This just may be the year when Congress seriously addresses the climate crisis. This summer, all hell broke loose here and around the world. Just a sampling of the extreme weather events exacerbated by climate change include the worst flooding in decades in Central Europe, deadly monsoon-triggered mudslides in India, unprecedented drought in the U.S. Southwest, and record-breaking wildfires in Greece, Italy, Turkey, Russia and the Western United States. Hurricane Ida, which killed more than 100 people and may have caused at least $95 billion in damages, was just one of a number of hurricanes that ravaged the Gulf Coast and states up and down the Eastern seaboard.
Against this backdrop of devastation, Congress is debating two critical pieces of legislation. First, the $1.2-trillion Infrastructure Investment and Jobs Act, which the Senate passed in August. The bill, which has yet to pass in the House, would fund new climate resilience initiatives, help modernize the nation’s power grid, rebuild deteriorating roads and bridges, and install electric vehicle charging infrastructure along roads and highways. Second, a $3.5-trillion, 10-year budget reconciliation bill called the Build Back Better Act, which would, among other things, encourage the electrification of the US transportation sector and require electric utilities to increase their use of carbon-free energy sources. A recent study estimates that the bill’s provisions could slash US carbon emissions by nearly a gigaton by 2030.
Given Republican intransigence, a slim Democratic Party majority in both houses of Congress, and disagreements among Democrats, neither bill is guaranteed to pass—at least not in their present form. The political situation is very fluid, and a lot could change between the time this piece is written and when you read it. So we’ll focus here on some highlights we’re keeping an eye on. The reconciliation bill in particular, if it stays strong and robustly funded at $3.5 trillion, could go a long way to meet the Biden administration’s goal of reducing US carbon emissions by at least 50 to 52 percent below 2005 levels by 2030 and advancing climate resilience. In addition to climate change, the bill’s provisions cover a range of pressing priorities for the nation, including health care, childcare, care for the elderly, jobs, education, and environmental justice.
UCS economist Rachel Cleetus, the Climate and Energy program’s policy director, has been closely following the ebb and flow of these two pieces of legislation. I asked her to provide us with a synopsis of the two bills’ major provisions to get a better fix on just what they could accomplish. An abridged version of our conversation follows.
EN: Let’s first talk briefly about the infrastructure bill. The previous administration was unable to get an infrastructure bill through Congress, and unlike infrastructure bills of the past, it covers a lot more than repairing and replacing roads and bridges. What do you like about the bill, and how could it be improved? What are its prospects in the House?
RC: The $1.2-trillion Infrastructure Investment and Jobs Act, which still must pass the House, would represent the largest federal investment in infrastructure in more than a decade and includes several notable investments in climate-relevant areas. Foremost among these include investments in climate resilience, upgrading and expanding the electricity grid, public transit, passenger rail, building out electric vehicle charging infrastructure, advancing remediation of abandoned fossil fuel infrastructure, and supporting energy workforce development. There are also important investments in clean drinking water, the clean-up of legacy pollution, and energy efficiency and weatherization programs, which are essential for disadvantaged communities that have borne the brunt of toxic pollution.
However, these investments would fall well short of the scale needed to address the climate crisis in a bold, just, and equitable way. And, at the same time, you can find in many of the act’s provisions evidence of the fossil fuel industry’s powerful influence. The act is littered with items that prioritize fossil fuel interests and also undermine the National Environmental Policy Act, which guarantees public input and requires federal agencies to assess the environmental impact of their projects prior to implementing them.
EN: The budget reconciliation bill squarely targets the electricity generation and transportation sectors—the two biggest sources of US carbon emissions. One provision would establish a clean electricity performance program encouraging utilities and other electricity providers to ramp up their use of carbon-free sources to generate electricity. What would this program do and how would the government get power generators to comply?
