Two takes on that recent Climate Bill, the IRA...

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woodgeek

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Jan 27, 2008
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The NYT has a long deep dive into the financial incentives, lobbying and finance contributions that led to the IRA (sorry if paywalled):


Basically, is says that the IRA was written with broad buy-in and contributions from the electrical utility industry (lobbyists), in many cases the very same utilities that bankrolled a bunch of dark-money efforts to kill/block Obama's 'Clean Power Plan' a decade ago.

While the CEOs are quoted about getting religion on Climate Change in the intervening period, the article points out the massive financial incentives that Uncle Sam is throwing their way... including opening some massive tax loopholes that were closed decades ago, that utilities has benefitted from before.

They also point out that campaign donations from these lobbyists have shifted from mostly Rep to mostly Dem, and big money to Manchin and Sinema sealed the deal in the end.

The tone of the article is a bit too cynical IMO, bc we are talking about industrial policy that will spur many trillions of dollar of private investment over the next decade, using 10-100s of billions in govt tax breaks. And maybe 10s of millions in campaign finance to grease the wheels. I think the relative number of zeros on the dollar figures matters. You are ofc welcome to disagree and be horrified and think its too much pork!

Also, the article linked to an academic modeling report of the IRA impact that I thought was pretty readable:


The electricity sector stuff is on page 11 and 12, and shows a large buildout of solar and wind spurred by the Act. Amounting to a few trillion $ in new capital investment in those technologies over the decade.

On page 10 the model indicates that rather than total household energy costs (including transportation fuel) rising by 4% over the next decade, after the IRA they will fall by 6%. This figure appears to be in constant dollars (inflation corrected), and not adjusted for population. So it probably means that cost projections going forward were roughly flat (inflation corrected) under baseline policy, and the IRA investments should reduced those bills by ~10% in a decade.

To be cynical, $300B divided by 100M households is $3k/household, versus a couple hundred dollars per year in 10 years... simple payback of 10 years?

Your thoughts?
 
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Given the fractured political climate and the Govee bureaucracy and over head, take the corporate approach makes sense. I still am wanting to see how red states implement many of the state level incentives in the IRA.

So I get it get the grid green. Fastest way it to throw money at the corporations operating that infrastructure. I’m still kinda shocked it passed. Is still think any homeowner cost projections are going to be rather idealistic. Duke Energy is beholdent to its shareholders not its customers. We are one elected office away from our utility commission be run with business profits in mind not consumers. (Am I being to pessimistic ).

We have ceded moral authority to corporations and I have to say I trust them more than politicians by a bit. (Elon aside, he’s out to make a buck and colonize mars any way he can).
 
Yeah, the current grid was built by private enterprise, with govt regulation and incentives. So its no surprise that building a new energy grid will also be done by private enterprise, with govt regulation and incentives.

Most large hydro installations were built largely with public funds, and were quite expensive by modern standards, even if they are now amortized.
 
The fact the IRA didn’t mandate really strict energy building codes or any mandatory home energy rating when house is sold was a HUGE missed opportunity (if it did I’m un-informed ).
 
It's all frustratingly too little too late.
 
Clicked on this assuming you were talking about Individual Retirement Accounts, figuring the Irish Republican Army was pretty well out of the news, by now. :p Why on earth they chose to glom atop one of the most frequently used acronyms in the history of mankind for a climate bill, is something I'll never understand, particularly when it runs counter to "Inflation Reduction".
 
Clicked on this assuming you were talking about Individual Retirement Accounts, figuring the Irish Republican Army was pretty well out of the news, by now. :p Why on earth they chose to glom atop one of the most frequently used acronyms in the history of mankind for a climate bill, is something I'll never understand, particularly when it runs counter to "Inflation Reduction".
Got you to click;)
 
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It's all frustratingly too little too late.
Yes and well it could have been sooner and was more likely later and most likely given the recent election not at all. It’s not the green new deal but it’s one heck of new green agreement.

Thinking a little more if we don’t have some shift in our consumptive habits I don’t see how we make any targets. I don’t think the IRA addressed any of those. Power is predicted to be cheaper! Maybe gas will stay high??? I’m kinda getting salty every time I go to my clothes line and hear my neighbors 20 year old AC/heatpump running when it’s 75 outside.
 
I guess I am more optimistic than all of you. I think the academic modelers have an excellent track record of their predictions over a 10 year horizon. The exceptions are when the incentives change due to new laws (which they can't predict) and the fact that they are usually too pessimistic! The EIA and IEA are famously off in the pessimistic direction, the academics do a lot better.

