Crunch time: this is America's last chance at serious climate policy for a decade

This is it, folks! The home stretch. It’s time to pay attention,
call your members of Congress, and mobilize your networks.


Congress is working on what is likely to be its last big shot at
climate change policy for a decade or more. If things go well,
the legislation will include a clean energy standard (CES) and
clean energy tax credits, which together would revolutionize the
US electricity system. If things don’t go well, there will be no
substantial climate legislation for many years to come.


That’s the only question being decided: Will we get a CES and tax
credits, or will we get nothing that will tackle fossil fuels
this decade? That’s the binary. It’s time to focus.


Looking around, it doesn’t seem like clean energy supporters,
climate hawks, or the left more broadly really get that. So let’s
talk about why this is such an important moment and what’s at
stake.


The reconciliation bill is likely the last chance for big federal
climate legislation


The Democratic approach for a while now has been to proceed along
dual tracks. On one track, there’s the bipartisan infrastructure
bill, hammered out by a group of just over 20 senators from both
parties. On the other track, there’s the budget reconciliation
bill, which is meant to contain … everything else in Biden’s
agenda. The former needs 60 votes; the latter can pass with 50
Democratic votes.


This has always been a fraught and delicate strategy. It could
crash and burn in any number of ways. But so far, at least, it is
hanging together.


The bipartisan group unveiled its bill this week; it is slowly
inching toward a vote, though Senate Minority Leader Mitch
McConnell (R-Ky.) is doing everything he can to slow it down and
gum it up.


It contains decent chunks of money for things that will
indirectly help clean energy — transmission, demonstration
projects, R&D — but it lacks anything that will directly
confront fossil fuels in the coming decade, the sine qua non of
adequate climate policy. As Robinson Meyer argues in The
Atlantic, it is not a climate bill, not really.


There’s no guarantee the bipartisan bill will pass, and there’s
no way to know how the Senate’s bipartisanship fetishists, Sens.
Joe Manchin (D-W.V.) and Kyrsten Sinema (D-Ariz.), will react if
it doesn’t.


But whether it passes or not, when it comes to decent climate
policy, it’s all about the reconciliation bill. There won’t be
another bill this big while Democrats control Congress, and they
won’t control Congress for long. What Democrats are able to get
through in the reconciliation bill is likely to be the last big
federal climate legislation for a decade at least.


This is the key thing to understand, so I’m going to repeat it:
What Democrats are able to get through in the reconciliation bill
is likely to be the last big federal climate legislation for a
decade at least.


(You may be thinking: can’t Democrats do another reconciliation
bill next year? Yes, they can, but the midterms will be in full
swing, moderates will be feeling even more cowardly than usual,
political appetite for big spending will have dried up in the
face of a recovering economy, and focus will have turned,
hopefully, to voting reform. This one is it.)


Absent substantial federal voting reform — which is looking less
and less likely, certainly nothing anyone should bet on — all
signs point toward Republicans taking back the House in 2022.
It’s unclear what will happen in the Senate, but regardless, if
the GOP controls either house, no climate legislation will pass
(and no voting reform).


Republican presidential candidates can win despite larger and
larger losses in the popular vote. And the chances of Democrats
controlling both houses of Congress again are only getting
dimmer. The structural advantages that favor the GOP in the US
system are only tilting further in its favor, while the party is
actively extending those advantages with a wave of
voter-suppression laws at the state level and an accompanying
wave of gerrymandering, which alone could win the GOP the House
in 2022, even absent any Dem seats being lost. The GOP is
protected in this endeavor by a hyper-conservative Supreme Court
(which, by the way, could get even more conservative if the
disastrously vain Stephen Breyer hangs on until there’s a
Republican president again).


The conservative movement in the US is attempting to engineer
one-party control of US government (along the lines of their new
hero, Hungarian autocrat Viktor Orban). There’s no way to know
how successful the endeavor will ultimately be, but it’s a pretty
good bet, given current trends, that Democrats won’t control the
presidency and both houses of Congress at the same time again for
a long while. Last time they lost full control (just before a
wave of gerrymandering in 2010), it was a decade until they got
it back.


That all begins in January 2023 — which makes this year’s
reconciliation bill the Democrats’ last big shot at climate and
clean energy policy.


