speech in 2018, Dr. Nordhaus pegged the “optimal” carbon price — that is, the shared economic burden caused by each ton of emissions — at $43 in 2020. Gernot Wagner, a climate economist at Columbia Business School, called it a “woeful underestimate of the true cost” — noting that the prize committee’s home country already taxed carbon at $120 per ton.

another tack. Carbon prices, they reasoned, tend to hit lower-income people hardest. Even if the proceeds funded rebates to taxpayers, as many proponents recommended, similar promises by supporters of trade liberalization — that people whose jobs went offshore would get help finding new ones in a faster-growing economy — proved illusory. Besides, without government investment in low-carbon infrastructure, many people would have no alternative to continued carbon use.

“You’re saying, ‘Things are going to cost more, but we aren’t going to give you help to live with that transition,’” said Rhiana Gunn-Wright, director of climate policy at the left-leaning Roosevelt Institute and an architect of the Green New Deal. “Gas prices can go up, but the fact is, most people are locked into how much they have to travel each day.”

At the same time, the cost of technologies like solar panels and batteries for electric vehicles — in part because of huge investments by the Chinese government — was dropping within the range that would allow them to be deployed at scale.

For Ryan Kellogg, an energy economist who worked as an analyst for the oil giant BP before getting his Ph.D., that was a key realization. Leaving an economics department for the public policy school at the University of Chicago, and working with an interdisciplinary consortium including climate scientists, impressed on him two things: that fossil fuels needed to be phased out much faster than previously thought, and that it could be done at lower cost.

Just in the utility sector, for example, Dr. Kellogg recently found that carbon taxes aren’t meaningfully more efficient than subsidies or clean electricity standards in driving a full transition to wind and solar power. And as more essential devices can be powered by batteries, affordable electricity becomes paramount.

more useful for policymakers than broad, top-down economic models.

begun to look at the relationship between extreme weather and federal revenue. But because it’s still not clear how best to do that, other institutions are trying as well.

Carter Price, a mathematician at the nonprofit RAND Corporation, is working on a budget model that will incorporate the latest social science research, as well as climate science, to inform long-term policy decisions.

“This is a space where having more models early on would be better,” Dr. Price said. “Rather than someone has an assumption, that assumption goes into a model, nobody questions it and, 10 years later, we realize that assumption is pretty powerful and maybe not right.”

The larger lesson is that modern climate policy is a complex endeavor that calls for large, interdisciplinary teams — which is not historically how the economics field has operated.

“You can only do so much by writing things down on a single sheet of paper from your office at Yale,” said Dr. Kopp, of Rutgers. “That’s not how science gets done. That’s how a lot of economics gets done. But you run into limits.”

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Expansion of Clean Energy Loans Is ‘Sleeping Giant’ of Climate Bill

Tucked into the Inflation Reduction Act that President Biden signed last week is a major expansion of federal loan programs that could help the fight against climate change by channeling more money to clean energy and converting plants that run on fossil fuels to nuclear or renewable energy.

The law authorizes as much as $350 billion in additional federal loans and loan guarantees for energy and automotive projects and businesses. The money, which will be disbursed by the Energy Department, is in addition to the more well-known provisions of the law that offer incentives for the likes of electric cars, solar panels, batteries and heat pumps.

The aid could breathe life into futuristic technologies that banks might find too risky to lend to or into projects that are just short of the money they need to get going.

failure of Solyndra, a solar company that had borrowed about $500 million from the Energy Department, to criticize the Obama administration’s climate and energy policies.

Backers of the program have argued that despite defaults like Solyndra, the program has been sustainable overall. Of the $31 billion the department has disbursed, about 40 percent has been repaid and interest payments in the fiscal year that ended on Sept. 30, 2021, totaled $533 million — more money than the failed Solyndra loan.

The Energy Department’s loan programs began in 2005 under the George W. Bush administration but expanded significantly in the Obama era. The department provided a crucial loan that helped Tesla expand when it only sold expensive two-door electric sports cars; the company is now the world’s most valuable automaker.

