manufacturers and extends the tax credit until 2032. The bill restricts the credit to vehicles that are assembled in North America which rules out several EVs made by Hyundai, Porsche, Toyota and Kia.
Only 21 car and truck models, including three from Rivian and a half dozen from Ford, for 2022 and 2023 are eligible to receive the credit if purchased before the end of the year. The Energy Department released a list of vehicles that qualify and guidance is coming from The Treasury Department which is working out the details.
Used cars qualify for a credit of up to $4,000. The used-car market is twice the size of the new-car market and is where most people buy their cars. This credit only applies to cars sold for $25,000 or less. Less than 20% of used EVs fit that category although the supply of secondhand vehicles will grow over time. New-car buyers typically keep their vehicles three or four years before trading them in. Carmakers sold nearly 200,000 new EVs in the US from April through June. As those new cars age, used EVs will become more accessible.
However, many new EVs may not qualify for the $7,500 credits. No later than 2024, the government will begin applying the requirements for how much of a car’s battery must be made in North America with raw materials from trade allies. While several car manufacturers and suppliers have announced plans to build battery factories in the US, this will take time. “Right now with our lack of capacity for materials, I don’t think there is any product that will meet that today,” Carla Bailo, president of the Center for Automotive Research in Ann Arbor, Mich., said of the standards. “Tesla is probably close, but the rest of the manufacturers, no way.”
Imported EVs are also excluded from the tax credit. The provision is designed to protect American jobs and undercuts the price advantage of Chinese brands that are expected to enter the US.
The Act offers new credits and will benefit companies like Tesla and General Motors that have been selling EVs for years and have reorganized their supply chains to produce vehicles in the US. A joint venture between GM and LG Energy Solution will soon open a battery plant in Ohio. Companies like Toyota and Stellantis, which owns Chrysler, Jeep and Ram, face more obstacles because they have not started making or selling large numbers of battery-powered vehicles in the US.
Newer electric car companies, like Lucid and Rivian, make vehicles that may be too expensive to qualify for the credits (after this year). The incentives apply to sedans costing no more than $55,000 and pickups, vans or sport utility vehicles costing up to $80,000. Lucid’s cheapest sedan starts at more than $80,000. Rivian’s electric pickups start at $72,500 but with options may exceed $80,000.
For households earning more than $300,000 annually, or to purchase a Rivian pickup truck or S.U.V. with options that cost over $80,000, you must purchase in 2022 to qualify for the $7,500 credit. In 2023, limits on income and vehicle-price apply.
The bill contains billions of dollars to help carmakers build factories and establish local supply chains. The income limits will encourage carmakers to offer less-expensive vehicles, said Mark Wakefield, co-leader of the automotive and industrial practice at AlixPartners, a consulting firm. “You’re going to see a laser focus on getting below the $80,000 and $55,000 caps.”
Even before these incentives kick in, sales of EVs are robust. Demand for EVs is so strong that models like the Ford Mach-E are effectively sold out, and buyers of Tesla’s Model Y ($66,000) will be delivered between January and April.
Hyundai’s electric Ioniq 5 sells at about $40,000. The cheapest models available from dealers in the NYC area were around $49,000 before taxes. When Tesla began producing its Model 3 in 2017, it was supposed to be the EV for the masses at $35,000. It now costs $47,000. Used EVs are so scarce that popular models like the Tesla Y and Ford Mach-E may cost thousands of dollars more used than they did new.
In May, the Department of Energy offered $45 million in grants to firms or researchers working on batteries that would last longer, to create a bigger supply of used vehicles. Gene Berdichevsky, chief executive of Sila Nanotechnologies, a California company working on next-generation battery technology, predicts that prices will decline as they did with solar cells. Prices for solar panels increased when demand was high, but then steadily declined.
Transportation accounts for 27% of GHG emissions in the US, according to the EPA. Battery-powered cars produce far less CO2 than fossil fuel powered vehicles even accounting for the emissions from generating electricity and from manufacturing batteries.
Vehicles that run on batteries accounted for 5.6% of new-car sales from April through June which is twice the share of a year ago. Carmakers faced shortages of semiconductors which are essential to EVs, and soaring prices for lithium and other raw materials needed for batteries.
“The transformation is real,” said John Lawler, the chief financial officer of Ford, which sold 15,300 EVs from April through June, a 140% increase from a year earlier. Ford is planning a $5.6 billion complex near Memphis to build EVs. Carmakers and suppliers have announced plans to invest more than $500 billion worldwide through 2026 to upgrade factory networks and supply chains. It will take several years for manufacturing capacity to meet demand, but it’s happening.
