House Speaker Nancy Pelosi, the House Speaker, rallied Democrats Tuesday morning to pass two ambitious bills that are at the heart President Biden's agenda. She aims for a final House vote later in this week. The climate provisions of the $1.75 billion budget reconciliation bill, which progressives want to pass along with a bipartisan infrastructure bill, are now uncertain. This is because Sen. Joe Manchin (D.WV) tried to delay the vote at a surprise press conference Monday.
This is the latest twist in the long battle for Congress to pass meaningful legislation to support the ambitious climate goals President Biden established upon his election. Last week's reconciliation framework, which invests $555 billion in clean energy, is the first major effort to achieve the Biden administrations goal that the grid be entirely carbon-free by 2035. Experts say that while the bill and its companion bill infrastructure do a lot in speeding up the growth of clean electricity in the US, these bills will not get Democrats to the top.
Very good down payment
It will be enough. Leah Stokes, associate professor of political science, University of California, Santa Barbara, said that it is not enough. This is a great down payment for the progress we need.
The majority of the climate funds included in the White House's reconciliation bill framework are for $320 million in tax incentives for clean-energy technologies. Existing tax incentives for solar and wind energy projects provide relief to individuals and utilities from federal income taxes. This bill would provide direct pay as an option. Stokes stated that this gives utilities more incentive for renewable energy projects because they don't have much federal tax liability. New tax credits are available for energy storage and microgrid controllers as well as batteries and energy storage. This bill provides rebates to home and building owners for electrification projects.
The reconciliation bill would also provide significant funding for supply chains and infrastructure to support a clean energy future. This includes funding to create a national network for electric vehicle charging stations and new offshore wind infrastructure. Nearly $10 billion would be granted and loaned to rural communities to help them transition to renewable energy. Rural communities are often unable to attract enough customers to finance new projects that require significant upfront investment. There are $20 billion to encourage governments to invest in next-generation technologies such as modular nuclear reactors and batteries.
They will need to close a large gap
In addition to the $2.8 billion required to locate and build new transmission lines, the reconciliation bill would also include $73 billion for grid upgrades. To ensure that the grid can operate completely on clean energy, thousands upon thousands of miles will be needed to build new transmission lines to transport the energy from distant wind farms and solar farms to people's homes.
One of the greatest challenges Democrats face in cleaning up the grid, and combating climate change, is getting enough renewable electricity online. They will need to close the huge gap between how many new renewable energy plants are built annually and how much they require to meet their climate targets. According to the Energy Information Administration, 2020 saw 32GW of new solar and wind capacity. According to the strategy document Biden released November 1, Biden outlines how his administration will achieve its long-term goal to reduce greenhouse gas emissions to zero by 2050. The key milestone in the journey to net-zero greenhouse gas emissions by the middle century is a clean grid by 2035.
This gap will be harder to close after Manchin effectively ended a policy which had been the core of Democrats' clean energy strategy. Clean Electricity Performance Program (CEPP), which would have paid utilities to switch to cleaner energy sources and penalized them for using dirty ones, would have pushed utilities to increase their use of clean energy every year. Biden stated that the CEPP was still being considered at a CNN Town Hall held on October 21st with the caveat of Manchin. The program had been canceled by the time Biden released his framework a week later.
This is the one area where it's more difficult to lose the CEPP, because it was going out to send a clear nationwide signal. Leah Rubin Shen is the policy director of Advanced Energy Economy, an association for clean energy businesses.
The US' credibility at the United Nations climate summit, which will take place in the coming weeks, is being weakened by all the back-and forth. The White House expects that the reconciliation bill will replace the CEPP with clean energy incentives. This is so that the US can meet its Paris climate commitments.
Biden could direct EPA to impose stricter pollution standards on power plants to close the gap. This is what the Obama administration attempted to do. States and municipalities will likely be required to make up the federal deficit with their own clean electricity standards. Stokes estimates that one in three Americans lives in areas that aim to produce 100 percent clean electricity. This includes cities such as New Orleans and California, as well states like Colorado.
We were very close.
It will continue to be incumbent upon state and local governments that drive forward the transformation of the power sector with the passage and enforcement of 100 percent clean electricity laws. Sam Ricketts is co-founder and director of Evergreen Action, which pushed for CEPP.
Advocates also hope federal clean electricity standards will resurface in future. However, it is possible that congressional impasse could be broken by midterm elections.
We came very close. Stokes said that we were just one senator away of passing a transformative electric investment program. We are now closer than ever.