But the modelers note that they do not try to model positive synergistic effects that we have been calling 'the Green Vortex'. That adopting cheap green tech leads to new niches for that tech and new technologies and broader adoption that was not anticipatable. I think they DO assume that mature green tech (here, PV, wind, and BEVs) gets cheaper according to a learning curve model (which the EIA and IEA do not IIRC) that plateaus at some cost level. Those learning curve models are usually also too pessimistic in practice when the tech finally scales. In the EV case, that would manifest as a new battery tech (sodium?, solid-state?) that come along 3-5 years from now and blows away the lithium learning curve. And never would've been discovered until 10s of billions were at stake to allow larger scale research.

As for the building codes... you guys make me crazy. Half of you act like building codes (and energy star appliance rules) are written by Bernie and AOC to bankrupt hard working families with useless expensive tech that isn't ready for prime time, and the other half of you want to increase the standards to levels beyond minimizing total cost of ownership! Sheesh. The existing system (building codes and energy star) TRIES to force the adoption of new tech when it leads to lower TCO on a reasonable time horizon. That is it. With buiulding codes, there hasn't been much new tech (other than HPWHs), so they haven't changed. With appliances, there has been a lot of action, with huge reductions in energy use that pay off (so long as the appliance doesn't break after 2-3 years). I think durability concerns are real and should be addressed.

I think the BBB had a lot of home retrofit money in it, and the IRA has a lot less. I think that IS sad, but a 'small potatoes' thing that can be addressed in a separate bill, both in terms of cost and energy savings (!) compared to the HUGE aims of IRA, to reduce the carbon intensity of the grid by a significant factor (!) AND to pull forward the adoption of EVs to get past peak oil demand (!!). We all agree that both things are going to require a LOT of large and small infrastructure changes, in the 'weeds' if you will. And the IRA aims to incentivize all those little things to speed/smooth the transition.

As for 'too little too late'. Maybe, I can't predict the future. But I don't think its 'little' to get within spitting distance of the Net Zero by 2050 trend for the next 10 years. The green Vortex or states can get us the rest of the way (maybe). While we worry that our houses are not net zero... this plan puts the US on a path (almost) to get the whole country to Net Zero by 2050. OFC things get shaky after 2035 in terms of what happens then, but honestly we can only hope to predict these things over 10-15 years anyway, so we fix the things we know we can fix.

As for too late? I don't subscribe to the tipping point and baked in alarmism of some looking at the Climate. There are SOME positive (unstable) feedbacks and some inertia in the system... but mostly in my reading there are a TON of negative (stable) feedbacks and most effects have short time constants.

So, bottom line, I think the IRA is 'sensibly perfect' in terms of industrial climate policy, and is not only a big step.. it is a step in the 'green abundance' and 'green vortex' direction, that will get the job done in a way that Carter's cardigan utterly failed to do.
 
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Living in an extremely rural area on the Gulf of Maine makes it very easy to see that climate change has already happened and we can only stop it from getting worse. Biodiversity is already tanking with only some species responding well to management. I'm not suggesting we do nothing, it's just not ever going to be enough because treating the earth poorly is more profitable. When it becomes more profitable to save the planet then things will change quickly.
 
Living in an extremely rural area on the Gulf of Maine makes it very easy to see that climate change has already happened and we can only stop it from getting worse. Biodiversity is already tanking with only some species responding well to management. I'm not suggesting we do nothing, it's just not ever going to be enough because treating the earth poorly is more profitable. When it becomes more profitable to save the planet then things will change quickly.
A lot of that loss of biodiversity is due to causes outside of climate change. Habitat destruction, ecosystem alteration, mass usage of herbicides and pesticides, over-harvesting, poor agricultural practices, rampant pollution, etc. All are caused by a systemic disregard for their consequences and not climate change. We have chit so much into our own beds to the point where mother's milk contains forever chemicals and plastic nanoparticles. As a species, our culture has bred into us an indifference to the gift of life that the planet provides.
 
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Plant life (spring bloom, leaves falling) dates clearly indicate it's already happening.
 
A lot of that loss of biodiversity is due to causes outside of climate change. Habitat destruction, ecosystem alteration, mass usage of herbicides and pesticides, over-harvesting, poor agricultural practices, rampant pollution, etc. All are caused by a systemic disregard for their consequences and not climate change. We have chit so much into our own beds to the point where mother's milk contains forever chemicals and plastic nanoparticles. As a species, our culture has bred into us an indifference to the gift of life that the planet provides.
It's all a feedback loop as well. As we destroy more habitat, pollute, etc. then the effects of global warming are more intense leading to more of the former. I'm also talking about the Gulf of Maine warming faster than anywhere else in the world. The native species loss from invasive predators better able to survive due to warming waters is worse than the issues from acidification.
 
if something is to be done about it the biggest corporations have the most money and power to commit and making real change. Without them onboard we are left with only grassroots activism and the political system certainly favors big business over grass roots. My last couple hotel stays we didn’t get mini shampoo bottles every day. Think of the effect of the that corporate decision. that’s just estimate a number is 1 million bottles a day! That have been replaced by one that lasts weeks or more.
 
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