Joe Biden wants to jump-start solar energy — a great idea, in theory. But will it work?
Whatever you make of Joe Biden as a man, a public figure or a chief executive, his presidency has been unlike any other in modern American history. He has quite likely faced more simultaneous crises than any president since Franklin D. Roosevelt, and one illustration of that fact is that Biden has already invoked the Defense Production Act (DPA) — a Cold War law that grants the executive branch broad authority to mass-produce resources necessary to mitigate domestic emergencies — at least six times.
Last year, the Biden administration drew on the DPA twice to boost the production of COVID vaccines and supplies, and later did the same to prepare for the Western wildfire season last fall. Between March and May of this year, the president again invoked the law to expand production of baby formula as well as critical minerals for electric vehicle production.
Regardless of their individual merits, these executive actions passed through the news cycle with little to no pushback from conservative pundits and Republican politicians, who are generally eager to criticize Biden’s every move. That emphatically changed this week following the president’s sixth DPA authorization, which left Democrats and Republicans bickering over whether Biden was extending his presidential powers outside their acceptable range.
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On Monday, the administration authorized the use of the DPA to bolster the domestic production of solar power and other green energy sources with loans and grants, according to Reuters. At the same time, the president also invoked an obscure section of the Smoot-Hawley Tariff Act, a once-controversial protectionist trade policy enacted in 1930, to exempt tariffs on solar panels imported from Cambodia, Malaysia, Thailand and Vietnam for the next 24 months.
This was all part of necessary “advance planning” meant “to ensure electric resource adequacy,” the White House said in a press release. “Electricity produced through solar energy is also critical to reducing our dependence on electricity produced by the burning of fossil fuels, which drives climate change.”
Sounds like a relatively uncontroversial statement, right? Not these days. Biden’s waiver has sparked the ire of many Republicans (and even some liberals) by effectively freezing a federal investigation into whether China’s solar industry has been diverting production to Southeast Asia in order to circumvent heightened duties.
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Sen. Rob Portman, R-Ohio, a longtime beneficiary of the fossil fuel industry, argued this week that Biden’s move to loosen rules on solar imports was “the wrong policy at the wrong time.” Using an abbreviation for the Chinese Communist Party, a noted trigger-phrase on the right, Portman wrote on Twitter: “This rewards the CCP for their unfair trade practices, doesn’t hold them accountable for their human rights abuses, and will not spur economic growth.”
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Sen. Josh Hawley, R-Mo., likewise accused Biden of being in China’s pocket, saying that the president “wants Americans paying $6 a gallon for gas and American energy workers jobless — but he will break the law to allow Chinese solar panel imports.”
“Joe Biden sold out American solar panel manufacturers to China,” echoed Sen. Tom Cotton, R-Ark, a known foe of renewables. “This weakness is dangerous.” (It may be worth noting that both Cotton and Hawley are clearly considering presidential campaigns in 2024, especially if Donald Trump decides not to run.)
Biden’s invocation of the DPA and the Smoot-Hawley Tariff Act are two separate prongs of a broader effort to shore up green energy. Most liberals and progressives have praised that effort as a necessary step in America’s urgently necessary transition toward renewables. But that sentiment isn’t universal, with some voices on the left arguing that Biden’s tariff suspension flouts statutory law and could lead to a medley of unintended consequences.
Matt Stoller, director of research at the American Economic Liberties Project, a nonprofit focused on corporate accountability, called Biden’s move “wildly illegal,” saying that “there is no legal authority to create an exemption to the duties levied on solar tariffs.”
“Let’s be clear about what is happening,” Stoller tweeted. “The White House is administratively gutting key pieces of trade law to enable Chinese solar producers possibly using slave labor and coal-fired power to move their products duty-free through Malaysia, Cambodia, Vietnam, and Thailand.”
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David Dayen, executive editor of the American Prospect, largely echoed Stoller’s concerns, arguing that Biden’s tariff policy “will likely allow China to dump cheap solar products in the U.S. by disguising them as coming from [Southeast Asia], and furthers the delay of the buildout of a U.S.-based solar industry.”