RC: The clean electricity performance program would offer incentives for electricity providers to clean up their electricity mix and levy penalties if they fail to do so. The version that recently passed out of the House Energy and Commerce Committee would provide payments to utilities that increase their clean, low-carbon electricity share by at least 4 percent per year. If the program details remain strong as the package moves toward final adoption, it could go a long way toward meeting the goal of 80 percent clean power by 2030.
The House committee-passed package also includes updated, expanded tax incentives for clean electricity and energy storage and transmission, as well as a new clean energy accelerator program called the Greenhouse Gas Reduction Fund. And it includes a fee on oil and gas sector methane emissions.
The challenge now is to make sure that the House package provisions aren’t weakened as the legislation moves through the Senate to final adoption, and UCS experts will be watching that closely.
EN: The US electricity grid is hopelessly out of date. Most of the system was built decades ago, and 70 percent of the lines and transformers are more than 25 years old. What would the infrastructure and budget reconciliation bills do to modernize the power grid?
RC: The US transmission system is indeed desperately in need of investments to strengthen its resilience to worsening climate impacts and upgrade it so more renewable energy can come on line quickly. The infrastructure bill includes some important provisions, including ones providing money for an Energy Department grid resiliency program, a smart grid investment matching grant program, and a transmission facilitation fund. The reconciliation bill includes a new investment tax credit for transmission that will provide critical incentives for regional and interregional “backbone” projects that will increase renewable energy penetration and expand access to new renewable energy resources. It also allocates billions of dollars for transmission upgrades and expansion.
EN: California Gov. Gavin Newsom issued an executive order in September 2020 phasing out the sale of gasoline- and diesel-powered passenger vehicles in the state by 2035. Britain and Norway have similar plans that will end gasoline- and diesel-fueled vehicle sales by 2030 and 2025, respectively. What would the reconciliation bill do to encourage US drivers to switch to electric vehicles and facilitate access to EV charging? How would it prod US automakers to embrace the technology more quickly?
RC: The bipartisan infrastructure bill contains some key provisions regarding clean transportation, including funding for electric vehicle charging infrastructure, transit, and electric buses, but not nearly enough. The House budget reconciliation bill, meanwhile, includes significant additional provisions that would fundamentally change the transportation sector by encouraging electrification of cars and heavy-duty trucks alike, which would significantly reduce carbon emissions and toxic tailpipe pollution.
Likewise, the reconciliation bill contains several important updates and additions to the tax code, including making the consumer EV credit for new light-duty vehicles more widely accessible and creating a new credit for used EVs and for commercial vehicles, from delivery trucks to tractor-trailers. The bill also would help expand electric vehicle charging infrastructure by extending the tax credit supporting it and providing rebates and grants to encourage widespread deployment, including in low-income communities and communities of color.
Finally, the reconciliation bill would provide investments in domestic EV manufacturing, ensuring that as the country makes the transition to EVs, automakers are producing them here in the United States. Besides supporting domestic EV and battery manufacturing, we are also encouraged that the House added language to some provisions that explicitly supports unionized plants, putting a spotlight on the importance of good labor conditions.
EN: Are there any provisions in the reconciliation bill that would place more constraints on oil and gas developers?
RC: The House bill includes a methane fee that would provide a strong incentive for the oil and gas industry to reduce these extremely potent heat-trapping emissions. The fee is currently set at $1,500 per metric ton of methane, or $60 per ton of carbon dioxide equivalent, and would be levied if methane emissions exceeded certain benchmarks.
However, both the infrastructure bill and the reconciliation bill unfortunately still leave in place the massive federal subsidies fossil fuel companies receive every year. Those subsidies must be eliminated if we are serious about making a rapid transition to clean energy. Sadly, the fossil fuel industry’s political influence remains all too strong.
EN: The budget reconciliation bill includes $3 billion for establishing a Civilian Climate Corps. What would it do? And while we’re talking about workers, how would the budget bill protect displaced fossil fuel industry workers?
