Climate Change Weekly #518: The High Cost of the Biden/Harris IRA Climate Rules

IN THIS ISSUE:

• The High Cost of the Biden/Harris IRA Climate Rules
• Modern Sea Level Rise Not Unusual for the Holocene
• Post-Paris Decarbonization Is Going in the Wrong Direction

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The High Cost of the Biden/Harris IRA Climate Rules

The Inflation Reduction Act (IRA), passed on August 16, 2022, contained billions of dollars in spending on green energy initiatives intended to reduce greenhouse gas emissions in order to fight climate change. A new analysis of the literature by Tim Benson of The Heartland Institute suggests the bill’s cost is much higher than the Biden/Harris administration claimed it would be, while the impacts on climate change are unmeasurable or inconsequential.

The IRA allocated billions of dollars in support for “green” or zero carbon dioxide emitting (during operation, at least) energy sources such as wind and solar power, as well as battery storage, electric vehicles (EVs), and their chargers, largely although not exclusively in the form of tax credits.

The bill, which passed without a single Republican vote in support, was touted by Congressional Democrats and the Biden/Harris administration as good for job creation and carbon reduction. The administration said the green subsidies would cost about $369 billion, bragging that it was “the most significant action … taken on clean energy and climate change in the nation’s history.” As is typical of government programs, the estimated costs were radically undercalculated, with the actual costs being much higher, as determined by multiple independent organizations and agencies.

Benson writes,

In November 2022, Credit Suisse estimated total federal spending on these provisions would be more than $800 billion, double the Biden administration’s claims. An estimate from the Joint Committee on Taxation from April 2023 put the spending figure at $515 billion between 2023 and 2033. Also in April 2023, Goldman Sachs estimated the IRA’s spending incentives at $1.2 trillion through 2032. In a March 2023 report, the Brookings Institution produced a range between $900 billion and $1.2 trillion through 2031. The Committee for a Responsible Federal Budget’s February 2024 cost estimate was $870 billion through 2031. An estimate from the Cato Institute in March 2024 found the cost of the IRA’s green subsidies could be north of $1.8 trillion over a decade.

The true cost of these green subsidies is anyone’s guess, but it is a practical certainty that they will come in far higher than originally proclaimed. We know this because the last federal budget before the incorporation of the IRA—fiscal year (FY) 2024—contained a ten-year cost projection for green energy subsidies that was only $145 billion, while the FY 2025 budget—which does incorporate the IRA—saw the cost of these subsidies balloon to over $1.1 trillion. This clearly suggests the true price tag of the IRA’s green subsidies will be closer to $907 billion than $369 billion.

Talking about true costs, these figures are just government spending. It does not account for the opportunity costs hampering economic development and entrepreneurial activity, resulting in malinvestment in subpar or unnecessary technologies driven by political considerations rather than consumer demand.

Nor does it take into account the hundreds of billions in green spending under the earlier-enacted Bipartisan Infrastructure Law. Looking at just one program funded in that law, the nearly $7.5 billion National Electric Vehicle Infrastructure (NEVI) program, provides a case study in the high and rising costs and limited benefits.

In May of 2024, more than two-and-a-half years after the law came into effect, Reason and other outlets reported that despite $7.5 billion dedicated to developing a planned 500,000 EV charging stations across the nation, only eight stations had been built, tantamount to $937.5 million per station. In early August, the online trade journal Inside EV fact-checked those figures, trying to argue the program was wildly successful. It found only $2.5 billion in EV charger funding had been delivered to the states so far, leading to the construction of 15 NEVI funded stations, each with multiple charging, providing 61 federally funded chargers in total.

That’s so much more encouraging. That amounts to $160 million per station, or $39 million per charger. And that’s for level two chargers, by the way, which take six to eight hours to provide a full charge. This is orders of magnitude greater than the cost of privately installed level two chargers at $400 to $6,500, and more than nine times the cost of the most expensive Level 3 charging system at approximately $45,000 per unit, although Level 3 chargers can be found for just $12,000 per unit.