There are two key clean-energy policies on the table


Climate folk are prone to endless policy arguments; everyone has
their favorites. But most of those arguments are immaterial right
now. Democrats have lined up behind a menu of clean energy
policies in line with Biden’s climate plan. What’s on that menu
is what might get in the bill. Might.


If it’s not on that menu, it’s not going to get in. There’s no
carbon tax. There’s no cap-and-dividend. There’s no prohibition
on new fossil fuel infrastructure. You may support any and all of
those policies, but they are not live options in the
reconciliation bill.


Right now, political pressure is best aligned behind options that
actually are on the menu. Two in particular are immensely
important — together, they would be transformative.


The first is a Clean Energy Standard that would reduce
electricity sector greenhouse gas emissions 80 percent by 2030.
(Biden’s plan calls for 100 percent by 2035, but a reconciliation
bill can only extend 10 years out.)


It’s not actually going to be a standard, per se, because you
can’t pass regulatory standards through reconciliation. Instead,
it’s going to be a system of fines and payments that will
incentivize utilities to increase their proportion of renewable
energy to meet the targets. It’s called a clean electricity
payment program (CEPP).


A CEPP actually has some advantages over the traditional CES’s
and renewable portfolio standards (RPSs) commonly seen in states.
For one thing, it’s more progressive: the money to drive the
transition comes from federal coffers (via taxes on corporations
and the wealthy) rather than from electricity rates, which are
regressive.


If you’re interested in the details of how a
reconciliation-friendly CEPP will be structured, see this piece
from Ben Storrow and Scott Waldman of E&E, or this thread
from Princeton professor Jesse Jenkins:


The end result will be the same as a conventional CES: the US
electricity grid will reach 80 percent decarbonization by 2030,
which is an achievable but still incredibly ambitious target. As
I’ve said so many times, nothing is more important to deep
decarbonization than cleaning up the electricity grid. It’s the
core of the “electrify everything” strategy.


The second is boosted and expanded clean energy tax credits. The
investment tax credit (ITC) and production tax credit (PTC), for
solar and wind respectively, would be renewed, but various forms
of tax credits would also be extended to energy storage,
hydrogen, carbon capture, and other key clean energy
technologies. (The details are in flux; for a blueprint, see the
Senate Finance Committee’s Clean Energy for America Act or the
House Ways and Means’ GREEN Act.)


Tax credits will provide the supply push; the CEPP will provide
the demand pull. The result will be an enormous surge of clean
energy projects and jobs.


This is the core of good climate policy: pushing fossil fuels off
the grid over the next decade and replacing them with zero-carbon
energy.


There are other good climate provisions on the Democrats’ menu
for reconciliation as well. I would love to see a Civilian
Climate Corps. I’d love to see more money for public
transportation and an electrified postal service fleet. Lots of
smaller climate provisions might make it through just by virtue
of not drawing much notice, which would be great.


But the CEPP and the tax credits are the one-two punch needed to
make a real short-term difference in the energy system. And they
are on the menu.


Manchin is likely to be skeptical of the CEPP. Although carbon
capture counts as clean energy under the program, every analyst
understands that the practical effect is going to be to ramp up
renewables and ramp down fossil fuels on the grid. Manchin
doesn’t actually want that.


I have no idea if public pressure will have any effect at all on
Manchin, but it couldn’t hurt. Might as well try it.


The perilous path ahead for reconciliation


Everyone on the left is aware that the reconciliation bill is the
last big legislative train leaving the station, and every
interest group wants a seat on it. Climate policy will be
competing with other Democratic priorities. Especially as Sinema
and Manchin arbitrarily reduce the total size of the bill, as
they surely will, the factions of the party will be fighting it
out over a shrinking pie.


It is far from a sure thing that the CEPP and tax credits will
survive negotiations. It’s all being decided right now. Everyone
who cares about US climate progress should put aside their
personal projects and preferences for a few weeks and speak in a
unified voice. Call your representatives. Push the groups you’re
involved with to make noise about it.


It’s going to be the CEPP and tax credits or nothing big for
climate. If both those policies are put in place, it could set
the US power system on a new course and strengthen American
credibility at the upcoming COP26 international climate meeting.
If they slip through the cracks, climate will have to settle for
scraps and the US will surrender all hope of meeting its climate
targets or influencing others to do the same.


For the next few months, this is all that matters. If you’ve ever
considered getting involved, now is the time.


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