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At State of the Union, Biden may tout a climate law that Europe hates

The Washington Post 2/7/2023 Maxine Joselow, Vanessa Montalbano

Good morning and welcome to The Climate 202! Today we’re reminiscing about our unreasonable expectations for President Biden’s first State of the Union speech last year. 🤣

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In today’s edition, we’ll explore why heat pumps are taking off in Maine and why France is covering parking lots in solar panels. But first:

Biden is expected to tout the Inflation Reduction Act at SOTU. Don’t expect cheers from Europe.

President Biden at the White House on Monday. (Susan Walsh/AP)

When President Biden delivers the State of the Union address to Congress this evening, he is expected to tout the Inflation Reduction Act as a signature achievement of his first two years in office.

Yet the speech will come hours after European lawmakers sound the alarm about trade tensions triggered by America’s climate law in meetings with Biden administration officials.

In particular, French Economy Minister Bruno Le Maire and his German counterpart Robert Habeck are visiting Washington today to discuss the law's impact on “future trade relations” with Treasury Secretary Janet L. Yellen, Commerce Secretary Gina Raimondo and U.S. Trade Representative Katherine Tai.

It’s the latest example of how the massive green subsidy package is fueling economic tensions across the Atlantic, even as Biden sells the package at home while preparing for a potential 2024 reelection bid.

“I imagine Biden’s speech will focus on boosting American manufacturing and industries at home, playing up the positive domestic side of the Inflation Reduction Act,” Sarah Jackson, a Berlin-based policy adviser at the climate think tank E3G, told The Climate 202.

“I doubt that Biden will touch on how much of an impact this law has had on the E.U., even though it does seem like the administration was caught off guard by the E.U.'s strong response,” Jackson said.

European lawmakers have voiced concern that the Inflation Reduction Act, including its $270 billion worth of tax credits for green technologies, could push companies to shift major investments from Europe to North America.

At last month’s World Economic Forum meeting in Davos, Switzerland, German Chancellor Olaf Scholz warned that the incentives would harm Germany’s auto industry and eventually spark a green trade war.
And last week, the European Commission proposed its own plan to help the bloc compete with the United States as a manufacturing hub for electric vehicles and other clean tech. European leaders will debate the plan during a summit in Brussels on Thursday and Friday.

Todd Tucker, director of industrial policy and trade at the Roosevelt Institute, a liberal think tank, told The Climate 202 that Biden will have to do a balancing act tonight in light of these transatlantic moves.

“With the State of the Union, you have multiple audiences: Biden’s own political base, Republicans and a global audience,” Tucker said. “As Biden speaks about the IRA, he's going to be trying to address all three of those.”

A White House spokesman did not respond to a request for comment on the climate elements of Biden’s speech, but in a fact sheet released Monday, the White House said the president would discuss how his economic plan is “transitioning the clean energy economy and lowering households’ energy costs.”

A Treasury Department spokeswoman said in an email that Yellen looks forward to meeting with her European counterparts and “working with our European allies on accelerating investments in green technologies.”

France urges ‘transparency’ around green subsidies

During his visit to Washington, Le Maire plans to call for greater “transparency” around U.S. green subsidies, he said in an interview with AFP on Friday.

“The most important thing is that we cooperate with allies to have transparency about the amount of subsidies and tax credits that will be granted,” Le Maire told the French news agency.
Pascal Confavreux, a spokesman for the French Embassy in Washington, added in an email to The Climate 202 that France wants to “know the level of subsidies, so that we can match it.”

However, it’s unclear exactly what remedy France is requesting and whether America can oblige.

The Treasury spokeswoman noted that the Joint Committee on Taxation scores for the Inflation Reduction Act are already public, while the credits claimed by individual taxpayers are “confidential information.”

Red states seek green investments

Le Maire also plans to ask U.S. officials — including at least one Republican governor — to stop making “aggressive” overtures to European businesses in a bid to “poach” their green investments, Sarah White and Guy Chazan report for the Financial Times.

Delegations from Michigan, Georgia, Ohio and other states have toured Europe in recent months to tout the subsidies available to European clean tech companies.
Georgia Gov. Brian Kemp (R) also pitched his state as a destination for clean tech investment in Davos, even though no congressional Republicans voted for the Inflation Reduction Act — part of a trend of GOP politicians touting the economic benefits coming to their states, but not the law that helped create them.