“More broadly,” he added, “any small company wanting to challenge trade practices that harm its business can now be stymied by a government that doesn’t agree, or a large lobbying campaign that forces the government into doing so. The precedent set by this action goes beyond solar panels, and could infringe on the government’s ability to conduct trade enforcement and industrial policy.”
Both Stoller and Dayen’s arguments are to some degree based on a close reading of a provision in the Smoot-Hawley Tariff Act that allows the president, after declaring an emergency, to “permit … the importation free of duty of food, clothing, and medical, surgical, and other supplies for use in emergency relief work.” It’s a massive stretch, they point out, to claim that solar panel production qualifies as “emergency relief work,” and that part of the law was clearly intended to address natural disasters or foreign invasions.
One could certainly argue that America’s inability to wean its economy off fossil fuels has created an emergency, but Biden’s critics would argue that twisting the language in a 90-year-old tariff law is not much of a solution.
“If you look at things [Biden] could do but isn’t doing that are squarely within a president’s powers, it makes you wonder why he picked solar panels and the DPA,” Erik Gordon, a business professor at the University of Michigan, told Salon by email. “It wasn’t a national emergency last month or the month before. Higher gas prices doesn’t make it a national emergency.”
It’s true that there are various policies Biden could enforce at the executive level that would at least begin to address the long-term impact of climate change. He could prohibit oil drilling on federal land and invoke the National Environmental Policy Act and Clean Water Act to halt carbon-intensive infrastructure projects that are currently in development.
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But those kinds of broad-strokes policy changes are politically risky for a president with a narrow majority facing a midterm election. Far more important, they don’t climate global warming at its root cause (i.e., continuing or accelerating carbon emissions). Arguably, there’s something of a vicious circle in action: Climate-induced weather patterns are increasing the risk of power outages, and a drilling ban on federal land, while desirable on its own terms, might make the looming “reliability crisis” predicted by the Federal Energy Regulatory Commission even worse.
It’s not clear whether Biden’s imaginative tariff suspension will pass legal muster. But even if it does, critics say, it may not do much to meet the nation’s solar needs, especially when domestic solar production is constrained by the DPA’s current bank balance.
“There’s not enough money authorized for this fiscal year, and probably the next, to really stimulate the creation of a domestic solar manufacturing industry,” Tyler Priest, an associate professor of energy policy at the University of Iowa, told Salon in an interview. “It’s just a jumpstart, or a signal that the Biden administration supports the growth of this industry.”
According to Bloomberg, the federal allocation for the DPA has dwindled to less than $500 million, much of which has already been allocated to finance drone and baby food production. Solar manufacturers told the outlet that what was left would only fund construction of a few solar manufacturing plants.
“Even if they spent all of that on solar panels, it’s a pittance,” Nick Iacovella, a spokesman for the pro-manufacturing Coalition for a Prosperous America, told Bloomberg.
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Leah Stokes, an associate professor of environmental science and management at the University of California, Santa Barbara, painted a more positive picture, arguing that the DPA’s benefits could be felt across a variety of green technologies.
“Beyond solar, funds will flow to heat pump technology, building insulation, clean hydrogen and critical grid components,” she told Salon by email. “In particular, expanding onshore heat pump manufacturing is an exciting opportunity to meet rising U.S. demand.”
Stokes pointed to statistics released by Rewiring America, a pro-electrification nonprofit, which found that actions like Biden’s could lead to the creation of up to 462,000 jobs in the clean heating sector and solar sectors — jobs that cannot be automated or offshored, an important point to as the coal, oil, and gas industries continue to shrink year after year.
But Biden’s DPA invocation “is just a first step,” Stokes noted. “The DPA can’t bring about the clean energy transition on its own — it is, unfortunately, a small amount of money compared to the investments we need,” she argued. The potential solution lies, Stokes said, in Biden’s stalled legislative agenda, specifically “the comprehensive $555 billion in climate and clean energy investments” that the Democratic-led House passed last year as part of the president’s Build Back Better package, but has lain dormant in the Senate. “We need Congress to act,” she said. With less than five months to go before the midterm elections, that seems like wishful thinking.
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