White House adviser Ali Zaidi said the Biden administration is racing to lock in the hundreds of billions of clean energy investments in its landmark climate law — a pledge that comes as former President Donald Trump is vowing to dismantle the whole effort.
In an interview with the POLITICO Energy podcast ahead of Climate Week in New York City, Zaidi said the incentives in Democrats’ Inflation Reduction Act and actions by U.S. allies abroad have sparked a shift in clean energy manufacturing and deployment.
“The Biden-Harris administration is focused on sprinting through the next few months, [with a] relentless focus on execution,” said Zaidi, the national climate adviser to President Joe Biden. “We’re implementing the largest investment climate in the history of the world and a regulatory agenda that has helped secure public health gains and environmental gains.”
“And frankly, I think there’s going to be real momentum,” he added.
Zaidi’s comments come as Trump, the GOP nominee, has blasted the law as a “green new scam” and promised to claw back unspent funding from the IRA if he wins the presidency. But some Republican lawmakers have said they favor preserving parts of the law, which is generating investments in battery factories and other energy projects in red states. And House Speaker Mike Johnson said last week that he’d favor using “a scalpel and not a sledgehammer” when it comes to rolling back pieces of the law.
Zaidi contended that any attempt to shut off the flow of funds would not just face political resistance but would be difficult to carry out.
Jobs like those at the nation’s largest solar manufacturing plant in Georgia are “at risk when we’re talking about pulling back the very tax credits and the incentives that have catalyzed this economic activity to help us meet climate [targets],” he said.
“Just the math of it, there’s not a ton to work with because we have been very effective at rigorous, robust and accelerated implementation,” Zaidi said. “There’s steel in the ground and there’s real momentum.”
The annual Climate Week event which started Sunday in conjunction with the United Nations General Assembly, has taken on heightened significance this year because of anxiety around the U.S. presidential election.
A win for Trump in the November election would stymie climate ambition from the world’s largest economy, and could set back global efforts to curb greenhouse gas emissions and address the changes in the climate that are already happening.
The election will take place just days before the COP 29 U.N. climate conference in Baku, Azerbaijan, where countries will hash out issues such as financial aid for developing countries to fight climate change and the new round of pledges to meet the Paris climate agreement target. Trump has vowed to pull the U.S. out of the Paris climate agreement for a second time if he returns to the White House.
Zaidi acknowledged the “sky-high stakes” of this week’s events in New York, noting countries are falling short at slashing emissions at the pace needed to help meet the Paris agreement’s goal of holding warming to 1.5 degrees Celsius. That shortfall, due in part to economic headwinds from high interest rates, permitting challenges in building new infrastructure and snarled supply chains, is “raising people’s anxiety level,” Zaidi added.
That’s true of the U.S. even after Biden has poured into the economy hundreds of billions of dollars in incentives and spending from the IRA, bipartisan infrastructure law and CHIPS and Science Act.
But the U.S. emissions reduction trajectory would undoubtedly worsen if Republicans deliver on their nominee’s threat to rescind parts of the IRA, even potentially targeting obligated but unspent funds, as some of Trump’s allies have suggested.
Republicans in Congress say they support Trump’s threat to revoke unspent funding, even as they seek to protect the clean energy and manufacturing tax credits from repeal.
“I am with him on pulling back on unspent money,” Sen. Shelley Moore Capito (R-W.V.), the top Republican on the Environment and Public Works Committee, told POLITICO. “That’s why they [the Biden administration] are trying to spend it so quickly.”
But she added, in her home state of West Virginia, “several investments are being driven by the tax credits in the IRA” and she hopes to “maintain those because they are job creators.”
The IRA, along with the other industrial spending laws, have driven a clean energy and manufacturing boom across the U.S., buoying production of solar power, electric vehicles and batteries, he said, which Republicans have threatened.
“Republicans have articulated very clearly not just a slow down agenda on climate, but a U-turn agenda on climate, a U-turn agenda on those clean energy factory jobs,” Zaidi said. “People are sensitive to that. And folks realize that the best antidote to all of this, whether it’s the climate anxiety or policy uncertainty, is action, it’s investment, it’s building.”
The climate and energy provisions under the IRA are largely new and expanded tax credits to incentivize the build out of low-carbon energy projects and their supply chains. The Treasury Department is racing to write guidance to implement those policies before the end of Biden’s term.
While the tax credits have sparked clean energy projects in GOP-led areas, prompting some Republicans to call on leadership to protect those provisions, agencies are still working to deploy billions of dollars in federal spending under the law for grant programs and loans.
The law’s grant programs include those to reduce methane emissions, increase energy efficiency and create green banks across the country— some of which have already drawn Republicans’ ire. It also boosts funding for a loan office under the Energy Department that has grown under Biden but that slowed down under the previous Trump administration.
Zaidi touted progress he said the administration has made in awarding and obligating grant dollars and making funding available for companies to apply for.
“Our agencies, our cabinet has been relentlessly focused on execution. If you look across the board, we’re north of 85 percent of those grant dollars being either awarded or well under competition,” Zaidi said. “EPA just hit a milestone, two thirds of their dollars obligated.” He added the agency projects to obligate 90 percent of their funds by the end of the year, including the Greenhouse Gas Reduction Fund.
Republicans have repeatedly targeted the Greenhouse Gas Reduction Fund, in particular, as a “slush fund.” EPA obligated the full $27 billion under the program in August, a month ahead of the law’s deadline. Those obligations make up roughly 65 percent of EPA’s funding from the law. The agency said last month it is on track to obligate $38.3 billion out of its $41.5 billion by the end of the year.
POLITICO previously reported on the various stages of the direct spending, since IRA obligations are not publicly tracked in a centralized place. As of June, just over $70 billion in tentative awards were announced under the IRA, or just over half of the law’s available total appropriations.
Trump and some of his GOP allies say they will rescind “unspent” funds from the law — potentially including obligated money — although which programs would be on the chopping block remains to be seen.
Zaidi argued Republicans would face a political backlash if they targeted these funds, noting grants and loans issued by the Biden administration have supported technologies that GOP members support, such as nuclear, batteries and clean hydrogen.
“So if you take the House Republican caucus at its word that they are for energy security, they are for American energy production, they are for American manufacturing, they’re for jobs and for the middle class, well, then these policies that they’re talking about — pulling back on loans to catalyze investment in America’s energy strength — it just doesn’t make any sense,” Zaidi said.
Sen. Kevin Cramer (R-N.D.), a close ally of Trump, told POLITICO the party’s presidential nominee is likely aware of the “Republican blowback” he’d receive by targeting the tax credits.
Clawing back unspent dollars though, Cramer said, might be “very appealing to swing voters” who “know we’ve overspent in lots of areas.”
Zaidi is hoping to deprive Republicans of that opportunity though.
Kelsey Tamborrino and Jessie Blaeser contributed to this report.
