Saturday, November 26, 2022

Senate Democrats Finalize Biggest Climate Spend in US History as Schumer, Manchin Outfox McConnell

The United States is back on the cusp of the biggest climate investment in its history after Senate Majority Leader Charles Schumer (D-NY) and coal state Senator Joe Manchin (D-WV) agreed to a US$370-billion climate and clean energy package, ending months of negotiations on what one elated advocate called the “best-kept secret in Washington”.

“I now propose and will vote for the Inflation Reduction Act of 2022,”Manchin said late Wednesday afternoon, in a statement that underscored the breadth of the victory for Senate Democrats as well as the depth of the compromise Manchin had levered compared to the Build Back Better plan originally proposed by President Joe Biden.

“Rather than risking more inflation with trillions in new spending,” he said, “this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination.”

On Wednesday evening, pundits’ attention was beginning to turn to whether Sen. Kyrsten Sinema (D-AZ), Democrats’ second-most high-maintenance vote in an evenly-divided senate, would support the Schumer-Manchin package. While “the provisions that mirror the White House framework for the Build Back Better Act are likely to be fine with her,” NBC writes, she may balk at a smaller provision in the deal that sustains a specific tax break for investment managers. She had not yet commented on the new agreement as The Energy Mix went to virtual press.

But until and unless Sinema throws U.S. climate action into another round of high-stakes legislative drama, U.S. climate hawks were celebrating a massive, unexpected, and desperately-needed win last night, with some news reports also pointing to a clever strategy to circumvent opposition orchestrated by Senate Minority Leader Mitch McConnell (R-KY).

The deal is “aimed at slashing carbon emissions an estimated 40% from 2005 levels economy-wide by 2030,” Politico reports. “But it also comes with plans to ease rules that the West Virginia senator has said are constricting fossil fuel production and slowing needed upgrades to the power grid.” It “invests in the technologies needed for all fuel types—from hydrogen, nuclear, renewables, fossil fuels, and energy storage,” and “does not arbitrarily shut off our abundant fossil fuels,” Manchin said in a statement Wednesday.

Utility Dive says the agreement includes moves by the end of the government fiscal year to speed up permitting for clean energy infrastructure. “Permitting reform is essential to unlocking domestic energy and transmission projects, which will lower costs for consumers and help us meet our long-term emissions goals,” states a one-page summary released by Senate Democrats.

Politico traces the “intensive effort to convince [Manchin] of the merits of supporting the new technologies—including from company executives who came forward with new plans to build manufacturing in West Virginia.”

“I want to thank Senator Schumer and Senator Manchin for the extraordinary effort that it took to reach this result,” Biden said in a statement supporting the compromise. “If enacted, this legislation will be historic, and I urge the Senate to move on this bill as soon as possible, and for the House to follow as well.”

Congressional Republicans “appeared to be livid as the news broke,” Axios writes, “with some accusing Manchin of being ‘deceitful’” in the way he had walked away from negotiations earlier this month, only to announce a fully-formed deal after the Senate passed an unrelated piece of legislation earlier in the day.

Climate champions on Capitol Hill were surprised but ecstatic, after the double hit of seeing a deeply radicalized U.S. Supreme Court severely undercut the authority of the Environmental Protection Agency to regulate carbon pollution, then Manchin apparently withdraw support for Biden’s climate agenda.

“The entire clean energy industry just breathed an enormous sigh of relief,” American Clean Power CEO Heather Zichal said in a release. This is an 11th hour reprieve for climate action and clean energy jobs, and America’s biggest legislative moment for climate and energy policy.”

Yesterday’s announcement puts the U.S. Congress “inches away” from a 10-year commitment that amounts to “the biggest climate and clean energy investment in American history,” Zichal added. “Passing this bill sends a message to the world that America is leading on climate, and sends a message at home that we will create more great jobs for Americans in this industry.”

Christina Deconcini, director of government affairs at the World Resources Institute, said the announcement was “the best news I’ve had in many years.”

“Yes, I’m surprised, but I’m also just elated,” she told The Mix, just minutes after the 900-page legislative text was released. “It makes me happy and proud that the United States is standing up to do what it needs to do to make a real commitment to dealing with climate change.”

That text in itself “is really a big deal,” Deconcini explained. “It’s not just more articles in newspapers about ‘so-and-so says this and that’. We have legislative text, and that’s just phenomenal.”

She added that “I have three adult children, I care about generations that come after me and after that, I care a lot about the planet, and we’re all reading about the warming happening every day and people suffering all over the world. It’s just a wonderful thing to realize the United States is going to step forward and do this. It just causes me great joy.”

The Inflation Reduction Act must now be reviewed by the Senate Parliamentarian to ensure it meets the rules for a legislative process called reconciliation, under which the Senate can pass bills with a simple majority, rather than the 60 votes it would need to clear a filibuster mounted by the minority party. But Deconcini said Democrats have been negotiating and crafting the bill for months with that hurdle clearly in mind.

“I read somewhere that it was the best-kept secret in Washington that they were working on this, but more power to them,” she said. “It’s just an incredible thing.”

The deal matters for the rest of the world, as well, making it likely the U.S. can deliver on its commitments under the Paris climate agreement. “Analysis really did show that even with executive action, states, and sub-national action, without this kind of significant federal policy it would be near-impossible for us to achieve the very bold climate commitments the President has made,” Deconcini said. “And we know that what the U.S. does [on emission reductions] has always had a big influence on what other countries do, as well.”

Schumer and Manchin released their joint statement just hours after the Senate adopted the CHIPS Act, a $52-billion measure to fund domestic production of the semiconductors that go into cars, computers, appliances, and an array of other devices and equipment, by a 64-33 vote. And that’s why Republicans are complaining they’ve been outmaneuvered.

McConnell “had previously threatened to hold the CHIPS Act hostage if Democrats continued negotiating with Manchin, but that threat evaporated after Manchin opposed new climate spending earlier this month,” Axios writes. Now, some Republicans are urging their colleagues in the House of Representatives to retaliate by voting down the semiconductor measure, but one close observer said the bill has enough support in both parties to withstand the attack.

This article first appeared in The Energy Mix.

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