California will require that all new cars sold in the state by 2035 be free of GHG emissions, with an interim goal of 35% by 2026, and 68% by 2030. Residents there drive nearly 40% of the EVs on the road in the US. Sixteen other states typically follow California’s lead which potentially could reach about a third of the US auto market. New York, Washington and Massachusetts have similar legislation in the works. The governments of Canada, Britain, France, Spain, Denmark and at least 6 other European countries have set goals phasing out the sale of new gasoline-powered vehicles between 2030 and 2040.
The attorneys general of 17 Republican-led states have sued to revoke California’s authority (its Waiver) to issue such rules. Patrick Morrisey, the attorney general of West Virginia and one of the plaintiffs in the lawsuit, called California’s waiver “favoritism” that “violates the states’ equal sovereignty.”
While EV sales in the US are growing fast, Europe and China remain far ahead. Battery-powered vehicles account for more than 10% of new cars sold in Europe and around 20% in China. Government quotas and subsidies play a large role, but there is also a greater selection of lower-priced models.
China has the world’s largest car market. The Chinese automaker BYD also produces batteries, and it sold 70,000 pure EVs worldwide in June alone. In Europe, Tesla trailed Volkswagen, Stellantis and Hyundai/Kia in EV sales during the first five months of 2022.
Tesla delivered more than 254,000 vehicles in the second quarter, down from 310,000 in the first quarter because of supply chain problems. The company said it built more cars in June 2022 than ever in its history, a sign that supply problems are easing.
The bill requires that by 2024 at least 50% of the components in an electric car battery come from the US, Canada or Mexico. And the share of the minerals in batteries that have to come from the US or a trade ally will climb to 80% in 2026, and 100% in 2028.
Regulators will have to determine which components will be classified as Chinese-made. It’s unclear whether the Chinese company CATL, the world’s largest battery maker, will be frozen out of the market if it produces batteries in the US. CATL has been exploring building a factory in the US South to supply Ford Motor and BMW.
The legislation contains other provisions intended to accelerate sales of EVs and reduce GHGs emissions. Money is available to help businesses install EV chargers. This will aid people who do not have garages or driveways where they can install their own chargers.
There are also tax credits of up to $40,000 for electric or hydrogen trucks and buses. Commercial vehicles emit a large percentage of GHGs and harmful pollutants as they spend more time driving than passenger cars.
Ford said in a statement that “While its consumer tax credit targets for electric vehicles are not all achievable overnight, the bill is an important step forward to meet our shared national climate goals and help strengthen American manufacturing jobs.”
On August 16, 2022, Biden finally got to sign climate legislation he has worked toward for the entirety of his presidency. It’s a big deal, several times larger than anything on climate the US has passed into law before. The architects and supporters of the $369 billion in climate and clean-energy provisions in Joe Manchin’s Inflation Reduction Act of 2022, estimate that it could reduce US carbon emissions by 40%, compared with 2005 levels, by 2030, compared with an estimated 30% under current policy. That 10% incremental improvement becomes significant over seven years. Achieving that reduction will move the US closer to reaching its commitment in the Paris Agreement to cut emissions by 50% to 52%. (In 2020, emissions were down 21% from 2005 levels.) The bill may also create nine million new American jobs and save the average American household $1,800 a year in energy costs, too.
The main goal of the legislation is to gradually displace fossil fuels in transportation, electricity, and the industrial and building sectors.
To avoid a Republican filibuster that would have required 60 votes to defeat, Democrats used a special budget process that required only 51 votes to pass. VP Kamala Harris cast the tiebreaking vote in the Senate, sending the bill to the House, which passed it on Aug 12. Under the Senate’s rules for budget bills, only measures related to raising or spending revenue, tax credits, subsidies, grants and the like, could be included in the bill.
The deal provides billions of dollars in tax credits over 10 years for companies that build new sources of emissions-free electricity, such as wind turbines, solar panels, battery storage, geothermal plants or advanced nuclear reactors. Previously, Congress had offered one or two-year credits for wind and solar which created boom and bust cycles. The bill gives companies more certainty.
