The U.S.’s Best Hope For Real Climate Policy Is Fizzling. What Happens Now?

Hopes are dimming after a lone coal-state Democrat sounded the death knell for President Joe Biden's clean electricity program.
A man uses a garden hose to water down dry vegetation as the Alisal fire burns at the edges of a ranch near Goleta, California, on Oct. 12.
A man uses a garden hose to water down dry vegetation as the Alisal fire burns at the edges of a ranch near Goleta, California, on Oct. 12.
Luis Sinco via Getty Images

With just two weeks until global leaders gather in Scotland for the world’s biggest climate conference, the United States is about to let its leading proposal to cut emissions die in Congress. President Joe Biden had pledged to cut planet-heating pollution in half by 2030, and his allies in Congress proposed a program to pay power companies to replace their coal and gas-fired plants with renewables or retrofit them with carbon capture technology, or else face fines.

But after months of negotiations, Sen. Joe Manchin (D-W.Va.), whose home state and personal fortune depend on the continued burning of heavily polluting coal, appears to have effectively blocked inclusion of the president’s Clean Electricity Performance Program, or CEPP, in a sweeping government spending bill, according to multiple sources familiar with the talks.

The possibility that Democrats may fail for the second time in 12 years to pass a meaningful climate law, first reported Friday night by The New York Times, has set off a high-stakes scramble to find a plausible alternative, either by salvaging the funding and redirecting it to other programs or pushing through some creative eleventh-hour proposal.

Democrats need all 50 senators to pass the multi-trillion-dollar package that contains the bulk of the White House’s political agenda items.

The $150 billion clean-electricity program was expected to provide more than 33% of the emissions reductions needed to hit the U.S.’s target by the end of this decade, and tossing it out to save the rest of the package likely forgoes the last opportunity Democrats may have to enshrine greenhouse gas cuts into law before the 2022 election, when Republicans are favored to win back at least one chamber of Congress.

“We can’t just cut a program that was going to deliver one-third of the pollution cuts and say that’s acceptable,” said Leah Stokes, a climate policy expert who has advised Senate Democrats throughout the budget negotiations. “The White House better have a Plan B for how we’re going to maintain those cuts.”

West Virginia Democratic Sen. Joe Manchin's family controls a coal empire.
West Virginia Democratic Sen. Joe Manchin's family controls a coal empire.
Tom Williams via Getty Images

The electricity sector produces 25% of U.S. emissions, second only to emissions spewed by automobiles. But decarbonizing the economy means swapping internal combustion engines for plug-in cars and oil furnaces for electric boilers, so ensuring a bountiful supply of clean electricity is key to avoiding simply displacing pollution to the power sector.

The plan aimed to cut utility sector emissions 80% below 2005 levels by the end of the decade, by paying power companies to increase their output of zero-carbon electricity 4% each year and fining those that don’t. Manchin insisted last week that utilities were already making that change. But just two utilities ― the municipally owned Orlando Utility Commission in Florida and Southern Indian Gas & Electric ― are on track to meet that target, according to company data the advocacy groups Evergreen Action and Natural Resources Defense Council collected.

The only other major carbon-cutting policy with comparable mainstream appeal ― specific and well-funded advocacy groups, supportive lawmakers, and successful examples of deployment ― is arguably a carbon tax. But levies on CO2 are far less popular with voters than with economists. That hasn’t stopped some Democrats in Congress from reviving previously ill-fated efforts for a carbon tax and putting new weight on a proposal working its way through the Senate Committee on Finance.

On Tuesday, however, Manchin seemed to end speculation that the death of the CEPP might breathe new life into a carbon tax, telling reporters such a proposal was “not on the board at all right now.” While Sen. Mitt Romney (R-Utah) has said he would support one — though not likely as part of a broader spending package he opposes — Sen. Jon Tester (D-Mont.) indicated his opposition to a carbon tax.

Utility infrastructure is costly, and investments are often planned a decade in advance. The purpose of the CEPP was to influence the speed and direction of that planning. That way, even if a Republican bent on preserving fossil fuels wins the White House in 2024, companies will be unlikely to shift gears.

The next best hope for creating such incentives may be to redirect the CEPP’s $150 billion price tag toward beefing up the climate provisions that remain in the budget deal to keep lawmakers from diverting the funds to other programs in the bill, said Sean McElwee, the executive director of the think tank and pollster Data for Progress.

That money could fund far bigger Department of Energy grants to states for clean energy, expand existing tax credits for zero-carbon electricity, and boost community solar programs. The bill could also implement a border adjustment tax ― a fee on imports that accounts for the pollution that went into the production of those goods, the first example of which the European Union proposed in July.

“If the CEPP is going to be reduced, that money has to be spent on meeting Biden’s climate goals, and we will not meet Biden’s climate goals unless we find other programs that would have the same emissions impact of the CEPP,” McElwee said.

The White House did not respond to a request for comment.

There is little complete or reliable modeling of what alternatives might equal the CEPP’s emissions cuts, though modeling is expected in the coming weeks.

“The White House better have a Plan B for how we’re going to maintain those cuts.”

- Leah Stokes, climate policy expert at the University of California, Santa Barbara

A spokesperson for Manchin did not respond to questions about what the senator, who chairs the chamber’s Committee on Energy and Natural Resources, sees as the best way for the U.S. to credibly ask other countries to slash emissions at the U.N. climate summit in Glasgow next month.

On Wednesday, a handful of progressive Democrats held a press conference in Washington, where Sen. Ed Markey (D-Mass.), one of the Senate’s leading climate hawks, vowed to assemble a package with enough clean-energy tax credits and other programs to “match the magnitude” of the emissions crisis.

“The Senate must put together a climate package that is something Joe Biden can say to the rest of the world that we are the leaders and not the laggards,” Markey said. “You cannot preach temperance from a bar stool. You cannot tell the rest of the world what to do if you, as a country, are not doing it yourselves.”

David Waskow, the international director at the World Resources Institute, said the Biden administration can point to significant steps the White House has taken to cut greenhouse gases when the president himself shows up in Scotland for the first few days of the summit.

U.S. climate action is not happening from scratch ― in just 9 months in office, President Biden already has taken a lot of important strides on tackling the climate crisis that he can showcase in Glasgow,” Waskow said by email. “The negotiations on Capitol Hill are complex, but we are confident that [the] reconciliation package will be enacted with significant climate provisions. What is uncertain is the timing. The legislative process can take some time, which other countries are aware of.”

The Environmental Protection Agency vowed to implement regulations on power plants if the legislation fails, mirroring the strategy the Obama administration took after its signature climate proposal died in Congress in 2010. But the Supreme Court temporarily halted the administration’s landmark power plant rule in 2016. And before EPA regulators could work out the legal kinks, Donald Trump won the presidency and named Scott Pruitt, the Oklahoma attorney general who spearheaded the lawsuit to block the power plant rule, as the new agency chief.

Climate rules enacted by the White House alone could face the same fate in the next Republican presidency. In the nearer term, the regulations would need to overcome legal challenges in courts now stacked with the droves of federal judges Trump appointed, including a 6-3 conservative majority on the Supreme Court.

“100% clean electricity was a core campaign commitment that President Biden won on,” said Jamal Raad, the executive director of Evergreen Action, which helped lead the charge for the CEPP. “Regardless of CEPP’s inclusion in the final bill, we need to make significant investments to decarbonize the electrical sector, or we will fail to meet our climate commitments.”

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