President Joe Biden is racing the clock to win passage of two bills in Congress that would fund most of his ambitious climate agenda and allow him to present a concrete and credible package of legally-binding US energy transition plans at the fast-approaching COP26 conference.
Failure to do so would likely undermine Biden’s ability to keep a pledge that the US will lead again on climate after four years of Donald Trump, but also public confidence in his central argument that democratic governments are best placed to lead the fight against global heating.
With his prestige on the line at home and overseas, Biden is struggling to unite fractious Democrats behind the Senate-approved bipartisan $1 trn Infrastructure Investment and Jobs Act and Build Back Better – his even more expansive partisan $3.5 trn spending package for climate and other domestic priorities.
We really need Congress to get its act together. It would bring us into Glasgow on a firm footing as a leader.
“We really need Congress to get its act together and pull through to pass these major investments. It would bring us into Glasgow on a very firm footing as a leader,” said Mike Williams, a senior fellow at the Center for American Progress, a prominent left-leaning public policy think tank in Washington, DC.
If fully funded and implemented, the bills’ policies and processes would slash US greenhouse gas emissions 45% from 2005 levels by 2030 – within striking distance of Biden’s 50-52% goal, which is consistent with the Paris agreement, according to an analysis by the staff of Senate Majority Leader Charles Schumer, a New York Democrat.
“With regulatory actions the administration could take, not to say easily as there is a lot of work to get there, we could meet that commitment,” said Williams, citing as examples tougher energy efficiency standards and a crackdown on emissions of methane, a powerful planet warming gas, at oil industry wellheads. State policies will also continue to play a key role.
Biden contends that the two pieces of legislation would set the US on a firm path toward his other headline climate-related targets: 30GW of offshore wind by 2030, a carbon-free electric grid by 2035 and net-zero emissions by 2050.
Democrats divided
However, the ascendent Democratic left in the House of Representatives so far won’t vote for the infrastructure bill even though it funds an unprecedented number of initiatives tied to carbon removal, clean energy development and grid upgrades, and will overhaul slow-moving federal permitting processes for transmission development.
Won't vote for it, that is, until Congress first passes elements of Build Back Better that they champion. These include hundreds of billions of additional dollars for climate action, and to develop US clean energy manufacturing capability to compete with China, as well as a historic expansion of federal programmes for public education, health, and social services.
The progressives largely represent safe Democratic districts and have held firm in their strategy to hold the infrastructure bill hostage. Party moderates from swing districts, however, face stiff challenges from Republicans in November 2022 mid-term elections. For that reason, they are anxious to showcase their support for legislation that promises to create numerous jobs and fuel economic development.
The moderates do have a key card to play – numbers. Given that Democrats have razor-thin majorities in the House and Senate, neither bill can pass without their support. No more than 20 Republicans are expected to vote for infrastructure, and they oppose Build Back Better in the belief that additional spending will add to record federal budget deficits and stoke inflation, now at the highest level in 30 years.
With the two sides deadlocked and publicly sniping at each other, the impasse threatens to also torpedo Biden’s domestic agenda when he badly needs a big political win given his already low national approval ratings.
“Everybody is frustrated. That’s part of government, being frustrated,” said Biden referring to the lack of tangible results thus far in the House legislative process. He sought to project confidence that it will eventually bear fruit.
It doesn’t matter whether it’s in six days or in six weeks. We’re going to get it done.
“It doesn’t matter whether it’s in six minutes, six days, or in six weeks. We’re going to get it done,” he said, without referring to the start of COP26 on 31 October. “There is no reason why both these bills couldn’t pass independently except that there are not the votes to do it that way. It’s a simple proposition. I support both, and I think we can get them both done.”
After dithering with the nation watching, Biden sided with the party’s left flank and embraced its dual-track approach, calling it “just reality.” However, in a concession to moderate Democrats, he told progressives they will need to trim the larger bill from $3.5trn to reportedly between $1.9trn and $2.3trn.
Even those lower numbers are too high for Senators Kyrsten Sinema (Arizona) and Joe Manchin (West Virginia), who will determine the fate of Build Back Better in the upper chamber. Biden remains hopeful the harder-line Manchin will accept spending more than $1.5trn that he earlier proposed. “Sure sounds like he’s moving. I hope that’s the case,” he said.
Finding the hard middle ground
As Biden looks to broker a compromise, his challenge with climate is to protect as much funding as possible to retain credibility on the issue in Glasgow. How this will play out is unclear. For starters, infrastructure is off-limits. He spent a lot of political capital this summer winning passage in the Senate and the bill is popular with most Americans.
“We’re enthusiastic about the infrastructure bill. It would be a game-changing piece of legislation for the energy transition and climate more broadly in the US,’ said Sasha Mackler, executive director of the Energy Project at the Bipartisan Policy Center in Washington, DC.
“It has a suite of really important programmes that are not only created and authorised, but also funded at profoundly different levels that we have seen historically on these issues,” he added. “I do expect it to pass through the House intact with the clean energy provisions.”
Among them is creation of an Office of Clean Energy Demonstrations with an initial $21.5bn budget managed by the Department of Energy (DoE) that will fund a range of cutting-edge technology commercial-scale projects such as advanced nuclear power, carbon and direct air capture, clean hydrogen, electricity storage, and renewables including hydro, marine energy, solar and wind.
“This has really been a problem area in energy innovation generally because there is high cost and high risk, and not something the private sector can do on its own,” said Mackler.
Build Back Better also promises to be hugely impactful in other ways for accelerating the energy transition. Under a new $150bn Clean Electricity Payment Programme (CEPP), utilities that raise the amount of clean power delivered to customers by 4% year on year will receive grants from DoE starting in 2023 through 2030, while those that fall short would pay a $40/MWh penalty.
The White House is bullish that the scheme will play a fundamental role in advancing the US to 80% clean electricity by 2030, a major advance toward eliminating fossil fuels five years later.
“The march toward decarbonisation starts with electricity. If we can’t decarbonise electricity fairly rapidly, we have very little chance to extend electrification to other parts of the economy,” said Ernest Moniz, who was energy secretary under former President Barack Obama.
The bill provides a 10-year extension of federal tax credits for solar and wind with a direct payment option and refundable from the US Treasury, which would allow projects, particularly smaller ones, to bypass the constrained and expensive tax equity market. The White House anticipates this will underpin hundreds of gigawatts in new capacity.
Credits would be created or enhanced for batteries, carbon capture, electric vehicles, energy efficiency, long-haul transmission, and other clean energy-related technologies.
In a twist, progressives want to make availability of those credits at full value contingent on projects meeting domestic content preferences for their inputs. The aim of this new requirement is to advance Biden’s “Made in America” clean energy manufacturing supply chain that is free of Chinese influence and employs union workers.
How this work in practice is uncertain, since the US currently lacks manufacturing capability in areas such as offshore wind, or enough capacity to churn out panels for the massive ramp-up Biden wants to see in solar to generate as much as 37% of the nation’s electricity in 2035, versus 3% today.
This is one of a series of special articles from Recharge in the run-up to COP26 in Glasgow. See the others below.
Read more
- COP 26 | Are energy islands the missing link to make Europe's 'net zero continent' dream reality?
- COP26 | Taiwan's offshore wind dilemma holds lessons for the world
- COP26 | Boris Johnson's net-zero power plan in peril if offshore wind gets stuck in the slow lane
- COP26 | Scotland flies the flag for North Sea's floating wind future
- COP 26 | 'Widespread use of green hydrogen in heating and cars is not only stupid — it’s practically impossible’