Leave it to government to pay 97,500 times more for EV chargers than the private sector can provide them for. The EV charger extravagance makes solid gold toilets and million-dollar wrenches seem cheap in comparison. If one is concerned about climate change (or homelessness, health, or wildlife) one wonders how much low-cost energy-efficient low-income housing one could build for that money, or how many trees could be planted or ecosystems restored, or how many cancer patients could be treated, or hospitals built.

Building upon that record of “success,” after announcing it was releasing an additional $521 million in grants to build out the NEVI network (about 3 ½ charging stations or 13 chargers, based on the government’s buildout so far) the Biden/Harris administration bragged that 192,000 public EV chargers now exist, with about 1,000 new chargers being added each week. Other than pushing the use of EVs, however, Biden/Harris government support has almost nothing to do with those stations. In fact, if anything, it shows there has never been any need for government to involve itself in the EV charger buildout. The private sector, for its own reasons, is building out the network, at a fraction of the cost of government efforts.

As an aside, I did a little back-of-envelope calculating to put the relative range and cost benefits driving the government’s push for EVs in perspective. There are currently about 3.3 million EVs in the United States, served likely by an equal amount of home or office charging stations (I doubt a person or business would buy an EV unless they could charge it at home or at their place of business), in addition to the 192,000 public stations. Just looking at the public stations, that amounts to about 17 vehicles per public charger. Yet, range anxiety is still among the top two factors (cost being the other) cited by potential vehicle purchasers for not considering EVs. By contrast, there are approximately 275.6 million gasoline and diesel vehicles licensed in the United States, fueled by nearly 197,000 gas stations. Despite the fact that there are 1,402 or so vehicles per gas station, rather than 17, range anxiety doesn’t seem to be dissuading buyers of internal combustion engine vehicles. Indeed, relatively fuel-inefficient trucks still top the annual list of new vehicle sales. And few people, aside from farmers, have personal gas pumps at their homes.

In the end, the federal government’s green energy programs are an increasingly expensive and unnecessary boondoggle. No climate change is averted, as if humans even had the ability to control climate, and peoples’ dollars are wasted for technologies the private sector can and is providing on its own to the elites who are really demanding (and benefitting with tax credits for) it.

Sources: Heartland Impact; Reason

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Modern Sea Level Rise Not Unusual for the Holocene

A recent study published in The Journal of Island and Coastal Archaeology reaffirms the fact that recent sea level rise is well within the normal historical range and in fact much slower than was occurring 8,200 years ago, when average sea levels rose as much as 6.5 meters over a span of approximately 140 years. As No Tricks Zone notes, discussing how this compares to contemporary sea level rise,

This is 470 centimeters per century, 4.7 centimeters per year, during a period when CO2 levels were alleged to be a “safe” and stagnant 260 ppm.

To put this change rate in perspective, global sea levels rose at a rate of 1.56 millimeters per year from 1900 to 2018, including 1.5 mm per year rate during the more recent period from 1958-2014. … This is just under 16 centimeters per century or sixteen hundredths of a centimeter (0.16 cm) per year.

The focus of the study’s international team of 14 authors from universities and research institutes in Australia, Brazil, and Japan was not sea level rise per se, but rather a history of the Ngurunderi peoples of South Australia, as detailed in their oral history, concerning their settlements, flood history, and resettlements from islands off the Fleurieu Peninsula, some of which were connected to the mainland when seas were lower.

The rapid flooding at the time separated the present islands from the mainland, created a peninsula, submerged their homes, and forced the Ngurunderi to relocate.

The rate of sea level rise has increased and slowed over decades, centuries, and millennia since the end of the most recent interglacial, all without human influence. The Earth’s natural range of sea level rise reached nearly two inches a year for a relatively short period of time, but averaged half an inch per year for thousands of years, much greater than the 0.156 cm per year rate measured from 1900 to 2018, a rise to which human CO2 emissions are supposedly contributing.

Sources: The Journal of Island and Coastal Archaeology; No Tricks Zone

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Post-Paris Decarbonization Is Going in the Wrong Direction

Roger Pielke Jr., Ph.D., a professor at the University of Colorado at Boulder, undertook an analysis of the decarbonization targets in the Paris climate agreement, and the success so far of various countries and the world as a whole in hitting various interim targets.