Under the Trump administration, which played down the risks of climate change, the department’s loan office was much less active. The Biden team has been working to change that. Last month, the department said it planned to loan $2.5 billion to General Motors and LG Energy Solution to build electric-car battery factories in Michigan, Ohio and Tennessee.

complicate the qualification process.

  • Plug-In Hybrids: After falling behind all-electric cars, U.S. sales of plug-in hybrids have been surging. The high cost of electric cars and gasoline have given them an opening.
  • Car Crashes: Tesla and other automakers capture data from their vehicles to operate their products. Experts say the collected information could also improve road safety.
  • A Frustrating Hassle: The electric vehicle revolution is nearly here, but its arrival is being slowed by a fundamental problem: The chargers where people refuel these cars are often broken.
  • One beneficiary of the new loan money could be the Palisades Power Plant, a nuclear facility on Lake Michigan near Kalamazoo, Mich., that closed in May. The plant had struggled to compete in the PJM energy market, which serves homes and businesses in 13 states, including Michigan, New Jersey and Pennsylvania, and Washington, D.C.

    The Biden administration has made nuclear power a focal point of its efforts to eliminate carbon dioxide emissions from the power sector by 2035. The administration has offered billions of dollars to help existing facilities like the Diablo Canyon Power Plant — a nuclear operation on California’s coast that is set to close by the end of 2025 — stay open longer. It is also backing new technologies like small modular reactors that the industry has long said would be cheaper, safer and easier to build than conventional large nuclear reactors.

    The owner of the Palisades facility, Holtec International, said it was reviewing the loan program and other opportunities for its own small reactors as well as bringing the shuttered plant back online.

    “There are a number of hurdles to restarting the facility that would need to be bridged,” the company said in a statement, “but we will work with the state, federal government, and a yet to be identified third-party operator to see if this is a viable option.”

    Rye Development, a company based in West Palm Beach, Fla., that is working on several projects in the Pacific Northwest.

    geothermal power; old coal power plants as sites for large batteries; and old coal mines for solar farms. Such conversions could reduce the need to build projects on undeveloped land, which often takes longer because they require extensive environmental review and can face significant local opposition.

    “We’re in a heap of trouble in siting the many millions of acres of solar we need,” Mr. Reicher said. “It’s six to 10 million acres of land we’ve got to find to site the projected build out of utility scale solar in the United States. That’s huge.”

    Other developers are hoping the government will help finance technologies and business plans that are still in their infancy.

    Timothy Latimer is the chief executive and co-founder of Fervo Energy, a Houston company that uses the same horizontal drilling techniques as oil and gas producers to develop geothermal energy. He said that his firm can produce clean energy 24 hours a day or produce more or less energy over the course of a day to balance out the intermittent nature of wind and solar power and spikes in demand.

    Mr. Latimer claims that the techniques his firm has developed will lower the cost for geothermal power, which in many cases is more expensive than electricity generated from natural gas or solar panels. He has projects under development in Nevada, Utah, Idaho and California and said that the new loan authority could help the geothermal business expand much more quickly.

    “It’s been the talk of the geothermal industry,” Mr. Latimer said. “I don’t think we were expecting good news a month ago, but we’re getting more ready for prime time. We have barely scratched the surface with the amount of geothermal that we can develop in the United States.”

    For all the potential of the new law, critics say that a significant expansion of government loans and loan guarantees could invite more waste and fraud. In addition to Solyndra, the Energy Department has acknowledged that several solar projects that received its loans or loan guarantees have failed or never got off the ground.

    A large nuclear plant under construction in Georgia, Vogtle, has also received $11.5 billion in federal loan guarantees. The plant has been widely criticized for years of delays and billions of dollars in cost overruns.

