Politically Connected Piggies at the Trough for ‘Inflation’ Bill
Climate Change Weekly #443
The corporate media was effusive in its praise for the Schumer-Manchin green energy bill, grossly mislabeled the Inflation Reduction Act (IRA). As history attests and the last two years of profligate federal spending confirmed once again, government spending increases inflation instead of reducing it. When was the last time Congress increased spending while simultaneously reducing inflation? I’m waiting for your answer.
As implausible as the inflation reduction staging of the Democrats’ pork-filled bill of special-interest fodder is, the claims being made about its effect on greenhouse gas emissions are pure fantasy. The media keep parroting the claims by Senate Democrats and the White House that this bill will reduce U.S. carbon dioxide emissions by 40 percent by 2030, less than seven-and-a-half years from now (long after Biden and most of those passing it have left office). The media has called this this bill a “breakthrough,” “astonishing,” and the “[b]iggest US Climate Legislation Ever.”
I have well-known doubts about claims the United States must reduce its greenhouse gas emissions. My assessment of the evidence indicates continued fossil fuel use will not cause a planetary emergency or anything like it. The best evidence further shows the policies imposed to restrict fossil fuel use will unnecessarily restrict freedom and impose higher costs on the economy than the harms they are meant to prevent. Having said that, I’ll admit I could be wrong.
What I am almost certainly not wrong about is that to hit the 40 percent reduction target, every regulation resulting from the bill and every dollar spent on subsidies will have to have the effect its authors say it will. People and companies will have to do exactly what Democrat senators expect of them and produce perfect results. Every electric car the bill can possibly subsidize must be built, purchased, and operate perfectly although they never have in the past. Every carbon-capture and -storage project must reduce emissions by the amount projected at economically competitive costs, although they never have in the past. Every wind and solar installation and the thousands of miles of transmission lines must be built quickly and operate at full capacity, although they never have in the past. Every building upgrade and high-efficiency appliance subsidized must be undertaken, completed or purchased, and function just as envisioned, although they never have in the past.
In other words, for the first time in history, Congress will have to have written a bill that functions perfectly as designed, with no human error, no state or local resistance, no lobbying undercutting the bill’s effect, no delays in construction, and no unintended costs or consequences. No perfection, no 40 percent reduction.
When was the last time anything designed by human minds, much less any policy imposed by government, worked perfectly as intended? I’m waiting for your answer.
The inducements the government is giving people to encourage us to buy electric cars, for example, are obviously unlikely to work. Electric vehicles are substantially more expensive than the more-capable vehicles powered by internal combustion engines (which are also far less prone to combust spontaneously). Research shows the average annual household income for those purchasing electric vehicles is more than $200,000. Ninety percent of the federal tax credit money for electric vehicles thus far has gone to Americans in the top 20 percent of income earners. That’s making the rich richer through a government program that makes the poor poorer.
Of EV purchases, many are second vehicles—after all, the wealthy can afford to keep an extra vehicle for use when they want to virtue-signal their green attitudes. Even then, when it is time to purchase a new vehicle, more than 20 percent of EV buyers switch back to fossil fuel powered cars and trucks.
The evidence shows EV tax credits represent nothing more than a giant transfer of wealth from low- and middle-income working people to the wealthy.
In statements about the bill, its Democratic shills say things will be different this time and the EV credits will benefit average people, in part by limiting the tax credits to the purchase of lower-cost EVs and by setting income limits on the households that can claim the credits.
That doesn’t solve the fundamental problem. EV prices are rising faster than those of gasoline and diesel powered vehicles, because of inflation and supply chain problems. If a low- or middle-income family, say somewhere in the range of $30,000 to $50,000 annual household income, couldn’t afford an EV that cost $10,000 to $15,000 more than a comparable fossil fuel powered model under the old subsidy scheme, they certainly won’t be able to afford the even-higher-priced EV now. Prices overall are increasing and draining the budgets of lower-income people, and the $7,500 EV credit hasn’t changed. That won’t enable more people to buy more-expensive vehicles that are difficult to keep powered absent widespread availability of additional expensive charging equipment. It will in fact do the opposite.
