Joe Biden uses the Defense Manufacturing Act for clean energy

Joe Biden uses the Defense Manufacturing Act for clean energy

President Biden seems to be done waiting for Congress to do something about the country’s dependence on foreign energy. Through a series of executive actions published on Mondaythe president plans to use the Defense Manufacturing Act to boost clean energy in the United States by freezing tariffs on solar panels coming to the country from Southeast Asia for two years while increasing domestic production of clean energy technologies.

This is the latest in a series of moves showing that the White House is beginning to treat climate change and clean energy as issues of national security. It’s also the kind of thing climate activists have been asking the Biden administration for months. Actions by the executive could bring thousands of jobs to production in the country, while making the U.S. less dependent on foreign oil and gas, especially as the war in Ukraine continues.

This week’s approval of the Defense Manufacturing Act (DPA) specifically targets solar technology, heat pumps, insulation, green hydrogen and network components such as transformers. They may not look very similar, for example. conversion of car production lines for tank construction, but in recent years we have seen the definition of national security shift to encompass more than mere military spending. It now includes everything from equipment production to treatment Covid-19 to baby formula. Biden’s latest move sends a message that it pays to invest in clean energy technologies because they are key to the country’s security, and the government is ready to support their production even if the market prefers cheaper imports.

“There are tons of things that the defense industry does that at first glance would not exist in a free market environment,” he said. Sarah Ladislaw, Director General of the U.S. Program at RMI, the Clean Energy Research Center. “But they are important for the proper functioning of our economy in a way that is far more important than the goods themselves.”

It will take time for production to start in response to the DPA, which is why Biden’s executive order also applies to tariffs on imported solar panels. A two-year freeze on tariffs on certain imported solar panels could sound like the kind of inconvenient solution best left to international economists to discuss, but experts say the action will have the most immediate impact. This is because the American solar industry was ua a state of generalized hysteria recently due to a Commerce Department investigation into whether developers evaded tariffs on Chinese solar equipment by importing equipment from four other Asian countries instead – Cambodia, Malaysia, Thailand and Vietnam. The investigation threatened to destroy solar projects across the country, threatening a growing solar market that employed hundreds of thousands of workers.

“The tariff thing is absolutely transformative,” said Leah Stokes, an associate professor in the Department of Political Science at the University of California, Santa Barbara. More than 230,000 people they work in the U.S. solar industry, mostly in the installation industry, and “the vast majority of these jobs depend on solar energy imports,” says Stokes, who is also a senior policy adviser at Rewiring America, a non-profit electrification organization.

Hundreds of solar projects across the country have been put on hold in the last two months as developers wait to find out if they will have to pay billions in tariffs. The newly announced freeze, however, should allow these projects to move forward immediately, while at the same time giving U.S. solar producers time to boost production to meet the needs of future projects. That is where the Law on Defense Production will come from, using grants and loans to encourage domestic solar production before the end of the tariff freeze.

The DPA gives the White House power to tell private companies what to produce for the good of the country. Both Presidents Trump and Biden used the act to bolster the country’s response to the pandemic, and Biden recently used the act to respond to lack of formula i rising energy prices due to the war in Ukraine – the latter executive action also directed DPA funding towards critical minerals for battery production. Combined with Monday’s approval, the order could trigger the country to increase both clean energy supplies and batteries to store that clean energy.

“It brings energy back to a place we haven’t been in a long time,” Ladislaw said. For decades, U.S. energy policy has prioritized cheap energy, opening the door to energy supply disruptions such as the one we saw during the 1973 oil crisis and the current rising gas prices due to the ban on Russian oil. Biden’s approval of the DPA puts the country on the path to energy independence and, according to Ladislaw, is a signal that the administration sees energy as a “strategic asset that must be managed differently, rather than just letting the market deal with it.”

In addition to solar production, the DPA’s mandate also includes funding to increase production of four other technologies: green hydrogen technology, which can be used to clean clean energy and clean industries that contain large amounts of carbon; network components such as transformers, which will help build a more modern, resilient network that can withstand the influx of renewable energy; heat pumps, which use electricity to heat and cool homes more efficiently than fossil fuel-dependent systems such as stoves; and building insulation, which is a neglected tool in the fight against climate changemaking homes more energy efficient and heating and cooling them longer.

This is an encouraging sign that the Biden administration is looking at energy holistically, focusing on energy efficiency and savings as well as supply. Heat pumps, in particular, have been the focus of writers such as Bill McKibben, as well as non-profit electrification organizations. McKibben recently wrote that using the DPA to boost heat pump production could help mitigate the effects of the war in Ukraine while reducing our climate impacts, and Rewiring America has released a heat pump policy plan to strengthen American production and labor and reduce Europe’s reliance on Russian oil and gas.

While all of these steps are encouraging, the DPA’s performance is still limited by its budget – several hundred million dollars – and the fact that the mandate can be easily revoked. President Biden increasingly needs to turn to executive action to achieve some sort of gradual revival of the climate agenda that has largely faltered in Congress, but that is not a long-term solution.

Republicans also questioned Biden’s characterization of clean energy as a national security issue worthy of the DPA. Sen. Pat Toomey (R-PA) attacked Biden is on Twitter for using his executive order to “advance his global warming agenda”, proposing to Congress to reduce that act if the administration “continues to abuse the DPA for non-defensive purposes”. However, Toomey’s argument ignores both the Pentagon and the text of the Defense Manufacturing Act itself: A Report of the Ministry of Defense since last October, he has determined that climate change is a matter of national security, a DPA text in itself it cites energy as “strategic and critical material”.

Lasting change, Stokes and Ladislaw said, must come through Congress. The spirit of Biden’s Build Back Better law, which is still undergoing reconciliation, could unlock hundreds of billions of dollars in incentives, far more than the budget allocated to the DPA.

“Congress action is really important,” Ladislaw said. “Our focus will be on security issues and energy security and climate. So what Congress is doing is really necessary; they will be a much bigger thing in terms of long-term impact. This should complement what Hill can achieve. ”

The question, of course, is whether Hill can achieve anything on climate change. Toomey’s reaction speaks volumes about the current atmosphere in Washington: a plan that increases the number of jobs in U.S. manufacturing, either through the Defense Manufacturing Act or through the Better Law Recovery Act, would be an easy two-party sale in all other circumstances. The problem, it seems, is not the plan but the product. It seems that clean energy and climate action are automatically banned by Republicans, and until that changes, the planet – and jobs in America – will simply have to bear the consequences.

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