The bill offers $9 billion in rebates for Americans buying and retrofitting their homes with energy efficient and electric appliances. It includes a decade of consumer tax credits to reduce the cost of heat pumps, rooftop solar, water heaters and electric heating, ventilation and air conditioning. As detailed above, there are numerous incentives promoting EVs.
The bill also expands a tax credit for companies that utilize carbon capture and sequestration from natural gas power plants or other industrial facilities. The bill provides tax breaks to keep existing nuclear plants running. About 13 reactors have closed nationwide since 2013 leading to an increase in emissions when they are replaced by fossil fuels. It provides grants and tax credits for states and electric utilities to reduce CO2 emissions. Billions of dollars are available to decarbonize the production of steel and concrete.
The bill imposes a fee on excess methane leaking from oil and gas wells, pipelines and other infrastructure. Polluters will pay a penalty of $900 per metric ton of methane emissions that exceed federal limits in 2024, increasing to $1,500 per metric ton in 2026.
The legislation strengthens the legal basis for regulating GHGs under the Clean Air Act. When the Supreme Court restricted the ability of the EPA to fight climate change this year in West Virginia vs. E.P.A, it argued that Congress had never granted the agency the broad authority to regulate burning fossil fuels. The bill includes language specifically addressing the Supreme Court’s concern. The new law amends the Clean Air Act to define the CO2 produced by the burning of fossil fuels as an “air pollutant.”
“The language, we think, makes pretty clear that greenhouse gases are pollutants under the Clean Air Act,” said Senator Tom Carper (D-Del) who led the movement to revise the law. With the new law, he added, there are “no ifs, ands or buts” that Congress has told federal agencies to tackle CO2, methane and other heat-trapping emissions from power plants, automobiles and oil wells.
The bill includes clean energy investment opportunities that are being supported by a coalition of labor and business, including manufacturing, auto and power companies. The bill also restores US credibility in international climate negotiations, enabling the country to lead by example and push others to advance their own domestic emissions-cutting programs. Senator Edward J. Markey (D-MA) said the legislation restores American credibility in international negotiations. “You can’t preach temperance from a bar stool, and you can’t ask China, India, Brazil or other countries to cut emissions if we’re not doing it ourselves in a significant way.”
Biden intends to further cut US emissions to at least 50% below 2005 levels by the end of this decade, which is roughly the pace scientists say the global community must follow to limit global warming to 1.5C (2.7F) above preindustrial levels. Beyond this threshold scientists say the likelihood of catastrophic floods, fires, storms and drought increases significantly. The planet has already warmed by about 1.1C over the past century and is experiencing such natural disasters.
The bill “keeps us in the climate fight and makes it possible that executive action, state and local government policies, and private sector leadership can get us across the finish line,” said Jesse Jenkins of Princeton University, who modeled the effects of earlier versions of the legislation. “Without this bill, we’d be hopelessly far from our climate goals.”
Diplomats and climate experts said they hoped the deal will revitalize international efforts to tackle global warming, which was derailed by Trump and then by the war in Ukraine and surging oil prices which caused many countries to shore up fossil fuel supplies. The global community is far from doing what it must to meet the 1.5C target, but leaders are scheduled to meet in Egypt in November to resume discussions. “We all needed good news,” said Tina Stege, the climate envoy for the Marshall Islands, which is at risk of disappearing beneath rising seas. The announcement of a climate deal “puts much-needed wind in our sails,” she said, but “we remain far from where we need to be.”
Senate Republicans unanimously opposed the legislation. “It is nothing short of an attack on the American family,” said Senator John Barrasso (R-WY). “If we want to reduce inflation, lower energy costs, and cut the deficit, the recipe is clear. Congress should cut spending and unleash American oil and natural gas production.”
Many companies see economic opportunities due to the bill. QCells, a South Korean-based solar company is building a $171 million assembly factory in Dalton, Ga., and is planning a multibillion-dollar expansion of supply chains in the US.
The bill includes $60 billion to address the disproportionate burden of pollution on low-income communities and communities of color. This includes grants for zero-emissions technology and vehicles, as well as money to mitigate the negative effects of highways, bus depots and other transportation facilities, along with construction projects located near disadvantaged communities. The bill provides $27 billion for a “green bank” as financial support for clean energy projects, particularly in disadvantaged communities.
As the agricultural sector generates about 11% of the GHGs emitted by the US, the bill provides $20 billion for programs to cut emissions that come from cows and other livestock, as well as from agricultural soil and rice production.
