Nov 22, 2021 - Politics & Policy

The murky future of Biden's climate agenda in the Senate

Illustration of the Earth looming over the Capitol dome.
Illustration: Allie Carl/Axios

House Democrats passed their $1.75 trillion social spending and climate package last week, but what happens next is hazy.

Why it matters: The bill, if it makes the finish line, would be by far the most sweeping U.S. climate package ever enacted.

  • The provisions — including over $300 billion in clean energy tax incentives — are key to the White House goal of cutting U.S. emissions 50% below 2005 levels by 2030.

Yes, but: The House plan approved Friday is likely to change in the Senate. Here are a few things we're watching:

1. Electric vehicles. The plan would expand consumer tax incentives, and one big way is that union-made EVs can receive up to $4,500 more in incentives over the base $7,500 credit.

  • But Sen. Joe Manchin (D-W.Va.) is reportedly not on board with the union-made provision, and nonunion automakers are lobbying against it too.
  • "The union provision may be problematic from an international trade standpoint in any case. I wouldn’t bet on seeing it in the final draft," ClearView Energy Partners Kevin Book said in an email exchange.

2. Carbon pricing. There's intermittent buzz about a carbon tax push, but the odds are very long.

3. The clock. Senate Majority Leader Chuck Schumer (D-N.Y.) wants to complete the plan before Christmas, but the calendar is very tight and negotiations could drag. If the talks spill over into 2022, the plan could lose momentum.

4. The overall size. The plan contains over $500 billion total in clean energy and climate-related provisions, so keep an eye on whether that overall size and scope remains.

5. Methane fees and other oil-and-gas provisions. The House plan imposes fees of up to $1,500 per ton on industry methane emissions.

  • Manchin, whose state is a major gas producer, is again a lawmaker to watch there.
  • ClearView's Book notes one reason a methane fee could survive: "Appalachian gas production might be a relative winner on methane intensity."
  • The plan also raises royalty rates for oil-and-gas production on federal lands and waters and includes new fees on federal leases.

Go deeper ... Poll: 52% of Americans say they've experienced effects of global warming

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