The US President launched the green transformation by agreeing on the huge subsidy packages.
(Photo: IMAGO/Xinhua)
Washington In a few weeks, the American President’s power to act will be severely restricted. On January 3, 2023, the new US Congress will be constituted, and with it the democratic majority in both chambers will disappear. The Republicans take over the House of Representatives, so the Democrats can probably no longer pass any major laws.
What does this mean for the second half of Joe Biden’s presidency? One thing is certain: he has already launched the most important project of his presidency: the green restructuring of the US economy. In fact, he has achieved more in this field than was foreseeable given the difficult circumstances. Majorities in Congress were tight, and the uncertainties of the pandemic could have paralyzed his entire agenda.
In fact, Biden failed to keep some promises. So he failed in his goals to carry out a reform of the electoral law and to introduce a minimum wage. But the green revolution will remain. Biden created the conditions for a modern, sustainable industrial policy.
This happened mainly through massive investments in electromobility, batteries or solar systems, divided into three laws: the infrastructure package, the Chips Act and the Inflation Reduction Act. Each package turned out to be smaller than originally planned. Biden had to cut corners.
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But he has doggedly pursued the vision of a sustainable economy, and that accomplishment will live on through his tenure—regardless of who succeeds him or whether Biden runs for the presidency again. Because the reforms of his government are designed for the long term. They don’t just symbolically pour money into eco-projects, they set economic transformation in motion.
The plant produces 300 megawatts of electricity. The US solar industry is benefiting greatly from the decisions made during the Biden presidency.
(Photo: Reuters)
Democrats pushed through tax credits and incentives combined with direct funding for research and development. As a result, companies and private citizens suddenly see a competitive advantage when energies become diversified and green technologies become affordable.
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Biden has understood: An energy transition cannot be driven only by idealism to save the planet. You have to take the economy with you.
Suddenly everyone wants to be part of the future
The Inflation Reduction Act in particular is controversial in Europe because of the market barriers it contains for foreign investors. But negotiations are still going on here, and there is a good chance that the transatlantic partners will come closer.
But the funds that are now being released are creating a gold rush mood in the USA. Green investments are no longer seen as a risk, but as an opportunity. Those who are not there suddenly fear missing out on new opportunities for prosperity.
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The consequences are already visible. Car manufacturers are concentrating on new electric models, solar companies are expanding their production, and new jobs are being created in hydrogen production and in lithium mines. For far too long, the potential for sustainable and mass-market key industries in the USA lay idle – now a new, lucrative “Battery Belt” is revitalizing entire regions in the South and Midwest of the USA.
Interestingly, Republican states in particular are benefiting from the green boom. That could benefit the Democrats in the 2024 presidential campaign. Republicans will gossip about their competitors’ “eco-fantasies.” But given the job growth in manufacturing, such attacks are unlikely to catch on.
The run for a green future in the USA is just beginning. The early signals are promising harbingers of a reversal that began under Biden.
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