Democrats tout climate spending in reconciliation

White House yields to Manchin's concerns about aggressive climate policies

Sen. Joe Manchin III, D-W.Va., has resisted what he describes as punitive measures on the fossil fuel industry. (Tom Williams/CQ Roll Call file photo)
Sen. Joe Manchin III, D-W.Va., has resisted what he describes as punitive measures on the fossil fuel industry. (Tom Williams/CQ Roll Call file photo)
Posted October 28, 2021 at 1:29pm

The White House on Thursday announced a framework for $555 billion worth of new climate-related spending, with most of that funding going to tax credits and other incentives.

Ahead of an international climate summit, President Joe Biden touted the framework as a path that would allow the United States to hit the goal he has established for the United States to cut emissions at least 50 percent by 2030, from 2005 levels.

The White House characterized the proposal as the largest climate-related spending bill in U.S. history and said the measure would reduce more than a gigaton — that’s a billion metric tons — of greenhouse gas emissions by 2030.

“And we'll do it in ways that grow the domestic industries, create good-paying union jobs, address long-standing environmental injustices as well,” Biden said in remarks.

On Capitol Hill, Democrats released updated text of their budget reconciliation package that went beyond the spending items and tax credits laid out by the White House. The bill includes a methane reduction program, increased fees on the oil and gas industry and additional climate-related measures. They cautioned, however, that pieces of the legislation could change as negotiations continue.

Sen. Joe Manchin III, D-W.Va., who chairs the Energy and Natural Resources Committee, has resisted what he describes as punitive measures on the fossil fuel industry, and his opposition killed a proposed $150 billion Clean Electricity Performance Program that would have offered incentives to power companies for switching to renewable energy sources and fined utilities that moved slowly from fossil energy sources.

But the latest bill text still includes many other provisions that would affect the oil and gas sector. For example, it would end new offshore fossil fuel leases in federal waters along the Atlantic and Pacific coasts as well as the Eastern Gulf of Mexico. It would block fossil fuel leasing in the Arctic National Wildlife Refuge.

The legislation also would raise revenues by increasing royalty rates and fees on oil and gas operations on federal lands and establish a new hard rock mining royalty projected to raise as much as $1 billion over a decade.

And it would require the Interior Department to hold offshore wind lease sales in federal waters in the eastern Gulf of Mexico and off the coasts of North Carolina, South Carolina, Georgia and Florida.

Those measures come from the House Natural Resources Committee portion of the package. That committee’s chairman, Rep. Raul M. Grijalva, D-Ariz., said in a statement the country needs to take environmental needs more seriously.

“For far too many of us, droughts, wildfires, crop failures and hurricanes are now the central facts of our lives, and we need sustained national leadership and long-term investments to confront that reality head on,” Grijalva said.

He lamented that the reduced size of the package meant some spending items had to be pared back, including programs for Native American communities.

“This bill does a lot of good things and leaves a lot of good ideas on the table, and I’m especially disappointed to see much of the support for Native American communities that we passed in September not reflected here today,” Grijalva said. “As soon as President Biden signs reconciliation into law, this committee is redoubling its efforts.”

'Unprecedented investments'

House Energy and Commerce Committee Chairman Frank Pallone Jr., D-N.J., said in a statement that the bill includes “sweeping, unprecedented investments” in tackling climate change.

Its greenhouse gas reduction fund will accelerate innovation and prioritize the needs of environmental justice communities, he said, while its methane emissions reduction program will help reduce oil and gas industry pollution.

“At the same time, substantial investments in electric vehicle charging stations and clean heavy-duty vehicles, like school buses, will serve the dual purpose of slashing our carbon emissions while helping American manufacturing stay globally competitive,” Pallone said.

Rep. Cindy Axne, D-Iowa, had pushed for funding to support biofuels infrastructure, complaining it was left out of the bipartisan infrastructure bill even as that measure delivered significant funding for electric vehicles.

The latest reconciliation package text includes $1 billion over 10 years in funding for the Agriculture Department to provide grants for expanding biofuel pump infrastructure, upgrade existing infrastructure and  increase usage of higher blends of ethanol and biodiesel.

“Not only does the Build Back Better Act represent the largest investment in clean energy and combating climate change ever — it also confirms that my colleagues have listened to my central argument in our clean energy discussions: biofuels can and should be a part of our fight against climate change,” Axne said in a statement.

The White House framework released earlier in the day envisions that $320 billion would be delivered in the form of clean energy tax credits to accelerate the transition from coal and gas-fired power plants to renewable energy sources such as wind turbines and solar panels.

That includes incentives for both utilities and residents and support for additional transmission and storage capacity — areas where bottlenecks have hampered the development of renewable energy sources.

The framework includes incentives intended to cut the cost for Americans to put rooftop solar panels on their homes and make it easier to purchase electric vehicles. New EV tax credits would lower the cost of a vehicle by $12,500 for a middle-class family, according to the White House.

The framework calls for $105 billion for climate resiliency and addressing legacy pollution in communities.

For example, a new Clean Energy and Sustainability Accelerator that would invest in climate-related projects around the country would allocate 40 percent of those benefits to disadvantaged communities — part of a pledge the Biden administration has made to deliver climate spending to communities traditionally on the front lines of environmental damage.

It also would fund grants to support environmental justice in disadvantaged communities and create a new Civilian Climate Corps with more than 300,000 members working on conservation projects that could help mitigate climate change.

The framework includes $110 billion in spending and incentives to boost domestic supply chains supporting solar power and batteries. It also would fund grants, loans and tax credits aimed at moving steel, cement and aluminum industries toward decarbonization.

There’s also $20 billion for the government to purchase new technologies such as long-duration storage, small modular reactors and clean construction materials.

While the size of the package falls short of initial proposals, some Capitol Hill Democrats declined to say they were disappointed with the climate portion.

Sen. Christopher S. Murphy, D-Conn., said he didn’t want to undersell the framework, as it would represent the most significant spending on climate policy since he joined Congress.

The fact that climate makes up about one-third of the overall spending shows how much the issue has been elevated within the Democratic Party, he said, and negotiations over bolstering it aren’t finished.

“I think there's a number of things that we can still find consensus on that might not be in this agreement. So climate is something you’ve got to work on every single day,” Murphy said. “If we're not passing climate change legislation every year, then we're not doing our job. So this is just one admittedly very big piece of the overall policy puzzle.”