Image Source: Shutterstock

Earlier this year, Mayor Buttigieg affirmed his support of the Green New Deal or something like it. This is of course music to the ears of environmentalists across the country. And, it is in stark contrast to Vice President Joe Biden’s relaxed 2050 climate goals. While he seems to be positioning himself as a younger and more moderate alternative to most of the field, his energy and environmental agenda seems fairly progressive and close to on par with the ambitious climate plans of Andrew Yang, Senator Sanders, Senator Warren, and Senator Booker. If Mayor Buttigieg somehow wins the nomination, environmentalists will not only have a leader that reverses the current administration’s bad deeds, but also a leader that has a solid handle on how to drive the transition to a sustainable future.

Perhaps the most surprising element of Mayor Buttigieg’s plan is that it includes a Carbon Tax. His plan states, “My administration will work with Congress to pass an economy-wide price on carbon, which will automatically increase each year. Revenue will be rebated back to Americans, meaning low- and middle-class households will receive enough to be better off economically than they were before.” This actually sounds a lot like Andrew Yang’s Universal Basic Income (UBI) proposal, except instead of funding UBI through a Value Added Tax (VAT), Mayor Buttigieg would do it through a Carbon Tax that would go up every year. This is similar to the way Alaska’s UBI program works. Alaska’s Permanent Fund gets a portion of the oil revenue generated in Alaska, and each year Alaskans get one to two thousand dollars from that fund.

In addition to advocating for a Carbon Tax, Mayor Buttigieg is advocating for a new suite of financing mechanisms. One of his ideas is to create an American Clean Energy Bank that would finance sustainability projects all over the country with a significant focus on “Regional Resilience Hubs” to serve under-resourced communities. He outlines the capabilities of such a bank in his plan stating, “Building on the success of green banks in states, the ​​American Clean Energy Bank will have $250 billion of initial capitalization. It will provide loans, grants, credit enhancements, and loan guarantees to finance clean energy technologies and energy efficiency, waste and water, and resilient infrastructure projects that create good local jobs, through which the bank can leverage up to six times more private-sector capital.” This is something that fiscally conservative environmentalists would rally behind as it would financially self-supporting operation after the initial capital investment. Also, Mayor Buttigieg notes the potential for this bank to leverage private capital for things like large clean energy projects.

Mayor Buttigieg is also committing to quadrupling the United States energy research and development budget. This is something that Bill Gates has been pushing every country to do to advance energy innovations at a faster pace. This funding change won’t happen over night, but Mayor Buttigieg’s plan sets a goal for reaching $25 billion per year by 2025 and investing over $200 billion specifically in energy research and development over 10 years. Mayor Buttigieg is also taking another idea out of Bill Gates’ playbook with his American Cleantech Fund. Bill Gates’ Breakthrough Energy Ventures is committed to building companies that will help stop climate change, typically investing in higher risk companies that could have larger impact. Mayor Buttigieg’s fund will similarly, “be​​ capitalized​​ with $50 billion in seed funding to support dozens of demonstration projects of new technologies that are too risky for the private sector, to build first-of-a-kind technology at government facilities, and to ensure these are translated into full scale U.S. manufacturing.” The next 20 years are going to be an exciting time to be a cleantech entrepreneur.

As you might expect, Mayor Buttigieg is also advocating for ending subsidies for polluters, developing new energy efficiency tax incentives, and establishing a clean electricity and vehicle net-zero emissions standards. These are all easy to understand and support. But, there is one section of his climate plan that isn’t really built out, but could be the most impactful program he creates. Mayor Buttigieg is advocating for the creation of Climate Action Bonds to fund large clean energy and resilience projects. This sounds like the mechanism that would fund higher dollar value projects like major climate adaptation infrastructure projects. There are some unaddressed issues surrounding this idea like how this would grow the national debt significantly, but it could also accelerate the transition to a carbon neutral economy.

Mayor Buttigieg’s approach to sustainability seems to focus significantly on tax policy, financing mechanisms, and regulation. The spirit of his climate plan is consistent with his peers, but there is significantly more focus on financial tools. Depending on the details that are yet to be developed, this could garner more support from fiscally conservative environmentalists, but if we get the details wrong, particularly on the Climate Action Bonds, it could result in significant increases to the national debt. All of the candidates in the race should dig into the details of their climate proposals a little bit more in the coming months and communicate those details to the public. The debate moderators should ask deeper detail-oriented questions to determine the viability of each candidate’s climate plan. Voters need to set a high bar for the candidates on the issue of climate.