The Climate Moment

A bird's eye view of a road winding through the forest.

August is usu­al­ly a slow month on Capi­tol Hill, but that was not the case this sum­mer. Both hous­es gave up parts of their recess to set up a poten­tial­ly his­toric moment for cli­mate action lat­er this fall.

First up, 69 bipar­ti­san sen­a­tors passed the infra­struc­ture bill, which pro­vides over $550 bil­lion in new spend­ing autho­riza­tions. The bill includes $7.5 bil­lion to con­struct elec­tric vehi­cle charg­ing sta­tions and bil­lions in grid fund­ing, as well as:

  • $5 bil­lion in grant fund­ing for grid resilience projects; 
  • $6 bil­lion for a civ­il nuclear cred­it pro­gram to com­pen­sate nuclear gen­er­a­tion for avoid­ing emis­sions; and
  • $2.5 bil­lion for a Depart­ment of Ener­gy (DOE) pro­gram designed to sup­port large new trans­mis­sion lines or upgrades to exist­ing lines. 

The bill strength­ens the roles of DOE and the Fed­er­al Ener­gy Reg­u­la­to­ry Com­mis­sion (FERC) in trans­mis­sion build­out. The leg­is­la­tion estab­lish­es more spe­cif­ic cri­te­ria for DOE to use when it des­ig­nates Nation­al Inter­est Elec­tric Trans­mis­sion Cor­ri­dors. And to relieve one of the poten­tial stum­bling blocks to trans­mis­sion, FERC would have sit­ing author­i­ty to approve per­mits for the con­struc­tion or mod­i­fi­ca­tion of inter­state trans­mis­sion facil­i­ties in those cor­ri­dors where state per­mit­ting is lag­ging.

Fol­low­ing pas­sage of the infra­struc­ture bill, the Sen­ate kicked off the bud­get rec­on­cil­i­a­tion process by adopt­ing a $3.5 tril­lion bud­get res­o­lu­tion the next day. The rec­on­cil­i­a­tion process is not sub­ject to the fil­i­buster in the Sen­ate — it can pass with a sim­ple major­i­ty — and it allows for expe­dit­ed con­sid­er­a­tion of leg­is­la­tion that brings exist­ing spend­ing and rev­enue pro­vi­sions into line with the fis­cal pri­or­i­ties includ­ed in the annu­al bud­get res­o­lu­tion. For its part, the bud­get res­o­lu­tion includes top-line fund­ing num­bers with instruc­tions for House and Sen­ate com­mit­tees to devel­op leg­isla­tive pol­i­cy pro­vi­sions with­in their juris­dic­tion relat­ed to direct spend­ing or rev­enue.

The bud­get rec­on­cil­i­a­tion process may lead Con­gress to take steps to cut green­house gas emis­sions. The bud­get res­o­lu­tion includes instruc­tions to the rel­e­vant con­gres­sion­al com­mit­tees to devel­op sev­er­al cli­mate pol­i­cy pro­vi­sions with spend­ing or rev­enue impacts for the bud­get rec­on­cil­i­a­tion pack­age.

Among these pro­vi­sions is the cre­ation of a Clean Elec­tric­i­ty Pay­ment Pro­gram, an alter­na­tive to a clean ener­gy stan­dard. Clean ener­gy stan­dard pro­grams have been suc­cess­ful in reduc­ing green­house gas emis­sions when imple­ment­ed at the state lev­el. The new pro­pos­al is not a man­date that each elec­tric­i­ty sup­pli­er achieve a cer­tain per­cent­age of clean elec­tric­i­ty by a par­tic­u­lar date. Rather, it is part of a pack­age of finan­cial incen­tives — includ­ing pay­ments to sup­pli­ers that increase their clean elec­tric­i­ty share year-over-year and fees assessed on sup­pli­ers that fail to meet annu­al tar­gets — that are designed to hit an 80% clean ener­gy nation­al aver­age by 2030. A recent analy­sis indi­cat­ed that the Clean Elec­tric­i­ty Pay­ment Pro­gram could gen­er­ate over $900 bil­lion in added eco­nom­ic val­ue to the U.S. econ­o­my and cre­ate 7.7 mil­lion jobs by 2031.

There is also an effort to reform the ener­gy tax code. The Sen­ate Finance Com­mit­tee has already advanced leg­is­la­tion this year that sim­pli­fies the ener­gy tax code in favor of a code that will pro­mote three goals through tech­nol­o­gy-neu­tral and per­for­mance-based tax cred­its: clean ener­gy, clean trans­porta­tion, and ener­gy efficiency. 

Sen­ate lead­er­ship asserts that these pro­vi­sions could account for near­ly two-thirds of the emis­sions reduc­tions need­ed to reduce green­house gas emis­sions 45% by 2030. Fur­ther progress on the 45% tar­get could be made through use of a few oth­er pos­si­ble tools: a fee on vent­ed, flared, or leaked methane emis­sions from the oil and gas indus­try; repeal of fos­sil fuel sub­si­dies; and agri­cul­ture con­ser­va­tion and for­est man­age­ment pro­grams. Lead­ing cli­mate states that have pledged fur­ther reduc­tions in excess of the fed­er­al-lev­el cuts would pro­vide addi­tion­al emis­sions reduc­tions.

After the action in the Sen­ate, the House returned on August 24 to approve a plan to vote on the infra­struc­ture bill with its cli­mate pro­vi­sions by the end of Sep­tem­ber and to clear the path for the use of the bud­get rec­on­cil­i­a­tion process. Sen­ate and House lead­ers have told their respec­tive com­mit­tees to sub­mit their parts of the bud­get rec­on­cil­i­a­tion pack­age to the Bud­get com­mit­tees by Sep­tem­ber 15 with the hope that the con­sol­i­dat­ed pack­age can be con­sid­ered by the full House and Sen­ate in the sec­ond half of the month. 

An untyp­i­cal­ly busy August has giv­en way to a busy ear­ly Sep­tem­ber. The com­ing weeks on Capi­tol Hill will deter­mine whether the U.S. embarks on a leg­isla­tive path to address­ing cli­mate emissions.