    “Many of these projects are funded based on political whim rather than project quality,” said Gary Ackerman, founder and former executive director of the Western Power Trading Forum, a coalition of more than 100 utilities and other businesses that trade in energy markets. “That leads to many stranded assets that never live up to their promises and become examples of government waste.”

    But Jamie Carlson, who was a senior adviser to the energy secretary during the Obama administration, said the department learned from its mistakes and developed a better approach to reviewing and approving loan applications. It also worked more closely with businesses seeking money to ensure that they were successful.

    “It used to be this black box,” said Ms. Carlson, who is now an executive at SoftBank Energy. “You just sat in purgatory for like 18 months and sometimes up to two years.”

    Ms. Carlson said the department’s loans serve a vital function because they can help technologies and companies that have demonstrated some commercial success but need more money to become financially viable. “It’s there to finance technologies that are proven but perhaps to banks that are perceived as more risky,” she said.

    Energy executives said they were excited because more federal loans and loan guarantees could turbocharge their plans.

    “The projects that can be done will go faster,” said William W. Funderburk Jr., a former commissioner at the Los Angeles Department of Water and Power who now runs a water and energy company. “This is a tectonic plate shift for the industry — in a good way.”

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    Dairy Farmers in the Netherlands Are Up in Arms Over Emission Cuts

    WOUDENBERG, Netherlands — The dairy farmers of the Netherlands have had enough.

    They have set fire to hay and manure along highways, dumped trash on roads to create traffic jams, and blockaded food distribution centers with their tractors, leading to empty shelves in supermarkets. Across the country, upside down flags wave from farmhouses in protest.

    The anger of the farmers is directed at the government, which has announced plans for a national 50 percent reduction of nitrogen emissions by 2030, in line with European Union requirements to preserve protected nature reserves, that they believe unfairly targets them. Factories and cars also emit large amounts of nitrogen and have not been targeted, they say, although the government said that cuts associated with both polluters would be addressed in the future.

    Agriculture is responsible for the largest share of nitrogen emissions in the Netherlands, much of it from the waste produced by the estimated 1.6 million cows that provide the milk used to make the country’s famed cheeses, like Gouda and Edam.

    wrote in a letter to the Dutch minister of agriculture this month that “the transition to a sustainable agricultural and food system is urgent and necessary.” The letter also said that consumers in the Netherlands needed to do their part to make sure emissions targets were reached.

    “Consumers also have to take responsibility,” it said. “Dutch people will have to consume more vegetables and fewer (-70%) animal proteins.”

    All of this comes as wrenching change in the Netherlands, where dairy farms have long been as much of the national identity as the country’s windmills and canals. It is also a major producer and exporter of milk and milk products. Last year it sent €8.2 billion worth of dairy products abroad and produced a total of 13.8 billion kilos of milk, according to ZuivelNL, a Dairy organization.

    to a survey by a Dutch research firm.

    Prime Minister Mark Rutte, who this month became the country’s longest-serving prime minister and has grappled with what is known in the Netherlands as “the nitrogen crisis,” has condemned the protests, calling them “unacceptable.”

    said recently on Twitter.

    in July.

    former President Donald J. Trump said at a rally last month.

    For now, a government-appointed mediator is engaged in negotiations between the farmers and the government. The mediator has said there is a “crisis of confidence” between the two sides.

    “We’re not going without a fight,” said Mr. Apeldoorn, the dairy farmer. “That’s how most farmers feel right now.”

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    Scientists Say New Climate Law Is Likely To Reduce Warming

    By Associated Press
    August 16, 2022

    Scientists say new climate investment will have some beneficial effect on global warming, but the U.S. has a way to go.

    Massive incentives for clean energy in the U.S. law signed Tuesday by President Joe Biden should reduce future global warming “not a lot, but not insignificantly either,” according to a climate scientist who led an independent analysis of the package.

    Even with nearly $375 billion in tax credits and other financial enticements for renewable energy in the law, the United States still isn’t doing its share to help the world stay within another few tenths of a degree of warming, a new analysis by Climate Action Tracker says. The group of scientists examines and rates each country’s climate goals and actions. It still rates American action as “insufficient” but hailed some progress.

