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Democrats Face Tough Climate Policy Choices As Glasgow Looms

October 13, 2021

Congressional Democrats negotiating climate provisions in a sweeping budget “reconciliation” bill are facing tough choices to assuage moderates and ensure final passage, while the Biden administration faces pressure to demonstrate it can implement its bold emissions targets ahead of next month’s international climate talks.

Recent analysis suggests Democrats may need to adopt a clean energy performance program (CEPP) -- a proposal pending on the House floor -- or enacting a carbon tax -- which remains a heavy political lift -- to achieve President Joe Biden’s target of reducing power sector emissions 80 percent by 2030.

At the same time, lingering divisions between progressives and moderates on the overall cost and scope of the reconciliation package are raising new alarms among environmentalists that a CEPP or other climate policy initiatives could be on the chopping block in order to reach a deal:

Hill Splits Sow Fears Of Thin US Climate Policies At Glasgow Meeting

Democratic divisions over their pending budget reconciliation package are exacerbating fears among environmentalists that Biden officials could arrive at next month’s international climate talks in Glasgow, Scotland, without significant legislative accomplishments on climate change, complicating the U.S. negotiating stance.

“I fear they have now waited until we are just about at [Glasgow] and the President is going to show up pretty much empty handed,” said an environmentalist, expressing concern that legislative gridlock could scar the Oct. 31-Nov. 12 talks, but also hoping for a preliminary legislative deal in time for the meeting.

“I don’t think we are in the freak-out stage yet, but it has definitely risen to the point that the uncertainty of reconciliation has gotten people [saying], what do we do” under different legislative scenarios, says another climate policy advocate.

With the Glasgow summit starting in slightly more than two weeks, the Biden administration has offered multiple assurances that America is committed to re-engagement on climate issues both nationally and on the international stage.

But U.S. officials still face questions about the credibility of their pledge to halve GHGs across the economy by 2030, and experts say a Capitol Hill deal on a climate-heavy reconciliation bill would go a long way toward addressing such skepticism.

At the same time, think tank Resources for the Future (RFF) released an analysis last week showing clean-energy tax credits alone would be insufficient for achieving Biden’s climate goals, setting up tough choices for Democrats:

Analysis Finds CEPP Or Carbon Fee Key To Biden’s 2030 Clean Power Goal

New research is suggesting that Democrats must supplement extended tax credits for clean energy with at least one of two contentious policies in their pending budget reconciliation package -- a clean electricity program or carbon tax -- to ensure achievement of the Biden administration’s 2030 target of 80 percent clean power.

The RFF analysis highlights climate policy tradeoffs as lawmakers and the Biden administration try to come to a deal on a reconciliation bill significantly below an often-cited $3.5 trillion figure. The renewed tax credits and a CEPP would be counted as a cost, but a controversial carbon fee floated by some lawmakers could be a source of revenue for other initiatives.

“[C]lean energy tax credits, the [CEPP] and a carbon fee -- all of which are under consideration for the budget reconciliation package -- could together reduce more than 18 billion metric tons of carbon emission in the power sector by 2040 while also reducing consumer electricity costs,” RFF says in an Oct. 7 press release on its new issue brief, “Cost Analysis and Emissions Projections under Power Sector Proposals in Reconciliation.”

The brief cites modeling of different combinations of several policies: the CEPP approach that rewards or penalizes power suppliers depending on whether they reach clean power goals; tax credits included in a Senate proposed Clean Energy for America Act; and two carbon fee scenarios including a “central” case modeled after legislation offered by Sen. Sheldon Whitehouse (D-RI), with an initial tax starting at $15 a ton. The second carbon fee option includes a more modest “alternative” plan starting at similar levels but ramping up more slowly.

The modeled clean energy tax credits do not include incentives for carbon capture and sequestration (CCS), which both makes the analysis simpler and reflects assumptions that CCS will not play a major role prior to 2030.

Progressive Democrats are seeking to maintain pressure on the Biden administration and moderates to preserve bold climate measures in the upcoming reconciliation package.

“The president must be able to put a deal on the table that reflects what we then expect from the rest of the world,” argued Sen. Ed Markey (D-MA), during an Oct. 7 press conference outside the Capitol with three Senate colleagues and environmentalists:

Citing Glasgow Talks, Senate Progressives Demand ‘Robust’ Climate Bill

Progressive senators are pressing Democratic leaders and the White House to hold firm on “robust spending” to address climate change in emerging budget “reconciliation” legislation, even as they signal room for negotiations by offering broad outlines for necessary policies.

Markey argued that both the reconciliation measure and a separate bipartisan infrastructure package are key to Biden’s broader economic agenda, “but only one of those two bills is a climate bill,” he added, referring to the reconciliation package.

For its part, the Biden administration last week released almost two dozen climate adaptation plans from federal agencies that make the case that inaction is more expensive than taking bold steps to counter climate change:

Agencies’ Climate Resiliency Reports Outline Government-Wide Efforts

EPA and almost two dozen other agencies are floating climate change resilience strategies, an effort that underscores the Biden administration’s push for a “whole of government” approach to climate as well as the government’s potentially vast vulnerabilities and the numerous adaptation efforts needed to fully prepare for future decades.

“By taking action now to better manage and mitigate climate risks, we will minimize disruptions to federal operations, assets and programs while creating safer working conditions for employees,” the White House says in an Oct. 7 statement announcing the plans.

The 23 reports were required by Biden’s January climate executive order and outline how each agency’s mission might be affected by climate risks as well as the steps officials plan to take to ensure climate readiness.

Specifically, the reports from the departments of Agriculture (USDA), Commerce and Interior cite climate threats to food supplies and critical supply chains for industrial manufacturing and energy production, upping the stakes for adopting bold measures to counter climate change:

Agencies Warn Of Climate Threats To Food, Supply Chains, Infrastructure

Agencies that oversee natural resources and federal lands are warning of a multitude of supply chain and other risks they will be facing from climate change, with officials outlining various strategies to adapt to such threats and boost the government’s resilience.

Climate-related changes in temperature and precipitation patterns may threaten our nation’s food supply, USDA’s report notes, as differing climate conditions could spur more crop-threatening pests and disease, reduced soil quality, and changes in optimal growing season periods.

At the same time, the Interior Department says it’s taking steps to “assess and manage the climate change risks” to its supply chain, meaning evaluating procurement processes for goods and services that allow Interior to perform its mission -- from steel for construction to data centers storing department data to charging stations for electric vehicles.

And the Commerce Department -- charged with overseeing economic growth including production and trade -- writes that coastal facilities, as well as piers, warehouses and other infrastructure, may be damaged or even wiped out due to rising sea levels and stronger, more frequent storms and shoreline erosion.

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