Dramatic deal at the 11th hour by US Democrats resuscitates global climate fight

With a dramatic timing worthy of The West Wing, Senator Joe Manchin has delivered an 11th hour deal that comes as a much-needed shot in the arm for the global climate fight.

Mr Manchin, a centrist Democrat from coal-heavy West Virginia, announced the pointedly-titled “Inflation Reduction Act” with Senate Majority Leader Chuck Schumer on Wednesday.

It’s a slimmed-down version of Build Back Better, the Biden administration’s original $1.75 trillion domestic spending plan. The bill, if passed into law, will be the biggest step that Congress has taken to address domestic planet-heating greenhouse gas emissions at a dark moment when global targets are faltering.

It will also bolster America’s credibility on the international stage when demanding that other major emitters in China, Europe and beyond sharply cut their own fossil fuel use.

The plan would direct hundreds of billions of dollars to not only boost renewable energy and tackle climate issues but also lower prescription drug costs, and help pay for health insurance.

President Joe Biden said the new bill was “the action the American people have been waiting for”.

“If enacted, this legislation will be historic,” he added.

Mr Manchin’s U-turn follows months of heated negotiations with fellow Democrats. They aim to pass the bill via the budget reconciliation process which allows for a simple majority. But with a 50-50 Senate and zero Republican support, Democrats still needed everyone on board.

Mr Schumer praised the deal in a press conference on Thursday afternoon.

“This legislation will be the greatest pro climate legislation that Congress has ever, ever passed”, he said. “This legislation fights the climate crisis with the urgency that the situation demands, and puts the US on a plan to reduce by roughly 40% emissions by 2030.”

Mr Schumer said that four days after previous talks fell apart on 14 July, Mr Manchin called him to see if they could come to an agreement. Mr Schumer responded by saying as long as they completed the work by August.

The Senate leader said Democrats have discussed passing the legislation next week before the Senate leaves town for its annual August recess.

Some Republican lawmakers were outraged by the new deal with Arkansas Senator Tom Cotton calling it a “double cross” by Mr Manchin, before dubbing the 725-page document “the longest suicide note in the history of West Virginia”.

Against a backdrop of rolling news coverage of wildfires and deadly heatwaves around the world, Mr Manchin appeared to doom meaningful climate legislation just weeks ago amid reported concerns about US inflation, now at the highest level in 40 years.

His decision drew the ire of climate scientists, activists and some members of his own party as it remains possible that Democrats will lose control of the Senate in the November Midterms –and with it the chance of a climate law for the foreseeable future.

The mood was more buoyant following the news. “Miracles happen”, Representative Jackie Speier, a California Democrat, told The Independent at the US Capitol on Wednesday.

The bill proposes $369bn in climate and clean energy investments. Among the big-ticket items: Billions of dollars for tax incentives to expand renewable energy over the next 10 years, and incentivise nuclear power plant owners to stay open where they may have closed.

It will also make it easier for Americans to buy electric cars, help farmers cut agricultural emissions, and fund changes for minority and low-income communities who are most harmed by climate and environmental pollution.

The legislation will be partly funded by a 15 per cent corporate minimum tax.

The clean energy industry welcomed news of the bill which provides stability for greater financial investments and rollouts in the sector.

US electricity generation is currently powered 60 per cent by fossil fuels with the rest near-evenly split between nuclear and renewables. The renewables industry has just seen its slowest quarter since 2019, according to a new report from the multi-tech renewable energy trade association, the American Clean Power Association (ACPA).

Heather Zichal, ACPA CEO, tweeted that the agreement was “an 11th-hour reprieve for climate action & clean energy jobs”.

Rapid, large-scale climate measures are needed across all of society in the next decade if world is to have a shot at limiting average global temperature rise to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels. The planet has already warmed 1.1-1.2C.

Beyond this point, scientists say impacts of climate breakdown will become more severe.

The planet is currently far overshooting 1.5C. Based on real-world action, we are heading for 2.7C by the end of the century, according to independent analysis by Climate Action Tracker.

To play its part in reducing the global carbon footprint, the US has pledged to cut emissions in half by the end of the 2020s, from 2005 levels.

Analysis last week by influential thinktank, The Rhodium Group, found the US was on track for a 24-35 per cent emissions cut by 2030, which they partly based on absence of new climate legislation.

Rhodium provided a rapid update to those findings on news of the Inflation Reduction Act.

“While we are still analyzing the full text, the deal includes a long-term extension of clean energy tax credits in line with what we’ve previously modeled, which means it could plausibly put the US on track to reduce emissions by 40 per cent in 2030,” the group tweeted.

“Additional action by the Biden administration and states can help close the rest of the gap to the target of a 50-52% cut by 2030.”

But some climate activists and environmental groups were sounding the alarm over provisions buried in the bill.

Mr Manchin, who has made a fortune from his state’s coal industry, stated that IRA would not reduce fossil fuel production.

“It is truly all of the above, which means this bill does not arbitrarily shut off our abundant fossil fuels”, he said. “It invests heavily in technologies to help us reduce our domestic methane and carbon emissions and also helps decarbonize around the world as we displace dirtier products.”

The non-profit Center for Biological Diversity described the provisions as Senator Manchin’s “poison pills”.

“This is a climate suicide pact,” said Brett Hartl, CBD’s government affairs director, in a statement. “It’s self-defeating to handcuff renewable energy development to massive new oil and gas extraction. The new leasing required in this bill will fan the flames of the climate disasters torching our country, and it’s a slap in the face to the communities fighting to protect themselves from filthy fossil fuels.”

Specifically, the legislation includes lease sales for drilling in the Gulf of Mexico and in Alaska. But Mr Schumer said on Thursdau that the trade-off was necessary to pass the bill.

“Senator Manchin wanted certain things in the bill that the vast majority in our caucus didn't want”, he noted.

He underlined that the IRA would still reduce emissions by 40 per cent. “And that includes the things we didn't like that mentioned putting the bill and all the leasing provisions in the existing leases that Biden had already announced.”

He also added that the lease sales are only in areas where drilling has occurred.

“So sticking to the 40% is what really counts the amount of carbon that goes into the atmosphere as much as I would have personally never put these provisions in the bill”, Mr Schumer said. “But we had to get it done.”

The bill arrived with 100 days to go until the next international climate summit, Cop27, in Egypt, with foreign governments keeping a close eye on US progress.

There is increasing pressure on large polluters from small island nations and emerging economies in the Global South who are bearing the brunt of climate impacts but have caused little of the emissions wreaking havoc.

Pacific island leaders declared an official climate emergency this month over the crisis which “threatens the livelihoods, security and wellbeing of its people and ecosystems”.

They emphasised the need to hold to 1.5C “through rapid, deep and sustained” emission cuts and called all those attending Cop27 to aim for “clear progress on turning pledges and commitments into action.”

John Kerry, President Biden’s special climate envoy, warned earlier this month that stalling on domestic emissions cuts would make it harder for the US to make the case abroad.

“They’ll make their own analysis that will conceivably have an impact at what they decide to do or not,” he told AP at the beginning of July.

Climate targets have been paused or been quietly edited by a number of big emitters amid the war in Ukraine which has sent oil prices rocketing, and increasing the cost of living in many countries.

Or as Democratic Senator Ed Markey memorably put it toThe New York Times on Wednesday: “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.”

This article has been updated