    “This is the biggest thing to happen to the U.S. on climate policy,” said Bill Hare, the Australia-based director of Climate Analytics which puts out the tracker. “When you think back over the last decades, you know, not wanting to be impolite, there’s a lot of talk, but not much action.”

    This is action, he said. Not as much as Europe, and Americans still spew twice as much heat-trapping gases per person as Europeans, Hare said. The U.S. has also put more heat-trapping gas into the air over time than any other nation.

    Before the law, Climate Action Tracker calculated that if every other nation made efforts similar to those of the U.S., it would lead to a world with catastrophic warming — 5.4 to 7.2 degrees (3 to 4 degrees Celsius) above pre-industrial times. Now in the best case scenario, which Hare said is reasonable and likely, U.S. actions, if mimicked, would lead to only 3.6 degrees (2 degrees Celsius) of warming. If things don’t work quite as optimistically as Hare thinks, it would be 5.4 degrees (3 degrees Celsius) of warming, the analysis said.

    Even that best case scenario falls short of the overarching internationally accepted goal of limiting warming to 2.7 degrees warming (1.5 degrees Celsius) since pre-industrial times. And the world has already warmed 2 degrees (1.1 degrees Celsius) since the mid-19th century.

    Other nations “who we know have been holding back on coming forward with more ambitious policies and targets” are now more likely to take action in a “significant spillover effect globally,” Hare said. He said officials from Chile and a few Southeast Asian countries, which he would not name, told him this summer that they were waiting for U.S. action first.

    And China “won’t say this out loud, but I think will see the U.S. move as something they need to match,” Hare said.

    Scientists at the Climate Action Tracker calculated that without any other new climate policies, U.S. carbon dioxide emissions in 2030 will shrink to 26% to 42% below 2005 levels, which is still short of the country’s goal of cutting emissions in half. Analysts at the think tank Rhodium Group calculated pollution cuts of 31% to 44% from the new law.

    Other analysts and scientists said the Climate Action Tracker numbers makes sense.

    “The contributions from the U.S. to greenhouse gas emissions are huge,” said Princeton University climate scientist Gabriel Vecchi. “So reducing that is definitely going to have a global impact.”

    Samantha Gross, director of climate and energy at the Brookings Institution, called the new law a down payment on U.S. emission reductions.

    “Now that this is done, the U.S. can celebrate a little, then focus on implementation and what needs to happen next,” Gross said.

    Additional reporting by The Associated Press.

    Source: newsy.com

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    Electric Cars Are Too Costly for Many, Even With Aid in Climate Bill

    Policymakers in Washington are promoting electric vehicles as a solution to climate change. But an uncomfortable truth remains: Battery-powered cars are much too expensive for a vast majority of Americans.

    Congress has begun trying to address that problem. The climate and energy package passed on Sunday by the Senate, the Inflation Reduction Act, would give buyers of used electric cars a tax credit.

    But automakers have complained that the credit would apply to only a narrow slice of vehicles, at least initially, largely because of domestic sourcing requirements. And experts say broader steps are needed to make electric cars more affordable and to get enough of them on the road to put a serious dent in greenhouse gas emissions.

    would eliminate this cap and extend the tax credit until 2032; used cars would also qualify for a credit of up to $4,000.

    With so much demand, carmakers have little reason to target budget-minded buyers. Economy car stalwarts like Toyota and Honda are not yet selling significant numbers of all-electric models in the United States. Scarcity has been good for Ford, Mercedes-Benz and other carmakers that are selling fewer cars than before the pandemic but recording fat profits.

    Automakers are “not giving any more discounts because demand is higher than the supply,” said Axel Schmidt, a senior managing director at Accenture who oversees the consulting firm’s automotive division. “The general trend currently is no one is interested in low prices.”