Kemp spokesman Andrew Isenhour said in an email that the governor’s stances on clean tech investment and the climate law were not inconsistent.

“Georgia is a destination state for all manner of new jobs and opportunity, despite the bad policies coming out of D.C. not because of them,” he said.

In the states

Heat pumps boom in Maine, despite frigid cold and oil industry pushback

In Maine, fossil fuel industry groups have waged a largely unsuccessful campaign to prevent homeowners from switching to electric heat pumps, claiming the technology doesn’t work well in frigid temperatures, The Washington Post’s Anna Phillips reports.

In one promotional video targeting Mainers, a radio show host walks through snow to a stranger’s door and offers her free heating oil. “My name’s Blake, we’re from Maine Energy Facts and we want to fill up your oil — it’s on us!” he says at another stop, where a woman thanks him profusely while cradling her baby.

The video directs viewers to a website dispensing home heating advice that is full of negative, and sometimes misleading, claims about heat pumps, saying they “are simply not ideal for climates like ours.” The campaign was funded by the National Oilheat Research Alliance, a trade association representing heating oil sellers, according to documents obtained by the Energy and Policy Institute, a pro-renewables group.

However, the message doesn’t seem to be working. Heat pumps, which combine heating and cooling systems in a single unit, do work in cold weather, and crews have installed thousands of the appliances in Maine. Keith Ouellette, a heat pump installer at the northernmost edge of Maine, said demand for the appliances “has just exploded.”

“When people call me, it’s not like they say, ‘Sell me on it,'” he said. “They’re already sold. They’re asking, ‘When can you come?’”

On the Hill

Democratic senators ask FTC to probe utilities’ ‘abusive practices’

Sen. Sheldon Whitehouse (D-R.I.) during a news conference Thursday at the Capitol. (Ting Shen/Bloomberg News)

Four Democratic senators on Monday urged the Federal Trade Commission to probe the electric utility industry’s alleged “abusive practices” and their effect on clean energy and consumers.

In a letter, the senators asked the commission “to investigate the full extent possible utility anticompetitive and anti-democratic activities waged at the expense of consumers.”

The senators noted that the Ohio-based utility FirstEnergy was involved in a $60 million bribery scheme to bail out its struggling nuclear and coal plants, while Florida-based utility Florida Power & Light wrote a draft of a bill for state legislators that environmentalists said would gut rooftop solar.

The letter, which comes after more than 230 advocacy groups requested a similar investigation, was signed by Sens. Sheldon Whitehouse (R.I.), John Hickenlooper (Colo.), Chris Van Hollen (Md.) and Elizabeth Warren (D-Mass.).

Spokespeople for the FTC and the Edison Electric Institute, a trade group representing investor-owned utilities, did not immediately respond to requests for comment.

International climate

French law will blanket parking lots with solar panels

A plan in France to cover parking lots with solar panels will be crucial for broader plans to phase out fossil fuels in the coming years, advocates say.

The French Senate on Tuesday is expected to pass a law requiring solar panels to be built atop all large parking lots in the country, The Post’s Michael Birnbaum reports.

The law would require all parking lots larger than about 16,000 square feet — able to hold roughly 50 American-size cars, and more French ones — to build raised solar-panel canopies covering at least half the surface of the lot.

The plan is part of a larger measure, dubbed the Law for the Acceleration of the Production of Renewable Energy, that French President Emmanuel Macron has made a centerpiece of his climate agenda. After the French Senate holds a final vote on the plan, Macron will give final approval.

The law, which could add as much electricity as 10 nuclear power plants to the French power grid, is aimed at increasing solar power coverage without taking away agricultural land or other open areas. Parking lots are typically big and unattractive, and policymakers say that covering them with solar panels won’t harm biodiversity or scar landscapes.

Most of France’s electricity comes from nuclear power, meaning its carbon footprint is unusually low. However, the country has otherwise lagged in installing renewable energy and has fallen short of standards from the European Union. The new proposal would instead make France a world leader in clean power generation.