Biden waffled in the first presidential debate of the general election season on whether his climate plan was the “Green New Deal” or the “Biden plan” despite his campaign website saying, “Biden believes the Green New Deal is a crucial framework for meeting the climate challenges we face.” Democratic nominee Biden said, “The Green New Deal is not my plan.” But a moment later, he said: “The Green New Deal will pay for itself as we move forward. You’re not going to build plants that in fact are great polluting plants.” After the debate, Massachusetts Senator Ed Markey said, “The liberal left is with Joe Biden, and we will pass a Green New Deal.” Markey made that claim despite Moderator Chris Wallace asking Biden, “You support the Green New Deal?” and Biden replying “No, I don’t support the Green New Deal.”
Mr. Biden is setting aside $2 trillion for his climate plan, which is supposed to replace fossil fuels on the electrical grid by 2035—10 years earlier than California’s state goal— and achieve net-zero emissions by 2050. During the debate, Biden vowed to rejoin the Paris climate accord and to pressure Brazil to stop land clearing in the Amazon. President Trump then told the viewers that the estimated cost of the Green New Deal was more like $100 trillion.
Transforming the U.S. Energy Sector
The cost of transforming the U.S. electrical system, which currently gets 62 percent of its power from coal and natural gas plants that are in perfectly good operating condition and replacing them with non-carbon emitting generating resources—most likely wind and solar power—and obtaining the necessary grid upgrades and the back-up battery power needed when the wind isn’t blowing and the sun isn’t shining would be an immense and expensive task in just 14 years. Add to that the further transition to carbon neutrality that Biden’s platform expects to achieve by 2050, which means transforming the entire transportation and industrial sectors in the United States to non-carbon fuels, and one can easily see how the costs add up. The United States currently gets 80 percent of its energy from fossil fuels that are abundant and affordable and American-made. Last year, the United States produced more energy than it consumed for the first time in over 60 years. Transforming the transportation sector that includes 280 million light duty vehicles and gets over 90 percent of its energy from petroleum products to non-carbon and adding all the infrastructure needed would be a phenomenal undertaking that must occur in 30 years, according to the Biden plan.
In fact, a new study found that 90 percent of America’s light-duty cars will need to be electric by 2050 if the transportation sector is to stay in line with climate mitigation targets set out in the Paris agreement. That might mean requiring all of the nation’s new car sales to be electric as early as 2035, the target recently established for California by Governor Gavin Newsom. The study estimated that if California’s target is adopted nationally, and current trends in car use and ownership continue, 350 million electric vehicles would be on America’s roads in 2050, using up the equivalent of 41 percent of the nation’s total power demand in 2018, which would create problems for the nation’s electrical grid. To change those numbers, more Americans would need to use public transportation, which they have shied away from recently due to the coronavirus pandemic.
Biden on the Cost of Renewable Energy
“…, during our administration in the recovery act, I was in charge able to bring down the cost of renewable energy to cheaper than are as cheap as coal and gas and oil.”
Much of the reason that solar and wind energy costs have declined is due to federal subsidies that were put into place way before Biden was Vice President and due to the technology’s forced construction because of individual state mandates for their generation, called renewable portfolio standards. The wind Production Tax Credit was created by the Energy Policy Act of 1992 and provides operators with a tax credit per kilowatt-hour of renewable electricity generation for the first 10 years the facility is in operation. The U.S. Treasury estimates that the existing form of the Production Tax Credit will cost taxpayers $40.12 billion from 2018 to 2027, making it the most expensive energy subsidy under current tax law.
The Investment Tax Credit for solar was set at a permanent 10 percent rate in 1992. In 2005, the Energy Policy Act raised its value to a temporary 30 percent rate, which is being phased out, returning the credit to 10 percent in 2022, unless Congress extends it again. This means taxpayers paid 30 percent of the cost of solar energy installations for many years.
State mandates forced utilities to build wind and solar plants. Between 2009 and 2019, the share of wind and solar power in the U.S. generation system increased from 2 percent to 9 percent, but average residential electricity prices increased by 13 percent. During this period, demand for electricity was fairly flat so little new capacity needed to be built. Instead, the state mandates and federal subsidies gave wind and solar preferential treatment forcing coal, natural gas and nuclear plants to prematurely retire.
The purpose of the lucrative tax subsidies for wind and solar energy by federal and state governments is ostensibly to establish these industries and lower their costs, making them competitive with other existing technologies. But, there is a fundamental flaw in the logic in that wind and solar energy are intermittent technologies, generating power only when the wind is blowing and the sun is shining. As a result, backup power is needed to supply electricity at the touch of a light switch, 24 hours a day and seven days a week. That backup power can take on different forms such as natural gas plants, hydroelectric dams, batteries, or some other form of standby power. But these backup costs are not attached to the cost of wind or solar power that most organizations report or that Joe Biden referenced, nor are they attributed to the wind or solar producer. They are paid for by taxpayers and energy consumers, typically without public disclosure of the costs.
The Institute for Energy Research did a study that calculated the cost of back-up power and recalculated the levelized costs of wind and solar incorporating the extra cost. Including the cost of the back-up power, a new wind plant or a new solar plant would be almost twice as expensive on the electric system as a new natural gas combined cycle plant.
Biden on Green Jobs
“There’s so many things that we can do now to create thousands and thousands of jobs. We can get to net zero, in terms of energy production, by 2035. Not only not costing people jobs, creating jobs, creating millions of good-paying jobs. Not 15 bucks an hour, but prevailing wage, by having a new infrastructure that in fact, is green. And the first thing I will do, I will rejoin the Paris Accord.”
In reality, Biden’s proposed transition from oil and gas to renewable energy would result in lower pay for blue-collar workers and possibly lower benefits as well. According to data from the Bureau of Labor Statistics for 2019, the median annual pay for petroleum engineers was $137,210—three times that for solar panel installers ($44,890) and 2.6 times higher than the average salary for a wind turbine technician ($52,910). Even petroleum pump system operators and refinery operators ($72,570) made more than solar and wind technicians by 40 to 60 percent.
Further, workers who have completed an apprentice program or otherwise dedicated years of their lives in a profession do not want to see their skill sets devalued or be thrown into junior positions in a new occupation. Laid-off workers will not be able to immediately find a new job at the same wage, but will likely spend a significant amount of time searching for work, and will most likely need to accept a lower wage in the new job market that may also mean relocation and the expenses that relocation entails.
According to Biden’s campaign website, he promises union jobs, but the renewable energy sector largely lacks union representation. According to a January 2017 report by the U.S. Department of Energy, only 3.4 percent of solar photovoltaic workers were unionized and only 4 percent of workers in wind power generation were unionized, compared to a national workplace average of 11 percent.
Conclusion
Biden’s plan calls for spending $2 trillion over four years to eliminate carbon emissions from the power sector by 2035 through a set of mandates and to be carbon neutral by 2050, something which would entail much greater costs. Biden promises to transition to cleaner energy creating an economic boon and good jobs by making sure the environment is clean. But those good jobs are actually lower-paying, the cost of the transition is more than allocated by Biden’s $2 trillion that comes from taxpayers and the result will increase energy prices for Americans, limit their choices for transportation and the type of vehicle they can purchase and increase the likelihood that Americans have unreliable energy as California provides an example during its recent heat wave.
*This article was adapted from content originally published by the Institute for Energy Research.
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