    Advertised prices for electric vehicles tend to start around $40,000, not including a federal tax credit of $7,500. Good luck finding an electric car at that semi-affordable price.

    Ford has stopped taking orders for Lightning electric pickups, with an advertised starting price of about $40,000, because it can’t make them fast enough. Hyundai advertises that its electric Ioniq 5 starts at about $40,000. But the cheapest models available from dealers in the New York area, based on a search of the company’s website, were around $49,000 before taxes.

    Tesla’s Model 3, which the company began producing in 2017, was supposed to be an electric car for average folks, with a base price of $35,000. But Tesla has since raised the price for the cheapest version to $47,000.

    pass the House, would give buyers of used cars a tax credit of up to $4,000. The used-car market is twice the size of the new-car market and is where most people get their rides.

    But the tax credit for used cars would apply only to those sold for $25,000 or less. Less than 20 percent of used electric vehicles fit that category, said Scott Case, chief executive of Recurrent, a research firm focused on the used-vehicle market.

    The supply of secondhand vehicles will grow over time, Mr. Case said. He noted that the Model 3, which has sold more than any other electric car, became widely available only in 2018. New-car buyers typically keep their vehicles three or four years before trading them in.

    SAIC’s MG unit sells an electric S.U.V. in Europe for about $31,000 before incentives.

    New battery designs offer hope for cheaper electric cars but will take years to appear in lower-priced models. Predictably, next-generation batteries that charge faster and go farther are likely to appear first in luxury cars, like those from Porsche and Mercedes.

    Companies working on these advanced technologies argue that they will ultimately reduce costs for everyone by packing more energy into smaller packages. A smaller battery saves weight and cuts the cost of cooling systems, brakes and other components because they can be designed for a lighter car.

    You can actually decrease everything else,” said Justin Mirro, chief executive of Kensington Capital Acquisition, which helped the battery maker QuantumScape go public and is preparing a stock market listing for the fledgling battery maker Amprius Technologies. “It just has this multiplier effect.”

    $45 million in grants to firms or researchers working on batteries that, among other things, would last longer, to create a bigger supply of used vehicles.

    “We also need cheaper batteries, and batteries that charge faster and work better in the winter,” said Halle Cheeseman, a program director who focuses on batteries at the Advanced Research Projects Agency-Energy, part of the Department of Energy.

    Gene Berdichevsky, chief executive of Sila Nanotechnologies, a California company working on next-generation battery technology, argues that prices are following a curve like the one solar cells did. Prices for solar panels ticked up when demand began to take off, but soon resumed a steady decline.

    The first car to use Sila’s technology will be a Mercedes luxury S.U.V. But Mr. Berdichevsky said: “I’m not in this to make toys for the rich. I’m here to make all cars go electric.” 

    A few manufacturers offer cars aimed at the less wealthy. A Chevrolet Bolt, a utilitarian hatchback, lists for $25,600 before incentives. Volkswagen said this month that the entry-level version of its 2023 ID.4 electric sport utility vehicle, which the German carmaker has begun manufacturing at its factory in Chattanooga, Tenn., will start at $37,500, or around $30,000 if it qualifies for the federal tax credit.

    Then there is the Wuling Hongguang Mini EV, produced in China by a joint venture of General Motors and the Chinese automakers SAIC and Wuling. The car reportedly outsells the Tesla Model 3 in China. While the $4,500 price tag is unbeatable, it is unlikely that many Americans would buy a car with a top speed of barely 60 miles per hour and a range slightly over 100 miles. There is no sign that the car will be exported to the United States.

    Eventually, Ms. Bailo of the Center for Automotive Research said, carmakers will run out of well-heeled buyers and aim at the other 95 percent.

    “They listen to their customers,” she said. “Eventually that demand from high-income earners is going to abate.”

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    California Not Counting Methane Leaks From Idle Wells

    By Associated Press
    July 31, 2022

    A scientist says the lack of data calls into question California’s ability to meet its ambitious goal of carbon neutrality by 2045.

