Energy & Environment — Sponsored By: Panasonic
Manchin-Schumer deal could be historic win on climate change
The deal crafted by Sen. Joe Manchin (D-W.Va.) and Senate Majority Leader Charles Schumer (D-N.Y.) would result in historic investments in combating climate change if the package is signed into law by President Biden.
Climate activists, who earlier this month were in despair after Manchin seemingly torpedoed an earlier deal, generally have praised the new agreement as a meaningful step in protecting the planet — even if it would still leave plenty of more work to do.
“It’s going to be the largest climate investment in American history by far,” Leah Stokes, an environmental politics professor at the University of California, Santa Barbara, told The Hill.
The bill also comes as Democrats have little time to spare. With Republicans favored to win back the House majority in the fall, losing an opportunity to pass meaningful climate legislation with Democrats in the White House and holding power in the House and Senate would be devastating.
Meanwhile, scientists have warned that time is limited for the world to get global climate change under control.
“It’s a make-or-break moment for a livable planet, and we have to get this bill over the finish line,” Stokes added.
The package contains a series of investments in clean energy and other programs that are expected to help the U.S. reduce its emissions.
And while the nearly $370 billion in climate and energy investments are pared down from the $555 billion passed by the House last year, the funding is still expected to make significant cuts to global warming.
Ben King, associate director of Rhodium Group, which has modeled the potential emissions reductions of past iterations of Democrats’ climate proposals, said his initial reaction was that the projection from Democrats that the package could cut 40 percent of emissions was plausible.
Combined with additional regulations, he said the U.S. may now be on track to meet Biden’s goal of cutting U.S. emissions at least in half by 2030, when compared to 2005 levels.
“While we are still analyzing the full text, the deal announced on Wednesday includes a long-term extension of clean energy tax credits in line with what we’ve previously modeled, which means it could plausibly put the U.S. on track to reduce emissions by 40 percent in 2030,” King said in a statement.
“Additional action by the Biden administration and states can help close the rest of the gap to the target of a 50-52 percent cut in emissions by 2030,” he added.
Rhodium Group’s modeling has shown that without any legislative action, the U.S. would be expected to reduce its emissions by between 24 and 35 percent.
The bill would provide $30 billion in tax credits for the manufacturing of solar panels, wind turbines, batteries and critical minerals processing. It includes an additional $10 billion in tax credits for clean energy technology manufacturing facilities that make electric vehicles, wind turbines and solar panels.
It would create another program to give financing to the oil and gas industry to cut down on their emissions of planet-warming methane and charge them for excess emissions. Methane is 25 times more potent than carbon dioxide over a 100-year period and is frequently released during oil and gas production.
Other provisions include $30 billion in loans and grants to help states and electric utilities transition to clean energy and $27 billion for a green bank that would provide more incentives for clean energy technology.
The bill would also expand royalties that companies pay for public lands drilling to include planet-warming natural gas that is burned off or otherwise released into the air.
And, while not directly related to climate change, the bill also puts $60 billion towards environmental justice — addressing disproportionately high pollution levels faced by people of color and low-income communities.
The bill is far from perfect from the point of view of fighting climate change point, and some provisions would further lock in fossil fuel use and add to planet-warming emissions.
Specifically, it would require the federal government to hold oil and gas lease sales as a condition for selling leases for renewable energy on public lands and waters.
In order for the government to allow new wind or solar energy development on federal lands, it will be required to hold onshore drilling lease sales. In order for the government to hold a lease sale enabling new offshore wind energy, it will need to have held a lease sale for new offshore oil and gas.
The legislation would also reinstate the results of a November lease sale for new offshore drilling that sold the rights to drill on 1.7 million acres in the Gulf of Mexico and was later struck down on environmental grounds. It would also require the Interior Department to hold other lease sales in the near future.
Brett Hartl, government affairs director at the Center for Biological Diversity, expressed outrage at the pro-fossil fuel provisions, arguing that they made the package a “bad deal” for Democrats.
“Ten more years of massive offshore and onshore drilling versus paltry tax incentives that may or may not move the needle, it’s just ludicrous to think that this is a good deal,” Hartl said.
Some environmentalists have also expressed concerns about an agreement Manchin said he reached with Democratic leaders to pass “comprehensive permitting reform.” Opponents fear that lawmakers could adopt reforms that weaken environmental reviews meant to protect communities from pollution in favor of expediting permits for infrastructure, energy and other construction projects.
But John Larsen, a partner at Rhodium Group, said that the pro-climate pieces of the new legislation outweigh the additional greenhouse gases that will come from its pro-fossil provisions, and noted that the oil and gas pieces are similar to the current status quo.
“It’s not any different than the historic average of lease sales,” he told reporters on a press call. “This isn’t some historic expansion of leasing compared to what’s happened over the last five to 10 years.”
“The $300-plus billion in additional incentives and investments on the clean energy side are probably a much more significant influence on emissions than the leasing components,” he added.
Stokes, of the University of California, Santa Barbara, made similar comments, noting that while the package isn’t perfect, it does significantly more on climate than not having a deal.
“There will be some concessions, but we need to be clear-eyed: without this package, we do not have a plan to cut carbon pollution by half by 2030, and scientists tell us that’s absolutely necessary to have a chance of limiting warming to 1.5 degrees,” she told The Hill.
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