The highlight of President Biden’s climate agenda is running into serious opposition from key moderate Democrats, putting in danger his Clean Electricity Performance Program (CEPP) and putting at risk the Biden administration goal of reducing the nation’s greenhouse gas emissions by at least 50% by the end of the decade.
Democratic leaders have failed to convince Sen. Joe Manchin, D-W.V., and other party moderates to support a budget package that includes the Clean Electricity Performance Program, which would force power companies to switch from carbon-emitting power plants to wind, solar, and other clean energy. They are now focusing on using tax credits to speed the adoption of those technologies, as well as electric cars, advanced nuclear reactors, and carbon capture, to get the nation on track to net-zero greenhouse gas emissions by mid-century.
Whether tax credits alone – without penalizing companies that don’t clean up emissions – will be enough to meet President Joe Biden’s climate goal remains to be seen. “Utilities are already under tremendous pressure to green their fleet, but (without CEPP) it allows power companies who are seeking to reduce carbon a more diverse portfolio, which benefits gas,” said Scott Segal, a Washington energy attorney.
Analysis by the California-based think tank Energy Innovation this month predicted that the Democrats’ clean energy tax credits, along with existing policies and trends, would result in a U.S. power grid that was between 61 and 69 percent clean energy – not that far off President Joe Biden’s goal of 80 percent.
Pelosi and Senate Majority Leader Chuck Schumer, D-N.Y., have set a goal of reaching a budget agreement by Oct. 31. But with a long list of issues still to work out, from climate to child tax credits to drug pricing, negotiations could easily extend into November, potentially leaving room for alternative climate strategies to emerge.
Progressives are already working on figuring out a way to make up for the emissions reductions they were expecting from the CEPP. One option under discussion would be to boost funding for the expansion of U.S. manufacturers producing clean energy technology such as batteries and solar panels. And discussions continue within the Democratic caucus around a carbon fee or tax — despite comments by Senate Democrats Manchin and John Tester, of Montana, indicating they would not support such a policy – said Brad Townsend, vice president for policy and outreach at the Center for Climate and Energy Solutions, a Washington think tank.
Antonio Bento, a professor of public policy and economics at USC who has been advising the Biden administration on its climate policies, said it’s too early to rule out a tax on carbon emissions.“One major advantage of the carbon tax of course is that it generates revenue,” he said. “By earmarking the money for pet projects of lawmakers, both conservatives and progressives might be able to support the idea.”
With time winding down, the question hanging over the democrats’ new strategy is whether progressives will go for a clean energy package that is long on financial incentives, but short on penalties for polluters. That might not make much difference in states like New York and California, which already have tough clean energy standards in place. But in states like Texas, power companies are largely left to decide for themselves how fast to clean up their generation.
That could be a tough pill to swallow for some progressive Democrats, but at least for now, environmentalists are urging them to go ahead.