    California claims to know how much climate-warming gas is going into the air from within its borders. It’s the law: California limits climate pollution and each year the limits get stricter.

    The state has also been a major oil and gas producer for more than a century, and authorities are well aware some 35,000 old, inactive oil and gas wells perforate the landscape.

    Yet officials with the agency responsible for regulating greenhouse gas emissions say they don’t include methane that leaks from these idle wells in their inventory of the state’s emissions.

    Ira Leifer, a University of California Santa Barbara scientist said the lack of data on emissions pouring or seeping out of idle wells calls into question the state’s ability to meet its ambitious goal to achieve carbon neutrality by 2045.

    Residents and environmentalists from across the state have been voicing concern about the possibility of leaking idle or abandoned wells for years, but the concerns were heightened in May and June when 21 idle wells were discovered to be leaking methane in or near two Bakersfield neighborhoods. They say that the leaking wells are “an urgent public health issue,” because when a well is leaking methane, other gases often escape too.

    Leifer said these “ridealong” gases were his biggest concern with the wells.

    “Those other gases have significant health impacts,” Leifer said, yet we know even less about their quantities than we do about the methane.

    In July, residents who live in the communities nearest the leaking wells protested at the California Geologic Management Division’s field offices, calling for better oversight.

    “It’s clear that they are willing to ignore this public health emergency. Our communities are done waiting. CalGEM needs to do their job,” Cesar Aguirre, a community organizer with the Central California Environmental Justice Network, said in a statement.

    Robert Howarth, a Cornell University methane researcher, agreed with Leifer that the amount of methane emissions from leaking wells isn’t well known and that it’s not a major source of emissions when compared with methane emissions from across the oil and gas industry.

    Still, he said, “it’s adding something very clearly, and we shouldn’t be allowing it to happen.”

    A ton of methane is 83 times worse for the climate than a ton of carbon dioxide, when compared over twenty years.

    A 2020 study said emissions from idle wells are “more substantial” than from plugged wells in California, but recommended more data collection on inactive wells at the major oil and gas fields throughout the state.

    Robert Jackson, a Stanford University climate scientist and co-author on that study, said they found high emissions from some of the idle wells they measured in the study.

    In order to get a better idea of how much methane is leaking, the state of California is investing in projects on the ground and in the air. David Clegern, a spokesperson for CARB, said the agency is beginning a project to measure emissions from a sample of properly and improperly abandoned wells to estimate statewide emissions from them.

    And in June, California Governor Gavin Newsom signed a budget that includes participation in a global effort to slash emissions called the Methane Accountability Project. The state will spend $100 million to use satellites to track large methane leaks in order to help the state identify sources of the gas and cap leaks.

    Some research has already been done, too, to find out how much methane is coming from oil and gas facilities. A 2019 Nature study found that 26% of state methane emissions is coming from oil and gas. A new investigation by the Associated Press found methane is billowing from oil and gas equipment in the Permian Basin in Texas and companies under report it.

    Howarth said even if methane from idle oil and gas wells isn’t a major pollution source, it should be a priority not just in California, but nationwide, to help the country meet its climate pledges.

    “Methane dissipates pretty quickly in the atmosphere,” he said, “so cutting the emissions is really one of the simplest ways we have to slow the rate of global warming and meet that Paris target.”

    A new Senate proposal would provide hundreds of millions dollars to plug wells and reduce pollution from them, especially in hard hit communities.

    Additional reporting by The Associated Press.

    Source: newsy.com

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    What’s In, And Out, Of Democrats’ Inflation-Fighting Package

    The new measure has inflation-fighting strategies aimed at health care, climate change and deficit reduction.

    What started as a $4 trillion effort during President Joe Biden’s first months in office to rebuild America’s public infrastructure and family support systems has ended up a much slimmer, but not unsubstantial, compromise package of inflation-fighting health care, climate change and deficit reduction strategies that appears headed toward quick votes in Congress.

