2024 Starts with a Grim Climate Milestone, but Hydrogen Policy Hope

2023 was the hottest year in recorded history by a large margin, and the planet is likely to surpass the internationally agreed-to target of 1.5-degree Celsius warming above pre-industrial levels in the next month. But the Biden administration’s proposed clean hydrogen rules offer real hope for urgently needed, effective climate policies.

Last year was the world’s hottest year ever, by a large margin.

That’s the conclusion of the 2023 Climate Change Summary of the European Union’s Copernicus Climate Change Service (CCCS).

Worse yet, CCCS found that the planet is now likely to pass the 1.5 degree above pre-industrial levels threshold set by the Paris Climate Agreement of 2015 in a matter of weeks. The report states: “It is likely that a 12-month period ending in January or February 2024 will exceed 1.5°C above the pre-industrial level.”

Crossing the 1.5-degree Rubicon magnifies the risk of warming-related catastrophes, as well as potentially irreversible deterioration in baseline climate conditions. A 2018 report by The Intergovernmental Panel on Climate Change (IPCC) recites a now too-familiar list of likely disasters: changes in the hydrological and other natural cycles that imperil people, species, ecosystems, and food production; more weather extremes; sea level rise and ocean acidification; “impact cascades” as one changing natural system impacts others; and “compound events” where impacts of simultaneous events like droughts and heat waves are magnified.

All this comes on top of global conditions that have already been so damaged by pollution and abuse that the planet is “well outside the safe operating space for humanity.”

The news is grim. Is there any hope?

I find some encouragement in an extremely important decision by the Biden administration just before Christmas.

First, recall that the Bipartisan Infrastructure Law provided $8 billion to create hydrogen production hubs,” and Pennsylvania scored two of them. From available information, it appears that at least some of the hydrogen that each Pennsylvania hub proposes to produce will use natural gas as a feedstock, which means methane emissions and a reliance on still-unproven (after all these years) carbon capture utilization and storage (CCUS) technology

But the climate success of a new hydrogen industry hinges on driving its emissions as close to zero as possible, as fast as possible—preferably out of the gate. So, the design of the massive tax subsidies that were included in the Inflation Reduction Act of 2022 are crucial.

On December 22, 2023, after intense lobbying, the other shoe dropped when the U.S. Department of the Treasury and Internal Revenue Service (IRS) released proposed regulations governing the IRA’s Clean Hydrogen Production Credit.

In the proposed rules, the Biden administration largely embraced the indispensable work of Jesse Jenkins and colleagues at Princeton University’s Andlinger Center for Energy and the Environment. Their work identified the policies necessary to minimize climate-damaging emissions from hydrogen production, similar to rules already adopted by the EU. See this reaction piece from Jenkins after the draft was released and this thread on X for the details.

The draft rules are stringent—as they must be. They provide billions of dollars in tax credits that should only go to truly clean producers, and they have strong hydrogen industry support.

The fossil fuel industry immediately announced its intention to fight for looser rules that would allow them to access the credits, and “create jobs”—which actually means “keep drilling.”

In the face of surpassing the 1.5-degree climate barrier literally in the coming days, the Biden administration must stay the course and finalize the strict, climate-saving hydrogen tax credit rules. In so doing, they will enable the creation of a truly clean new industry, and not prop up an old one that must be phased out as soon as possible. They will prove that government can rise to this existential challenge and do great things—and the right thing.

The jobs and investment will come under these strong rules. And with them will come some desperately needed hope for a sustainable economy and a liveable world.

John Quigley

Senior Fellow, Kleinman Center
John Quigley is a senior fellow at the Kleinman Center and previously served on the Center’s Advisory Board. He served as Secretary of the PA Department of Environmental Protection and of the PA Department of Conservation and Natural Resources.