The news is even worse for those hoping the bill will reduce greenhouse gas emissions by causing widespread adoption of EVs. The auto industry is warning that provisions in the bill intended to shore up labor’s support for it will cut or eliminate the subsidies for most people. The Associated Press writes,
The auto industry is warning that the vast majority of EV purchases won’t qualify for a tax credit that large.
That’s mainly because of the bill’s requirement that, to qualify for the credit, an electric vehicle must contain a battery built in North America with minerals mined or recycled on the continent.
And those rules become more stringent over time—to the point where, in a few years, it’s possible that no EVs would qualify for the tax credit, says John Bozzella, CEO of the Alliance of Automotive Innovation, a key industry trade group. As of now, the alliance estimates that about 50 of the 72 electric, hydrogen or plug-in hybrid models that are sold in the United States wouldn’t meet the requirements.
“The $7,500 credit might exist on paper,” Bozzella said in a statement, “but no vehicles will qualify for this purchase over the next few years.”
The AP notes, “the idea behind the requirement is to incentivize domestic manufacturing, build a robust battery supply chain in North America and lessen the industry’s dependence on overseas supply chains that could be subject to disruptions.” These are laudable goals that I have long endorsed. The critical minerals and rare earths necessary to make EVs are also critical for other technologies throughout modern society. Those supplies, however, are controlled by often-hostile economic and geopolitical rivals, primarily China and corrupt regimes such as those in Myanmar and the Congo, countries where their production is tied to horrible human rights abuses such as child and slave labor, and their mining and refining causes massive environmental destruction and harm to human health.
Even so, costs are not the primary factor limiting the production of the materials and finished products such as batteries and other parts for electric vehicles in the United States. Regulations are the big impediment, and under Biden they are getting more stringent, not less. It is nearly impossible to open a new mine in the United States, especially one that will involve the kind of environmental disruption necessary to tease out small particles of rare earths and critical minerals from the massive amount of overburden containing them. Even when the federal government approves a mine (rare in itself) with all necessary permits being granted, each mine faces dozens of lawsuits from environmental radicals and locals hoping to get it stopped. This delays mine projects for years and adds to the cost of bringing to market the minerals, much less the finished products using them. To hit the IRA’s targets, the mines would have to be open and operating now, not 10 years from now.
Environmental regulations also make it almost impossible to open a plant to refine rare minerals, even if they are mined here. Rare minerals mined outside of China almost always end up in China for refining. A July 2022 report from the Brookings Institution states,
China is the dominant player in global mineral processing. …
A best-case scenario would be characterized by geographic diversification of critical minerals supply chains, coupled with globally aligned statutory due diligence requirements to make these supply chains cleaner and greener. This would see the U.S. and Europe making considerable investments in and successfully building out their critical minerals supply chains, from mining to battery manufacturing. It would also entail China instituting mandatory due diligence requirements on critical minerals sourcing and global coordination among major players, including Beijing, Washington, and Brussels, to align these requirements. …
As things stand, this best-case scenario looks unlikely. Considerable investment would be needed to build out critical minerals supply chains in the U.S. and Europe. Current planning, including that undertaken by the Biden administration in the U.S., is a step in the right direction, but it is unclear whether it is commensurate with the scale of the challenge.
Indeed, contrary to Brookings’ assessment and Biden’s rhetoric, the Biden administration is imposing new climate regulations on infrastructure development that are likely to make getting federal permits for mining and for industrial facilities even more difficult and expensive. Former President Donald Trump set hard limits on the time agencies had to process permits, and he limited the scope of environmental reviews to direct impacts. Biden has rescinded these changes. There simply isn’t enough federal financial support in the Schumer-Manchin monstrosity to encourage companies even to try to overcome the regulatory hurdles, much less start production in time to hit the 2030 emission reduction targets.
Those are the complications impeding just one, small portion of the IRA’s numerous provisions that must be successful if the bill is to reduce greenhouse gas emissions by 40 percent by 2030 as advertised.
Time and space don’t permit me to go through all the subsidies for green energy and infrastructure schemes contained in the bill, but they are just as likely to fail as the EV tax credits and for similar reasons.
The 40 percent reduction claims are pure wish fulfillment for alarmists, a way to claim “we won.” They will prove at least as false as the bill’s name.