    Lawmakers are poring over the $739 billion proposal struck by two top negotiators, Senate Majority Leader Chuck Schumer and holdout Sen. Joe Manchin, the conservative West Virginia Democrat who rejected President Biden’s earlier drafts but surprised colleagues late Wednesday with a new one.

    What’s in, and out, of the Democrats’ 725-page Inflation Reduction Act of 2022 as it stands now:

    LOWER PRESCRIPTION DRUG COSTS

    Launching a long-sought goal, the bill would allow the Medicare program to negotiate prescription drug prices with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window.

    Those new revenues would be put back into lower costs for seniors on medications, including a $2,000 out-of-pocket cap for older adults buying prescriptions from pharmacies.

    Money would also be used to provide free vaccinations for seniors, who now are among the few not guaranteed free access, according to a summary document.

    HELP PAY FOR HEALTH INSURANCE

    The bill would extend the subsidies provided during the COVID-19 pandemic to help some Americans who buy health insurance on their own.

    Under earlier pandemic relief, the extra help was set to expire this year. But the bill would allow the assistance to keep going for three more years, lowering insurance premiums for people who are purchasing their own health care policies.

    ‘SINGLE BIGGEST INVESTMENT IN CLIMATE CHANGE IN U.S. HISTORY’

    The bill would invest $369 billion over the decade in climate change-fighting strategies including investments in renewable energy production and tax rebates for consumers to buy new or used electric vehicles.

    It’s broken down to include $60 billion for a clean energy manufacturing tax credit and $30 billion for a production tax credit for wind and solar, seen as ways to boost and support the industries that can help curb the country’s dependence on fossil fuels.

    For consumers, there are tax breaks as incentives to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar. There are tax breaks for buying electric vehicles, including a $4,000 tax credit for purchase of used electric vehicles and $7,500 for new ones.

    In all, Democrats believe the strategy could put the country on a path to cut greenhouse gas emissions 40% by 2030, and “would represent the single biggest climate investment in U.S. history, by far.”

    HOW TO PAY FOR ALL OF THIS?

    The biggest revenue-raiser in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits.

    It’s a way to clamp down on some 200 U.S. companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all.

    The new corporate minimum tax would kick in after the 2022 tax year and raise some $313 billion over the decade.

    Money is also raised by boosting the IRS to go after tax cheats. The bill proposes an $80 billion investment in taxpayer services, enforcement and modernization, which is projected to raise $203 billion in new revenue — a net gain of $124 billion over the decade.

    The bill sticks with President Biden’s original pledge not to raise taxes on families or businesses making less than $400,000 a year.

    The lower drug prices for seniors are paid for with savings from Medicare’s negotiations with the drug companies.

    EXTRA MONEY TO PAY DOWN DEFICITS

    With $739 billion in new revenue and some $433 billion in new investments, the bill promises to put the difference toward deficit reduction.

    Federal deficits have spiked during the COVID-19 pandemic when federal spending soared and tax revenues fell as the nation’s economy churned through shutdowns, closed offices and other massive changes.

    The nation has seen deficits rise and fall in recent years. But overall federal budgeting is on an unsustainable path, according to the Congressional Budget Office, which put out a new report this week on long-term projections.

    WHAT’S LEFT BEHIND

    This latest package after 18 months of start-stop negotiations leaves behind many of President Biden’s more ambitious goals.

    While Congress did pass a $1 trillion bipartisan infrastructure bill of highway, broadband and other investments that President Biden signed into law last year, the president’s and the party’s other priorities have slipped away.

    Among them, a continuation of a $300 monthly child tax credit that was sending money directly to families during the pandemic and is believed to have widely reduced child poverty.

    Also gone, for now, are plans for free pre-kindergarten and free community college, as well as the nation’s first paid family leave program that would have provided up to $4,000 a month for births, deaths and other pivotal needs.

    Additional reporting by The Associated Press.

    Source: newsy.com

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