Update On National Climate Legislation

by Jeff Hammarlund

Hello from our family cabin on Priest Lake in northern Idaho. We do have occasional access to the Internet up here, but we will leave by canoe on a camping trip tomorrow, so I won’t have any way to communicate for the next few days.,As you probably heard, the Senate passed the $1.2 trillion bipartisan infrastructure bill this morning.  Here is a link to the best summary I have found on what is and is not in that bill. 
The infrastructure bill now goes to the House. I hope Nancy Pelosi will stand by her commitment to keep a hold on the bipartisan bill (despite pressure from the more moderate House Democrats) until the Senate passes the much more extensive budget reconciliation package that includes the climate provisions that now must proceed through the reconciliation process. With their passage of the infrastructure bill, Senate Democrats immediately turned their attention to getting the filibuster-proof $3.5 trillion reconciliation package moving. On August 9, the Senate Budget Committee, chaired by Bernie Sanders, released its resolution that contains the instructions for Senate and House committees to draw up policies in their jurisdiction, which will be cobbled together in the coming weeks into a filibuster-proof reconciliation bill. Majority Leader Schumer released an accompanying memo that gives more detailed direction on which committees will be responsible for developing the specific policy details on different pieces of the reconciliation package.

Senator Sanders announced that he believes that his committee’s Budget Resolution “will allow the Senate to make the most significant investment in tackling the climate crisis in US history, and put America on a path to meet President Biden’s climate change goals of 80% clean electricity and 50% economy-wide carbon emissions reductions by 2030.” 

The Good and Bad News

The resolution and memo provide good and bad news. On the good news side, the Senate Finance Committee, chaired by Oregon Senator Ron Wyden, gets to play a major role in the reconciliation package. Wyden’s proposed Clean Energy for America Act is excellent, has already passed out of the Finance Committee, and will form the basis for the Committee’s work to be meet its budget resolution assignment. It provides a sweeping clean energy tax overhaul that would expand and consolidate a host of energy tax credits into three categories intended to push the production of clean electricity, clean transportation fuels, and energy efficiency. Just as important, it would also eliminate all existing subsidies and tax breaks for the fossil fuel industry and provide a “border adjustment tariff” to levy charges against imported products from nations that lack significant carbon and other greenhouse gas emission controls. By eliminating these subsidies and tax breaks, the Finance Committee is charged with reducing the federal budget by $1 billion over the next 10 years and provide much of the funding for the clean energy tax credits. Other committees have been given important roles as well. For example, the Senate Environment and Public Works Committee is allocated $67 billion to establish and fund a methane fee, various clean vehicle investments, a clean energy accelerator, and EPA’s new environmental justice programs. The Agriculture Committee is allocated $135 billion for a variety of regenerative agriculture, climate resilience, and carbon reduction programs. The Homeland Security and Government Affairs Committee is directed to draw up policies to electrify federal buildings and vehicle fleets as part of its $37 billion allocation. On the House side, the Energy and Commerce Committee would get a $486.5 billion allocation, while the Natural Resources Committee would get $25.6 billion.

The bad news is that the Senate Energy and Natural Resources Committee, chaired by Senator Joe Manchin of West Virginia, is allocated $198 billion to take the lead on the bill’s most important new climate program – what is now called the Clean Electricity Payment Program (CEPP) – that would fit the strict rules that govern the budget reconciliation process. We know that Senator Manchin is only open to a clean energy standard if it does not “forcibly eliminate fossil fuels.” His campaign ads are notorious for showing macho Joe shooting previous climate bills with a rifle “because it’s bad for West Virginia.”

Unfortunately, the best possible outcome now seems to be that Manchin will agree to a Clean Energy Payment Program that will primarily benefit truly clean energy (energy efficiency, solar, wind, geothermal, etc.) while also allowing his pet project, carbon capture and storage (CCS) technologies, to qualify. as well  While Manchin is less supportive of new nuclear power plants, the CEPP will almost certainly be technology-neutral, so if new nuclear plants are built, they will also qualify as clean since they are not significant sources of greenhouse gases. It is very likely that CCS and new (and at least some existing) nuclear plants will fail since they will no longer be able to rely on their substantial existing subsidies (assuming Wyden does his job), but this remains to be seen.