IN THIS ISSUE …
CANADA’S TRUDEAU TARGETS FOOD FOR CLIMATE CUTS … ELECTRIC BUSES MANDATED, THEN WITHDRAWN AFTER FIRE IN CONNECTICUT
CANADA’S TRUDEAU TARGETS FOOD FOR CLIMATE CUTS
Not content to throttle the country’s energy industry with climate change regulations, Canadian Prime Minister Justin Trudeau intends to use climate regulations to hamstring the nation’s farmers, the National Post reports. Canada is following the lead of the Netherlands, Ireland, and Sri Lanka, where in the latter case harmful agricultural restrictions caused a 50 percent decline in farm production in single year, followed by riots and the fall of the government.
Trudeau has told Canadian farmers and ranchers they must cut back their greenhouse gas emissions. Specifically, the National Post says, “the government has set a goal of reducing greenhouse gas emissions from fertilizer use by 30 per cent as part of its overall effort to reduce Canada’s emissions by 40 to 45 per cent by 2030.”
In response to this threat announcement, Saskatchewan Agriculture Minister David Marit said, “We’re really concerned with this arbitrary goal,” the National Post reports. “The Trudeau government has apparently moved on from their attack on the oil and gas industry and has set their sights on Saskatchewan farmers.”
As the National Post notes, “Energy and food [are] the twin essentials of life and security.” If Trudeau’s policies come to fruition, it will probably mean a painful economic decline for Canada and further food and energy insecurity for its people and others around the world.
SOURCE: National Post
ELECTRIC BUSES MANDATED, THEN WITHDRAWN AFTER FIRE IN CONNECTICUT
Although Connecticut’s greenhouse gas emissions amount to far less than 0.1 percent of total global annual emissions, Gov. Ned Lamont signed the Clean Air Act on July 22 in a public ceremony to show his leadership on climate action to save the planet.
The Manhattan Contrarian reports a central feature of the state’s Clean Air Act “is to electrify the state’s fleet of vehicles, particularly its city buses and school buses.” The new law bars the purchase of new diesel-powered buses after 2023.
“There are approximately 800 buses that we are responsible for at the DOT that are being replaced with no-emissions electric models,” said state Transportation Commissioner Joe Giuletti at the July 22 event. “They’re quieter, they emit no emissions, and they last longer.”
Last longer? That’s an untested assumption at best, and based on the limited experience thus far it is dubious.
Notice Giuletti didn’t say the buses are safer. On January 23, just one day after Lamont’s green virtue signaling event, one of the state’s “pilot program” fleet of 12 electric buses burst into flames while sitting unused in a parking lot in Hamden, Connecticut. The bus was out of service at the time, sitting idle, minding its own business, you might say, when it spontaneously combusted. Because of the particular chemistry of the lithium-ion batteries that power the EV buses, the fire department had to let the inferno burn out on its own.
“Lithium ion battery fires are difficult to extinguish due to the thermal chemical process that produces great heat and continually reignites,” Hamden fire officials said, according to the Manhattan Contrarian.
State officials, who had been praising the EV bus transition only the day before, immediately pulled Connecticut’s remaining EV bus fleet from service. In this instance, they put public safety above green virtue-signaling. The New Haven Register quoted state transit spokesman Josh Rickman as saying, “The importance of rider safety is demonstrated by taking these buses out of service and ensuring an investigation is completed prior to any redeployment of the fleet.”
The state’s 12 EV buses, the shining example of an explosive future, were replaced with good, old, reliable, less-expensive diesel buses that were pulled out of mothballs and put back into service.
If all of Connecticut’s emissions from all sources went away tomorrow, it would have no measureable impact on climate change. None. Zero. Connecticut’s officials should never have been playing Russian roulette with the state’s school children and public transit riders. Yet that’s just what they did.
As I detailed in previous Climate Change Weekly posts (here, here, and here, for example), EV cars, buses, and scooters in the United States and around the world have long been known to endanger the public by spontaneously combusting or by stranding emergency personnel during emergency calls when their batteries run down. For a government to put its citizens or residents at risk to score green brownie points, even for a moment, is unconscionable.