Pielke found almost every country, and certainly every country that significantly contributes to the overall anthropogenic share of CO2 emissions, has missed its emissions reduction targets so far, with overall emissions rising, although at a slower rate than before Paris. At this rate, the Paris 2050 commitments will not be met.

Pielke writes,

In 2015, countries around the world met in Paris at the 21st Conference of Parties to the U.N Framework Convention on Climate Change (UNFCCC) where they agreed to limit global temperature increases well below 2 degrees Celsius by 2100. …

Today, I evaluate the effects of the Paris Agreement on decarbonization by comparing rates of decarbonization for the 8 years before the Paris Agreement to the 8 years following—for the top 20 emitting countries and the world overall. This evaluation seeks to identify an acceleration of decarbonization rates (that is, a reduction in the ratio of carbon dioxide emissions to GDP). Such acceleration is necessary if the world is to achieve ambitious targets for global emissions consistent with the temperature targets of the Paris Agreement.

Let’s start with a topline number—8.1%.

That is the annual rate of decarbonization necessary globally to achieve an 80% reduction in global carbon dioxide emissions by 2050, assuming an annual global GDP growth rate of 2.5%.

Looking at the top 20 CO2 emitting countries, which were responsible for approximately 81 percent global human emissions in 2023, Pielke found the decarbonization rates were virtually unchanged eight years after Paris, with overall global CO2 emissions rising slightly (despite trillions of dollars spent on various decarbonization policies, I might add). With nearly a quarter of the 2015 to 2050 target period having passed, the world’s rate of decarbonization amounts to approximately 2 percent annually, far below the 8.1 percent needed to hit the 2050 targets.

“No individual country among the top 20 emitters is anywhere close to the 8.1% annual rate of decarbonization implied by the Paris Agreement,” writes Pielke. “Note that the 8.1% grows larger every year that the world does not meet the required decarbonization rate.”

Interestingly, the oil sheikdom UAE, with a 2.98 percent change in its decarbonization rate before and after the Paris agreement, led the top 20 emitting countries in reducing its emissions per unit of GDP. Brazil (2.91 percent) and Saudi Arabia (2.65 percent) had the second and third largest increases in their decarbonization rates. The United States showed a meager increase in decarbonization of 0.03 percent, despite spending far more than any other country (by hundreds of billions of dollars) on programs and schemes to reduce carbon dioxide emissions in its agriculture, energy, housing, and transportation sectors.

Although 14 of the top 20 emitting countries improved their rates of decarbonizing post-Paris, six did not, with the latter countries’ emissions of carbon dioxide growing per unit of GDP. Those six countries account for 41.4 percent of global emissions, so the annual rate of decarbonization globally improved by an almost negligible 0.01 percent since 2015. Indonesia, Russia, and China had the largest reversals in decarbonization over the period, with each country increasing its carbon dioxide output per unit of GDP by more than 2 percent annually.

I suspect the slow decarbonization rates in industrialized nations are due to a few key factors. As their economies have grown, energy use has increased even as carbon dioxide intensity has declined. In addition, data shows fossil fuels remain the mainstay of their energy and transportation sectors: despite the growth in wind, solar, and EVs, fossil fuels still provide more than 80 percent of the energy they use.

Also, in the early stages of industrialization and development, emissions rise, but as economies mature, energy efficiency increases. Most developed countries began adopting lower-emitting and more fuel-efficient technologies and programs decades ago, so the low-hanging fruit has already been taken. The costs for each gain in emissions reduction are significantly higher for them than for their developing-country counterparts, and their citizens are increasingly bucking or rejecting the higher costs that bring barely measurable results.

Pielke summarizes the results showing slow or nearly nonexistent gains in decarbonization rates in most countries despite trillions of dollars spent:

Bottom line: At the global level, data on decarbonization from 2006 to 2023 shows no global effect of the Paris Agreement. At the individual country level, 14 countries show evidence of accelerated rates of decarbonization, but remain far off rates required to hit the Paris Agreement targets.

Source: The Honest Broker