The CEEP cannot be a true Clean Energy Standard because it is not possible to include a regulatory standard in a reconciliation bill. Instead, it will involve a system of fines and payments that will incentivize utilities to increase their proportion of renewable energy to meet the targets. Advocates argue that a CEEP actually has some advantages over the traditional clean energy standards and renewable portfolio standards commonly seen at the state level. It’s more progressive: the money to drive the transition comes from federal coffers (via taxes on corporations and the wealthy as established through the Senate Finance Committee) rather than from electricity rates, which are traditionally regressive. For more information on how this is expected to work, check out these two helpful articles linked here and here.

My Very Limited Role

I am now able to mention that I had a very small role in the development of the CEPP. My participation was due to a number of factors: I was once a member of the professional staff of the Senate Energy Committee with the responsibility for addressing renewable energy and energy efficiency provisions, I currently serve as an adviser to the DNC Climate Council, and, probably most important, I have personal and professional relationships with some of the key people who had a much more significant role in the development of the CEEP.  (It is worth noting that I made it clear that I was participating on my own as a concerned citizen and was not “wearing any of my other hats” such as those associated with Climate Crisis Policy, Earth Bill, Indivisible, EMO Creation Justice Committee, NW Energy Coalition, etc.) My role was very limited and simply involved serving as a sounding board to respond to specific questions and offer occasional suggestions when asked. To use an analogy from the musical Hamilton I used once before, I was most definitely not “in the room where it happened.” I was not even in the room next to the room where it happened. At best, I was in the closet in the room next door, but the closet door was sometimes opened enough for me to get a general sense of what was going on. That was exciting enough for me at this late stage of my life. 

I also made sure my contacts knew that I was personally opposed to measures that would advance CCS and civilian nuclear power, and that their inclusion would receive vigorous push back from many.  However, it was explained to me that the political realities are that if these were not allowed under the CEEP, no meaningful climate bill would pass out of the Senate, period. Bernie Sanders, and all the other progressive environmentalists in the Senate and House know this to be true, and while they are not happy about it, most are now demonstrating a willingness to be candid about it.  I wish this was not the case, but we need all 50 Democrats in the Senate to support this bill, including Joe Manchin. And Joe Manchin’s (and Kyrlsten Sinema’s) votes will come at a cost.  

My Thoughts on Next StepsI appreciate that many of my friends and colleagues in the climate movement will be disappointed that this bill does not go as far as we had hoped.  They have every reason to be disappointed.  At the same time, I will tell you that I plan to support this bill as vigorously as I can.  Why? David Roberts said it best in his recent essay, Crunch Time: This Is America’s Last Chance at Serious Climate Policy for a Decade. To summarize his very important essay, “What Democrats are able to get through in the reconciliation bill is likely to be the last big federal climate legislation for a decade at least.”

When David published his essay on August 8, he wrote “Looking around, it doesn’t seem like clean energy supporters, climate hawks, or the left more broadly really get that. So let’s talk about why this is such an important moment and what’s at stake”.  Fortunately, some important players on the left, including the Sunrise Movement, have since indicated that they do get it, as suggested by their “Seal the Deal Day of Action on August 19. 
I encourage you to take a good look at the Reconciliation Package as it develops and see if you can get behind it too  It is consistent with Biden’s climate goals and objectives.  The only reason it stops at 80% clean in the power sector by 2030 rather than 100% by 2035 is the fact that a budget reconciliation can only go out to 2030.

As a political scientist who used to work on the Hill, I know that democracy is often messy and frustrating. For better or worse, our founding fathers decided to make it very difficult for major legislation to pass both chambers. If they knew then what we know about the urgent need to address climate change, they might have setup the system differently. But they didn’t, so we are stuck with what we’ve got.  
Let’s get the best deal we can given the political realities while the Democrats still have their razor-thin majorities in both chambers.  It may not be enough, but we have a better chance of improving an imperfect law through future amendments once the law is passed. At least we will have something on the books we can work with to improve. This is how it has worked with most of our major environmental laws – the Clean Air Act, the Clean Water Act, the Endangered Species Act, and many more.