The most immediate effect of the bill will be to enhance the growth of wind turbine, solar panel and EV production in the US. Renewable energy production has slowed significantly this year, due to pandemic-related disruptions, trade disputes and uncertainty about federal policy. “The entire clean energy industry just breathed an enormous sigh of relief,” said Heather Zichal, chief executive of the association. “This is an 11th-hour reprieve for climate action and clean energy jobs.”
The bill provides some support for fossil fuels, a concession necessary to win support from Sen. Manchin of West Virginia, which is rich in natural gas and the nation’s second-largest producer of coal. The bill mandates new lease sales for oil drilling in the Gulf of Mexico, despite Biden’s promise to halt such sales as a presidential candidate. The bill includes a rule that the government can auction new offshore wind leases only if, within the past year, it also auctioned new oil and gas permits, an all-inclusive approach inconsistent with the International Energy Agency’s recommendation that no new investments in fossil-fuel infrastructure is permissible if the world is to have any chance of limiting warming to 1.5C from preindustrial levels.
“It is truly all of the above, which means this bill does not arbitrarily shut off our abundant fossil fuels,” Manchin said. He called the package “a “realistic energy and climate policy.”
As part of the agreement, Manchin said both Biden and Speaker Pelosi had committed to get Congressional approval of a separate measure addressing the permitting of energy infrastructure, likely including natural gas pipelines, before the end of the fiscal year on Sept. 30. That could enable a project Manchin has a personal interest in, the Mountain Valley Pipeline, which would carry more than two billion cubic feet of natural gas per day out of the Marcellus shale fields in West Virginia and through southern Virginia. Manchin is a millionaire due to his family coal business and he has accepted more campaign cash from oil and gas interests than any of his colleagues as he is the chairman of the Senate energy committee.
Even so, “the bill is still absolutely worth it for climate change,” said Leah Stokes, a professor of environmental policy at the University of Santa Barbara, California, who had been advising Senate Democrats.
The bill provides $60 billion for clean energy manufacturing in the US, including $30 billion in production tax credits for solar panels, wind turbines, batteries and critical minerals processing and $10 billion in investment tax credits to build manufacturing facilities for EVs and renewable energy technologies. The bill invests $500 million through the Defense Production Act for heat pumps and critical minerals processing.
“We must stop pretending that there is only one way to combat global climate change or achieve American energy independence,” Manchin said in a statement. “As the superpower of the world, it is vital we not undermine our superpower status by removing dependable and affordable fossil fuel energy before new technologies are ready to reliably carry the load.”
The mining industry in West Virginia has declined sharply over the past decade as electric utilities have closed hundreds of coal plants nationwide due to inexpensive natural gas and renewable power. More coal plant closures are likely with the passage of the bill. “Our preliminary estimates indicate that West Virginia would be one of the states with the largest number of coal retirements due to the wind and solar tax credits,” Michelle Bloodworth, chief executive of America’s Power, an industry trade group, said.
There are more former coal miners in West Virginia than current coal miners and the bill will undoubtedly help them, said Phil Smith, the top lobbyist for the United Mine Workers of America. He praised the permanent funding for the Black Lung Disability Trust Fund. Mr. Smith said the bill’s $4 billion in tax incentives for renewable energy manufacturers to build their factories in former coal fields would directly help the approximately 45,000 miners nationwide who have lost their jobs in the past decade.
Manchin’s spokeswoman, Sam Runyon, pointed to $5 billion in the package that would allow existing coal-fired power plants to improve their efficiency and adopt environmental controls like scrubbers, which remove pollutants from smokestacks. Those measures to help the coal industry, she noted, are in addition to $8.5 billion for carbon capture and storage that Manchin secured as part of a bipartisan infrastructure bill last year.
Natural gas pipeline companies have dramatically increased their contributions to Manchin, from just $20,000 in 2020 to more than $331,000 so far this election cycle, as tallied by the Center for Responsive Politics. NextEra Energy, a utility giant and stakeholder in the Mountain Valley Pipeline, is a top donor to both Manchin and Senator Schumer (D-NY), who negotiated the pipeline side deal with Manchin. Schumer has received more than $281,000 from NextEra this election cycle. Equitrans Midstream, which owns the largest stake in the pipeline, has given more than $10,000 to Manchin.
Carl Howard, Co-chair Global Climate Change Committee
The views expressed above are my own. Thanks to Teraine Okpoko who assisted me with Facts on the Ground.
Follow me on Twitter @Howard.Carl