Presumptive Democrat nominee Joe Biden has opened up a big lead over US Present Trump three months out from the election on November 3. Climate activists can dare to dream about the next President, and possibly Congress, that takes climate change seriously once more.
The centre-piece of the Democrat climate policy is a catchy three-word slogan, the Green New Deal (GND), incorporated into Biden’s Build Back Better (BBB) platform. (We don’t go for that sort of cheap stunt here at NEM Risk Bulletin).
Biden’s revised form of the GND is still a policy cornucopia of climate initiatives designed to activate younger voters and get the left base of the Democratic Party on side and voting come November.
It includes plans for new fast rail investment, electric cars manufacturing and expanded recharging facilites, higher car emissions standards, expanded public transport, massive investment in clean energy, storage, transmission and energy efficiency and multi-billion dollar investment in clean energy innovation. But no carbon price.
Bipartisan calls by leading US economists for the introduction of a price on emissions have fallen on deaf ears as the Democrats have opted for a more populist, less market-based policy approach.
Biden’s small target political strategy against Trump is reflected in his climate policy platform. He has taken many of the key elements of the GND proposed by left-leaning Democrats, but modified them for broader appeal, selling a simpler message of a smarter, cleaner economy that creates jobs in new green-tech industries while making life better and easier for ordinary Americans.
The shift is significant for Australian policy makers with the Federal Government pursuing a pro-technology climate roadmap while Opposition leader Anthony Albanese is gently moonwalking away from Labor’s commitment to carbon pricing which has caused it considerable political harm over the last decade.
Biden’s plan, if enacted as promised, will spend USD$2 trillion on clean energy, technology and infrastructure investments, indirectly linking spending on climate with post-COVID-19 recovery spending, programs targeting direct support for low-income households, industry policy for domestic manufacturing complete with a more unionised workforce.
If the Democrats can maintain their momentum until November and have a realistic shot at controlling both the While House and the Congress, this will at best defer global efforts for carbon pricing, leaving the European Union as the sole proponents of most economists preferred climate policy design.
For Australian electricity markets this will mean more debate over technology development and direct investment in renewables and transmission, while the future of remaining coal fired generators will be determined by when they can no longer manage the increasing demand and price volatility that comes from increased renewables capacity.