RC: The Civilian Climate Corps, which is reminiscent of the Civilian Conservation Corps the federal government set up in the 1930s, would establish an avenue for young people all across the country to address the climate crisis by staffing mitigation and adaptation projects and preparedness and response efforts for climate-related disasters. The program would prioritize training residents of low-income communities, communities of color, and tribal and environmental justice communities.
Besides the CCC, the reconciliation bill contains a number of labor provisions, including some requirements for prevailing wages and domestic content. The bill would provide an additional $16 billion for the Department of Labor’s dislocated worker program, which provides laid-off workers training and career services. Likewise, there is a substantial investment in the Economic Development Administration, to the tune of more than $9 billion, which would support the creation of regional innovation hubs and economic development in distressed communities.
The problem is that these programs are not directly targeted at the workers who stand to lose the most as we shift toward clean energy—those working in the fossil fuel industry. More will be needed in the form of income support and flexible education benefits for these impacted workers, as well as resources for affected communities.
EN: How does the reconciliation bill address environmental justice issues?
RC: The House committee’s package includes historic, bold measures that address longstanding environmental injustices that disproportionately harm Black and Brown communities. The provisions include environmental and climate justice block grants, funding to reduce carbon emissions and toxic pollution, funding to replace lead drinking water pipes, increased toxic air pollution monitoring in frontline communities, solar projects for low-income households, and weatherization-assistance programs and climate resilience.
EN: We haven’t talked about the particularities of a budget reconciliation bill, which only requires a simple majority to pass in the Senate, unlike most bills, which are subject to the filibuster and these days require a 60-vote majority. It is no secret that there are at least a couple of Senate Democrats who are holding out, and the Democrats need all 50 of its Senate members to get the bill passed. What are the budget bill’s prospects at this point?
RC: The budget reconciliation bill represents the best chance for climate action in a long while, so we are going to fight like hell to secure it. That said, there’s no question it faces some serious headwinds as it goes to the Senate. Climate action shouldn’t be partisan issue, but unfortunately no Republicans have stepped up to support the bill thus far. A budget reconciliation bill requires a simple majority to pass, unlike regular-order legislation that has a 60-vote threshold. With the makeup in the Senate, every Democrat’s vote will be needed for the bill to pass, with Vice President Harris casting the deciding vote.
As you noted, some moderate Democrats, notably West Virginia Sen. Joe Manchin—who has strong ties to the coal industry—and Arizona Sen. Kyrsten Sinema—who has held fundraisers with major industry groups opposed to provisions in the Build Back Better agenda—do not support the full $3.5-trillion bill and would prefer a smaller package. But the reality is both West Virginia and Arizona are already facing significant climate risks, from heavy rainfall and flooding in the case of West Virginia to extreme heat, drought and wildfires in the case of Arizona. The reconciliation bill also features provisions that would generate jobs, provide more healthcare benefits, better protect the elderly, and broaden educational opportunities—things that would significantly improve the lives of their constituents, not to mention the lives of the residents of every other state.
Congress has just voted on a stop-gap measure to fund the government through early December and prevent a government shutdown. It has also extended key transportation funding programs through the end of October, by which point it is hoped lawmakers can move forward on the two major pieces of legislation. For those who care about a bold investment in climate action, the needs of working families, and the nation’s social safety net, passing the bipartisan infrastructure bill must be closely tied to assurances about passing the reconciliation bill. As if that weren’t enough, lawmakers also have to vote to raise the debt ceiling by mid-October, otherwise the United States faces the risk of defaulting on its debt, and so far Republicans are refusing to vote on that measure. All of these issues will come to a head in the coming weeks.
So, it is thus: In the midst of an unprecedented climate crisis and a historic legislative opportunity for solutions, we also have to contend with all of the dysfunctions in our political system and the power of the fossil fuel lobby. Keeping the climate provisions strong in the reconciliation bill is by no means a sure thing, but we are doing everything we can to win this fight.