Biden brings ‘trust us’ message to Skeptical UN climate summit

Bloomberg photo by Ting Shen.
President Joe Biden speaks during a news conference in the State Dining Room of the White House in Washington, D.C., on Nov. 9, 2022.

President Joe Biden will arrive Friday at the UN climate summit in Egypt with a message for thousands of delegates who long ago grew skeptical of U.S. promises of climate action: You can trust us now.

Biden has new evidence to back up that claim, despite the midterm elections Tuesday likely to put Republicans back in charge of the House of Representatives. The newly enacted Inflation Reduction Act dedicates hundreds of billions of dollars to clean energy, conservation and carbon capture – giving the country a shot at fulfilling its Paris Agreement pledge to at least halve greenhouse gas emissions by the end of the decade. And because the law’s benefits touch every state, including deep-red America, even climate skeptics in Congress would find it difficult to derail.

It’s a “credibility letter” for the U.S., according to Special Presidential Envoy for Climate John Kerry, who says the law is already defanging common attack lines from other nations about America making big promises it doesn’t keep. The big-spending act also gave Biden a big political boost ahead of the midterm elections, helping energize Democratic voters and thwart predictions of sweeping Republican gains.

Yet it does nothing to resolve a thornier issue: the failure of the U.S. government to dole out more than a tiny fraction of long-promised climate finance to help developing nations adopt green energy and adapt to the intense storms, scorching heat waves and punishing droughts exacerbated by climate change.

“A lot of countries are going to be very pleased the U.S. is starting to get its domestic house in order,” said Joe Thwaites, an international climate finance advocate with the Natural Resources Defense Council. “But it’s not international public climate finance, and they’re going to be increasingly pressed on that.”

Rich countries and the U.S. have so far failed to fulfill their promise of $100 billion annually in climate finance, which was supposed to start flowing in 2020. But the U.S. is by far the biggest laggard, having put forward about $1.7 billion in 2020. Even former President Barack Obama’s 2014 promise of $3 billion for the UN Green Climate Fund has proved too politically toxic; Congress has disbursed just a third of that.Read more of Bloomberg’s COP27 coverage

International climate finance is the real currency of climate talks. And tensions over funding are simmering at COP27, as poor countries on the front lines of climate change demand financial and technological assistance to cope with the “loss and damage” stoked by global warming. While some developing nations are insisting on a new program to provide that help, in negotiations, the U.S. and other rich countries have pushed back, arguing it would take far longer to create a new system and funding than to tap existing initiatives and revenue streams.

Developing nations are candid about their expectations. Asked what she most wanted to see out of this year’s climate conference, Freetown, Sierra Leone mayor Yvonne Aki-Sawyerr was blunt: “Money.”

“Real money – not commitments,” Aki-Sawyerr added during a panel discussion at the Bloomberg Green summit in Egypt Thursday.

Biden promised world leaders he’d deliver $11.4 billion in international climate finance by 2024. But even with Democrats in control of Congress last year, the administration managed to provide just $1 billion. Persuading a Republican-controlled House to provide more will be an near-impossible political challenge.

Don’t count Biden out, National Climate Advisor Ali Zaidi told the Bloomberg Zero podcast Thursday in Sharm el-Sheikh. Last year, the president arrived at the COP26 climate summit in Glasgow to gloomy predictions he wouldn’t be able to overcome political obstacles in Congress and pass legislation that could help the U.S. slash its greenhouse gas emissions. A year later, he’s muscled through two laws that are already driving new investments in solar manufacturing, electric vehicle charging and grid upgrades. “People love to, I think, view the process with skepticism, and I think time and time and time again, Joe Biden has delivered,” Zaidi said.

Frustrated by the limits of the federal government’s reach, U.S. climate envoy John Kerry has already been working on a creative solution that would help lure risk-averse private capital to funding the construction of solar arrays and wind farms in developing countries. His carbon credit proposal, unveiled Wednesday, was greeted with skepticism by many carbon-market experts because past offset programs have been abused, but many environmental groups praised it as a promising first step.

On decarbonizing the U.S., Biden has a much better story to share, thanks to the Inflation Reduction Act, which analysts say gives the U.S. a credible path to cutting greenhouse gas emissions at least 40% from 2005 levels by the end of the decade.

The law expands and creates a slew of tax incentives to drive a host of climate-friendly investments – from capturing carbon dioxide and creating hydrogen to manufacturing batteries and installing wind turbines. “The ultimate public climate spending enabled by the IRA could be over $800 billion,” Credit Suisse said in a Sept. 28 research note.

It’s already speeding investments in U.S. clean energy manufacturing and domestic supply chains: Zinc8 Energy Solutions Inc. plans to build a new battery manufacturing facility in New York; solar panel maker Hanwha Q Cells is evaluating sites in Georgia, South Carolina and Texas for a new plant; and REC Silicon ASA and Mississippi Silicon now intends to expand facilities in Washington state and Montana.

“The dollars are designed in a way to metabolize quickly into the economy, so we have hundreds of billions of dollars of private investment that have already mobilized because of the structure of the investments in the Inflation Reduction Act,” Zaidi said in an interview at COP27. “That is a fast-moving train that is picking up speed and mass at the same time.”

And the benefits are being felt even in deep-red strongholds, helping immunize the law from political attack. “We’re seeing the economic upside manifest all across the United States – in every state and every zip code, and that boosts the political economy of these investments,” Zaidi added.

Across the board, the Biden administration appears confident its agenda can survive the possible Republican takeover of the House.

“I don’t think the elections will change the fact that EPA has legislative authority” to “pursue the reduction of greenhouse gas emissions to protect public health and protect the planet,” EPA Administrator Michael S. Regan told Bloomberg TV on Thursday. “We’re going to continue to move forward and do our job.”

Taken together, Biden’s record on climate gives the U.S. new credibility in negotiations, Kerry said.

“We’re not promising, we’re not pontificating,” and “we’re not sort of sucking air,” Kerry said in an interview ahead of COP27. “The Inflation Reduction Act has been a very positive step, not just because it’s real money that has been going into real initiatives in the United States and elsewhere,” but “because it also has kind of kicked other countries into gear.”