Oct 1, 2021 - Politics & Policy

The rickety state of climate legislation

Illustration of the U.S. Capitol with images of wind turbines in front.
Photo Illustration: Eniola Odetunde/Axios. Getty Images photos: Rudy Sulgan and Anton Petrus

The last 24 hours have somehow been confusing and clarifying about the state of major climate legislation at the same time.

Catch up fast: Last night House Democratic leaders, facing a revolt from progressives, put off a vote on the bipartisan infrastructure package for now.

  • White House aides and Democrats are negotiating the scope of the separate Democrats-only package of social and climate measures, and the progressives won't back the bipartisan plan until that's done.

The big picture: Everything remains in flux, but here are a few takeaways based on what we know as of this morning...

Democrats' climate vision will be downsized. Sen. Joe Manchin dug in Thursday on his insistence that $1.5 billion is the max he'll accept in the catch-all, Democrats-only social safety net and clean energy package.

  • It's highly unlikely a politically viable plan could match robust energy incentives and spending in the $3.5 trillion House plan.
  • The House package includes, for instance, electric vehicle incentives up to $12,500 per buyer and a major new program of financial support for utilities to boost clean power.
  • "We think the $150 billion Clean Electricity Performance Program (CEPP) would likely be the first element to go in the transition to a smaller bill," Capital Alpha Partners said in a note.

Manchin's policy goals are a little clearer. A late July document Politico obtained shows Manchin's posture in finer strokes, such as wanting means-testing for new health and social provisions and other constraints.

  • He offered details on climate, saying he wants policies to be "fuel neutral," and that if renewable power tax credits are extended, oil-and-gas industry incentives should not be repealed.
  • Manchin's influence would likely ensure natural gas is credited in programs to cut emissions from the electricity sector.

White House climate diplomacy won't get easier. This isn't just inside baseball.

  • The scaled-down reconciliation plan under negotiation is unlikely to get the U.S. all the way to its new commitments under the Paris Agreement to slash greenhouse gas emissions.
  • That could complicate negotiations at the upcoming United Nations climate summit in one month.

If there's a deal, it'll be a bitter pill for many. Remember that progressives initially wanted a package in the $6 trillion range before a Senate deal went down to $3.5 trillion.

  • "$1.5 trillion would make it absolutely impossible to do what has to be done to address the climate crisis," Sen. Bernie Sanders told reporters Thursday.

The bottom line: The bipartisan plan has very substantial transit, grid and clean energy investments.

  • But it's the reconciliation package that Democrats are eyeing as a vehicle for vastly larger emissions-cutting provisions. Both are up in the air.
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