Joe Biden Uses Defense Production Act For Clean Energy

It looks like President Biden is done waiting for Congress to do something about the country’s reliance on foreign energy. Through a series of executive actions announced on Mondaythe president plans to use the Defense Production 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 simultaneously ramping up domestic production of clean energy technologies bowls.

This is the latest in a series of steps that show the White House beginning to treat climate change and clean energy as national security issues. It’s also the kind that climate activists have been asking the Biden administration for for months. The executive measures could bring thousands of manufacturing jobs to the country, while also reducing the US’s dependence on foreign oil and gas, especially as the war in Ukraine continues.

This week’s Defense Production Act (DPA) permit focuses specifically on solar technology, heat pumps, insulation, green hydrogen and grid components such as transformers. They may not look much like, shall we say, repurposing car production lines to build tanks;, but in recent years we have seen the definition of national security shifting to more than just military spending. It now includes everything from the manufacture of equipment to treat Covid-19 to baby formula† Biden’s latest move sends the message that clean energy technologies are worth investing in because they are critical to the country’s security, and the government is willing to support their production even if the market favors cheaper ones. input.

“There are a lot of things the defense industry does that, on the face of it, wouldn’t exist in a free market environment,” he said. Sarah Ladislaw, director of the US program at RMI, a clean energy think tank. “But they are important to the proper functioning of our economy in a way that is far more important than just a commodity.”

It will be some time before production gets underway in response to the DPA, which is why Biden’s executive order is also addressing tariffs on imported solar panels. A two-year tariff freeze on certain solar panel imports may sound like the kind of shaky business that international economists can discuss best, but experts say it’s the action that will have the most immediate impact. That’s because the US solar industry is in a state of generalized hysteria recently because of a Ministry of Commerce investigation into whether developers were avoiding tariffs on Chinese solar equipment by importing the equipment instead from four other Asian countries – Cambodia, Malaysia, Thailand and Vietnam. The investigation threatened to derail solar projects across the country, endangering a burgeoning solar market with hundreds of thousands of employees.

“The tariff issue is absolutely transformative,” said Leah Stokes, an associate professor in the Department of Political Science at the University of California at Santa Barbara. More than 230,000 people work in the U.S. solar industry, mostly in installation, and “the vast majority of those jobs depend on solar energy imports,” said Stokes, who is also the senior policy advisor at the electrification nonprofit Rewiring America .

Hundreds of solar projects across the country had been put on hold in the past two months as developers waited to find out if they would have to pay billions in tariffs. However, the newly announced freeze should allow these projects to go ahead immediately, while also giving US solar producers time to ramp up production to meet the needs of future projects. That’s where the Defense Production Act comes in handy, using grants and loans to boost domestic solar production before the tariff freeze ends.

The DPA gives the White House the power to tell private companies what to produce in the interest of the country. Presidents Trump and Biden both used the law to bolster the country’s pandemic response, and Biden recently used the law to respond to the formula shortage and rising energy prices as a result of the war in Ukraine – the latest executive action also established DPA funding for crucial minerals for battery production. Coupled with Monday’s authorization, that order could set the country for an increase in both clean energy supplies and batteries to store that clean energy.

“It returns energy to a place we haven’t been in a long time,” says Ladislaw. For decades, US energy policy has prioritized cheap energy, opening the door to energy supply disruptions such as the 1973 oil crisis and the current surge in gas prices caused by a Russian oil ban. Biden’s DPA authorization puts the country on the path to energy independence and, according to Ladislaw, is a signal that the government sees energy as “a strategic asset that needs to be managed differently, rather than just letting the market handle it.” .” †

Aside from solar energy production, the DPA’s license also includes funding to ramp up production of four other technologies: green hydrogen technology, which can be used to store clean energy and clean up carbon-intensive industries; grid components such as transformers, which will help build a more modern, resilient grid that can handle an influx of renewable energy; heat pumps, which use electricity to heat and cool homes more efficiently than fossil fuel dependent systems such as furnaces; and building insulation, an overlooked tool in combating climate change, making homes more energy efficient and keeping them heated and cooled for longer.

It’s an encouraging sign that the Biden administration is looking at energy holistically, focusing as much on efficiency and energy conservation as it does on delivery. Heat pumps, in particular, have been the focus of writers such as Bill McKibben and of nonprofits in the field of electrification. McKibben recently wrote that using the DPA to boost heat pump production could help alleviate the effects of the war in Ukraine while reducing our climate impacts, and Rewiring America has launched a heat pump-focused policy plan to bolster US production and labor and reduce Europe’s dependence on Russian oil and gas.

While all of these steps are encouraging, the impact of the DPA is still limited by the budget – a few hundred million dollars – and the fact that authorization can be easily revoked. President Biden has had to take increasingly executive action to bring about some sort of piecemeal resurrection of a climate agenda that has largely faltered in Congress, but that’s not a long-term solution.

Republicans have also objected to Biden’s characterization of clean energy as a matter of national security worthy of the DPA. sen. Pat Toomey (R-PA) attacked Biden on Twitter for using his executive order to “advance his global warming agenda,” suggesting Congress would curtail the law if the government “continues to abuse the DPA for non-defense purposes.” However, Toomey’s argument ignores both the Pentagon and the text of the Defense Production Act itself: A Ministry of Defense report of last October discovered that climate change was a matter of national security, and the text of the AP itself calls energy a ‘strategic and critical material’.

Lasting change, Stokes and Ladislaw said, must come through Congress. The ghost of Biden’s Build Back Better bill, which is still making its way through 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 shift to security issues and energy security and climate. So what Congress is doing is really necessary; they will be a much bigger deal in terms of long term impact. This is intended to complement what the Hill can achieve.”

The question, of course, is whether the Hill can achieve anything in terms of climate change. Toomey’s response is revealing about the current atmosphere in Washington: A plan to increase US manufacturing jobs, either through the Defense Production Act or through the Build Back Better Bill, would be an easy two-pronged sale under all other circumstances. The problem doesn’t seem to be the plan, but the product. Clean energy and climate action seem like automatic no-gos for Republicans, and until that changes, the planet — and American jobs — will just have to bear the consequences.

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