The Green New Deal, in Disguise

Biden’s ‘infrastructure’ bill is really a plan to remake the economy

WSJ editorial. Excerpts:

"• Start with $213 billion to build and retrofit two million energy-efficient homes and buildings. These putative “upgrades” would be financed by federal grants, tax credits and the economically inefficient Weatherization Assistance Program (WAP).

A 2018 study in the Quarterly Journal of Economics of the WAP in Michigan found that its upfront investment costs are about twice the actual energy savings. “Even when accounting for the broader societal benefits derived from emissions reductions, the costs still substantially outweigh the benefits; the average rate of return is approximately −7.8% annually,” the study found.

• Or take the plan’s $40 billion in spending to “mitigate imminent hazards to residents, and undertake energy efficiency measures” in public housing. The New York City Housing Authority paid unionized electricians $135 an hour including benefits to install LED lighting, which cost about $1,973 per apartment. Then it had no money to repair moldy apartments.

• Mr. Biden’s biggest climate-works project is to re-engineer the grid to banish fossil fuels. Natural gas and coal currently make up more than half of U.S. electricity generation and a larger share in the South and Midwest. Mr. Biden aims to replace them with carbon-free energy by 2035.

He’d start with an Energy Efficiency and Clean Electricity Standard, which would force states and utilities to phase out fossil fuels. He’d then accelerate their abolition by extending the renewable investment and production tax credits for 10 years. Congress began these credits decades ago to boost the infant wind and solar industries.

But renewable prices have since fallen tremendously—as climateers like to point out—and now the credits let producers turn profits even when wholesale prices go negative. Baseload fossil fuel and nuclear plants struggle to compete, and many are shutting down. This is making the grid less reliable."

"• And herein lies an irony: The green energy tax credits would enrich large corporations and billionaires. Hedge funds and tech companies are some of the biggest green energy investors. These tax credits would become more attractive as tax rates increase. Even big oil companies would benefit from credits for investing in carbon capture and “sustainable” aviation fuels. This is one reason CEOs like Amazon’s Jeff Bezos are endorsing a corporate tax increase. They’ll make it up in subsidies."

"His plan would also increase consumer rebates and build 500,000 charging stations. But the federal government didn’t need to build gas stations or subsidize purchases of Model Ts to get Americans to ditch the horse and buggy. The reality is that breakthroughs in technology will be necessary to achieve widespread EV adoption and other climate goals."