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Biden Announces New Energy Policy

During a speech on July 14th Presidential Candidate Joe Biden announced a proposed plan to tackle climate change in America as a part of his manifesto for the election later this year. Mr Biden promises to tackle both the climate crisis and the strong racial disparity prevalent in the US which in turn will aid economic growth. In his plan Biden emphasises the need for green infrastructure in America, which will reportedly create thousands of jobs and strive for prosperity.

Current initiatives tackling climate change in America

One would think political talk on tackling climate change in America to be merely a passing comment due to the inertia of the current American Federal Government combined with America being the largest cumulative contributor in the world for carbon emissions, but change is occurring at both a city and state level.

Howard Harris, a representative from the DC Sustainable Energy Utility (DCSEU), said of his work on low income and market rate energy projects for the housing sector “In the Fiscal year of 2020 alone there have been numerous lighting, gas and boiler projects which have saved $500,000, which was immediately invested back into the community” he pointed out that as these installations reduced gas consumption by 15% the work had “saved money on bills for the community”. These results alone show the sizeable impact on living standards for low income citizens that de-centralised green energy can have, providing them with higher amounts of disposable income as well as creating a cleaner environment for them to live in. Howard believes that there has been a rising synergy between utility companies and DCSEU and there are hopes of cohesion and collaboration in order to achieve carbon neutrality in the US by 2050. Washington DC are also currently obtaining the majority of their energy from nuclear power stations and hope to exclusively use carbon free nuclear energy by 2035.

The geographical variance of energy sources in America requires rigorous policies to implement the least harmful, most cost-efficient renewable energy source. For example, the location of Vermont provides the state with an abundance of sunlight as well as substantial land space making them a prime location for the development of Solar Power. Vermont Energy Investment Corporation have begun a project in Vermont that would enable the state to obtain 20% of their electricity from solar energy by 2025. Simultaneously Burlington, Vermont are already running on 100% renewable energy which is sourced from hydroelectric Power in Quebec.

Climate plans accross the globe

A selection of countries have signed the Paris Agreement, which was adopted to address climate changeacross the globeand although the US initially signed the agreement as of December 2019they have fully resigned their support of the pact. This change of heart was reportedly motivated by acting President Donald Trump, who considers the Agreement as a burden on the US economy and citizens of the country.

Canada is a world leader in tackling climate change, utilising a rigorous plan to achieve results similar to Biden’s aspirations. The International Institute for Sustainable Development (IISD) have released a report titled ‘Why Low-Carbon Renovation is a Pragmatic Recovery Plan’ in which they have commented that Canada will create 660,000 jobs by 2025 and 6 million jobs by 2060 on the back of clean energy development.

The International Monetary Fund (IMF) confirmed that imposing a carbon tax is the most effective way to combat climate change and the Nordic countries are a shining example of the results one could achieve with carbon tax as Denmark, Sweden, Iceland and Finland began their fight against climate change nearly three decades ago. In 1990 Sweden introduced a carbon tax but simultaneously reduced income tax. The main argument against carbon tax is the increased prices of goods and services for consumers, however as Sweden reduced income tax simultaneously with the introduction of the carbon tax consumers were not affected and the measures did not cause an economic slump. Since 1991 Sweden has seen a 26% drop in fossil fuels.

Biden’s climate plan

There are many long-term outcomes for the climate plan which Biden has proposed that will directly and indirectly impact the economy and society of the US.  His leading policy to escalate the use of American made energy, mainly through wind and solar is a method corporations have already begun to implement, due to the extremely competitive economies of the power sources. The benefits Vermont and Washington DC alone have witnessed through the adoption of renewable energy sources have included employment, economic growth and increased standards of living in low income areas.  A by-product of the growth of various institutions focused on developing green energy has elevated economic growth by creating jobs at a national level and the impact of a Federal institution who will subside and support green infrastructure in a sector that is already creating many jobs and positive results will encourage economic growth at a larger scale. Biden’s plan to invest in green infrastructure will also facilitate the speed at which America will meet Carbon Neutral targets.

In addition to implementing green infrastructure, Biden has promised to upgrade 4 million buildings and create 1 million sustainable homes within the first term of his presidency. Economies of scale will be fulfilled through the investment of creating resilient buildings and homes as there will be a significant reduction of costs in property damage and insurance. Building a significant amount of homes and buildings could be expected encourage the growth of the job market and consequently encourage GDP growth. According to US Government statistics, following COVID-19 unemployment rates have reached 13.0%, equivalent to a loss of 14 million jobs in May 2020, it is therefore important for countries across the globe to implement policies that will aid economic growth following the coronavirus induced recession. Biden’s climate plan illuminates the ways in which the job market can benefit from a green revolution, highlighting how employment levels can be rectified post COVID-19 whilst also tackling climate change.

The social divide between racial groups remains prevalent within America and Biden has promised to tackle racial disparity and injustice through his climate plan by promising that communities that have suffered the most from air pollution will be the first to benefit from his investments. However, the long-term disadvantages associated with investment in low income areas may eventually be detrimental to the citizens. Investing in low income areas will inevitably increase land value in the long term as the standard of living increases. While Biden has outlined the need for energy equity there is also a need for economic support and equality for those low income areas when land value begins to increase. It will be important for the Government to look at how they will support individuals when it comes to possible increased rent payments or mortgage payments.