As tax credits supporting electric vehicle purchases are poised to sunset this year, a new bipartisan bill would extend a $7,000 tax credit (down slightly from $7,500) to consumers purchasing the climate-friendly vehicles. Senators Lamar Alexander (R-Tenn.), Debbie Stabenow (D-Mich.), Susan Collins (R- Maine), and Gary Peters (D-Mich.), and Congressman Dan Kildee (D-Mich.) are backing the bill, which would provide the credit to an additional 400,000 vehicles per manufacturer on top of the previous cap of 200,000 already reached by Tesla and General Motors.
In its own right, this bill would be a significant driver to grow deployment of electric vehicles and develop consumer acceptance for electrification – a necessary component of decarbonizing the transportation sector. While EVs can be less expensive than conventional vehicles over the life of the vehicle (i.e. factoring in fuel savings and reduced maintenance costs), the upfront premium can deter would-be buyers. That’s where the EV tax credit is helpful. Over time, EVs are expected to reach cost parity with conventional vehicles as battery technology improves.
But I believe it’s also a promising sign of the potential for more bipartisan steps that Congress can and should tackle now – even in a political atmosphere that doesn’t lend itself to broad and comprehensive action. The EV tax credit extension is among a list of bipartisan policy options C2ES released earlier this year, which Congress could take action on now for meaningful emission reductions.
These options are among the work products of Climate Innovation 2050, a new C2ES effort to identify pathways to decarbonizing the U.S. economy. C2ES is working with leading companies and lawmakers on both sides of the aisle to strengthen the foundation for such an approach.
Since the “Green New Deal” helped reignite the debate for climate solutions, we have seen growing engagement from congressional Republicans. Members on both sides of the aisle have been developing carbon pricing proposals. Senator Alexander has also proposed a “New Manhattan Project” aimed at jump-starting energy research and development with new funding. And many Democrats are signaling a willingness to work constructively with them.
The EV proposal along with Mr. Alexander’s research funding are necessary down payments on broader climate action. They put in place policies that reduce greenhouse gas emissions, but of great political importance they – along with bipartisan policies C2ES has identified – could also establish the foundation of bipartisan trust and cooperation we’ll need if a broader, long-term strategy is to be reached in the near future. The time to set those wheels in motion is now, and heightened concern can help compel our political leaders to act.
The growing urgency of climate action was dramatically underscored by the latest findings of Intergovernmental Panel on Climate Change, and by the U.S. National Climate Assessment, which projects health, property and infrastructure damages exceeding $500 billion a year in 2100. Meanwhile, a recent Gallup tracking poll indicates broad public support for climate action may have reached a 20-year high.
Averting the consequences of climate change requires an ambitious mix of policy, innovation and investment in climate resilient infrastructure to transform the U.S. energy system and reduce our greenhouse gas emissions to net zero by mid-century. Only with strong U.S. leadership can we expect the rest of the world to set a similar course.
Both now and over the longer term, progress requires a shared understanding of both the grave realities of climate change and the practical challenges of getting to net-zero emissions. It requires a technology-inclusive approach that taps not only renewables and efficiency, but other solutions including nuclear, carbon capture, and perhaps even other yet-to-be-imagined solutions.
We have seen recent bipartisan cooperation. This emerging bipartisan support enabled enactment last fall of tax credits for both renewables (like fuel cells, small wind, and geothermal) and carbon capture. Earlier this year, an overwhelmingly bipartisan embrace of environmental values, Congress enacted a sweeping land conservation package. We can add to, and build on, the momentum. For instance, Congress can:
- Make the U.S. a leader on low-carbon innovation by boosting support for research and development, including by significantly increasing funding for the Advanced Research Projects Agency for Energy – ARPA-E.
- Ensure that any infrastructure package includes measures to expand charging infrastructure for electric vehicles, modernize the nation’s electric grid, and build pipelines to transport captured CO2 for use or storage.
- As mentioned above, extend and expand an existing tax credit for electric vehicles and make it easier for consumers to take advantage by making it available at the point of sale.
- Establish a permanent investment tax credit and take other steps to support the development of offshore wind projects.
- Take steps to help preserve existing nuclear power plants, our largest source of zero-carbon electricity, and develop advanced nuclear technologies.
- Help farmers and forest owners adopt practices that sequester carbon from the atmosphere in soils and vegetation.
- Support state and local efforts to save energy by upgrading existing homes and introducing “intelligent efficiency” into building codes.
- Adopt measures to reduce emissions of short-lived climate pollutants, including methane and hydrofluorocarbons (HFCs).
The idea of a Green New Deal has injected vital new urgency and energy into the climate debate. But for climate solutions to be effective, they must be durable, which is possible only with bipartisan buy-in.
Bipartisanship, of course, isn’t a “Big Bang” event. It must be carefully nurtured, through a willingness to listen, and to find common ground. But for meeting the climate challenge, like so many others, it’s an essential ingredient. And the sooner we begin cultivating it, the better our chances of avoiding climate disaster.